Document:

Exhibit 4.1

Exhibit 4.1

THE BON-TON STORES, INC. RETIREMENT CONTRIBUTION PLAN

Copyright 2009 SunGard

All Rights Reserved

 

 

 

	 	 	 	 	 
	 
	 	 	 	 
	ARTICLE I

DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE I

ADMINISTRATION
	 	 	18	 
	 
	 	 	 	 
	2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
	 	 	18	 
	2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
	 	 	19	 
	2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
	 	 	19	 
	2.4 POWERS AND DUTIES OF THE ADMINISTRATOR
	 	 	19	 
	2.5 RECORDS AND REPORTS
	 	 	20	 
	2.6 APPOINTMENT OF ADVISERS
	 	 	20	 
	2.7 PAYMENT OF EXPENSES
	 	 	21	 
	2.8 CLAIMS PROCEDURE
	 	 	21	 
	2.9 CLAIMS REVIEW PROCEDURE
	 	 	21	 
	 
	 	 	 	 
	ARTICLE III

ELIGIBILITY
	 	 	22	 
	 
	 	 	 	 
	3.1 CONDITIONS OF ELIGIBILITY
	 	 	22	 
	3.2 EFFECTIVE DATE OF PARTICIPATION
	 	 	22	 
	3.3 DETERMINATION OF ELIGIBILITY
	 	 	23	 
	3.4 TERMINATION OF ELIGIBILITY
	 	 	23	 
	3.5 REHIRED EMPLOYEES AND BREAKS IN SERVICE
	 	 	23	 
	3.6 ELECTION NOT TO PARTICIPATE
	 	 	24	 
	3.7 OWNER-EMPLOYEE LIMITATION
	 	 	24	 
	3.8 OMISSION OF ELIGIBLE EMPLOYEE; INCLUSION OF INELIGIBLE EMPLOYEE
	 	 	25	 
	 
	 	 	 	 
	ARTICLE IV

CONTRIBUTION AND ALLOCATION
	 	 	25	 
	 
	 	 	 	 
	4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
	 	 	25	 
	4.2 PARTICIPANT’S SALARY REDUCTION ELECTION
	 	 	26	 
	4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
	 	 	30	 
	4.4 ALLOCATION OF CONTRIBUTION AND USAGE OF FORFEITURES AND EARNINGS
	 	 	30	 
	4.5 ACTUAL DEFERRAL PERCENTAGE TEST
	 	 	33	 
	4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TEST
	 	 	35	 
	4.7 ACTUAL CONTRIBUTION PERCENTAGE TEST
	 	 	36	 
	4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TEST
	 	 	39	 
	4.9 MAXIMUM ANNUAL ADDITIONS
	 	 	41	 

 

 

 

	 	 	 	 	 
	4.10 ADJUSTMENT FOR EXCESS ANNUAL ADDITIONS
	 	 	43	 
	4.11 PLAN-TO-PLAN TRANSFERS (OTHER THAN ROLLOVERS) FROM QUALIFIED PLANS
	 	 	44	 
	4.12 ROLLOVERS FROM OTHER PLANS
	 	 	45	 
	4.13 AFTER-TAX VOLUNTARY CONTRIBUTIONS
	 	 	46	 
	4.14 PARTICIPANT DIRECTED INVESTMENTS
	 	 	46	 
	4.15 QUALIFIED MILITARY SERVICE
	 	 	48	 
	 
	 	 	 	 
	ARTICLE V

VALUATIONS
	 	 	49	 
	 
	 	 	 	 
	5.1 VALUATION OF THE TRUST FUND
	 	 	49	 
	5.2 METHOD OF VALUATION
	 	 	49	 
	 
	 	 	 	 
	ARTICLE VI

DETERMINATION AND DISTRIBUTION OF BENEFITS
	 	 	49	 
	 
	 	 	 	 
	6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
	 	 	49	 
	6.2 DETERMINATION OF BENEFITS UPON DEATH
	 	 	49	 
	6.3 DISABILITY RETIREMENT BENEFITS
	 	 	51	 
	6.4 DETERMINATION OF BENEFITS UPON TERMINATION
	 	 	51	 
	6.5 DISTRIBUTION OF BENEFITS
	 	 	53	 
	6.6 DISTRIBUTION OF BENEFITS UPON DEATH
	 	 	54	 
	6.7 TIME OF DISTRIBUTION
	 	 	54	 
	6.8 REQUIRED MINIMUM DISTRIBUTIONS
	 	 	55	 
	6.9 DISTRIBUTION FOR MINOR OR INCOMPETENT INDIVIDUAL
	 	 	59	 
	6.10 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
	 	 	60	 
	6.11 PRE-RETIREMENT DISTRIBUTION OF EMPLOYER CONTRIBUTIONS
	 	 	60	 
	6.12 ADVANCE DISTRIBUTION FOR HARDSHIP
	 	 	60	 
	6.13 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
	 	 	62	 
	6.14 DIRECT ROLLOVER
	 	 	62	 
	6.15 TRANSFER OF ASSETS FROM A MONEY PURCHASE PLAN
	 	 	63	 
	6.16 CORRECTIVE DISTRIBUTIONS
	 	 	63	 
	6.17 DISTRIBUTION OF EMPLOYER DISCRETIONARY NONELECTIVE CONTRIBUTIONS
	 	 	63	 
	 
	 	 	 	 
	ARTICLE VII

AMENDMENT, TERMINATION, MERGERS AND LOANS
	 	 	64	 
	 
	 	 	 	 
	7.1 AMENDMENT
	 	 	64	 
	7.2 TERMINATION
	 	 	65	 
	7.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
	 	 	65	 
	7.4 LOANS TO PARTICIPANTS
	 	 	65	 
	 
	 	 	 	 
	ARTICLE VIII

TOP-HEAVY
	 	 	66	 
	 
	 	 	 	 
	8.1 TOP-HEAVY PLAN REQUIREMENTS
	 	 	66	 
	8.2 DETERMINATION OF TOP-HEAVY STATUS
	 	 	66	 

 

 

 

	 	 	 	 	 
	ARTICLE IX

MISCELLANEOUS
	 	 	68	 
	 
	 	 	 	 
	9.1 PARTICIPANT’S RIGHTS
	 	 	68	 
	9.2 ALIENATION OF BENEFITS
	 	 	68	 
	9.3 CONSTRUCTION AND INTERPRETATION OF PLAN
	 	 	69	 
	9.4 GENDER AND NUMBER
	 	 	69	 
	9.5 LEGAL ACTION
	 	 	69	 
	9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
	 	 	70	 
	9.7 EMPLOYER’S AND TRUSTEE’S PROTECTIVE CLAUSE
	 	 	70	 
	9.8 INSURER’S PROTECTIVE CLAUSE
	 	 	70	 
	9.9 RECEIPT AND RELEASE FOR PAYMENTS
	 	 	70	 
	9.10 ACTION BY THE EMPLOYER
	 	 	70	 
	9.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
	 	 	71	 
	9.12 HEADINGS
	 	 	71	 
	9.13 APPROVAL BY INTERNAL REVENUE SERVICE
	 	 	71	 
	9.14 ELECTRONIC MEDIA
	 	 	71	 
	9.15 PLAN CORRECTION
	 	 	72	 
	9.16 UNIFORMITY
	 	 	72	 
	9.17 FORFEITURE SUSPENSE ACCOUNTS FOR ADMINISTRATIVE ERRORS
	 	 	72	 
	 
	 	 	 	 
	ARTICLE X

PARTICIPATING EMPLOYERS
	 	 	72	 
	 
	 	 	 	 
	10.1 ADOPTION BY OTHER EMPLOYERS
	 	 	72	 
	10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
	 	 	72	 
	10.3 DESIGNATION OF AGENT
	 	 	73	 
	10.4 EMPLOYEE TRANSFERS
	 	 	73	 
	10.5 PARTICIPATING EMPLOYER CONTRIBUTION AND FORFEITURES
	 	 	73	 
	10.6 AMENDMENT AND/OR RESTATEMENT
	 	 	73	 
	10.7 DISCONTINUANCE OF PARTICIPATION
	 	 	73	 
	10.8 ADMINISTRATOR’S AUTHORITY
	 	 	74	 
	10.9 PROVISIONS APPLIED SEPARATELY (OR JOINTLY) FOR PARTICIPATING
NON-AFFILIATED EMPLOYERS
	 	 	74	 
	10.10 TOP-HEAVY APPLIED SEPARATELY FOR PARTICIPATING NON-AFFILIATED EMPLOYERS
	 	 	75	 
	10.11 HIGHLY COMPENSATED EMPLOYEE STATUS
	 	 	75	 
	10.12 SERVICE
	 	 	75	 
	10.13 REQUIRED MINIMUM DISTRIBUTIONS
	 	 	75	 

 

 

 

THE BON-TON STORES, INC. RETIREMENT CONTRIBUTION PLAN

THIS PLAN, hereby adopted this 21st day of April, 2010, by The Bon-Ton Stores, Inc. (herein
referred to as the “Employer”).

W I T N E S S E T H:

WHEREAS, the Employer heretofore established a Profit Sharing Plan effective August 1, 1986,
(hereinafter called the “Effective Date”) known as The Bon-Ton Stores, Inc. Retirement Contribution
Plan (herein referred to as the “Plan”) in recognition of the contribution made to its successful
operation by its Employees and for the exclusive benefit of its Eligible Employees; and

WHEREAS, under the terms of the Plan, the Employer has the ability to amend the Plan, provided
the Trustee joins in such amendment if the provisions of the Plan affecting the Trustee are
amended;

NOW, THEREFORE, effective January 1, 2010, except as otherwise provided herein, the Employer
in accordance with the provisions of the Plan pertaining to amendments thereof, hereby amends the
Plan in its entirety and restates the Plan to provide as follows:

ARTICLE I

DEFINITIONS

1.1 “Account” means any separate notational account established and maintained by the Administrator
for each Participant under the Plan. The term “Participant’s Account” or “Participant’s Account
Balance” generally means the sum of all Accounts being maintained for the Participant, which
represents the Participant’s total interest in the Plan. Section 6.8 contains a definition of
“Participant’s Account Balance” for purposes of that Section. To the extent applicable, a
Participant may have any (or all) of the following notational Accounts:

(a) the After-Tax Voluntary Contribution Account

(b) the Elective Deferral Account

(c) the Matching Contribution Account

(d) the Nonelective Contribution Account

(e) the Qualified Matching Contribution Account

(f) the Qualified Nonelective Contribution Account

(g) the Rollover Account

(h) the Transfer Account

(i) any other account, including an overlapping account, sub-account or any accounts set up due
to plan mergers or spinoffs necessary for the administration of the Plan

 

1

 

1.2 “ACP” means the actual contribution percentage that is equal to, for a specific group of
Participants (either Highly Compensated Employees or Nonhighly Compensated Employees) for a Plan
Year, the average of the ACRs (calculated separately for each Participant in such group). The ACP
for each group shall be calculated to the nearest one-hundredth of one percent.

For purposes of computing an ACP, a Participant is an Eligible Employee who is eligible to
have Matching Contributions or Qualified Matching Contributions made pursuant to Section 4.1(b)
(whether or not a deferral election was made or suspended pursuant to Section 4.2(e)) allocated to
such Participant’s Matching Contribution Account or Qualified Matching Contribution Account for a
“specific Plan Year”. In addition, if an Employee contribution is required as a condition of
participation in the Plan, any Employee who would be a Participant in the Plan if such Employee
made such a contribution shall be treated (for purposes of the ACP test) as an eligible Participant
on behalf of whom no Employee contributions are made. However, if a Participant has no 414(s)
Compensation for the Plan Year, then such Participant shall be disregarded for purposes of
calculating the ACP of a group.

For purposes of the above paragraph, the term “specific Plan Year” means, for Participants who
are Highly Compensated Employees, the Plan Year being tested. If the current year testing method is
being used, then the term “specific Plan Year” means, for Participants who are Nonhighly
Compensated Employees, the Plan Year being tested. If the prior year testing method is being used,
then the term “specific Plan Year” means, for Participants who are Nonhighly Compensated Employees,
the Plan Year prior to the Plan Year being tested.

1.3 “ACP Test” means the actual contribution percentage test determined pursuant to Section 4.7.

1.4 “ACR” means the actual contribution ratio of each Participant, that is a ratio (expressed as a
percentage) equal to (1) the Contribution Percentage Amounts of such Participant for such Plan
Year, to (2) such Participant’s 414(s) Compensation for such Plan Year.

For purposes of determining a Participant’s ACR, After-Tax Voluntary Contributions are
considered to have been made in the Plan Year in which contributed to the Plan. Matching
Contributions, Qualified Matching Contributions and Qualified Nonelective Contributions will be
considered made for a Plan Year if made no later than the end of the twelve (12) month period
beginning on the date after the close of the Plan Year.

The ACR for each Participant shall be calculated to the nearest one-hundredth of one percent.

1.5 “Act” means the Employee Retirement Income Security Act of 1974, as it may be amended from time
to time.

1.6 “Administrator” means the Employer unless another person or entity has been designated by the
Employer pursuant to Section 2.2 to administer the Plan on behalf of the Employer. “Administrator”
also includes any Qualified Termination Administrator (QTA) that has assumed the responsibilities
of the Administrator in accordance with guidelines set forth by the Department of Labor.

1.7 “ADP” means the actual deferral percentage that is equal to, for a specific group of
Participants (either Highly Compensated Employees or Nonhighly Compensated Employees) for a Plan
Year, the average of the ADRs (calculated separately for each Participant in such group). The ADP
for each group shall be calculated to the nearest one-hundredth of one percent.

For purposes of computing an ADP, a Participant is an Eligible Employee who is eligible to
make Elective Deferrals pursuant to Section 4.2 (whether or not a deferral election was made or
suspended pursuant to Section 4.2(e)) allocated to the Participant’s Elective Deferral Account for
a “specific Plan Year.” However, if a Participant has no 414(s) Compensation for the Plan Year,
then such Participant shall be disregarded for purposes of calculating the ADP of a group.

For purposes of the above paragraph, the term “specific Plan Year” means, for Participants who
are Highly Compensated Employees, the Plan Year being tested. If the current year testing method is
being used, then the term “specific Plan Year” means, for Participants who are Nonhighly
Compensated Employees, the Plan Year being tested. If the prior year testing method is being used,
then the term “specific Plan Year” means, for Participants who are Nonhighly Compensated Employees,
the Plan Year prior to the Plan Year being tested.

 

2

 

1.8 “ADP Test” means the actual deferral percentage test determined pursuant to Section 4.5.

1.9 “ADR” means the actual deferral ratio of each Participant, that is a ratio (expressed as a
percentage) equal to (1) the amount of Employer contributions actually paid over to the Plan on
behalf of such Participant for such Plan Year, to (2) such Participant’s 414(s) Compensation for
such Plan Year.

For purposes of this definition of ADR, Employer contributions actually paid over to the Plan
on behalf of any Participant shall include: (a) any Elective Deferrals (other than Catch-Up
Contributions) made pursuant to the Participant’s deferral election (including Excess Deferrals of
any Highly Compensated Employee), but excluding (1) Excess Deferrals of any Nonhighly Compensated
Employee that arise solely from Elective Deferrals made under this Plan or any other plans
maintained by the Employer, and (2) Elective Deferrals that are taken into account in the ACP Test
set forth in Section 4.7 (provided that the ADP Test is satisfied both with and without the
exclusion of these Elective Deferrals); and (b) at the election of the Employer, Qualified
Nonelective Contributions and Qualified Matching Contributions to the extent such contributions are
not used to satisfy the ACP Test.

For purposes of computing a Participant’s ADR, an Eligible Employee who would be a Participant
but for the failure to make Elective Deferrals shall be treated as a Participant on whose behalf no
Elective Deferrals are made.

The ADR for each Participant shall be calculated to the nearest one-hundredth of one percent.

1.10 “Affiliated Employer” means any corporation which is a member of a controlled group of
corporations (as defined in Code Section 414(b)) which includes the Employer; any trade or business
(whether or not incorporated) which is under common control (as defined in Code Section 414(c))
with the Employer; any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the Employer; and any
other entity required to be aggregated with the Employer pursuant to Regulations under Code
Section 414(o).

1.11 “After-Tax Voluntary Contribution” means any Employee contribution that is voluntarily made
to the Plan by the Participant pursuant to Section 4.13.

1.12 “After-Tax Voluntary Contribution Account” means the separate account established and
maintained by the Administrator for each Participant with respect to the Participant’s total
interest in the Plan resulting from After-Tax Voluntary Contributions, and gains and losses
attributable to those amounts. Amounts in the After-Tax Voluntary Contribution Account are
nonforfeitable when made and are distributable pursuant to the provisions of the Plan.

1.13 “Anniversary Date” means the last day of the Plan Year.

1.14 “Annual Additions” means, for purposes of applying the limitations of Code Section 415, the
sum credited to a Participant’s Accounts for any Limitation Year of (1) Employer contributions,
(2) Employee contributions, (3) forfeitures, (4) amounts allocated to an individual medical
account, as defined in Code Section 415(l)(2) which is part of a pension or annuity plan maintained
by the Employer, (5) amounts derived from contributions paid or accrued which are attributable to
post-retirement medical benefits allocated to the separate account of a key employee (as defined in
Code Section 419A(d)(3)) under a welfare benefit plan (as defined in Code Section 419(e))
maintained by the Employer and (6) allocations under a simplified employee pension plan.

Annual Additions do not include the transfers of funds from one plan to another. In addition,
the following are not Annual Additions for the purposes of this definition: (1) rollover
contributions as defined in Code Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3) and 457(e)(16);
(2) repayments of loans made to a Participant from the Plan; (3) repayment of distributions
received by an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayment of
distributions received by an Employee pursuant to Code Section 411(a)(3)(D) (mandatory
contributions); (5) Catch-Up Contributions and (6) employee
contributions to a simplified employee pension excludable from gross income under Code Section
408(k)(6).

 

3

 

1.15 “Beneficiary” means the person (or entity) to whom the share of a deceased Participant’s
interest in the Plan is payable. Section 6.8 contains a definition of “designated Beneficiary” for
purposes of that Section.

1.16 “Catch-Up Contribution” means, effective June 1, 2002, Elective Deferrals made to the Plan by
a Catch-Up Eligible Participant during any taxable year of such Participant that are in excess of:

(a) a statutory dollar limit on Elective Deferrals or Annual Additions as provided in Code
Sections 401(a)(30), 402(h), 403(b), 408, 415(c), or 457(b)(2) (without regard to Code
Section 457(b)(3)), as applicable;

(b) a Plan limit on Elective Deferrals which is not a limit provided in (a) above; or

(c) the limit imposed by the ADP Test under Code Section 401(k)(3), in which Excess
Contributions would otherwise be distributed pursuant to Section 4.6(b) to a Highly Compensated
Employee who is a Catch-Up Eligible Participant.

Catch-Up Contributions for a Participant for a Participant’s taxable year may not exceed the
dollar limit on Catch-Up Contributions under Code Section 414(v)(2)(B)(i) for the Participant’s
taxable year. The dollar limit on Catch-Up Contributions under 414(v)(2)(B)(i) is $1,000 for
taxable years beginning in 2002, increasing by $1,000 for each year thereafter up to $5,000 for
taxable years beginning in 2006 and later years. After 2006, the $5,000 limit will be adjusted by
the Secretary of the Treasury for cost-of-living increases under Code Section 414(v)(2)(C). Any
such adjustments will be in multiples of $500.

1.17 “Catch-Up Eligible Participant” means, effective June 1, 2002, a Participant who:

(a) is eligible to defer Compensation pursuant to Section 4.2; and

(b) will attain age 50 or over by the end of the Participant’s taxable year.

1.18 “Code” means the Internal Revenue Code of 1986, as amended or replaced from time to time.

1.19 “Compensation” means, with respect to any Participant and except as otherwise provided herein,
such Participant’s wages for the Plan Year (the “determination period”) within the meaning of Code
Section 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 location
of the employment or the services performed (such as the exception for agricultural labor in Code
Section 3401(a)(2)) (wages subject to Federal income tax withholding). Compensation for any
Self-Employed Individual shall be equal to such individual’s Earned Income.

For purposes of this Section, the determination of Compensation shall be made by:

(a) excluding (even if includible in gross income) reimbursements or other expense allowances,
fringe benefits (cash or noncash), moving expenses, deferred compensation, and welfare
benefits.

(b) including amounts which are contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the Participant under Code
Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and employee contributions
described in Code Section 414(h)(2) that are treated as Employer contributions. For this
purpose, effective January 1, 1998, amounts not includible in gross income under Code
Section 125 shall be deemed to include any amounts not available to a Participant in cash in
lieu of group health coverage because the Participant is unable to certify that the Participant
has other health coverage, provided 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.

 

4

 

(c) excluding pre-participation Compensation paid during the Plan Year while not a Participant
in the component of the Plan for which Compensation is being used.

(d) effective for Plan Years beginning in and after 2008 including Post-Severance Compensation.

(e) excluding post-severance bonuses.

(f) excluding income attributable to forgiveness of indebtedness, exercise of stock options,
expense reimbursements, the value of fringe benefits or perquisites, or similar items.

For Plan Years beginning on or after January 1, 2002, Compensation in excess of $200,000 (or
such other amount provided in the Code) shall be disregarded for all purposes other than for
purposes of salary deferral elections pursuant to Section 4.2. Such amount shall be adjusted for
increases in the cost-of-living in accordance with Code Section 401(a)(17)(B), except that the
dollar increase in effect on January 1 of any calendar year shall be effective for the Plan Year
beginning with or within such calendar year. For any “determination period” of less than twelve
(12) months, the Compensation limit shall be an amount equal to the Compensation limit for the
calendar year in which the “determination period” begins multiplied by the ratio obtained by
dividing the number of full months in the short “determination period” by twelve (12). A
“determination period” is not less than twelve (12) months solely because a Participant’s
Compensation does not include Compensation paid during a “determination period” while the
Participant was not a Participant in the Plan (or a component of the Plan).

If any Employees are excluded from the Plan (or from any component of the Plan), then
Compensation for any such Employees who become eligible or cease to be eligible to participate in
the Plan (or in the component of the Plan) during a Plan Year shall only include Compensation while
such Employees are Eligible Employees of the Plan (or of such component of the Plan).

For purposes of this Section, if the Plan is a plan described in Code Section 413(c) or 414(f)
(a plan maintained by more than one Employer), the limitation applies separately with respect to
the Compensation of any Participant from each Employer maintaining the Plan.

If, in connection with the adoption of any amendment, the definition of Compensation has been
modified, then, except as otherwise provided herein, for Plan Years prior to the Plan Year which
includes the adoption date of such amendment, Compensation means compensation determined pursuant
to the terms of the Plan then in effect.

1.20 “Contract” or “Policy” means any life insurance policy, retirement income policy or annuity
contract (group or individual) issued pursuant to the terms of the Plan. In the event of any
conflict between the terms of this Plan and the terms of any contract purchased hereunder, the Plan
provisions shall control.

1.21 “Contribution Percentage Amounts” means the sum of any Matching Contributions which are made
pursuant to Section 4.1(b); Qualified Matching Contributions (to the extent such Qualified Matching
Contributions are not used to satisfy the ADP Test) and Qualified Nonelective Contributions (to the
extent not used to satisfy the ADP Test), as well as any contributions authorized by (and to the
extent prescribed by) Section 4.8(g). In addition, Contribution Percentage Amounts may include
Elective Deferrals, provided the ADP Test is met before the Elective Deferrals are used in the ACP
Test and continues to be met following the exclusion of those Elective Deferrals that are used to
meet the ACP Test. However, Contribution Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct Excess Aggregate Contributions or due to Code
Section 401(a)(4) and the Regulations thereunder because the contributions to which they relate are
Excess Deferrals, Excess Contributions, or Excess Aggregate Contributions.

	1.22	 	“Custodian” means a person or entity that has custody of all or any portion of the Plan
assets.

 

5

 

1.23 “Designated Investment Alternative” means a specific investment identified by name by the
Employer (or such other Fiduciary who has been given the authority to select investment options) as
an available investment under the Plan to which Plan assets may be invested by the Trustee pursuant
to the investment direction of a Participant.

1.24 “Directed Account” means that portion of a Participant’s interest in the Plan with respect to
which the Participant has directed the investment in accordance with the Participant Direction
Procedures.

1.25 “Directed Investment Option” means a Designated Investment Alternative and any other
investment permitted by the Plan and the Participant Direction Procedures to which Plan assets may
be invested by the Trustee pursuant to the investment direction of a Participant.

1.26 “Disability” means a medically determinable physical or mental impairment of a permanent
nature which prevents a participant from performing his customary employment duties without
endangering his health. Disability will be determined by the Administrator, in its absolute
discretion, on the basis of such medical evidence as the Administrator deems necessary or
desirable.

1.27 “Early Retirement Date” means the first day of the month (prior to the Normal Retirement Date)
coinciding with or next following the date on which a Participant attains age 55.

A Participant who separates from service before satisfying the age requirement for Early
Retirement Age and who thereafter reaches the age requirement contained herein shall be entitled to
receive benefits under this Plan (other than any accelerated vesting and allocations of Employer
contributions) as though the requirements for “early retirement age” had been satisfied.

1.28 “Earned Income” means with respect to a Self-Employed Individual, the net earnings from
self-employment in the trade or business with respect to which the Plan is established, for which
the personal services of the individual are a material income-producing factor. Net earnings will
be determined without regard to items not included in gross income and the deductions allocable to
such items. Net earnings are reduced by contributions by the Self-Employed Individual to a
qualified Plan to the extent deductible under Code Section 404. In addition, net earnings shall be
determined with regard to the deduction allowed to the Self-Employed Individual by Code
Section 164(f).

If any combination of bonuses, commissions, tips, overtime, moving expenses, fringe benefits,
or any other element of compensation is excluded from Compensation for the purpose of determining
any contribution, then for the purpose of determining the amount of such contribution on behalf of
any Self-Employed Individual, such person’s Earned Income will be reduced in the same proportion
that the “includible compensation” of “common law participants” bears to the “total compensation”
of all “common law participants.”

For purposes of the preceding paragraph, “common law participant” means a Participant who is
neither a Highly Compensated Employee nor a Self-Employed Individual, “includible compensation”
means the amount of Compensation taken into account in determining the amount of such contribution
for “common law participants,” and “total compensation” means the amount of Compensation that would
have been taken into account in determining such contribution for “common law participants” if (1)
no element of Compensation had been excluded in determining such contribution, and (2) all of the
following are included in Compensation: any amount which is contributed by the Employer at the
election of the Participant pursuant to a salary reduction agreement and which is not includible in
the gross income of the Participant by reason of Code Sections 125, 132(f)(4), 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and employee contributions described in Code Section 414(h)(2) that
are treated as Employer contributions.

However, to the extent that the amount of “includible compensation” for “common law
participants” includes any amount which is contributed by the Employer at the election of the
Participant pursuant to a salary reduction agreement and which is not includible in the gross
income of the Participant by reason of Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B),
403(b) or 457(b), and employee contributions
described in Code Section 414(h)(2) that are treated as Employer contributions, then those
amounts shall be added back to Earned Income after making the adjustment described in the preceding
paragraph.

 

6

 

1.29 “Elective Deferral” means any Employer contributions made to the Plan at the election of the
Participant in lieu of cash Compensation pursuant to Section 4.2. With respect to any taxable year,
a Participant’s Elective Deferrals is the sum of all employer contributions made on behalf of such
Participant pursuant to an election to defer under any qualified cash or deferred arrangement
(“CODA”) described in Code Section 401(k), any salary reduction simplified employee pension
described in Code Section 408(k)(6), any SIMPLE IRA plan described in Code Section 408(p) and any
plan described under Code Section 501(c)(18), and any employer contributions made on the behalf of
a Participant for the purchase of an annuity contract under Code Section 403(b) pursuant to a
salary reduction agreement. Elective Deferrals shall not include any deferrals properly distributed
as excess Annual Additions pursuant to Section 4.10(a).

1.30 “Elective Deferral Account” means the separate account established and maintained by the
Administrator for each Participant with respect to the Participant’s total interest in the Plan
resulting from Elective Deferrals. Amounts in the Elective Deferral Account are nonforfeitable when
made and are subject to the distribution restrictions of Section 4.2(d).

1.31 “Eligible Employee” means any Employee, except as provided below, and except as provided in
any other particular provision for the limited purposes of that provision (e.g., ADP test). The
following Employees shall not be eligible to participate in this Plan:

(a) Employees of Affiliated Employers, unless such Affiliated Employers have specifically
adopted this Plan in writing.

(b) An individual shall not be an Eligible Employee if such individual is not reported on the
payroll records of the Employer as a common law employee. In particular, it is expressly
intended that individuals not treated as common law employees by the Employer on its payroll
records and out-sourced workers, are neither Employees nor Eligible Employees, and are excluded
from Plan participation even if a court or administrative agency determines that such
individuals are common law employees and not independent contractors. However, this paragraph
shall not apply to partners or other Self-Employed Individuals unless the Employer treats them
as independent contractors.

(c) Unless or until otherwise provided, Employees who became Employees as the result of a “Code
Section 410(b)(6)(C) transaction” will not be Eligible Employees until the expiration of the
transition period beginning on the date of the transaction and ending on the last day of the
first Plan Year beginning after the date of the transaction. A Code Section 410(b)(6)(C)
transaction is an asset or stock acquisition, merger, or similar transaction involving a change
in the Employer of the Employees of a trade or business that is subject to the special rules
set forth in Code Section 410(b)(6)(C).

(d) Employees who are Leased Employees.

(e) Employees whose employment is governed by the terms of a collective bargaining agreement
between Employee representatives (within the meaning of Code Section 7701(a)(46)) and the
Employer under which retirement benefits were the subject of good faith bargaining between the
parties, unless such agreement expressly provides for coverage in this Plan.

(f) Employees who are nonresident aliens (within the meaning of Code Section 7701(b)(1)(B)) and
who receive no earned income (within the meaning of Code Section 911(d)(2)) from the Employer
which constitutes income from sources within the United States (within the meaning of Code
Section 861(a)(3)).

1.32 “Employee” means any common law employee, Self-Employed Individual, Leased Employee or other
person to the extent that the Code treats such an individual as an employee of the Employer for
purposes of the Plan, such as (for certain purposes) any person who is employed by an Affiliated
Employer.

 

7

 

1.33 “Employer” means The Bon-Ton Stores, Inc. and any successor which shall maintain this Plan;
and any predecessor which has maintained this Plan. The Employer is a corporation, with principal
offices in the Commonwealth of Pennsylvania. In addition, where appropriate, the term Employer
shall include any Participating Employer.

1.34 “Excess Aggregate Contributions” means, with respect to any Plan Year, the excess of:

(a) The aggregate Contribution Percentage Amounts actually made on behalf of Participants who
are Highly Compensated Employees for such Plan Year and taken into account in computing the
numerator of the ACR, over

(b) The maximum Contribution Percentage Amounts permitted by the ACP Test of Section 4.7(a)
(determined by hypothetically reducing contributions made on behalf of Participants who are
Highly Compensated Employees in order of their ACRs beginning with the highest of such ACRs).

Such determination shall be made after first taking into account corrections of any Excess
Deferrals pursuant to Section 4.2 and then taking into account any adjustments of any Excess
Contributions pursuant to Section 4.6.

1.35 “Excess Compensation” with respect to any Participant means the Participant’s Compensation
which is in excess of the “integration level,” which shall be 40% of the Taxable Wage Base. For any
determination period of less than twelve (12) months, the “integration level” shall be reduced by a
fraction, the numerator of which is the number of full months in the short year and the denominator
of which is twelve (12). A determination period is not less than twelve (12) months solely because
a Participant’s Compensation does not include Compensation paid during a determination period while
the Participant was not a Participant in this component of the Plan.

1.36 “Excess Contributions” means, with respect to a Plan Year, the excess of Elective Deferrals
made on behalf of Participants who are Highly Compensated Employees for the Plan Year over the
maximum amount of such contributions permitted under Section 4.5(a) (determined by hypothetically
reducing contributions made on behalf of Participants who are Highly Compensated Employees in order
of the ADRs beginning with the highest of such ADRs). Excess Contributions shall be treated as an
Annual Addition pursuant to Section 1.14.

1.37 “Excess Deferrals” shall mean those Elective Deferrals of a Participant that either (1) are
made during the Participant’s taxable year and which exceed the dollar limitation under Code
Section 402(g) (including, if applicable, the dollar limitation on Catch-Up Contributions defined
in Code Section 414(v)) for such year; or (2) are made during a calendar year and exceed the dollar
limitation under Code Section 402(g) (including, if applicable, the dollar limitation on Catch-Up
Contributions defined in Code Section 414(v)) for the Participant’s taxable year beginning in such
calendar year, counting only Elective Deferrals made under this Plan and any other plan, contract
or arrangement maintained by the Employer.

1.38 “Fiduciary” means any person who (a) exercises any discretionary authority or discretionary
control respecting management of the Plan or exercises any authority or control respecting
management or disposition of its assets, (b) renders investment advice for a fee or other
compensation, direct or indirect, with respect to any monies or other property of the Plan or has
any authority or responsibility to do so, or (c) has any discretionary authority or discretionary
responsibility in the administration of the Plan.

1.39 “Fiscal Year” means the Employer’s accounting year based upon a fifty-two (52) to fifty-three
(53) week accounting year ending on the Saturday nearest January 31 of each year and commencing on
the next day thereafter.

 

8

 

1.40 “Forfeiture” means that portion of a Participant’s Account that is not Vested, and which
becomes a Forfeiture at the time described below:

The earlier of:

(a) the distribution of the entire Vested portion of the Participant’s Account of a Participant
who has severed employment with the Employer. For purposes of this provision, if the
Participant has a Vested benefit of zero (determined without regard to the Participant’s
Qualified Voluntary Employee Contribution Account or Rollover Account), then such Participant
shall be deemed to have received a distribution of such Vested benefit as of the date on which
the severance of employment occurs, or

(b) the last day of the Plan Year in which a Participant who has severed employment with the
Employer incurs five (5) consecutive 1-Year Breaks in Service.

In addition, the term “Forfeiture” shall also include amounts deemed to be Forfeitures
pursuant to any other provisions of this Plan.

Regardless of the preceding provisions, if a Participant is eligible to share in the
allocation of Forfeitures in the year in which the Forfeiture would otherwise occur, then the
Forfeiture will not occur until the end of the subsequent Plan Year.

For purposes of this Plan, any Forfeiture will be disposed of by the Plan Year following the
Plan Year in which the Forfeiture arises.

1.41 “Former Employee” means an Employee who had a severance from employment with the Employer or
an Affiliated Employer.

1.42 “415 Compensation” with respect to any Participant means such Participant’s wages for the Plan
Year within the meaning of Code Section 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 location of the employment or the services performed (such as the exception
for agricultural labor in Code Section 3401(a)(2)). 415 Compensation for any Self-Employed
Individual shall be equal to such individual’s Earned Income.

Notwithstanding the above, the determination of 415 Compensation shall be made by:

(a) including any Elective Deferrals, and any amount which is contributed by the Employer at
the election of the Participant pursuant to a salary reduction agreement and which is not
includible in the gross income of the Participant by reason of Code Sections 125, 132(f)(4),
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions. For this purpose, effective
January 1, 1998, amounts not includible in gross income under Code Section 125 shall be deemed
to include any amounts not available to a Participant in cash in lieu of group health coverage
because the Participant is unable to certify that the Participant has other health coverage,
provided 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.

(b) effective for Limitation Years and Plan Years beginning in and after 2008, including
Post-Severance Compensation.

1.43 “414(s) Compensation” means 415 Compensation or any other definition of compensation that
satisfies the nondiscrimination requirements of Code Section 414(s) and the Regulations thereunder.
The period for determining 414(s) Compensation must be either the Plan Year or the calendar year
ending with or within the Plan Year. An Employer may further limit the period taken into account to
that part of the Plan Year or calendar year in which an Employee was a Participant in the component
of the Plan being tested. The period used to determine 414(s) Compensation must be applied
uniformly to all Participants for the Plan Year.

 

9

 

1.44 “Highly Compensated Employee” means an Employee described in Code Section 414(q) and the
Regulations thereunder, and generally means any Employee who:

(a) was a “five percent owner” as defined in Section 1.49(b) at any time during the
“determination year” or the “look-back year”; or

(b) for the “look-back year” had 415 Compensation from the Employer in excess of $80,000 and
was in the Top-Paid Group for the “look-back year.” The $80,000 amount is adjusted at the same
time and in the same manner as under Code Section 415(d), except that the base period is the
calendar quarter ending September 30, 1996.

The “determination year” means the Plan Year for which testing is being performed, and the
“look-back year” means the immediately preceding twelve (12) month period.

In determining who is a Highly Compensated Employee, Employees who are nonresident aliens and
who received no earned income (within the meaning of Code Section 911(d)(2)) from the Employer
constituting United States source income within the meaning of Code Section 861(a)(3) shall not be
treated as Employees. If an Employee who is a nonresident alien has U.S. source income, that
Employee is treated as satisfying this definition if all of such Employee’s U.S. source income from
the Employer is exempt from U.S. income tax under an applicable income tax treaty. Additionally,
all Affiliated Employers shall be taken into account as a single employer and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless
such Leased Employees are covered by a plan described in Code Section 414(n)(5) and are not covered
in any qualified plan maintained by the Employer. The exclusion of Leased Employees for this
purpose shall be applied on a uniform and consistent basis for all of the Employer’s retirement
plans. Highly Compensated Former Employees shall be treated as Highly Compensated Employees without
regard to whether they performed services during the “determination year.”

1.45 “Highly Compensated Participant” means, for a particular Plan Year, a Participant who meets
the definition of a Highly Compensated Employee in effect for that Plan Year.

1.46 “Hour of Service” means (1) each hour for which an Employee is directly or indirectly
compensated or entitled to Compensation by the Employer for the performance of duties (these hours
will be credited to the Employee for the computation period in which the duties are performed);
(2) each hour for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment relationship has terminated)
for reasons other than performance of duties (such as vacation, holidays, sickness, jury duty,
disability, lay-off, military duty or leave of absence) during the applicable computation period
(these hours will be calculated and credited pursuant to Department of Labor
regulation 2530.200b-2, which is incorporated herein by reference); (3) each hour for which back
pay is awarded or agreed to by the Employer without regard to mitigation of damages (these hours
will be credited to the Employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the award, agreement or payment is
made). The same Hours of Service shall not be credited both under (1) or (2), as the case may be,
and under (3).

Notwithstanding (2) above, (i) no more than 501 Hours of Service are required to be credited
to an Employee on account of any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii) an hour for which
an Employee is directly or indirectly paid, or entitled to payment, on account of a period during
which no duties are performed is not required to be credited to the Employee if such payment is
made or due under a plan maintained solely for the purpose of complying with applicable worker’s
compensation, or unemployment compensation or disability insurance laws; and (iii) Hours of Service
are not required to be credited for a payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.

 

10

 

For purposes of (2) above, a payment shall be deemed to be made by or due from the Employer
regardless of whether such payment is made by or due from the Employer directly, or indirectly
through, among others, a trust fund, or insurer, to which the Employer contributes or pays premiums and
regardless of whether contributions made or due to the trust fund, insurer, or other entity are for
the benefit of particular Employees or are on behalf of a group of Employees in the aggregate.

Each Employee shall be credited with such Employee’s actual Hours of Service.

For purposes of this Section, Hours of Service will be credited for employment with any
Affiliated Employers. The provisions of Department of Labor regulations 2530.200b-2(b) and (c) are
incorporated herein by reference.

1.47 “Income” means the gains or losses for the “applicable computation period” allocable to an
“excess amount”, which amount shall be determined and allocated, at the discretion of the
Administrator, using any of the methods set forth below:

(a) Method of allocating Income. The Administrator may use any reasonable method for computing
the Income allocable to an “excess amount” for the “applicable computation period,” provided
that the method is used consistently for all Participants and for all corrective distributions
under the Plan for the “applicable computation period,” and is used by the Plan for allocating
earnings to a Participant’s “specific account(s).”

(b) Alternative method of allocating Income. The Administrator may allocate Income to an
“excess amount” for the “applicable computation period” by multiplying the earnings for the
“applicable computation period” allocable to the “Employer contributions” taken into account
under the test or limitation giving rise to such “excess amount” by a fraction, the numerator
of which is the “excess amount” for the Employee for the “applicable computation period,” and
the denominator of which is the sum of:

(1) The “specific account(s)” balance(s) taken into account under the test or limitation
giving rise to such “excess amount” as of the beginning of the “applicable computation
period,” and

(2) Any additional amount of such “Employer contributions” made for the “applicable
computation period” to the “specific account(s).”

(c) For purposes of calculating the Income attributable to Excess Deferrals of Section 4.2(g),
the terms “applicable computation period”, “Employer contributions”, “excess amount”, and
“specific account(s)” will have the following substitutions:

(1) The taxable year of the Participant shall be substituted for the “applicable
computation period”;

(2) Elective Deferrals shall be substituted for “Employer contributions”;

(3) Excess Deferrals shall be substituted for “excess amount”; and

(4) The Elective Deferral Account shall be substituted for the “specific account(s).”

(d) For purposes of calculating the Income attributable to Excess Contributions of
Section 4.6(b), the terms “applicable computation period”, “Employer contributions”, “excess
amount”, and “specific account(s)” will have the following substitutions:

(1) The Plan Year shall be substituted for the “applicable computation period”;

(2) Elective Deferrals, and other contributions included in determining the ADR under
Section 1.9, shall be substituted for “Employer contributions”;

(3) Excess Contributions shall be substituted for “excess amount”;

(4) The Elective Deferral Account, and, if included in the determination of the ADR under
Section 1.9, the Qualified Matching Contribution and/or the Qualified Nonelective
Contribution Account(s), shall be substituted for the “specific account(s).”

 

11

 

(e) For purposes of calculating the Income attributable to Excess Aggregate Contributions of
Section 4.8(b), the terms “applicable computation period”, “Employer contributions”, “excess
amount”, and “specific account(s)” will have the following substitutions:

(1) The Plan Year shall be substituted for the “applicable computation period”;

(2) Any Matching Contributions which are made pursuant to Section 4.1(b); Qualified
Matching Contributions (to the extent such Qualified Matching Contributions are not used to
satisfy the ADP Test) and Qualified Nonelective Contributions (to the extent not used to
satisfy the ADP Test) shall be substituted for “Employer contributions.” Elective Deferrals
may be included in the substitution listed above, provided the ADP Test is met before the
Elective Deferrals are used in the ACP Test and continues to be met following the exclusion
of those Elective Deferrals that are used to meet the ACP Test. However, Matching
Contributions that are forfeited either to correct Excess Aggregate Contributions or due to
Code Section 401(a)(4) and the Regulations thereunder because the contributions to which
they relate are Excess Deferrals, Excess Contributions, or Excess Aggregate Contributions
shall not be included in the substitution listed above.

(3) Excess Aggregate Contributions shall be substituted for “excess amount”;

(4) The Matching Contribution Account, Qualified Matching Contribution Account and
Qualified Nonelective Contribution Account shall be substituted for the “specific
account(s).”

(f) With respect to Excess Contributions and Excess Aggregate Contributions, effective
beginning with the first Plan Year beginning in 2006, Income for the period between the end of
the Plan Year and the date of the distribution (the “gap period”) is required to be
distributed. A Plan will not fail to use a reasonable method for computing the Income that is
allocable to Excess Contributions and Excess Aggregate Contributions merely because the Income
allocable to Excess Contributions and Excess Aggregate Contributions is determined on a date
that is no more than 7 days before the distribution. Income for the “gap period” shall be
calculated by using any of the methods set forth below:

(1) Safe harbor method of allocating “gap period” income. The Administrator may use the
safe harbor method in this paragraph to determine the Income on Excess Contributions and
Excess Aggregate Contributions for the “gap period.” Under this safe harbor method, Income
on Excess Contributions and Excess Aggregate Contributions for the “gap period” is equal to
10% of the Income allocable to Excess Contributions and Excess Aggregate Contributions for
the Plan Year that would be determined under paragraph (b) above (with the appropriate
substitutions of paragraph (d) and paragraph (e)), multiplied by the number of calendar
months that have elapsed since the end of the Plan Year. For purposes of calculating the
number of calendar months that have elapsed under this safe harbor method, a corrective
distribution that is made on or before the fifteenth day of a month is treated as made on
the last day of the preceding month and a distribution made after the fifteenth day of a
month is treated as made on the last day of the month.

(2) Alternative method for allocating Plan Year and “gap period” income. The Administrator
may determine the allocable Income for the aggregate of the Plan Year and the “gap period”
by applying the alternative method provided by paragraph (b) above with respect to the
entire period represented by the Plan Year and the “gap period”, rather than just the Plan
Year.

1.48 “Investment Manager” means any Fiduciary described in Act Section 3(38).

 

12

 

1.49 “Key Employee” means, for Plan Years beginning after December 31, 2001, an Employee as defined
in Code Section 416(i) and the Regulations thereunder. Generally, any Employee or Former
Employee (as well as each of the Employee’s or Former Employee’s Beneficiaries) is considered a Key
Employee if the Employee or Former Employee, at any time during the Plan Year that contains the
“determination date” is described in one of the following categories:

(a) an officer of the Employer (as that term is defined within the meaning of the Regulations
under Code Section 416) having annual 415 Compensation greater than $130,000 (as adjusted under
Code Section 416(i)(1) for Plan Years beginning after December 31, 2002).

(b) a “five percent owner” of the Employer. “Five percent owner” means any person who owns (or
is considered as owning within the meaning of Code Section 318) more than five percent (5%) of
the outstanding stock of the Employer or stock possessing more than five percent (5%) of the
total combined voting power of all stock of the Employer or, in the case of an unincorporated
business, any person who owns more than five percent (5%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o) shall be treated as separate employers.

(c) a “one percent owner” of the Employer having an annual 415 Compensation from the Employer
of more than $150,000. “One percent owner” means any person who owns (or is considered as
owning within the meaning of Code Section 318) more than one percent (1%) of the outstanding
stock of the Employer or stock possessing more than one percent (1%) of the total combined
voting power of all stock of the Employer or, in the case of an unincorporated business, any
person who owns more than one percent (1%) of the capital or profits interest in the Employer.
In determining percentage ownership hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be treated as separate employers. However,
in determining whether an individual has 415 Compensation of more than $150,000, 415
Compensation from each employer required to be aggregated under Code Sections 414(b), (c), (m)
and (o) shall be taken into account.

In determining percentage ownership hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be treated as separate employers. In determining
whether an individual has 415 Compensation of more than $150,000, 415 Compensation from each
employer required to be aggregated under Code Sections 414(b), (c), (m) and (o) shall be taken into
account.

1.50 “Late Retirement Date” means a Participant’s actual Retirement Date after having reached
Normal Retirement Date.

1.51 “Leased Employee” means any person (other than an Employee of the recipient Employer) who,
pursuant to an agreement between the recipient Employer and any other person or entity (“leasing
organization”), has performed services for the recipient (or for the recipient and related persons
determined in accordance with Code Section 414(n)(6)) on a substantially full time basis for a
period of at least one year, and such services are performed under primary direction or control by
the recipient Employer. Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the recipient Employer shall be
treated as provided by the recipient Employer. Furthermore, Compensation for a Leased Employee
shall only include Compensation from the leasing organization that is attributable to services
performed for the recipient Employer.

A Leased Employee shall not be considered an employee of the recipient Employer if: (a) such
employee is covered by a money purchase pension plan providing: (1) a non-integrated employer
contribution rate of at least ten percent (10%) of compensation, as defined in Code
Section 415(c)(3), (2) immediate participation, and (3) full and immediate vesting; and (b) leased
employees do not constitute more than twenty percent (20%) of the recipient Employer’s nonhighly
compensated work force.

1.52 “Limitation Year” means the Plan Year. However, the Employer may elect a different Limitation
Year by amending the Plan. All qualified plans maintained by the Employer must use the same
Limitation Year. Furthermore, unless there is a change to a new Limitation Year, the Limitation
Year will be a twelve (12) consecutive month period. In the case of an initial Limitation Year, the
Limitation Year will be the twelve (12) consecutive month period ending on the last day of the
initial Plan Year. If the Limitation Year
is amended to a different twelve (12) consecutive month period, the new Limitation Year must begin
on a date within the Limitation Year in which the amendment is made.

 

13

 

1.53 “Matching Contribution” means any Employer contribution (including a contribution made at the
Employer’s discretion) to the Plan on account of a Participant’s Elective Deferrals.

1.54 “Matching Contribution Account” means the separate account established and maintained by the
Administrator for each Participant with respect to the Participant’s total interest in the Plan
resulting from Matching Contributions. However, if Matching Contributions are Qualified Matching
Contributions, then such Qualified Matching Contributions shall be allocated to the Qualified
Matching Contribution Account.

1.55 “Nonelective Contribution” means any Employer contribution (including a contribution made at
the Employer’s discretion) to the Plan, other than a Participant’s Elective Deferrals, Matching
Contributions, Qualified Matching Contributions and Qualified Nonelective Contributions.

1.56 “Nonelective Contribution Account” means the separate account established and maintained by
the Administrator for each Participant with respect to the Participant’s total interest in the Plan
resulting from Nonelective Contributions.

1.57 “Nonhighly Compensated Employee/Participant” means any Employee who is not a Highly
Compensated Employee. However, for purposes of Section 4.5(a) and Section 4.7(a), if the prior year
testing method is used, a Nonhighly Compensated Employee shall be determined using the definition
of Highly Compensated Employee in effect for the preceding Plan Year. A Nonhighly Compensated
Participant is a Participant who is not a Highly Compensated Employee.

A Participant is a Nonhighly Compensated Participant for a particular Plan Year if such
Participant does not meet the definition of a Highly Compensated Employee in effect for that Plan
Year.

1.58 “Non-Key Employee” means any Employee or Former Employee (and such Employee’s or Former
Employee’s Beneficiaries) who is not a Key Employee.

1.59 “Normal Retirement Age” means the Participant’s 65 birthday. A Participant shall become fully
Vested in the Participant’s Account upon attaining Normal Retirement Age (if the Participant is
still employed by the Employer on or after that date).

1.60 “Normal Retirement Date” means the date a Participant attains Normal Retirement Age.

1.61 “1-Year Break in Service” means the applicable computation period during which an Employee has
not completed more than 500 Hours of Service with the Employer. Further, solely for the purpose of
determining whether a Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for “authorized leaves of absence” and “maternity and paternity leaves of absence.”
Years of Service and 1-Year Breaks in Service shall be measured on the same computation period.

For purposes of this definition, “authorized leave of absence” means an unpaid, temporary
cessation from active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.

Furthermore, for purposes of this definition, “maternity and paternity leave of absence” means
an absence from work for any period by reason of the Employee’s pregnancy, birth of the Employee’s
child, placement of a child with the Employee in connection with the adoption of such child, or any
absence for the purpose of caring for such child for a period immediately following such birth or
placement. For this purpose, Hours of Service shall be credited for the computation period in which
the absence from work begins, only if credit therefore is necessary to prevent the Employee from
incurring a 1-Year Break in Service, or, in any other case, in the immediately following
computation period. The Hours of Service credited for “maternity and paternity leaves of absence”
shall be those which would normally have been credited but for such absence, or, in any case in
which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of Service required to
be credited for “maternity and paternity leaves of absence” shall not exceed the number of Hours of
Service needed to prevent the Employee from incurring a 1-Year Break in Service.

 

14

 

1.62 “Owner-Employee” means a sole proprietor who owns the entire interest in the Employer or a
partner (or member in the case of a limited liability company treated as a partnership or sole
proprietorship for federal income tax purposes) who owns more than 10% of either the capital
interest or the profits interest in the Employer and who receives income for personal services from
the Employer.

1.63 “Participant” means any Employee or Former Employee who has satisfied the requirements of
Sections 3.1 and 3.2 and entered the Plan and is eligible to accrue benefits under the Plan. In
addition, the term “Participant” also includes any individual who was a Participant (as defined in
the preceding sentence) and who must continue to be taken into account under a particular provision
of the Plan (e.g., because the Participant has an Account Balance in the Plan).

1.64 “Participant Direction Procedures” means such instructions, guidelines or policies, the terms
of which are incorporated herein, as shall be established pursuant to Section 4.14 and observed by
the Administrator and applied and provided to Participants who have Participant Directed Accounts.

1.65 “Participating Employer” means an Employer who adopts the Plan pursuant to Section 10.1.

1.66 “Plan” means this instrument, including all amendments thereto.

1.67 “Plan Year” means the Plan’s accounting year of twelve (12) months commencing on January 1 of
each year and ending the following December 31.

1.68 “Post-Severance Compensation” means payments made within 2 1/2 months after severance from
employment (within the meaning of Code Section 401(k)(2)(B)(i)(I)) if they are payments that,
absent a severance from employment, would have been paid to the Employee while the Employee
continued in employment with the Employer and are regular compensation for services during the
Employee’s regular working hours, compensation for services outside the Employee’s regular working
hours (such as overtime or shift differential), commissions, bonuses, or other similar
compensation, and payments for accrued bona fide sick, vacation or other leave, but only if the
Employee would have been able to use the leave if employment had continued. Any payments not
described above are not considered compensation if paid after severance from employment, even if
they are paid within 2 1/2 months following severance from employment, except for payments to an
individual who does not currently perform services for the Employer by reason of qualified military
service (within the meaning of Code Section 414(u)(1)) to the extent these payments do not exceed
the amounts the individual would have received if the individual had continued to perform services
for the Employer rather than entering qualified military service.

1.69 “Qualified Matching Contribution” means any Employer contribution (including a contribution
made at the Employer’s discretion) to the Plan on account of a Participant’s Elective Deferrals
that are designated as such pursuant to Section 4.6.

1.70 “Qualified Matching Contribution Account” means the separate account established and
maintained by the Administrator for each Participant with respect to the Participant’s total
interest in the Plan resulting from Qualified Matching Contributions. Amounts in the Qualified
Matching Contribution Account are nonforfeitable when made and are subject to the distribution
restrictions of Section 4.2(d).

1.71 “Qualified Nonelective Contribution” means any Employer contributions to the Plan that are
designated as such pursuant to Sections 4.1(c) and 4.6 or any other provision of the Plan.
Qualified Nonelective Contributions may be used to satisfy the ADP Test or the ACP Test. All such
contributions shall be allocated to the Qualified Nonelective Contribution Account, and shall be
fully vested and subject to the restrictions on distributions from that Account.

 

15

 

1.72 “Qualified Nonelective Contribution Account” means the separate account established and
maintained by the Administrator for each Participant with respect to the Participant’s total
interest in the Plan resulting from Qualified Nonelective Contributions. Amounts in the Qualified
Nonelective Contribution Account are nonforfeitable when made and are subject to the distribution
restrictions of Section 4.2(d).

1.73 “Regulation” means the Income Tax Regulations as promulgated by the Secretary of the Treasury
or a delegate of the Secretary of the Treasury, and as amended from time to time.

1.74 “Retirement Date” means the date as of which a Participant retires for reasons other than
Disability, whether such retirement occurs on a Participant’s Normal Retirement Date, Early or Late
Retirement Date.

1.75 “Rollover Account” means the separate account established and maintained by the Administrator
for each Participant with respect to such Participant’s interest in the Plan resulting from amounts
that are rolled over from another plan or Individual Retirement Account in accordance with
Section 4.12. Amounts in the Rollover Account are nonforfeitable when made.

A separate accounting shall be maintained with respect to any portion of the Rollover Account
that is attributable to voluntary after-tax employee contributions.

1.76 “Self-Employed Individual” means an individual, other than an independent contractor, who has
Earned Income for the taxable year from the trade or business for which the Plan is established,
and, also, an individual who would have had Earned Income but for the fact that the trade or
business had no net profits for the taxable year. A Self-Employed Individual shall be treated as an
Employee.

1.77 “Shareholder-Employee” means a Participant who owns more than five percent (5%) of the
Employer’s outstanding capital stock during any year in which the Employer elected to be taxed as a
Small Business Corporation under the applicable Code Section.

1.78 “Taxable Wage Base” means, with respect to any Plan Year, the contribution and benefit base in
effect under Section 230 of the Social Security Act at the beginning of the Plan Year.

1.79 “Terminated Participant” means a person who has been a Participant, but whose employment has
been terminated other than by death, Disability or retirement.

1.80 “Top-Heavy Plan” means a plan described in Section 8.1(a).

1.81 “Top-Heavy Plan Year” means a Plan Year during which the Plan is a Top-Heavy Plan.

1.82 “Top-Paid Group” means the top-paid group as determined pursuant to Code Section 414(q) and
the Regulations thereunder and generally means the top twenty percent (20%) of Employees who
performed services for the Employer during the applicable year, ranked according to the amount of
415 Compensation received from the Employer during such year. All Affiliated Employers shall be
taken into account as a single employer, and Leased Employees shall be treated as Employees if
required pursuant to Code Section 414(n) or (o). Employees who are nonresident aliens who received
no earned income (within the meaning of Code Section 911(d)(2)) from the Employer constituting
United States source income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Furthermore, for the purpose of determining the number of Employees in any year, the
following additional Employees may also be excluded, however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top-Paid Group:

(a) Employees with less than six (6) months of service;

(b) Employees who normally work less than 17 1/2 hours per week;

(c) Employees who normally work less than six (6) months during a year; and

(d) Employees who have not yet attained age twenty-one (21).

 

16

 

In addition, if ninety percent (90%) or more of the Employees of the Employer are covered
under agreements the Secretary of Labor finds to be collective bargaining agreements between
Employee representatives and the Employer, and the Plan covers only Employees who are not covered
under such agreements, then Employees covered by such agreements shall be excluded from both the
total number of active Employees as well as from the identification of particular Employees in the
Top-Paid Group.

The foregoing exclusions set forth in this Section shall be applied on a uniform and
consistent basis for all purposes for which the Code Section 414(q) definition is applicable.
Furthermore, in applying such exclusions, the Employer may substitute any lesser service, hours or
age.

1.83 “Total Vested Benefit” means the total Participant’s Vested Account balances derived from
Employer and Employee contributions, including rollover contributions, whether Vested before or
upon death.

1.84 “Transfer Account” means the separate account established and maintained by the Administrator
for each Participant with respect to the Participant’s total interest in the Plan resulting from
amounts transferred to this Plan from a direct plan-to-plan transfer in accordance with
Section 4.11. To the extent that the Plan is a direct or indirect transferee of a defined benefit
or defined contribution pension plan, then the funds transferred to this Plan from such other plan
shall be treated as funds that are subject to a life annuity form of payment as well as the
survivor annuity requirements of Code Sections 401(a)(11) and 417 (and are part of the
Participant’s Pre-Retirement Survivor Annuity Account). The preceding sentence does not apply to
amounts rolled over into a Participant’s Rollover Account, even if from a pension plan.

1.85 “Trustee” means the person or entity named as trustee herein or in any separate trust forming
a part of this Plan, and any successors, effective upon the written acceptance of such person or
entity to serve as Trustee.

1.86 “Trust Fund” means the assets of the Plan and Trust as the same shall exist from time to time.

1.87 “Valuation Date” means the Anniversary Date and may include any other date or dates deemed
necessary or appropriate by the Administrator for the valuation of the Participants’ Accounts
during the Plan Year, which may include any day that the Trustee, any transfer agent appointed by
the Trustee or the Employer or any stock exchange used by such agent, is open for business. Nothing
in this Plan requires or implies a uniform Valuation Date for all Accounts; thus certain valuation
provisions that apply to an Account that is not valued on each business day will have no
application, in operation, to an Account that is valued on each business day.

1.88 “Vested” means the nonforfeitable portion of any account maintained on behalf of a
Participant.

1.89 “Year of Service” means the computation period of twelve (12) consecutive months, herein set
forth, during which an Employee has at least 1,000 Hours of Service.

For vesting purposes, the computation periods shall be the Plan Year, including periods prior
to the Effective Date of the Plan.

The computation period shall be the Plan Year if not otherwise set forth herein.

Notwithstanding the foregoing, for any short Plan Year, the determination of whether an
Employee has completed a Year of Service shall be made in accordance with Department of Labor
regulation 2530.203-2(c). However, in determining whether an Employee has completed a Year of
Service for benefit accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in the short Plan
Year.

 

17

 

Years of Service with (i) The Elder-Beerman Stores Corp. and (ii) periods of employment with
Saks Incorporated (“Saks”) and/or affiliates of Saks prior to the acquisition contemplated in the
Purchase Agreement dated as of October 29, 2005 by and between Saks and The Bon-Ton Stores, Inc.
shall be recognized for purposes of eligibility and vesting.

Years of Service with any Affiliated Employer shall be recognized.

In the event the method of crediting service is amended from the elapsed-time method to the
hour-of-service method, an Employee will receive credit for Years of Service equal to:

(a) The number of Years of Service equal to the number of 1-year Periods of Service credited to
the Employee as of the date of the amendment; and

(b) In the computation period which includes the date of the amendment, a number of Hours of
Service (using the Hours of Service equivalency method elected in the Plan) to any fractional
part of a year credited to the Employee under this Section as of the date of the amendment.

ARTICLE II

ADMINISTRATION

2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER

(a) Appointment of Trustee and Administrator. In addition to the general powers and
responsibilities otherwise provided for in this Plan, the Employer shall be empowered to
appoint and remove the Trustee and the Administrator from time to time as it deems necessary
for the proper administration of the Plan to ensure that the Plan is being operated for the
exclusive benefit of the Participants and their Beneficiaries in accordance with the terms of
the Act, the Plan and the Code. The Employer may appoint counsel, specialists, advisers, agents
(including any nonfiduciary agent) and other persons as the Employer deems necessary or
desirable in connection with the exercise of its fiduciary duties under this Plan. The Employer
may compensate such agents or advisers from the assets of the Plan as fiduciary expenses (but
not including any business (settlor) expenses of the Employer), to the extent not paid by the
Employer.

(b) Appointment of Investment Manager. The Employer may appoint, at its option, an Investment
Manager (qualified under the Investment Company Act of 1940 as amended), investment adviser, or
other agent to provide investment direction to the Trustee with respect to any or all of the
Plan assets. Such appointment shall be given by the Employer in writing in a form acceptable to
the Trustee and shall specifically identify the Plan assets with respect to which the
Investment Manager or other agent shall have authority to direct the investment.

(c) Funding policy and method. The Employer shall establish a funding policy and method, i.e.,
it shall determine whether the Plan has a short run need for liquidity (e.g., to pay benefits)
or whether liquidity is a long run goal and investment growth (and stability of same) is a more
current need, or shall appoint a qualified person to do so. The Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall coordinate such Plan needs with its
investment policy. The communication of such a funding policy and method shall not, however,
constitute a directive to the Trustee as to the investment of the Trust Funds. Such funding
policy and method shall be consistent with the objectives of this Plan and with the
requirements of Title I of the Act.

(d) Review of fiduciary performance. The Employer shall periodically review the performance of
any Fiduciary or other person to whom duties have been delegated or allocated by it under the
provisions of this Plan or pursuant to procedures established hereunder. This requirement may
be satisfied by formal periodic review by the Employer or by a qualified person specifically
designated by the Employer, through day-to-day conduct and evaluation, or through other
appropriate ways.

 

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2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY

The Employer shall be the Administrator. The Employer may appoint any person, including, but
not limited to, the Employees of the Employer, to perform the duties of the Administrator. Any
person so appointed shall signify acceptance by filing written acceptance with the Employer. Upon
the resignation or removal of any individual performing the duties of the Administrator, the
Employer may designate a successor.

2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES

If more than one person is serving as Administrator, the responsibilities of each
Administrator may be specified by the Employer and accepted in writing by each Administrator. In
the event that no such delegation is made by the Employer, the Administrators may allocate the
responsibilities among themselves, in which event the Administrators shall notify the Employer and
the Trustee in writing of such action and specify the responsibilities of each Administrator. The
Trustee thereafter shall accept and rely upon any documents executed by the appropriate
Administrator until such time as the Employer or the Administrators file with the Trustee a written
revocation of such designation.

2.4 POWERS AND DUTIES OF THE ADMINISTRATOR

The primary responsibility of the Administrator is to administer the Plan for the exclusive
benefit of the Participants and their Beneficiaries, subject to the specific terms of the Plan. The
Administrator shall administer the Plan in accordance with its terms and shall have the power and
discretion to construe the terms of the Plan and to determine all questions arising in connection
with the administration, interpretation, and application of the Plan. Benefits under this Plan will
be paid only if the Administrator decides in its discretion that the applicant is entitled to them.
Any such determination by the Administrator shall be conclusive and binding upon all persons. The
Administrator may establish procedures, correct any defect, supply any information, or reconcile
any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of the Plan; provided, however, that any procedure, discretionary act,
interpretation or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the Plan shall
continue to be deemed a qualified plan under the terms of Code Section 401(a), and shall comply
with the terms of the Act and all regulations issued pursuant thereto. The Administrator shall have
all powers necessary or appropriate to accomplish the Administrator’s duties under the Plan.

The Administrator shall be charged with the duties of the general administration of the Plan
as set forth under the terms of the Plan, including, but not limited to, the following:

(a) the discretion to determine all questions relating to the eligibility of Employees to
participate or remain a Participant hereunder and to receive benefits under the Plan;

(b) the authority to review and settle all claims against the Plan, including claims where the
settlement amount cannot be calculated or is not calculated in accordance with the Plan’s
benefit formula. This authority specifically permits the Administrator to settle disputed
claims for benefits and any other disputed claims made against the Plan;

(c) to compute, certify, and direct the Trustee with respect to the amount and the kind of
benefits to which any Participant shall be entitled hereunder;

(d) to authorize and direct the Trustee with respect to all discretionary or otherwise directed
disbursements from the Trust;

(e) to maintain all necessary records for the administration of the Plan;

 

19

 

(f) to interpret the provisions of the Plan and to make and publish such rules for regulation
of the Plan as are consistent with the terms hereof;

(g) to determine the size and type of any Contract to be purchased from any insurer, and to
designate the insurer from which such Contract shall be purchased;

(h) to compute and certify to the Employer and to the Trustee from time to time the sums of
money necessary or desirable to be contributed to the Plan;

(i) to consult with the Employer and the Trustee regarding the short and long-term liquidity
needs of the Plan in order that the Trustee can exercise any investment discretion (if the
Trustee has such discretion) in a manner designed to accomplish specific objectives;

(j) to prepare and implement a procedure to notify Eligible Employees that they may elect to
have a portion of their Compensation deferred or paid to them in cash;

(k) to act as the named Fiduciary responsible for communications with Participants as needed to
maintain Plan compliance with Act Section 404(c), including, but not limited to, the receipt
and transmitting of Participant’s directions as to the investment of their account(s) under the
Plan and the formulation of policies, rules, and procedures pursuant to which Participants may
give investment instructions with respect to the investment of their accounts;

(l) to determine the validity of, and take appropriate action with respect to, any qualified
domestic relations order received by it; and

(m) to assist any Participant regarding the Participant’s rights, benefits, or elections
available under the Plan.

2.5 RECORDS AND REPORTS

The Administrator shall keep a record of all actions taken and shall keep all other books of
account, records, policies, and other data that may be necessary for proper administration of the
Plan and shall be responsible for supplying all information and reports to the Internal Revenue
Service, Department of Labor, Participants, Beneficiaries and others as required by law.

2.6 APPOINTMENT OF ADVISERS

The Administrator, or the Trustee with the consent of the Administrator, may appoint counsel,
specialists, advisers, agents (including nonfiduciary agents) and other persons as the
Administrator or the Trustee deems necessary or desirable in connection with the administration of
this Plan, including but not limited to agents and advisers to assist with the administration and
management of the Plan, and thereby to provide, among such other duties as the Administrator may
appoint, assistance with maintaining Plan records and the providing of investment information to
the Plan’s investment fiduciaries and to Plan Participants.

 

20

 

2.7 PAYMENT OF EXPENSES

All reasonable expenses of administration may be paid out of the Plan assets unless paid by
the Employer. Such expenses shall include any expenses incident to the functioning of the
Administrator, or any person or persons retained or appointed by any named Fiduciary incident to
the exercise of their duties under the Plan, including, but not limited to, fees of accountants,
counsel, Investment Managers, agents (including nonfiduciary agents) appointed for the purpose of
assisting the Administrator or the Trustee in carrying out the instructions of Participants as to
the directed investment of their accounts (if permitted) and other specialists and their agents,
the costs of any bonds required pursuant to Act Section 412, and other costs of administering the
Plan. Until paid, the expenses shall constitute a liability of the
Trust Fund. In addition, unless specifically prohibited under statute, regulation or other guidance of
general applicability, the Administrator may charge to the Account of an individual Participant a
reasonable charge to offset the cost of making a distribution to the Participant, Beneficiary, or
alternate payee under a qualified domestic relation order, as defined in Code Section 414(p). If
liquid assets of the Plan are insufficient to cover the fees of the Trustee or the Plan
Administrator, then Plan assets shall be liquidated to the extent necessary for such fees. In the
event any part of the Plan assets becomes subject to tax, all taxes incurred will be paid from the
Plan assets. Until paid, the expenses shall constitute a liability of the Trust Fund.

2.8 CLAIMS PROCEDURE

Claims for benefits under the Plan may be filed in writing with the Administrator. Written
notice of the disposition of a claim shall be furnished to the claimant within ninety (90) days (45
days if the claim involves disability benefits) after the application is filed, or such period as
is required by applicable law or Department of Labor regulation. In the event the claim is denied,
the reasons for the denial shall be specifically set forth in the notice in language calculated to
be understood by the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will be provided. In
addition, the claimant shall be furnished with an explanation of the Plan’s claims review
procedure.

2.9 CLAIMS REVIEW PROCEDURE

Any Employee, Former Employee, or Beneficiary of either, who has been denied a benefit by a
decision of the Administrator pursuant to Section 2.8 shall be entitled to request the
Administrator to give further consideration to a claim by filing with the Administrator a written
request for a hearing. Such request, together with a written statement of the reasons why the
claimant believes the claim should be allowed, shall be filed with the Administrator no later than
sixty (60) days (45 days if the claim involves disability benefits) after receipt of the written
notification provided for in Section 2.8. The Administrator shall then conduct a hearing within the
next 60 days (45 days if the claim involves disability benefits), at which the claimant may be
represented by an attorney or any other representative of such claimant’s choosing and expense and
at which the claimant shall have an opportunity to submit written and oral evidence and arguments
in support of the claim. At the hearing the claimant or the claimant’s representative shall have an
opportunity to review all documents in the possession of the Administrator which are pertinent to
the claim at issue and its disallowance. A final decision as to the allowance of the claim shall be
made by the Administrator within sixty (60) days (45 days if the claim involves disability
benefits) of receipt of the appeal (unless there has been an extension of sixty (60) days (45 days
if the claim involves disability benefits) due to special circumstances, provided the delay and the
special circumstances occasioning it are communicated to the claimant within the 60-day period (45
days if the claim involves disability benefits)). Such communication shall be written in a manner
calculated to be understood by the claimant and shall include specific reasons for the decision and
specific references to the pertinent Plan provisions on which the decision is based.
Notwithstanding the preceding, to the extent any of the time periods specified in this Section are
amended by law or Department of Labor regulation, then the time frames specified herein shall
automatically be changed in accordance with such law or regulation.

If the Administrator, pursuant to the claims review procedure, makes a final written
determination denying a Participant’s or Beneficiary’s benefit claim, then in order to preserve the
claim, the Participant or Beneficiary must file an action with respect to the denied claim not
later than one hundred eighty (180) days following the date of the Administrator’s final
determination.

 

21

 

ARTICLE III

ELIGIBILITY

3.1 CONDITIONS OF ELIGIBILITY

(a) Eligibility. Any Eligible Employee classified on the employment records of the Employer as
a “benefit status employee,” with respect to (i) salary reduction elections pursuant to Section
4.1(a) who has completed three (3) consecutive months of service and has attained age 18 shall
be eligible to participate hereunder as of the date such Employee has satisfied such
requirements, and with respect to (ii) Matching Contributions pursuant to Section 4.1(b),
Qualified Non-Elective Contributions pursuant to Section 4.1(c) and Nonelective Contributions
pursuant to Section 4.1(d) who has completed one Year of Service and has attained age 18 shall
be eligible to participate hereunder as of the date such Employee has satisfied such
requirements. Any other Eligible Employee, with respect to salary reduction elections pursuant
to Section 4.1(a), Matching Contributions pursuant to Section 4.l(b), Qualified Non-Elective
Contributions pursuant to Section 4.1(c) and Nonelective Contributions pursuant to Section
4.1(d) who has completed one Year of Service and has attained age 18 shall be eligible to
participate hereunder as of the date such Employee has satisfied such requirements. However,
any Employee who was a Participant in the Plan prior to the effective date of this amendment
and restatement shall continue to participate in the Plan.

For purposes of this Section, an Eligible Employee classified on the records of the Employer as
a “benefit status employee” will be deemed to have completed the required number of months of
service if such Employee is in the employ of the Employer for three (3) consecutive months
after the Employee’s employment commencement date. Employment commencement date shall be the
first day that the Employee is entitled to be credited with an Hour of Service for the
performance of duty. Any other Eligible Employee will be deemed to have completed a Year of
Service if such Employee is credited with 1,000 or more Hours of Service in the one-year period
which begins on the date such Employee first begins working for the Employer. If such Employee
is not credited with 1,000 Hours of Service in that one-year period, then the following
measuring period will begin with the first day of the Plan Year next following the date such
Employee was credited with an Hour of Service and continue on a Plan Year basis thereafter.

(b) Months of service. For purposes of this Section, an Eligible Employee will be deemed to
have completed the required number of months of service if such Employee is in the employ of
the Employer at any time after such months after the Employee’s employment commencement date.
Employment commencement date shall be the first day that the Employee is entitled to be
credited with an Hour of Service for the performance of duty.

3.2 EFFECTIVE DATE OF PARTICIPATION

(a) Effective date of participation. An Eligible Employee shall become a Participant effective
as of the first day of the month coinciding with or next following the date on which such
Employee met the eligibility requirements of Section 3.1 (or if sooner, the first day of the
following Plan Year), provided said Employee was still employed as of such date (or if not
employed on such date, as of the date of rehire if a 1-Year Break in Service has not occurred
or, if later, the date that the Employee would have otherwise entered the Plan had the Employee
not terminated employment).

(b) Recognition of other employer service. If an Eligible Employee satisfies the eligibility
requirement conditions of a specific component of the Plan by reason of recognition of service
with an entity that is not an Affiliated Employer, then such Employee shall become a
Participant in such component of the Plan as of the day that the Plan credits such service with
the entity or, if later, the date the Employee would have otherwise entered such component of
the Plan had the service with the entity not been recognized for purposes of this Plan.

(c) Ineligible to eligible classification. If an Employee, who has satisfied the Plan’s
eligibility requirements and would otherwise have become a Participant in the Plan, shall go
from a classification of an ineligible Employee to an Eligible Employee, such Employee shall
become a Participant in the Plan on the date such Employee becomes an Eligible Employee or, if
later, the date that the Employee would have otherwise entered the Plan had the Employee always
been an Eligible Employee.

 

22

 

(d) Eligible to ineligible classification. If an Employee, who has satisfied the Plan’s
eligibility requirements and would otherwise become a Participant in the Plan, shall go from a
classification of an Eligible Employee to an ineligible class of Employees, such Employee shall
become a Participant in the Plan on the date such Employee again becomes an Eligible Employee,
or, if later, the date that the Employee would have otherwise entered the Plan had the Employee
always been an Eligible Employee. However, if such Employee incurs five (5) consecutive 1-Year
Breaks in Service, eligibility will be determined under the Break in Service rules set forth in
Section 3.5.

3.3 DETERMINATION OF ELIGIBILITY

The Administrator shall determine the eligibility of each Employee for participation in the
Plan based upon information furnished by the Employer. Such determination shall be conclusive and
binding upon all persons, as long as the same is made pursuant to the Plan and the Act. Such
determination shall be subject to review pursuant to Section 2.9.

3.4 TERMINATION OF ELIGIBILITY

In the event a Participant shall go from a classification of an Eligible Employee to an
ineligible Employee with respect to the Plan, then such Participant shall continue to Vest in the
Plan for each Year of Service completed while an ineligible Employee, until such time as the
Participant’s Account is forfeited or distributed pursuant to the terms of the Plan. Additionally,
the Participant’s interest in the Plan shall continue to share in the earnings of the Trust Fund.

3.5 REHIRED EMPLOYEES AND BREAKS IN SERVICE

(a) Reemployed before five (5) consecutive 1-Year Breaks in Service. If any Employee becomes a
Former Employee due to severance from employment with the Employer and is reemployed by the
Employer before five (5) consecutive 1-Year Breaks in Service occur, then the Former Employee’s
prior service shall count in the same manner as if severance from employment with the Employer
had not occurred. If any Participant ceases to be a Participant due to severance from
employment with the Employer and is reemployed by the Employer before five (5) consecutive
1-Year Breaks in Service occur, then the Participant shall resume participation (in the same
manner as if severance from employment with the Employer had not occurred) as of the
reemployment date.

(b) Reemployed after five (5) consecutive 1-Year Breaks in Service (“rule of parity”
provisions). If any Employee becomes a Former Employee due to severance from employment with
the Employer and is reemployed after a 5-Year Break in Service has occurred, Years of Service
shall include Years of Service prior to the 5-year break in service subject to the following
rules:

(1) Rule of parity. In the case of a Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from Employer contributions,
Years of Service before a period of consecutive 1-Year Breaks in Service will not be taken
into account if the number of consecutive 1-Year Breaks in Service equal or exceed the
greater of (A) five (5) or (B) the aggregate number of pre-break Years of Service. Such
aggregate number of Years of Service will not include any Years of Service disregarded
under the preceding sentence by reason of prior period of five (5) consecutive 1-Year
Breaks in Service.

(2) Participation in Plan. A Former Employee shall participate in the Plan as of the date
of reemployment, or if later, as of the date that the Former Employee would otherwise enter
the Plan pursuant to Sections 3.1 and 3.2 taking into account all service not disregarded
in this subsection.

 

23

 

(c) Vesting after five (5) consecutive 1-Year Breaks in Service. After a Participant who has
severed employment with the Employer incurs five (5) consecutive 1-Year Breaks in Service, the
Vested portion of said Participant’s Account attributable to pre-break service shall not be
increased as a result of post-break service. In such case, separate accounts will be maintained
as follows:

(1) one account for nonforfeitable benefits attributable to pre-break service; and

(2) one account representing the Participant’s Employer derived account balance in the Plan
attributable to post-break service.

(d) Buyback provisions. If any Participant severs employment with the Employer and is
reemployed by the Employer before five (5) consecutive 1-Year Breaks in Service, and such
Participant had received a distribution of the entire Vested interest prior to reemployment,
then the forfeited account shall be reinstated only if the Participant repays the full amount
which had been distributed. Such repayment must be made before the earlier of five (5) years
after the first date on which the Participant is subsequently reemployed by the Employer or the
close of the first period of five (5) consecutive 1-Year Breaks in Service commencing after the
distribution. If a distribution occurs for any reason other than a severance of employment, the
time for repayment may not end earlier than five (5) years after the date of distribution. In
the event the Participant does repay the full amount distributed, the undistributed forfeited
portion of the Participant’s Account must be restored in full, unadjusted by any gains or
losses occurring subsequent to the Valuation Date preceding the distribution. The source for
such reinstatement may be Forfeitures occurring during the Plan Year. If such source is
insufficient, then the Employer will contribute an amount which is sufficient to restore any
such forfeited Accounts provided, however, that if a discretionary contribution is made for
such year pursuant to Section 4.1(d), such contribution will first be applied to restore any
such Accounts and the remainder shall be allocated in accordance with the terms of the Plan.

If a non-Vested Participant was deemed to have received a distribution and such
Participant is reemployed by the Employer before five (5) consecutive 1-Year Breaks in Service,
then such Participant will be deemed to have repaid the deemed distribution as of the date of
reemployment.

3.6 ELECTION NOT TO PARTICIPATE

(a) Irrevocable election not to participate. An Employee may, subject to the approval of the
Employer, elect voluntarily not to participate in every Qualified Plan maintained by the
Employer. Such election must be made prior to the time the Employee first becomes eligible to
participate under any Qualified Plan maintained by the Employer. The election not to
participate must be irrevocable and communicated to the Employer, in writing, within a
reasonable period of time before the date the Employee would have otherwise entered any
Qualified Plan. “Qualified Plan” means, for purposes of this Section, a plan intended to be
tax-qualified under Code Section 401(a).

(b) Prior Plan document provision. Notwithstanding anything in this Section to the contrary, if
any prior Plan document of this Plan contained a provision permitting an Employee to make a
revocable election not to participate and an Employee made such revocable election not to
participate while that prior Plan document was in effect, then such Employee may irrevocably
revoke such election at any time and participate in the Plan.

(c) Effect on coverage, ADP and ACP Tests. An Employee who elected not to participate under the
Plan is treated as a nonbenefiting Employee for purposes of the minimum coverage requirements
under Code Section 410(b). Furthermore, such Employee is not a Participant for purposes of the
ADP Test or the ACP Test.

3.7 OWNER-EMPLOYEE LIMITATION

If this Plan provides contributions or benefits for one or more Owner-Employees, the
contributions on behalf of any Owner-Employee shall be made only with respect to the Earned Income
for such Owner-Employee which is derived from the trade or business with respect to which such Plan is
established.

 

24

 

3.8 OMISSION OF ELIGIBLE EMPLOYEE; INCLUSION OF INELIGIBLE EMPLOYEE

If, in any Plan Year, any Employee who should be included as a Participant in the Plan is
erroneously omitted and discovery of such omission is not made until after a contribution by the
Employer for the year has been made and allocated, or any person who should not have been included
as a Participant in the Plan is erroneously included, then the Employer shall apply the principles
described by, and take corrective actions consistent with, the IRS Employee Plans Compliance
Resolution System.

ARTICLE IV

CONTRIBUTION AND ALLOCATION

4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION

For each Plan Year, the Employer shall contribute to the Plan:

(a) Salary reductions. The amount that all Participants’ Compensation was reduced pursuant to
Section 4.2(a), which amount shall be Elective Deferrals.

(b) Matching Contributions. On behalf of each Participant who is eligible to share in a
Matching Contribution for the Plan Year, a Discretionary Base Match contribution may be
determined each Plan Year by the Employer on the basis of two or more rate groups based on
Years of Service with the Employer. The rate groups will be determined based on Years of
Service as follows:

Years of Service

Less than 5

5 but less than 15

15 but less than 25

25 or more

Within each rate group, the Employer may contribute a uniform percentage of each
Participant’s Elective Deferrals, the exact percentage, if any, to be determined each year
by the Employer. Years of Service for purposes of determining a Participant’s rate group
shall be a consecutive 12-month period beginning on the Participant’s first employment
commencement date or, if later, a consecutive 12-month period beginning on the
Participant’s latest rehire date, as recorded on the books and records of the Employer.
The Discretionary Base Match shall only be made on Elective Deferrals that do not exceed 6%
of Compensation or such other percentage to be determined by the Employer in its sole
discretion each Plan Year.

The Employer may make an additional Discretionary Match contribution on behalf of each
eligible Participant, who is eligible to share in a Matching Contribution for the Plan Year
equal to a uniform percentage, if any, to be determined each Plan Year by the Employer.
The Discretionary Match shall only be made on Elective Deferrals that do not exceed 6% of
Compensation or such other percentage to be determined by the Employer in its sole
discretion each Plan Year.

Catch-Up Contributions shall not be subject to the Matching Contribution.

 

25

 

(c) Qualified Nonelective Contribution. On behalf of each Participant who is eligible to share
in the Qualified Nonelective Contribution for the Plan Year, a discretionary Qualified
Nonelective Contribution equal to a uniform percentage of each eligible individual’s
Compensation or 415 Compensation. Such Qualified Nonelective Contribution shall be allocated to
the Qualified Nonelective Contribution Account.

(d) Nonelective Contributions. A discretionary amount, which amount, if any, shall be a
Nonelective Contribution.

(e) Top-Heavy contribution. Additionally, to the extent necessary, the Employer shall
contribute to the Plan the amount necessary to provide the top-heavy minimum contribution, even
if it exceeds the amount that would be deductible under Code Section 404.

(f) Form of contribution. All contributions by the Employer shall be made in cash or in such
property as is acceptable to the Trustee.

4.2 PARTICIPANT’S SALARY REDUCTION ELECTION

(a) Deferral elections. Each Participant may elect to defer Compensation which would have been
received in the Plan Year, but for the deferral election, by up to 50%. However, if you are a
Participant and a Highly Compensated Employee, the Employer may limit the amount of your
deferral election in connection with maintaining compliance with applicable nondiscrimination
tests imposed by the Code. A deferral election (or modification of an earlier election) may not
be made with respect to Compensation which is currently available on or before the date the
Participant executed such election. For purposes of this Section, Compensation shall be
determined prior to any reductions made pursuant to Code Sections 125, 132(f)(4), 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and employee contributions described in Code Section 414(h)(2)
that are treated as Employer contributions.

Notwithstanding anything in this Plan to the contrary, the Employer may impose a minimum
elective deferral percentage of 1% as an administrative procedure applied on a uniform and
consistent basis to all Participants.

For purposes of this Section, the annual dollar limitation of Code Section 401(a)(17)
($200,000 as adjusted) shall not apply except that the Administrator may elect to apply such
limit as part of the deferral election procedures established hereunder.

Deferral elections of bonuses. Additionally, each Participant may elect to defer up to 50%
of any cash bonus to be paid by the Employer during the Plan Year. A deferral election may not
be made with respect to cash bonuses that are currently available on or before the date the
Participant executes such deferral election. However, if an opportunity to make a deferral
election is given to a Participant with respect to a cash bonus but such Participant fails to
make such a deferral election, then the Participant’s bonus shall be subject to the deferral
election (not to exceed 50% of the bonus) in effect on the day before the day that such
Participant’s bonus becomes currently available.

Automatic deferral election procedures. Effective October 1, 2005, in the event a
Participant who is described in the next sentence fails to make a new affirmative deferral
election, such Participant shall be deemed to have made a pre-tax deferral election equal to 3%
of Compensation per payroll period. Only those Employees who became Participants on or after
October 1, 2005 shall be subject to the provisions of this paragraph.

Effective July 1, 2006, a Participant who has not deferred at least 1% of his/her
Compensation, in the absence of an election made by a Participant to the contrary within such
time period as established by the Plan Administrator, shall be deemed to have made a pre-tax
deferral election equal to 3% of his/her Compensation.

 

26

 

Effective on or after August 1, 2007, in absence of an election made by a Participant for
payroll periods ending on or after August 1, 2007 to the contrary within such time period
established by the Plan Administrator, any Participant who is deferring a minimum of 1% to a
maximum of 5% of his/her Compensation, shall have deemed to have made a pre-tax deferral
election equal to 1% (maximum Elective Contribution shall not exceed 6% of Compensation) in
conjunction with his/her annual increase related to his/her annual review performance process.
Such increase shall be effective as soon as administratively practicable.

The amount that is deferred by a Participant shall be subject to the limitations of this
Section, shall be an Elective Deferral, and shall be held for such Participant in the Elective
Deferral Account.

(b) Catch-Up Contributions. Notwithstanding anything in the Plan to the contrary, effective
June 1, 2002, each Catch-Up Eligible Participant shall be eligible to make Catch-Up
Contributions during the Participant’s taxable year in accordance with, and subject to the
limitations of, Code Section 414(v). Such Catch-Up Contributions are not subject to the limits
on Annual Additions under Code Section 415(c), are not counted in the ADP Test of
Section 4.5(a), are not counted in determining the minimum allocation required in a Top-Heavy
Plan during a Top-Heavy Plan Year under Code Section 416 (but Catch-Up Contributions made in
prior years are counted in determining whether the Plan is a Top-Heavy Plan), and are not taken
into account under the limit on Elective Deferrals under Code Section 402(g). Catch-Up
Contributions may be a dollar amount or a percentage of Compensation for each payroll period
not to exceed the applicable dollar limit under Code Section 414(v), pursuant to procedures
established by the Administrator. The Plan shall not be treated as failing to satisfy the
provisions of the Plan implementing the requirements of Code Section 401(k)(3), 416 or 410(b),
as applicable, by reason of the making of such Catch-Up Contributions.

(c) Full vesting. Each Participant’s Elective Deferral Account shall be fully Vested at all
times and shall not be subject to Forfeiture for any reason.

(d) Distribution restrictions. Notwithstanding anything in the Plan to the contrary, effective
with respect to distributions and transactions made after December 31, 2001, amounts (including
any offset of loans) held in the Participant’s Elective Deferral Account may not be distributed
except as authorized by other provisions of this Plan, but in no event may such amounts be
distributed earlier than:

(1) a Participant’s death, disability or other severance of employment;

(2) a Participant’s attainment of age 59 1/2;

(3) effective beginning with the first Plan Year beginning in 2006, the termination of the
Plan without the existence at the time of Plan termination of an alternative defined
contribution plan or the establishment of an alternative defined contribution plan by the
Employer or an Affiliated Employer within the period ending twelve months after
distribution of all assets from the Plan maintained by the Employer. For this purpose, a
defined contribution plan is not treated as an alternative defined contribution plan if the
plan is an employee stock ownership plan (as defined in Code Section 4975(e)(7) or 409(a)),
a simplified employee pension plan (as defined in Code Section 408(k)), a SIMPLE IRA plan
(as defined in Code Section 408(p)), a plan or contract that satisfies the requirements of
Code Section 403(b), or a plan that is described in Code Sections 457(b) or 457(f).
Furthermore, if at all times during the 24-month period beginning 12 months before the date
of the Plan’s termination, fewer than 2% of the Participants in the Plan as of the date of
Plan termination are eligible under the other defined contribution plan, then the other
defined contribution plan is not an alternative defined contribution plan. Distributions
from the terminating Plan may only be made in lump sum distributions, pursuant to and
defined in Regulation 1.401(k)-1(d)(4)(ii);

(4) the proven financial hardship of a Participant, subject to the limitations of
Section 6.12.

 

27

 

(e) Suspension due to hardship. In the event a Participant has received a hardship
distribution, on or after December 31, 2001 pursuant to Regulation 1.401(k)-1(d)(3)(iv)(E)(2)
from this Plan or any other plan maintained by the Employer, then such Participant shall not be
permitted to elect to have Elective Deferrals contributed to the Plan for a period of six
months following the receipt of the distribution.

(f) Deferrals limited to Code Section 402(g) dollar limit. A Participant’s “elective deferrals”
made under this Plan and all other plans, contracts or arrangements of the Employer maintaining
this Plan during any calendar year shall not exceed the dollar limitation. For this purpose,
“elective deferrals” means, with respect to a calendar year, the sum of all Employer
contributions made on behalf of such Participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section 401(k), any salary
reduction simplified employee pension (as defined in Code Section 408(k)(6)), any SIMPLE IRA
plan described in Code Section 408(p), any eligible deferred compensation plan under Code
Section 457, any plans described under Code Section 501(c)(18), and any Employer contributions
made on the behalf of a Participant for the purchase of an annuity contract under Code Section
403(b) pursuant to a salary reduction agreement. “Elective deferrals” shall not include any
deferrals properly distributed as excess “Annual Additions” pursuant to Section 4.9. “Dollar
limitation” shall mean the dollar limitation contained in Code Section 402(g) in effect for the
Participant’s taxable year beginning in such calendar year. In the case of a participant aged
50 and over by the end of the taxable year, the “dollar limitation” described in the preceding
sentence shall be adjusted to include the amount of Elective Deferrals that may be treated as
Catch-Up Contributions. The “dollar limitation” contained in Code Section 402(g) is $10,500 for
taxable years beginning in 2000 and 2001, increasing to $11,000 for taxable years beginning in
2002 and increasing by $1,000 for each year thereafter up to $15,000 for taxable years
beginning in 2006 and later years. After 2006 the $15,000 limit will be adjusted by the
Secretary of the Treasury for cost-of-living increases under Code Section 402(g)(4). Any such
adjustments will be in multiples of $500.

(g) Assigning Excess Deferrals to this Plan. If a Participant’s Elective Deferrals under this
Plan together with any elective deferrals (as defined in Regulation 1.402(g)-1(b)) under
another qualified cash or deferred arrangement (as described in Code Section 401(k)), a
simplified employee pension (as described in Code Section 408(k)(6)), a simple individual
retirement account plan (as described in Code Section 408(p)), a salary reduction arrangement
(within the meaning of Code Section 3121(a)(5)(D)), or a trust described in Code
Section 501(c)(18) cumulatively exceed the “dollar limitation” described in the subsection
4.2(f) of this Section, for such Participant’s taxable year, then the Participant may assign to
this Plan any Excess Deferrals made during a taxable year of the Participant by notifying the
Administrator in writing on or before March 1 following the close of the Participant’s taxable
year, of the amount of the Excess Deferrals to be assigned to the Plan. A Participant shall be
deemed to notify the Administrator of any Excess Deferrals that arise by taking into account
only those Elective Deferrals made to this Plan and any other plan, contract, or arrangement of
the Employer.

Notwithstanding any other provision of the Plan to the contrary, the Administrator may
direct the Trustee to distribute such Excess Deferrals, plus any Income allocable to such
Excess Deferrals, to the Participant not later than the first April 15th following the close of
the Participant’s taxable year. Such a distribution may be made to a Participant to whose
account Excess Deferrals were assigned for the preceding year or/and who claims Excess
Deferrals for such taxable year or calendar year. Any distribution of less than the entire
amount of Excess Deferrals and Income shall be treated as a pro rata distribution of Excess
Deferrals and Income. The amount of the distribution shall not exceed the Participant’s
Elective Deferrals under the Plan for the taxable year (and any Income allocable to such Excess
Deferrals). If a distribution of Excess Deferrals is to be made on or before the last day of
the Participant’s taxable year, then each of the following conditions must be satisfied:

(1) the distribution must be made after the date on which the Plan received the Excess
Deferrals;

 

28

 

(2) the Participant shall designate the distribution as Excess Deferrals; and

(3) the Plan must designate the distribution as a distribution of Excess Deferrals.

Any distribution made pursuant to this Section shall be made first from unmatched Elective
Deferrals and, thereafter, from Elective Deferrals which are matched.

Matching Contributions that relate to Excess Deferrals which are distributed pursuant to
this Section 4.2(g) shall be treated as a Forfeiture.

(h) Coordination with ADP Test. Notwithstanding Section 4.2(g) above, a Participant’s Excess
Deferrals shall be reduced, but not below zero, by any distribution of Excess Contributions
pursuant to Section 4.6 for the Plan Year beginning with or within the taxable year of the
Participant.

(i) Segregation. Elective Deferrals made pursuant to this Section may be segregated into a
separate account for each Participant in a federally insured savings account, certificate of
deposit in a bank or savings and loan association, money market certificate, or other
short-term debt security acceptable to the Trustee until such time as the allocations pursuant
to Section 4.4 have been made.

(j) No conditions to receive Elective Deferrals. Notwithstanding anything herein to the
contrary, Participants who terminated employment for any reason during the Plan Year shall
share in the Elective Deferrals made by the Employer for the year of termination without regard
to the Hours of Service credited.

(k) Procedures to implement deferral elections. The Employer and the Administrator may adopt a
procedure to implement the salary reduction elections provided for herein. If such procedure is
adopted, then the procedure shall include (and shall not be limited to) the following:

(1) A Participant must make an initial salary deferral election, or an election to receive
cash in lieu of a salary deferral election, unless the Employer has implemented an
automatic deferral election feature. If the Participant fails to make an initial salary
deferral election, or an election to receive cash in lieu of a salary deferral election, if
the automatic deferral election applies, then such Participant may thereafter make an
election in accordance with the rules governing modifications. The Participant shall make
such an election by entering into a salary reduction agreement with the Employer and filing
such agreement with the Administrator. Such election shall initially be effective beginning
with the pay period following the acceptance of the salary reduction agreement by the
Administrator (or as soon thereafter as practical), shall not have retroactive effect and
shall remain in force until revoked.

(2) A Participant may modify a prior salary deferral election during the Plan Year and
concurrently make a new election by filing a notice with the Administrator (in accordance
with procedures established by the Administrator) within a reasonable time before the pay
period for which such modification is to be effective. However, modifications to a salary
deferral election shall only be permitted at any time to be effective as soon as
administratively possible. Any modification shall be implemented as soon as practical after
being accepted by the Administrator, shall not have retroactive effect and shall remain in
force until revoked.

(3) A Participant may elect to prospectively revoke the Participant’s salary reduction
agreement in its entirety at any time during the Plan Year by providing the Administrator
with thirty (30) days written notice of such revocation (or upon such shorter notice period
as may be acceptable to the Administrator). Such revocation shall become effective as of
the beginning of the first pay period coincident with or next following the expiration of
the notice period (or as soon thereafter as practical).

(4) Any notices or required actions under this subsection may be provided or made in
accordance with Section 9.14.

 

29

 

4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION

Unless otherwise provided by contract or law, the Employer may make its contribution to the
Plan for a particular Plan Year at such time 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,
then the Employer will designate to the Administrator the Plan Year for which the Employer is
making its contribution.

4.4 ALLOCATION OF CONTRIBUTION AND USAGE OF FORFEITURES AND EARNINGS

(a) Separate accounting. The Administrator shall establish and maintain an account in the name
of each Participant to which the Administrator shall credit as of each Anniversary Date, or
other Valuation Date, all amounts allocated to a particular Account of each such Participant as
set forth herein.

(b) Allocation of contributions. The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation of the Employer
contributions for each Plan Year. Within a reasonable period of time after the date of receipt
by the Administrator of such information, the Administrator shall allocate such contribution as
follows:

(1) Elective Deferrals. With respect to the Elective Deferrals made pursuant to
Section 4.1(a), to each Participant’s Elective Deferral Account.

(2) Matching Contributions. With respect to the Matching Contribution made pursuant to
Section 4.1(b), to each Participant’s Matching Contribution Account in accordance with
Section 4.1(b).

Only Participants who are employed on the last day of the Plan Year shall be eligible
to share in the Matching Contribution for the year.

(3) Waiver of conditions to share in Matching Contributions. Notwithstanding the foregoing,
Participants who are not employed on the last day of the Plan Year due to death, Disability
or Retirement (Normal or Late) and Participants who attained age 55, completed a Year of
Service during the Plan Year and competed twenty (20) Years of Service with the Employer or
an Affiliated Employer shall share in the allocation of Matching Contributions for that
Plan Year.

(4) Qualified Nonelective Contributions. With respect to the Qualified Nonelective
Contribution made pursuant to Section 4.1(c), to each Participant’s Qualified Nonelective
Contribution Account in accordance with Section 4.1(c).

The Employer may limit such Qualified Nonelective Contributions only to Participants
who are Nonhighly Compensated Employees and/or Non-Key Employees. In addition, the Employer
may condition such Qualified Nonelective Contributions only to Participants who have
completed a Year of Service (or portion thereof) during the Plan Year and/or who are
employed on the last day of the Plan Year.

(5) Nonelective Contributions. With respect to the Nonelective Contribution made pursuant
to Section 4.1(d), to each Participant’s Nonelective Contribution Account in the following
manner:

(i) A dollar amount equal to 4.3% of the sum of each Participant’s total Compensation
plus Excess Compensation shall be allocated to each Participant’s Account. If the
Employer does not contribute such amount for all Participants, then each Participant
will be allocated a share of the contribution in the same proportion that the
Participant’s total Compensation plus the Participant’s total Excess Compensation for
the Plan Year bears to the total Compensation plus the total Excess Compensation of all
Participants for that year.

 

30

 

(ii) The balance of the Employer Contribution over the amount allocated above, if any,
shall be allocated to each Participant’s Account in the same proportion that the
Participant’s total Compensation for the Plan Year bears to the total Compensation of
all Participants for such year.

No other qualified plan or simplified employee pension, as defined in Code
Section 408(k), maintained by the Employer shall (A) impute disparity pursuant to
Regulation 1.401(a)(4)-7 for any Participant and (B) provide for permitted disparity
pursuant to Code Section 401(l).

Additionally, the cumulative permitted disparity limit for a Participant is
thirty-five (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 this 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, all years ending
in the same calendar year are treated as the same year. If the Participant has not
benefited under a defined benefit or target benefit plan for any year beginning after
December 31, 1993, then such Participant has no cumulative disparity limit.

Notwithstanding the preceding paragraphs, any Participant whose cumulative
permitted disparity limit would exceed thirty-five (35) will receive the allocation
above by substituting total Compensation for Excess Compensation.

(6) Entitlement to Nonelective Contribution. Only Participants who have completed a Year of
Service during the Plan Year and are employed on the last day of the Plan Year shall be
eligible to share in the discretionary contribution made pursuant to Section 4.1(d) for the
year.

(7) Waiver of conditions to share in Nonelective Contributions. Notwithstanding the
foregoing, Participants who are not employed on the last day of the Plan Year due to
Retirement (Normal or Late), Disability or death and Participants who attained age 55,
completed a Year of Service during the Plan Year and competed twenty (20) Years of Service
with the Employer or an Affiliated Employer shall share in the allocation of Nonelective
Contributions for that Plan Year.

(c) Usage of Forfeitures. Effective January 1, 2008, any amounts which become forfeitures
during a Plan Year shall be allocated as of the Anniversary Date or the following Plan Year’s
Anniversary Date. Such forfeitures may be made available to reinstate previously forfeited
Account balances of Participants, if any, in accordance with Section 3.5(d), to satisfy any
contribution that may be required pursuant to Section 3.8 and/or 6.10, or to pay any
administrative expenses of the Plan. The remaining Forfeitures, if any, shall be used to reduce
any Employer contributions for the Plan Year in which such Forfeitures occur or the following
Plan Year.

(d) Minimum required allocation to those not otherwise eligible to share. For any Top-Heavy
Plan Year, Non-Key Employees not otherwise eligible to share in the allocation of contributions
as provided above, shall receive the minimum required allocation of Section 4.4(g) if eligible
pursuant to the provisions of Section 4.4(j).

(e) Allocation of earnings. As of each Valuation Date, before the current valuation period
allocation of Employer contributions, any earnings or losses (net appreciation or net
depreciation) of the Trust Fund shall be allocated in the same proportion that each
Participant’s nonsegregated accounts bear to the total of all Participants’ nonsegregated
accounts as of such date. Earnings or losses with respect to a Participant’s Directed Account
shall be allocated in accordance with Section 4.14.

(f) Incoming transfers and rollovers. Participants’ transfers from other qualified plans and
rollovers deposited in the general Trust Fund shall share in any earnings and losses (net
appreciation or net
depreciation) of the Trust Fund in the same manner provided above. Each segregated account
maintained on behalf of a Participant shall be credited or charged with its separate earnings
and losses.

 

31

 

(g) Minimum required allocation for Top-Heavy Plan Years. Notwithstanding the foregoing, for
any Top-Heavy Plan Year, the sum of the Employer contributions allocated to the Account of each
Non-Key Employee shall be equal to at least three percent (3%) of such Non-Key Employee’s 415
Compensation (reduced by contributions and forfeitures, if any, allocated to each Non-Key
Employee in any defined contribution plan included with this Plan in a required aggregation
group). However, if (1) the sum of the Employer contributions allocated to the Participant’s
Account of each Key Employee for such Top-Heavy Plan Year is less than three percent (3%) of
each Key Employee’s 415 Compensation and (2) this Plan is not required to be included in an
aggregation group to enable a defined benefit plan to meet the requirements of Code
Section 401(a)(4) or 410, then the sum of the Employer contributions allocated to the
Participant’s Account of each Non-Key Employee shall be equal to the largest percentage
allocated to the Account of any Key Employee. However, in determining whether a Non-Key
Employee has received the minimum required allocation, such Non-Key Employee’s Elective
Deferrals shall not be taken into account. The minimum allocation required (to the extent
required to be nonforfeitable under Code Section 416(b)) may not be forfeited under Code
Section 411(a)(3)(B) or 411(a)(3)(D).

However, no minimum required allocation shall be required in this Plan for any Non-Key
Employee who participates in another defined contribution plan subject to Code Section 412
included with this Plan in a required aggregation group, if the other defined contribution plan
subject to Code Section 412 satisfies the minimum required allocation.

(h) Top-Heavy contribution allocation. For purposes of the minimum required allocation set
forth above, the percentage allocated to the Account of any Key Employee who is a Participant
shall be equal to the ratio of the sum of the Employer contributions (excluding any Catch-Up
Contributions) allocated on behalf of such Key Employee for the Plan Year divided by the 415
Compensation for such Key Employee for the Plan Year.

(i) Matching contributions used to satisfy top-heavy contribution. Effective with respect to
Plan Years beginning after December 31, 2001, Matching Contributions shall be taken into
account for purposes of satisfying the minimum required allocation of Code Section 416(c)(2)
and the Plan. The preceding sentence shall apply with respect to Matching Contributions under
the Plan or, if the Plan provides that the minimum required allocation shall be met in another
plan, such other plan. Matching Contributions that are used to satisfy the minimum required
allocation shall be treated as Matching Contributions for purposes of the ACP Test and other
requirements of Code Section 401(m).

(j) Participants eligible for top-heavy allocation. For any Top-Heavy Plan Year, the minimum
required allocation set forth above shall be allocated to the Nonelective Contribution Account
of all Non-Key Employees who are Participants and who are employed by the Employer on the last
day of the Plan Year regardless of the Non-Key Employee’s level of Compensation, including
Non-Key Employees who have (1) failed to complete a Year of Service; and (2) declined to make
mandatory contributions (if required) or, in the case of a cash or deferred arrangement,
Elective Deferrals to the Plan.

(k) 415 Compensation for top-heavy purposes. For the purposes of this Section, 415 Compensation
will be limited to the same dollar limitations set forth in Section 1.19, adjusted in such
manner as permitted under Code Section 415(d).

(l) Delay in processing transactions. Notwithstanding anything in this Section to the contrary,
all information necessary to properly reflect a given transaction may not be available until
after the date specified herein for processing such transaction, in which case the transaction
will be reflected when such information is received and processed. Subject to express limits
that may be imposed under the Code, the processing of any contribution, distribution or other
transaction may be delayed for any legitimate business reason or force majeure (including, but
not limited to, failure of systems or
computer programs, failure of the means of the transmission of data, the failure of a service
provider to timely receive values or prices, and the correction for errors or omissions or the
errors or omissions of any service provider). The processing date of a transaction will be
binding for all purposes of the Plan.

 

32

 

4.5 ACTUAL DEFERRAL PERCENTAGE TEST

(a) ADP Test. The ADP for Highly Compensated Employees who are Participants for each Plan Year
and the ADP for Nonhighly Compensated Employees who are Participants for each Plan Year (or for
the preceding Plan Year if the prior year testing method is used) shall satisfy one of the
following tests:

(1) The ADP for the group of Highly Compensated Employees who are Participants shall not
exceed the ADP for the group of Nonhighly Compensated Employees who are Participants (for
the preceding Plan Year if the prior year testing method is used to calculate the ADP for
the group of Nonhighly Compensated Employees who are Participants) multiplied by 1.25, or

(2) The ADP for the group of Highly Compensated Employees who are Participants shall not
exceed the ADP for the group of Nonhighly Compensated Employees who are Participants (for
the preceding Plan Year, if the prior year testing method is used to calculate the ADP for
the group of Nonhighly Compensated Employees who are Participants) by more than two
percentage points. Furthermore, the ADP for the group of Highly Compensated Employees who
are Participants shall not exceed the ADP for the group of Nonhighly Compensated Employees
who are Participants (for the preceding Plan Year, if the prior year testing method is used
to calculate the ADP for the group of Nonhighly Compensated Employees who are Participants)
multiplied by 2.

(b) Prior Year test upon amendment. Notwithstanding the above, if the prior year test method is
used to calculate the ADP for the group of Nonhighly Compensated Employees who are Participants
for the first Plan Year of this amendment and restatement, then the ADP for the group of
Nonhighly Compensated Employees who are Participants for the preceding Plan Year shall be
calculated pursuant to the provisions of the Plan then in effect.

(c) Participant regardless of deferral election. For the purposes of Sections 4.5(a) and 4.6, a
Participant shall be any Employee eligible to make a deferral election pursuant to Section 4.2
at any point during the Plan Year, whether or not such deferral election was made or suspended
pursuant to Section 4.2.

(d) Aggregation with other plans. In the event this Plan satisfies the requirements of Code
Sections 401(a)(4), 401(k), or 410(b) only if aggregated with one or more other plans, or if
one or more other plans satisfy the requirements of such Code Sections only if aggregated with
this Plan, then this Section shall be applied by determining the ADP of Employees as if all
such plans were a single plan. If more than ten percent (10%) of the Employer’s Nonhighly
Compensated Employees are involved in a plan coverage change as defined in Regulation Section
1.401(k)-2(c)(4), then any adjustments to the Nonhighly Compensated Employees’ ADP for the
prior year will be made in accordance with such Regulations, unless the Employer has elected to
use the current year testing method. Plans may be aggregated in order to satisfy Code Section
401(k) only if they have the same Plan Year and use the same ADP Testing method.

(e) ADP of Highly Compensated Employee in multiple plans. For the purposes of this Section, the
ADP for any Participant who is a Highly Compensated Employee for the Plan Year and who is
eligible to have Elective Deferrals (and Qualified Nonelective Contributions and/or Qualified
Matching Contributions, if treated as Elective Deferrals for purposes of the ADP Test)
allocated to the Participant’s accounts under two or more cash or deferred arrangements
described in Code Section 401(k) of the Employer or an Affiliated Employer, shall be determined
as if such Elective Deferrals (and, if applicable, such Qualified Nonelective Contributions
and/or Qualified Matching Contributions) were made under a single cash or deferred arrangement.
If a Highly Compensated Employee participates in two or more cash or deferred arrangements of
the Employer or an Affiliated Employer that have different plan years, then all Elective
Deferrals made during the Plan Year under
all such arrangements shall be aggregated. However, for Plan Years beginning before 2006, if
the cash or deferred arrangements have different plan years, then all such cash or deferred
arrangements ending with or within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under the Regulations of Code Sections 401(k) or 410(b).

 

33

 

(f) Testing method. For the purpose of this Section, when calculating the ADP for the group of
Nonhighly Compensated Employees who are Participants, the prior year testing method shall be
used. Once the current year testing method has been elected, then the Employer may elect to use
the prior year testing method for a Plan Year only if the Plan has used the current year
testing method for each of the preceding 5 Plan Years (or if lesser, the number of Plan Years
that the Plan has been in existence) or if, as a result of a merger or acquisition described in
Code Section 410(b)(6)(C)(i), the Employer maintains both a plan using prior year testing
method and a plan using current year testing method and the change is made within the
transition period described in Code Section 410(b)(6)(C)(ii).

(g) Otherwise excludable Employee and early participation rules. Notwithstanding anything in
this Section to the contrary, the provisions of this Section and Section 4.6 may be applied
separately (or will be applied separately to the extent required by Regulations) to each “plan”
within the meaning of Regulation Section 1.401(k)-1(b)(4)(iv). For purposes of applying this
provision, the Administrator may use any effective date of participation that is permitted
under Code Section 410(b) provided such date is applied on a consistent and uniform basis to
all Participants. Alternatively, the provisions of Code Section 401(k)(3)(F) may be used to
exclude from consideration all Nonhighly Compensated Employees who have not satisfied the
greatest minimum age and service requirements of Code Section 410(a)(1)(A).

(h) Timing of allocations. For purposes of determining the ADP Test, only Elective Deferrals,
Qualified Nonelective Contributions and Qualified Matching Contributions that are contributed
to the Plan prior to the end of the twelve (12) month period immediately following the Plan
Year to which the contributions relate shall be considered.

(i) Targeted Qualified Nonelective Contributions. Notwithstanding the preceding, for Plan Years
beginning in and after 2006, Qualified Nonelective Contributions cannot be taken into account
in determining the ADR for a Plan Year for a Nonhighly Compensated Employee to the extent such
contributions exceed the product of that Nonhighly Compensated Employee’s 414(s) Compensation
and the greater of five percent (5%) or two (2) times the Plan’s “representative contribution
rate.” Any Qualified Nonelective Contribution taken into account under an ACP Test under
Regulation Section 1.401(m)-2(a)(6) (including the determination of the representative
contribution rate for purposes of Regulation Section 1.401(m)-2(a)(6)(v)(B)), is not permitted
to be taken into account for purposes of this paragraph (including the determination of the
representative contribution rate under this Section). For purposes of this subsection:

(1) The Plan’s “representative contribution rate” is the lowest applicable contribution
rate of any eligible Nonhighly Compensated Employee among a group of eligible Nonhighly
Compensated Employees that consists of half of all eligible Nonhighly Compensated Employees
for the Plan Year (or, if greater, the lowest “applicable contribution rate” of any
eligible Nonhighly Compensated Employee in the group of all eligible Nonhighly Compensated
Employees for the Plan Year and who is employed by the Employer on the last day of the Plan
Year), and

(2) The “applicable contribution rate” for an eligible Nonhighly Compensated Employee is
the sum of the Qualified Matching Contributions taken into account for the eligible
Nonhighly Compensated Employee for the Plan Year and the Qualified Contributions made for
the eligible Nonhighly Compensated Employee for the Plan Year, divided by the eligible
Nonhighly Compensated Employee’s 414(s) Compensation for the same period.

 

34

 

Restriction on Qualified Matching Contributions. Qualified Matching Contributions may only
be used to calculate the ADP to the extent that such Qualified Matching Contributions are
Matching Contributions that are not precluded from being taken into account for ACP Test purposes
under the rules of Regulation Section 1.401(m)-2(a)(5)(ii).

Restrictions of Qualified Nonelective Contributions and Qualified Matching Contributions.
Qualified Nonelective Contributions and Qualified Matching Contributions cannot be taken into
account to determine the ADP to the extent such contributions are taken into account for
purposes of satisfying any other ADP Test, any ACP Test, or the requirements of Regulation
Sections 1.401(k)-3, 1.401(m)-3 or 1.401(k)-4. Thus, for example, Matching Contributions that
are made pursuant to Regulation Section 1.401(k)-3(c) cannot be taken into account under the
ADP Test. Similarly, if a plan switches from the current year testing method to the prior year
testing method pursuant to Regulation Section 1.401(k)-2(c), then Qualified Nonelective
Contributions that are taken into account under the current year testing method for a year may
not be taken into account under the prior year testing method for the next year.

(j) ADP when no Nonhighly Compensated Employees. If, for the applicable year for determining
the ADP of the Nonhighly Compensated Employees for a Plan Year, there are no eligible Nonhighly
Compensated Employees, then the Plan is deemed to satisfy the ADP Test for the Plan Year.

(k) Repeal of multiple use test. The multiple use test described in Code Section 401(m) in
effect prior to the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001
shall not apply for Plan Years beginning after December 31, 2001.

4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TEST

(a) Authority to correct. In the event that the initial allocations of the Elective Deferrals
made pursuant to Section 4.2 do not satisfy the ADP Test set forth in Section 4.5(a), the
Administrator shall implement some or all of the provisions of this Section in order to correct
such failure.

(b) Corrective action. The Participant who is the Highly Compensated Employee having the
largest dollar amount of Elective Deferrals shall have a portion of such Participant’s Elective
Deferrals first treated as Catch-Up Contributions and then distributed until the amount of such
Participant’s remaining Elective Deferrals equals the Elective Deferrals (less Catch-Up
Contributions) of the Participant who is the Highly Compensated Employee having the second
largest dollar amount of Elective Deferrals (less Catch-Up Contributions). This process shall
continue until the total amount of Excess Contributions has been eliminated. In determining the
amount of Excess Contributions to be treated as Catch-Up Contributions and/or distributed with
respect to an affected Participant who is a Highly Compensated Employee as determined herein,
such amount shall be reduced pursuant to Section 4.2(g) by any Excess Deferrals previously
distributed to such affected Participant who is a Highly Compensated Employee for such
Participant’s taxable year ending with or within such Plan Year.

(1) Corrective distribution. With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:

(i) may be postponed but not later than the last day of the twelve-month period
following the Plan Year to which they are allocable;

(ii) shall be made first from unmatched Elective Deferrals and, thereafter,
proportionately from Elective Deferrals which are matched and the related Matching
Contributions that are used in the ADP Test pursuant to Section 4.5;

(iii) shall be adjusted for Income; and

(iv) shall be designated by the Employer as a distribution of Excess Contributions (and
Income).

 

35

 

Matching contributions which relate to Excess Contributions that are distributed
pursuant to this subsection shall be treated as a Forfeiture to the extent required
pursuant to Code Section 401(a)(4) and the Regulations thereunder, unless the related
Matching Contribution is distributed as an Excess Contribution or as an Excess
Aggregate Contribution.

(2) Income and principal. Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata distribution of Excess Contributions and
Income.

(3) Related Matching Contributions. Matching Contributions which relate to Excess
Contributions shall be forfeited unless the related Matching Contribution is distributed as
an Excess Aggregate Contribution pursuant to Section 4.8.

(c) Administrator may prevent projected failure. If during a Plan Year, it is projected that
the aggregate amount of Elective Deferrals to be allocated to all Highly Compensated
Participants under this Plan would cause the Plan to fail the tests set forth in
Section 4.5(a), then the Administrator may automatically reduce the deferral amount of affected
Highly Compensated Participants, beginning with the Highly Compensated Participant who has the
highest ADR until it is anticipated the Plan will pass the tests or until such Participant’s
ADR equals the ADR of the Highly Compensated Participant having the next highest ADR. This
process may continue until it is anticipated that the Plan will satisfy one of the tests set
forth in Section 4.5(a). Alternatively, the Employer may specify a maximum percentage of
Compensation that may be deferred.

(d) Excise tax after 2 1/2 months. Any Excess Contributions (and Income) which are distributed
on or after 2 1/2 months after the end of the Plan Year shall be subject to the ten percent
(10%) Employer excise tax imposed by Code Section 4979.

4.7 ACTUAL CONTRIBUTION PERCENTAGE TEST

(a) ACP Test. The ACP for Highly Compensated Employees who are Participants for each Plan Year
and the ACP for Nonhighly Compensated Employees who are Participants for each Plan Year (or for
the preceding Plan Year if the prior year testing method is used) shall satisfy one of the
following tests:

(1) The ACP for the group of Highly Compensated Employees who are Participants shall not
exceed the ACP for the group of Nonhighly Compensated Employees who are Participants (for
the preceding Plan Year if the prior year testing method is used to calculate the ACP for
the group of Nonhighly Compensated Employees who are Participants) multiplied by 1.25; or

(2) The ACP for the group of Highly Compensated Employees who are Participants shall not
exceed the ACP for the group of Nonhighly Compensated Employees who are Participants (for
the preceding Plan Year, if the prior year testing method is used to calculate the ACP for
the group of Nonhighly Compensated Employees who are Participants) by more than two
percentage points. Furthermore, the ACP for the group of Highly Compensated Employees who
are Participants shall not exceed the ACP for the group of Nonhighly Compensated Employees
who are Participants (for the preceding Plan Year, if the prior year testing method is used
to calculate the ACP for the group of Nonhighly Compensated Employees who are Participants)
multiplied by 2.

(b) Prior-year test upon amendment. Notwithstanding the above, if the prior year test method is
used to calculate the ACP for the group of Nonhighly Compensated Employees who are Participants
for the first Plan Year of this amendment and restatement, then the ACP for the group of
Nonhighly Compensated Employees who are Participants for the preceding Plan Year shall be
calculated pursuant to the provisions of the Plan then in effect.

 

36

 

(c) Aggregation with other plans. In the event that this Plan satisfies the requirements of
Code Sections 401(a)(4), 401(m), or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of such sections of the Code only if
aggregated with this Plan
(other than the average benefits test under Code Section 410(b)(2)(A)(ii)), then this Section
shall be applied by determining the ACP of Employees as if all such plans were a single plan.
If more than ten percent (10%) of the Employer’s Nonhighly Compensated Employees are involved
in a plan coverage change as defined in Regulation Section 1.401(m)-2(c)(4), then any
adjustments to the Nonhighly Compensated Employees ACP for the prior year will be made in
accordance with such Regulations, unless the Employer has elected to use the current year
testing method. Plans may be aggregated in order to satisfy Code Section 401(m) only if they
have the same Plan Year and use the same ACP testing method.

(d) ACP of Highly Compensated Employee in multiple plans. For the purposes of this Section, if
a Highly Compensated Employee is a Participant under two (2) or more plans which are maintained
by the Employer or an Affiliated Employer to which Matching Contributions, nondeductible
Employee contributions, or both, are made, then all such contributions on behalf of such Highly
Compensated Employee shall be aggregated for purposes of determining such Highly Compensated
Employee’s ACR. If the plans have different plan years, then all such contributions made during
the Plan Year under all such arrangements shall be aggregated. However, for Plan Years
beginning before 2006 this paragraph shall be applied by treating all plans ending with or
within the same calendar year as a single plan. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated under Regulations under Code Section
401(m).

(e) Current year testing method. For the purpose of this Section, when calculating the ACP for
the group of Nonhighly Compensated Employees who are Participants, the current year testing
method shall be used. Once the current year testing method has been elected, then the Employer
may elect to use the prior year testing method for a Plan Year only if the Plan has used the
current year testing method for each of the preceding 5 Plan Years (or if lesser, the number of
Plan Years that the Plan has been in existence) or if, as a result of a merger or acquisition
described in Code Section 410(b)(6)(C)(i), the Employer maintains both a plan using prior year
testing method and a plan using current year testing method and the change is made within the
transition period described in Code Section 410(b)(6)(C)(ii).

(f) Otherwise excludable Employee and early participation rules. Notwithstanding anything in
this Section to the contrary, the provisions of this Section and Section 4.8 may be applied
separately (or will be applied separately to the extent required by Regulations) to each plan
within the meaning of Regulation Section 1.401(m)-1(b)(4). For purposes of applying this
provision, the Administrator may use any effective date of participation that is permitted
under Code Section 410(b) provided such date is applied on a consistent and uniform basis to
all Participants. Alternatively, the provisions of Code Section 401(m)(5)(C) may be used to
exclude from consideration all Nonhighly Compensated Employees who have not satisfied the
greatest minimum age and service requirements of Code Section 410(a)(1)(A).

(g) Targeted Matching Contributions. Notwithstanding the preceding, for Plan Years beginning in
and after 2006, a Matching Contribution (and a Qualified Matching Contribution not used in the
ADP Test) with respect to an Elective Deferral for a year is not taken into account in
determining the ACP for Nonhighly Compensated Employees to the extent it exceeds the greatest
of:

(1) five percent (5%) of the Participant’s 414(s) Compensation for the year;

(2) the Employee’s Elective Deferrals for the year; and

(3) the product of two (2) times the Plan’s “representative matching rate” and the
Participant’s Elective Deferrals for the year.

For purposes of this subsection, the Plan’s “representative matching rate” is the lowest
“matching rate” for any eligible Nonhighly Compensated Employee among a group of Nonhighly
Compensated Employees that consists of half of all eligible Nonhighly Compensated Employees in
the Plan for the Plan Year who make Elective Deferrals for the Plan Year (or, if greater, the
lowest “matching rate” for
all eligible Nonhighly Compensated Employees in the Plan who are employed by the Employer
on the last day of the Plan Year and who make Elective Deferrals for the Plan Year).

 

37

 

For purposes of this subsection, the “matching rate” for an Employee generally is the
Matching Contributions (and Qualified Matching Contributions not used in the ADP Test) made for
such Employee divided by the Employee’s Elective Deferrals for the year. If the matching rate
is not the same for all levels of Elective Deferrals for an Employee, then the Employee’s
“matching rate” is determined assuming that an Employee’s Elective Deferrals are equal to six
percent (6%) of 414(s) Compensation.

(h) Targeted Qualified Nonelective Contributions. Notwithstanding the preceding, for Plan Years
beginning in and after 2006, Qualified Nonelective Contributions cannot be taken into account
in determining the ACR for a Plan Year for a Nonhighly Compensated Employee to the extent such
contributions exceed the product of that Nonhighly Compensated Employee’s 414(s) Compensation
and the greater of five percent (5%) or two times the Plan’s “representative contribution
rate.” Any Qualified Nonelective Contribution taken into account in the ADP test under
Regulation Section 1.401(k)-2(a)(6) (including determination of the representative contribution
rate for purposes of Regulation Section 1.401(k)-2(a)(6)(iv)(B)), is not permitted to be taken
into account for purposes of this paragraph (including the determination of the representative
contribution rate under this Section). For purposes of this subsection:

(1) The Plan’s “representative contribution rate” is the lowest applicable contribution
rate of any eligible Nonhighly Compensated Employee among a group of eligible Nonhighly
Compensated Employees that consists of half of all eligible Nonhighly Compensated Employees
for the Plan Year (or, if greater, the lowest “applicable contribution rate” of any
eligible Nonhighly Compensated Employee in the group of all eligible Nonhighly Compensated
Employees for the Plan Year and who is employed by the Employer on the last day of the Plan
Year), and

(2) The “applicable contribution rate” for an eligible Nonhighly Compensated Employee is
the sum of the Matching Contributions taken into account under this Section for the
eligible Nonhighly Compensated Employee for the Plan Year and the Qualified Nonelective
Contributions taken into account under this Section made for the eligible Nonhighly
Compensated Employee for the Plan Year, divided by the eligible Nonhighly Compensated
Employee’s 414(s) Compensation for the same period.

Restrictions of Qualified Nonelective Contributions and Qualified Matching Contributions.
Qualified Nonelective Contributions and Qualified Matching Contributions cannot be taken into
account to determine the ACP to the extent such contributions are taken into account for
purposes of satisfying any other ACP Test, any ADP Test, or the requirements of Regulation
Sections 1.401(k)-3, 1.401(m)-3 or 1.401(k)-4. Thus, for example, Qualified Nonelective
Contributions that are made pursuant to Regulation Section 1.401(k)-3(b) cannot be taken into
account under the ACP Test. Similarly, if a plan switches from the current year testing method
to the prior year testing method pursuant to Regulation Section 1.401(m)-2(c)(1), then
Qualified Nonelective Contributions that are taken into account under the current year testing
method for a year may not be taken into account under the prior year testing method for the
next year.

(i) ACP when no Nonhighly Compensated Employees. If, for the applicable year for determining
the ACP of the Nonhighly Compensated Employees for a Plan Year, there are no eligible Nonhighly
Compensated Employees, then the Plan is deemed to satisfy the ACP Test for the Plan Year.

(j) Repeal of multiple use test. The multiple use test described in Code Section 401(m) in
effect prior to the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001
shall not apply for Plan Years beginning after December 31, 2001.

 

38

 

4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TEST

(a) Authority to correct. In the event that the ACP Test set forth in Section 4.7(a) is not
satisfied, the Administrator shall implement some or all of the provisions of this Section in
order to correct such failure.

(b) Corrective distribution or Forfeiture. On or before the close of the following Plan Year,
the Participant who is the Highly Compensated Employee having the largest dollar amount of
Contribution Percentage Amounts shall have a portion of such Contribution Percentage Amounts
(and Income allocable to such amounts) distributed or, if non-Vested, treated as a Forfeiture
(including Income allocable to such Forfeitures) until the total amount of Excess Aggregate
Contributions has been distributed, or until the amount of the Participant’s Contribution
Percentage Amounts equals the Contribution Percentage Amounts of the Participant who is a
Highly Compensated Employee having the next largest amount of Contribution Percentage Amounts.
This process shall continue until the total amount of Excess Aggregate Contributions has been
distributed or forfeited. Any distribution and/or Forfeiture of Contribution Percentage Amounts
shall be made in the following order:

(1) Matching Contributions distributed and/or forfeited pursuant to Section 4.6(b);

(2) Any remaining Matching Contributions.

If the distribution of Excess Aggregate Contributions attributable to Matching
Contributions is not in proportion to the Vested and non-Vested portion of such Matching
Contributions, then the Vested portion of the Participant’s Matching Contribution Account after
the distribution shall be subject to Section 6.5(d).

(c) Source of corrective distribution or Forfeiture. Any distribution and/or Forfeiture of less
than the entire amount of Excess Aggregate Contributions (and Income) shall be treated as a
pro rata distribution and/or Forfeiture of Excess Aggregate Contributions (and Income).
Distribution of Excess Aggregate Contributions shall be designated by the Employer as a
distribution of Excess Aggregate Contributions (and Income). Forfeitures of Excess Aggregate
Contributions shall be treated in accordance with Section 4.4.

(d) Treatment of Excess Aggregate Contributions. Excess Aggregate Contributions, including
Matching Contributions that are treated as Forfeitures, shall be treated as Employer
contributions for purposes of Code Sections 404 and 415 even if distributed from the Plan.

(e) Ordering of tests. The determination of the amount of Excess Aggregate Contributions with
respect to any Plan Year shall be made after first determining the Excess Contributions, if
any, to be treated as After-Tax Voluntary Contributions due to recharacterization for the Plan
Year of any other qualified cash or deferred arrangement (as defined in Code Section 401(k))
maintained by the Employer that ends with or within the Plan Year.

(f) Administrator may prevent projected failure. If during a Plan Year the projected aggregate
Contribution Percentage Amounts to be allocated to all Participants who are Highly Compensated
Employees under this Plan would, by virtue of the ACP Test of Section 4.7(a), cause the Plan to
fail the ACP Test, then the Administrator may automatically reduce proportionately or in the
order provided in Section 4.8(b) the projected share each affected Participant who is a Highly
Compensated Employee of such contributions by an amount necessary to satisfy the ACP Test of
Section 4.7(a).

 

39

 

(g) Corrective contributions. Notwithstanding the above, if the current year testing method is
used, within twelve (12) months after the end of the Plan Year, the Employer may make a
Qualified Nonelective Contribution or Matching Contribution in accordance with one of the
following provisions, which contribution shall be allocated to the Qualified Nonelective
Contribution Account, Qualified Matching Contribution Account, or Matching Account of each
Participant who is a Nonhighly Compensated Employee eligible to share in the allocation in
accordance with such provision. If the prior year testing method is used, then a Qualified
Nonelective Contribution may not be made to correct a failed ACP test. The Employer shall
provide the Administrator with written
notification of the amount of the contribution being made and for which provision it is being
made pursuant to:

(1) A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated
Participants in an amount sufficient to satisfy one of the tests set forth in
Section 4.7(a). Such contribution shall be allocated in the same proportion that each
Nonhighly Compensated Employee’s 414(s) Compensation for the year bears to the total 414(s)
Compensation of all Nonhighly Compensated Employees for such year.

(2) A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated
Employees in an amount sufficient to satisfy one of the tests set forth in Section 4.7(a).
Such contribution shall be allocated in the same proportion that each Nonhighly Compensated
Employee’s 414(s) Compensation for the year bears to the total 414(s) Compensation of all
Nonhighly Compensated Employees for such year. However, for purposes of this contribution,
Nonhighly Compensated Employees who are not employed at the end of the Plan Year shall not
be eligible to share in the allocation and shall be disregarded.

(3) A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated
Employees in an amount sufficient to satisfy one of the tests set forth in Section 4.7(a).
Such contribution shall be allocated in equal amounts (per capita).

(4) A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated
Employees in an amount sufficient to satisfy one of the tests set forth in Section 4.7(a).
Such contribution shall be allocated in equal amounts (per capita). However, for purposes
of this contribution, Nonhighly Compensated Employees who are not employed at the end of
the Plan Year shall not be eligible to share in the allocation and shall be disregarded.

(5) A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated
Employees in an amount sufficient to satisfy one of the tests set forth in Section 4.7(a).
Such contribution shall be allocated to the Qualified Nonelective Contribution Account of
the Nonhighly Compensated Employee having the lowest 414(s) Compensation, until one of the
tests set forth in Section 4.7(a) is satisfied, or until such Nonhighly Compensated
Employee has received the maximum permissible amount pursuant to Section 4.9, or the
maximum that may be taken into account in the ACP Test pursuant to Section 4.7(h) (Targeted
Qualified Nonelective Contributions). This process shall continue until one of the tests
set forth in Section 4.7(a) is satisfied.

(6) A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated
Employees in an amount sufficient to satisfy one of the tests set forth in Section 4.7(a).
Such contribution shall be allocated to the Qualified Nonelective Contribution Account of
the Nonhighly Compensated Employee having the lowest 414(s) Compensation, until one of the
tests set forth in Section 4.7(a) is satisfied, or until such Nonhighly Compensated
Employee has received the maximum permissible amount pursuant to Section 4.9, or the
maximum that may be taken into account in the ACP Test pursuant to Section 4.7(h) (Targeted
Qualified Nonelective Contributions). This process shall continue until one of the tests
set forth in Section 4.7(a) is satisfied. However, for purposes of this contribution,
Nonhighly Compensated Employees who are not employed at the end of the Plan Year shall not
be eligible to share in the allocation and shall be disregarded.

 

40

 

(7) A Matching Contribution or Qualified Matching Contribution may be made on behalf of
Nonhighly Compensated Employees in an amount sufficient to satisfy one of the tests set
forth in Section 4.7(a). Such contribution shall be allocated to the Qualified Matching
Contribution Account of each Nonhighly Compensated Employee in the same proportion that
each Nonhighly Compensated Employee’s Elective Deferrals for the year bears to the total
Elective Deferrals of all Nonhighly Compensated Employees.

(8) A Matching Contribution or Qualified Matching Contribution may be made on behalf of
Nonhighly Compensated Employees in an amount sufficient to satisfy one of the tests set
forth in Section 4.7(a). Such contribution shall be allocated to the Qualified Matching
Contribution Account of each Nonhighly Compensated Employee in the same proportion that
each Nonhighly Compensated Employee’s Elective Deferrals for the year bears to the total
Elective Deferrals of all Nonhighly Compensated Employees. However, for purposes of this
contribution, Nonhighly Compensated Employees who are not employed at the end of the Plan
Year shall not be eligible to share in the allocation and shall be disregarded.

(9) A Matching Contribution or Qualified Matching Contribution may be made on behalf of
Nonhighly Compensated Employees in an amount sufficient to satisfy one of the tests set
forth in Section 4.7(a). Such contribution shall be allocated to the Qualified Matching
Contribution Account of the Nonhighly Compensated Employee having the lowest Elective
Deferrals until one of the tests set forth in Section 4.7(a) is satisfied, or until such
Nonhighly Compensated Employee has received the maximum permissible amount pursuant to
Section 4.9, subject to the restriction on Targeted Matching Contributions imposed by the
provisions of Section 4.7(g). This process shall continue until one of the tests set forth
in Section 4.7(a) is satisfied.

(10) A Matching Contribution or Qualified Matching Contribution may be made on behalf of
Nonhighly Compensated Employees in an amount sufficient to satisfy one of the tests set
forth in Section 4.7(a). Such contribution shall be allocated to the Qualified Matching
Contribution Account of the Nonhighly Compensated Employee having the lowest Elective
Deferrals until one of the tests set forth in Section 4.7(a) is satisfied, or until such
Nonhighly Compensated Employee has received the maximum permissible amount pursuant to
Section 4.9, subject to the restriction on Targeted Matching Contributions imposed by the
provisions of Section 4.7(g). This process shall continue until one of the tests set forth
in Section 4.7(a) is satisfied. However, for purposes of this contribution, Nonhighly
Compensated Employees who are not employed at the end of the Plan Year shall not be
eligible to share in the allocation and shall be disregarded.

(h) Excise tax. Any Excess Aggregate Contributions (and Income) which are distributed on or
after 2 1/2 months after the end of the Plan Year shall be subject to the ten percent (10%)
Employer excise tax imposed by Code Section 4979.

4.9 MAXIMUM ANNUAL ADDITIONS

(a) Maximum permissible amount. Notwithstanding the foregoing, for Limitation Years beginning
after December 31, 2001, the maximum Annual Additions credited to a Participant’s Accounts for
any Limitation Year shall equal the lesser of:

(1) $40,000 adjusted annually as provided in Code Section 415(d) pursuant to the
Regulations, or

(2) one-hundred percent (100%) of the Participant’s 415 Compensation for such Limitation
Year.

The percentage limitation in paragraph (2) above shall not apply to: (1) any contribution
for medical benefits (within the meaning of Code Section 419A(f)(2)) after separation from
service which is otherwise treated as an annual addition, or (2) any amount otherwise treated
as an annual addition under Code Section 415(l)(1).

For any short Limitation Year, the dollar limitation in paragraph (1) above shall be
reduced by a fraction, the numerator of which is the number of full months in the short
Limitation Year and the denominator of which is twelve (12).

(b) Reasonable estimate permissible. Prior to determining the Participant’s actual 415
Compensation for the Limitation Year, the Employer may determine the maximum permissible amount
for a Participant on the basis of a reasonable estimation of the Participant’s 415 Compensation
for the Limitation Year, uniformly determined for all Participants similarly situated. As soon
as is
administratively feasible after the end of the Limitation Year, the maximum permissible amount
for the Limitation Year will be determined on the basis of the Participant’s actual 415
Compensation for the Limitation Year.

 

41

 

(c) Excess Annual Additions defined. For purposes of this Article, the term “Excess Annual
Additions” for any Participant for a Limitation Year means a Participant’s Annual Additions
under this Plan and such other plans of the Employer or Affiliated Employer that are in excess
of the maximum permissible amount of Section 4.9 for a Limitation Year. The Excess Annual
Additions will be deemed to consist of the Annual Additions last allocated, except that Annual
Additions attributable to a simplified employee pension will be deemed to have been allocated
first, followed by Annual Additions to a welfare benefit fund or individual medical account,
and then by Annual Additions to a plan subject to Code Section 412, regardless of the actual
allocation date.

(d) Annual Additions can cease when maximum permissible amount reached. If the Employer
contribution that would otherwise be contributed or allocated to the Participant’s Accounts
would cause the Annual Additions for the Limitation Year to exceed the maximum permissible
amount, then the amount that would otherwise be contributed or allocated will be reduced so
that the Annual Additions for the Limitation Year will equal the maximum permissible amount,
and any such amounts which would have been allocated to such Participant may be allocated to
other Participants.

(e) All DC plans treated as one plan. For the purpose of this Section, all qualified defined
contribution plans (regardless of whether such plan has terminated) maintained by the Employer
during a Limitation Year shall be treated as one defined contribution plan.

(f) All Employees of Related Employers treated as employed by one Employer. For the purpose of
this Section, if the Employer is a member of a controlled group of corporations, trades or
businesses under common control (as defined by Code Section 1563(a) or Code Section 414(b) and
(c) as modified by Code Section 415(h)), is a member of an affiliated service group (as defined
by Code Section 414(m)), or is a member of a group of entities required to be aggregated
pursuant to Regulations under Code Section 414(o), then all Employees of such Employers shall
be considered to be employed by a single Employer.

(g) 413(c) Plan. If this is a plan described in Code Section 413(c) (other than a plan
described in Code Section 414(f)), then all of the benefits or contributions attributable to a
Participant from all of the Employers maintaining this Plan shall be taken into account in
applying the limits of this Section with respect to such Participant. Furthermore, in applying
the limitations of this Section with respect to such a Participant, the total 415 Compensation
received by the Participant from all of the Employers maintaining the Plan shall be taken into
account.

(h)(1) DC Plans with same/different Anniversary Dates. If a Participant participates in more
than one defined contribution plan maintained by the Employer that have different Anniversary
Dates, then the maximum permissible amount under this Plan shall equal the maximum permissible
amount for the Limitation Year minus any Annual Additions previously credited to such
Participant’s Accounts during the Limitation Year.

(2) If a Participant participates in both a defined contribution plan subject to Code
Section 412 and a defined contribution plan not subject to Code Section 412 maintained by
the Employer which have the same Anniversary Date, then Annual Additions will be credited
to the Participant’s Accounts under the defined contribution plan subject to Code
Section 412 prior to crediting Annual Additions to the Participant’s Accounts under the
defined contribution plan not subject to Code Section 412.

(3) If a Participant participates in more than one defined contribution plan not subject to
Code Section 412 maintained by the Employer which have the same Anniversary Date, then the
maximum permissible amount under this Plan shall equal the product of (A) the maximum
permissible amount for the Limitation Year minus any Annual Additions previously credited
under subparagraphs (1) or (2) above, multiplied by (B) a fraction (i) the numerator of
which is the Annual Additions which would be credited to such Participant’s Accounts under
this Plan without regard to the limitations of Code Section 415 and (ii) the denominator of
which is such Annual Additions for all plans described in this subparagraph.

 

42

 

4.10 ADJUSTMENT FOR EXCESS ANNUAL ADDITIONS

(a) Disposal of Excess Annual Additions. Allocation of Annual Additions to a Participant’s
Account for a Limitation Year generally will cease in accordance with Section 4.9(d) once the
maximum permissible amount of Section 4.9 has been reached for such Limitation Year. However,
if, as a result of a reasonable error in estimating a Participant’s Compensation, a reasonable
error in determining the amount of Elective Deferrals (within the meaning of Code
Section 402(g)(3)) that may be made with respect to any Participant with respect to the maximum
permissible amount of Section 4.9 or other facts and circumstances to which
Regulation 1.415-6(b)(6) shall be applicable, the Annual Additions under this Plan would cause
Excess Annual Additions for any Participant, then the Excess Annual Additions will be disposed
of in one of the following ways, as uniformly determined by the Administrator for all
Participants similarly situated.

(1) Any unmatched Elective Deferrals and, thereafter, proportionately from Elective
Deferrals which are matched and Matching Contributions which relate to such Elective
Deferrals, will be reduced to the extent they would reduce the Excess Annual Additions. The
Elective Deferrals (and any gains attributable to such Elective Deferrals) shall be
distributed to the Participant and the Matching Contributions (and any gains attributable
to such Matching Contributions) will be used to reduce the Employer contribution in the
next Limitation Year;

(2) If the Participant is covered by the Plan at the end of the Limitation Year, then the
Excess Annual Additions will be used to reduce the Employer contribution for such
Participant in the next Limitation Year, and each succeeding Limitation Year if necessary;

(3) If the Participant is not covered by the Plan at the end of the Limitation Year, then
the Excess Annual Additions will be held unallocated in a “Section 415 suspense account.”
The “Section 415 suspense account” will be applied to reduce future Employer contributions
for all remaining Participants in the next Limitation Year, and each succeeding Limitation
Year if necessary;

(4) If a “Section 415 suspense account” is in existence at any time during the Limitation
Year pursuant to this Section, then the “Section 415 suspense account” will not participate
in the allocation of investment gains and losses of the Trust Fund. If a “Section 415
suspense account” is in existence at any time during a particular Limitation Year, then all
amounts in the “Section 415 suspense account” must be allocated and reallocated to
Participants’ Accounts before any Employer contributions or any Employee contributions may
be made to the Plan for that Limitation Year. Except as provided above, Excess Annual
Additions may not be distributed to Participants.

(b) Section 415 suspense account defined. For purposes of this Section, the term “Section 415
suspense account” means an unallocated account equal to the sum of Excess Annual Additions for
all Participants in the Plan during the Limitation Year.

 

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4.11 PLAN-TO-PLAN TRANSFERS (OTHER THAN ROLLOVERS) FROM QUALIFIED PLANS

(a) Transfers into this Plan. With the consent of the Administrator (such consent must be
exercised in a nondiscriminatory manner and applied uniformly to all Participants), amounts may
be transferred (within the meaning of Code Section 414(l)) to this Plan from other tax
qualified plans under Code Section 401(a), provided that the plan from which such funds are
transferred permits the transfer to be made, the funds are not subject to the notice and
consent requirements of Code Section 417 (i.e., qualified joint and survivor annuity
requirements), and the transfer will not jeopardize the tax exempt
status of the Plan or Trust or create adverse tax consequences for the Employer. Prior to
accepting any transfers to which this Section applies, the Administrator may require
satisfactory evidence that the amounts to be transferred meet the requirements of this Section.
The transferred amounts shall be allocated to the Transfer Account of the Participant.

At the time of the transfer, the nonforfeitable percentage of the funds under the
transferor plan shall apply, but thereafter shall increase (if applicable) for each Year of
Service that the Participant completes after such transfer in accordance with the Vesting
provisions of this Plan applicable to the type of Account represented by the transferred funds
(e.g., transferred nonelective funds will be subject to the vesting schedule applicable to
Nonelective Contributions under this Plan). If the vesting schedule applicable to a Transferred
Account changes as a result of this paragraph, such change will be treated as an amendment to
the vesting schedule for each affected Participant.

(b) Accounting of transfers. The Transfer Account of a Participant shall be held by the Trustee
pursuant to the provisions of this Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in paragraph (d) of this Section. The
Trustee shall have no duty or responsibility to inquire as to the propriety of the amount,
value or type of assets transferred, nor to conduct any due diligence with respect to such
assets; provided, however, that such assets are otherwise eligible to be held by the Trustee
under the terms of this Plan.

(c) Restrictions on elective deferrals. Except as permitted by Regulations (including
Regulation Section 1.411(d)-4), amounts attributable to elective deferrals (as defined in
Regulation Section 1.401(k)-6), including amounts treated as elective deferrals, which are
transferred from another qualified plan in a plan-to-plan transfer (other than a direct
rollover) shall be subject to the distribution limitations provided for in Code Section
401(k)(2) and the Regulations.

(d) Distribution of Transfer Account. At Normal Retirement Date, or such other date when the
Participant or the Participant’s Beneficiary shall be entitled to receive benefits, the
Transfer Account of a Participant shall be used to provide additional benefits to the
Participant or the Participant’s Beneficiary. Any distributions of amounts held in the Transfer
Account shall be made in a manner which is consistent with and satisfies the provisions of
Sections 6.5 and 6.6, including, but not limited to, all notice and consent requirements of
Code Section 411(a)(11) and the Regulations thereunder. Furthermore, the Transfer Account shall
be considered as part of a Participant’s benefit in determining whether an involuntary cash-out
of benefits may be made without Participant consent.

(e) Segregation. The Administrator may direct that Employee transfers made after a Valuation
Date be segregated into a separate account for each Participant until such time as the
allocations pursuant to this Plan have been made, at which time they may remain segregated or
be invested as part of the general Trust Fund or be directed by the Participant pursuant to
Section 4.14.

(f) Protected benefits. Notwithstanding anything herein to the contrary, a transfer directly to
this Plan from another qualified plan (or a transaction having the effect of such a transfer)
shall only be permitted if it will not result in the elimination or reduction of any “Section
411(d)(6) protected benefit” as described in Section 7.1(e).

(g) Separate Accounts. With respect to each Participant’s Transfer Account, separate
sub-accounts shall be maintained to the extent necessary to carry out the provisions of this
Plan.

 

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4.12 ROLLOVERS FROM OTHER PLANS

(a) Acceptance of rollovers into the Plan. This Section applies to a rollover from an eligible
retirement plan into this Plan made on or after January 1, 2002. With the consent of the
Administrator (such consent must be exercised in a nondiscriminatory manner and applied
uniformly to all Participants), the Plan may accept a rollover by Participants, excluding
Participants who are no longer employed as an Employee and including Eligible Employees,
provided the rollover will not jeopardize the tax-exempt status of the Plan or create adverse
tax consequences for the Employer. The rollover
amounts shall be allocated to the Rollover Account of the Participant. The Rollover Account of
a Participant shall be 100% Vested at all times and shall not be subject to Forfeiture for any
reason.

(b) Treatment of Rollover Account in the Plan. The Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be withdrawn by, or distributed to
the Participant, in whole or in part, except as provided in paragraph (c) of this Section. The
Trustee shall have no duty or responsibility to inquire as to the propriety of the amount,
value or type of assets transferred, nor to conduct any due diligence with respect to such
assets; provided, however, that such assets are otherwise eligible to be held by the Trustee
under the terms of this Plan.

(c) Distribution of rollovers. The Administrator, at the election of the Participant, shall
direct the Trustee to distribute all or a portion of the amount credited to the Participant’s
Rollover Account at any time. Furthermore, amounts in the Participant’s Rollover Account, with
respect to distributions made on and after January 1, 2002, shall not be considered as part of
a Participant’s benefit in determining whether the $5,000 threshold has been exceeded for
purposes of the timing or form of payments under the Plan. Notwithstanding the foregoing,
amounts in the Rollover Account, with respect to distributions made on or after March 28, 2005,
shall be considered in determining whether a mandatory involuntary cash-out distribution of
benefits may be made without Participant consent. Any distributions of amounts that are held in
the Rollover Account shall be made in a manner which is consistent with and satisfies the
provisions of Sections 6.5 and 6.6, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations thereunder.

(d) Limits on accepting rollovers. Prior to accepting any rollovers to which this Section
applies, the Administrator may require the Employee to provide evidence that the amounts to be
rolled over to this Plan meet the requirements of this Section. The Employer may instruct the
Administrator, operationally and on a nondiscriminatory basis, to limit the source of rollovers
that may be accepted by the Plan.

(e) Rollovers maintained in a separate account. The Administrator may direct that rollovers
received after a Valuation Date be segregated into a separate account for each Participant
until such time as the allocations pursuant to this Plan have been made, at which time they may
remain segregated or be invested as part of the general Trust Fund or be directed by the
Participant pursuant to Section 4.14.

(f) Definitions. For purposes of this Section, the following definitions shall apply:

(1) The term “rollover” means: (i) amounts transferred to this Plan directly from another
“eligible retirement plan;” (ii) distributions received by an Employee from other “eligible
retirement plans” which are eligible for tax-free rollover to an “eligible retirement plan”
and which are transferred by the Employee to this Plan within sixty (60) days following
receipt thereof; and (iii) any other amounts which are eligible to be rolled over to this
Plan pursuant to the Code.

(2) The term “eligible retirement plan” means an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code Section 408(b)
(other than an endowment contract), a qualified trust (an employees’ trust described in
Code Section 401(a) which is exempt from tax under Code Section 501(a)), an annuity plan
described in Code Section 403(a), an eligible deferred compensation plan described in Code
Section 457(b) which is maintained by an eligible employer described in Code
Section 457(e)(1)(A), and an annuity contract described in Code Section 403(b).

 

45

 

4.13 AFTER-TAX VOLUNTARY CONTRIBUTIONS

(a) After-Tax Voluntary Contributions previously allowed. Any After-Tax Voluntary Contributions
shall be maintained in each Participant’s Voluntary Contribution Account.

(b) 100% Vesting. The balance in each Participant’s After-Tax Voluntary Contribution Account
shall be 100% Vested at all times and shall not be subject to Forfeiture for any reason.

(c) Distribution at any time. A Participant may elect to receive a distribution at any time of
After-Tax Voluntary Contributions from such Participant’s After-Tax Voluntary Contribution
Account and the actual earnings thereon in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice and consent requirements
of Code Section 411(a)(11) and the Regulations thereunder. If the Administrator maintains
sub-accounts with respect to After-Tax Voluntary Contributions (and earnings thereon) that were
made on or before a specified date, then a Participant shall be permitted to designate which
sub-account shall be the source for withdrawal. Forfeitures of any Employer contributions shall
not occur solely as a result of an Employee’s withdrawal of After-Tax Voluntary Contributions.

(d) After-Tax Voluntary Contribution Account used for additional benefits. At Normal Retirement
Date, or such other date when the Participant or the Participant’s Beneficiary is entitled to
receive benefits, the Participant’s After-Tax Voluntary Contribution Account shall be used to
provide additional benefits to the Participant or the Participant’s Beneficiary.

4.14 PARTICIPANT DIRECTED INVESTMENTS

(a) Directed Investments allowed. Participants may, subject to a procedure established by the
Administrator (the Participant Direction Procedures) and applied in a uniform nondiscriminatory
manner, direct the Trustee, in writing (or in such other form which is acceptable to the
Trustee), to invest their entire Accounts in specific assets, specific funds or other
investments permitted under the Plan and the Participant Direction Procedures. That portion of
the interest of any Participant so directing will thereupon be considered a Participant’s
Directed Account.

(b) Establishment of Participant Direction Procedures. The Administrator will establish
Participant Direction Procedures, to be applied in a uniform and nondiscriminatory manner,
setting forth the permissible investment options under this Section, how often changes between
investments may be made, and any other limitations and provisions that the Administrator may
impose on a Participant’s right to direct investments.

(c) Administrative discretion. The Administrator may, in its discretion, include or exclude by
amendment or other action from the Participant Direction Procedures such instructions,
guidelines or policies as it deems necessary or appropriate to ensure proper administration of
the Plan, and may interpret the same accordingly.

(d) Allocation of earnings. As of each Valuation Date, all Participant Directed Accounts shall
be charged or credited with the net earnings, gains, losses and expenses as well as any
appreciation or depreciation in the market value using publicly listed fair market values when
available or appropriate as follows:

(1) to the extent that the assets in a Participant’s Directed Account are accounted for as
pooled assets or investments, the allocation of earnings, gains and losses of each
Participant’s Directed Account shall be based upon the total amount of funds so invested in
a manner proportionate to the Participant’s share of such pooled investment; and

(2) to the extent that the assets in the Participant’s Directed Account are accounted for
as segregated assets, the allocation of earnings, gains and losses from such assets shall
be made on a separate and distinct basis.

 

46

 

(e) Plan will follow investment directions. Investment directions will be processed as soon as
administratively practicable after proper investment directions are received from the
Participant. No guarantee is made by the Plan, Employer, Administrator or Trustee that
investment directions will be processed on a daily basis, and no guarantee is made in any
respect regarding the processing time of an investment direction. Notwithstanding any other
provision of the Plan, the Employer, Administrator or Trustee reserves the right to not value
an investment option on any given Valuation Date for any reason deemed appropriate by the
Employer, Administrator or Trustee. Furthermore, the processing of any investment transaction
may be delayed for any legitimate business reason or force majeure (including, but not limited
to, failure of systems or computer programs, failure of the means of the transmission of data,
the failure of a service provider to timely receive values or prices, and correction for errors
or omissions or the errors or omissions of any service provider). The processing date of a
transaction will be binding for all purposes of the Plan and considered the applicable
Valuation Date for an investment transaction.

(f) Section 404(c) provisions. The Participant Direction Procedures shall provide an
explanation of the circumstances under which Participants and their Beneficiaries may give
investment instructions, including, but not limited to, the following to the extent required
under the Department of Labor regulations or guidance:

(1) the conveyance of instructions by the Participants and their Beneficiaries to invest
Participant Directed Accounts in Directed Investment Options;

(2) the name, address and phone number of the Fiduciary (and, if applicable, the person or
persons designated by the Fiduciary to act on its behalf) responsible for providing
information to the Participant or a Beneficiary upon request relating to the Directed
Investment Options;

(3) applicable restrictions on transfers to and from any Designated Investment Alternative;

(4) any restrictions on the exercise of voting, tender and similar rights related to a
Directed Investment Option by the Participants or their Beneficiaries;

(5) a description of any transaction fees and expenses which affect the balances in
Participant Directed Accounts in connection with the purchase or sale of Directed
Investment Options; and

(6) general procedures for the dissemination of investment and other information relating
to the Designated Investment Alternatives as deemed necessary or appropriate, including but
not limited to a description of the following:

(i) the investment vehicles available under the Plan, including specific information
regarding any Designated Investment Alternative;

(ii) any designated Investment Managers; and

(iii) a description of the additional information which may be obtained upon request
from the Fiduciary designated to provide such information.

(g) Other documents. Any information regarding investments available under the Plan, to the
extent not required to be described in the Participant Direction Procedures, may be provided to
the Participant in one or more written documents (or in any other form including, but not
limited to, electronic media) which are separate from the Participant Direction Procedures and
are not thereby incorporated by reference into this Plan.

(h) Instructions, guidelines or policies. The Administrator may, in its discretion, include or
exclude by amendment or other action from the Participant Direction Procedures such
instructions, guidelines or policies as it deems necessary or appropriate to ensure proper
administration of the Plan, and may interpret the same accordingly.

 

47

 

(i) Employer Stock

(1) General. The Committee shall direct the Trustee to establish a separate
investment fund consisting solely of Employer Stock (the “Employer Stock Fund”). All dividends
or other distributions with respect to Employer Stock shall be applied to purchase additional
 shares of Employer Stock provided, however, that no fractional shares of Employer Stock shall
be so purchased. The Trustee may acquire Employer Stock from any source, including the public
market, in private transactions, from the Company’s treasury shares or from authorized but
unissued shares, as the Employer shall direct. Employer Stock purchased from the Employer
shall be based on the closing price of the common stock on the date preceding the date on which
the purchase is made. Notwithstanding anything herein to the contrary, up to 100% of the
assets of the Plan may be invested in qualifying employee securities (as defined in Section
407(d)(5) of ERISA) in accordance with the provisions of Section 408(e) of ERISA. In
accordance with this section, a Participant may elect that (A) all or a portion of his Account
be applied to purchase shares of Employer Stock, or (B) all or a portion of his shares of
Employer Stock be liquidated for reinvestment. The Committee shall direct the Trustee to
arrange for the elections, procedures and deadlines for Participants to authorize Plan
transactions in Employer Stock and shall direct the Trustee to consummate all such purchase and
sale transactions as soon as administratively practicable. Notwithstanding the foregoing, in
the case of Participants subject to the provisions of Section 16 of the Securities Exchange Act
of 1934 (the “1934 Act”), the Committee shall establish such rules and procedures as may be
required in order for the Plan to satisfy the requirements of Rule 16b-3 of the 1934 Act.

(2) Voting of Shares. Each Participant may direct the Trustee as to the manner in
which the shares of Employer Stock attributable to the Participant’s Account under the Plan are
to be voted, determined as of the record date used to determine the eligibility of other
shareholders to vote Employer Stock. Before each annual or special meeting of shareholders of
the Employer, there shall be sent to each Participant a copy of the proxy solicitation material
for each meeting, together with a form requesting instructions to the Trustee on how to vote
the Employer Stock attributable to the Participant. Upon receipt of such instructions, the
Trustee shall vote such shares as instructed. In lieu of voting Participants’ fractional
 shares as instructed by Participants, the Trustee may vote the combined fractional shares of
Employer Stock to the extent possible to reflect the direction of Participants with allocated
fractional shares. The Trustee shall vote shares of Employer Stock attributable to those
Participants from whom the Trustee received no valid instructions in the same manner and in the
same proportion as the Employer Stock attributable to those Participants from whom the Trustee
received valid voting instructions.

(j) Adoption of Rules. Notwithstanding anything to the contrary contained herein, the
Committee may make such other rules for the administration of the Plan and may cause the Plan
to be administered in such fashion as the Committee deems appropriate or necessary, including
provisions for more frequent investment elections or reallocations, and special provisions
relating to investments in Employer Stock, in order to comply with Section 404(c) of ERISA.

4.15 QUALIFIED MILITARY SERVICE

Notwithstanding any provision of this Plan to the contrary, contributions, benefits and
service will be provided in accordance with Code Section 414(u). Furthermore, loan repayments may
be suspended under this Plan as permitted under Code Section 414(u)(4).

 

48

 

ARTICLE V

VALUATIONS

5.1 VALUATION OF THE TRUST FUND

The Administrator shall direct the Trustee, as of each Valuation Date, to determine the net
worth of the assets comprising the Trust Fund as it exists on the Valuation Date. In determining
such net worth, the Trustee shall value the assets comprising the Trust Fund at their fair market
value as of the Valuation Date and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund. The Trustee may update the value of any
shares held in the Participant Directed Account by reference to the number of shares held by that
Participant, priced at the market value as of the Valuation Date.

5.2 METHOD OF VALUATION

In determining the fair market value of securities held in the Trust Fund which are listed on
a registered stock exchange, the Administrator shall direct the Trustee to value the same at the
prices they were last traded on such exchange preceding the close of business on the Valuation
Date. If such securities were not traded on the Valuation Date, or if the exchange on which they
are traded was not open for business on the Valuation Date, then the securities shall be valued at
the prices at which they were last traded prior to the Valuation Date. Any unlisted security held
in the Trust Fund shall be valued at its bid price next preceding the close of business on the
Valuation Date, which bid price shall be obtained from a registered broker or an investment banker.
In determining the fair market value of assets other than securities for which trading or bid
prices can be obtained, the Trustee may appraise such assets itself, or in its discretion, employ
one or more appraisers for that purpose and rely on the values established by such appraiser or
appraisers.

ARTICLE VI

DETERMINATION AND DISTRIBUTION OF BENEFITS

6.1 DETERMINATION OF BENEFITS UPON RETIREMENT

Every Participant may terminate employment with the Employer and retire for the purposes
hereof on the Participant’s Normal Retirement Date or Early Retirement Date. However, a Participant
may postpone the termination of employment with the Employer to a later date, in which event the
participation of such Participant in the Plan, including the right to receive allocations pursuant
to Section 4.4, shall continue until such Participant’s Late Retirement Date. Upon a Participant’s
Retirement Date, or as soon thereafter as is practicable, the Administrator shall direct the
distribution, at the election of the Participant, of the Participant’s entire Vested interest in
the Plan (or any portion thereof), in accordance with Section 6.5.

Notwithstanding the foregoing, a Participant who terminates employment with the Employer on or
after attaining his Early Retirement Date but before attaining his Normal Retirement Date shall be
treated as terminating employment under Section 6.4 of the Plan.

6.2 DETERMINATION OF BENEFITS UPON DEATH

(a) 100% Vesting on death. Upon the death of a Participant before the Participant’s Retirement
Date or other termination of employment, all amounts credited to such Participant’s Account
shall become fully Vested.

(b) Distribution upon death. Upon the death of a Participant, the Administrator shall direct,
in accordance with the provisions of Sections 6.6 and 6.7, the distribution of any remaining
amounts credited to the accounts of the deceased Participant to such Participant’s Beneficiary.

(c) Security for loans. Any security interest held by the Plan by reason of an outstanding loan
to the Participant shall be taken into account in determining the amount of the death benefit.

(d) Determination of death benefit by Administrator. The Administrator may require such proper
proof of death and such evidence of the right of any person to receive payment of the value of
the account of a deceased Participant as the Administrator may deem desirable. The Administrator’s
determination of death and of the right of any person to receive payment shall be conclusive.

 

49

 

(e) Beneficiary designation. The Beneficiary of the death benefit payable pursuant to this
Section shall be the Participant’s surviving spouse. Except, however, the Participant may
designate a Beneficiary other than the spouse if:

(1) the spouse has waived the right to be the Participant’s Beneficiary, or

(2) the Participant is legally separated or has been abandoned (within the meaning of local
law) and the Participant has a court order to such effect (and there is no qualified
domestic relations order as defined in Code Section 414(p) which provides otherwise), or

(3) the Participant has no spouse, or

(4) the spouse cannot be located.

In such event, the designation of a Beneficiary shall be made on a form satisfactory to
the Administrator. A Participant may at any time revoke a designation of a Beneficiary or
change a Beneficiary by filing written notice (or in such other form as permitted by the
Internal Revenue Service) of such revocation or change with the Administrator. However, the
Participant’s spouse must again consent in writing (or in such other form as permitted by the
Internal Revenue Service) to any change in Beneficiary unless the original consent acknowledged
that the spouse had the right to limit consent only to a specific Beneficiary and that the
spouse voluntarily elected to relinquish such right.

(f) Beneficiary if no beneficiary elected by Participant. In the event no valid designation of
Beneficiary exists with respect to all or a portion of the death benefit, or if the Beneficiary
of such death benefit is not alive at the time of the Participant’s death and no contingent
Beneficiary has been designated, then such death benefit will be paid in the following order of
priority to:

(1) the Participant’s surviving spouse;

(2) the Participant’s children, including adopted children, per stirpes;

(3) the Participant’s surviving parents, in equal shares; or

(4) the Participant’s estate.

If the Beneficiary does not predecease the Participant, but dies prior to distribution of
the death benefit, the death benefit will be paid to the Beneficiary’s designated Beneficiary
(or there is no designated Beneficiary, to the Beneficiary’s estate).

(g) Divorce revokes spousal beneficiary designation. Notwithstanding anything in this Section
to the contrary, if a Participant has designated the spouse as a Beneficiary, then a divorce
decree or a legal separation that relates to such spouse shall revoke the Participant’s
designation of the spouse as a Beneficiary unless the decree or a qualified domestic relations
order (within the meaning of Code Section 414(p)) provides otherwise or a subsequent
beneficiary designation is made.

(h) Spousal consent. Any consent by the Participant’s spouse to waive any rights to the death
benefit must be in writing (or in such other form as permitted by the Internal Revenue
Service), must acknowledge the effect of such waiver, and be witnessed by a Plan representative
or a notary public. Further, the spouse’s consent must be irrevocable and must acknowledge the
specific nonspouse Beneficiary.

 

50

 

6.3 DISABILITY RETIREMENT BENEFITS

In the event of a Participant’s Disability prior to the Participant’s Retirement Date or other
termination of employment, all amounts credited to such Participant’s Account shall become fully
Vested. In the event of a Participant’s Disability, the Administrator, in accordance with the
provisions of Sections 6.5 and 6.7, shall direct the distribution to such Participant of all Vested
amounts credited to such Participant’s Account.

6.4 DETERMINATION OF BENEFITS UPON TERMINATION

(a) Payment on termination of employment. If a Participant’s employment with the Employer is
terminated for any reason other than death, Disability or retirement (Normal or Late), then
such Participant shall be entitled to such benefits as are provided hereinafter pursuant to
this Section 6.4.

Distribution of the funds due to a Terminated Participant shall be made on the occurrence
of an event which would result in a distributable event had the Terminated Participant remained
in the employ of the Employer (upon the Participant’s death, Disability, Early or Normal
Retirement). However, at the election of the Participant, the Administrator shall direct the
distribution of the entire Vested portion of the Terminated Participant’s Account be payable to
such Terminated Participant as soon as administratively feasible after termination of
employment. Any distribution under this paragraph shall be made in a manner which is consistent
with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and
consent requirements of Code Section 411(a)(11) and the Regulations thereunder.

If the value of a Terminated Participant’s Total Vested Benefit does not exceed $1,000,
then the Participant’s Vested benefit shall be paid to such Participant in a single lump sum as
soon as administratively feasible after termination of employment.

For purposes of this Section 6.4, if the value of a Terminated Participant’s Vested
benefit is zero, the Terminated Participant shall be deemed to have received a distribution of
such Vested benefit.

(b) Vesting schedule. The Vested portion of the Account of any Participant attributable to
Employer contributions shall be a percentage of the total amount credited to the Participant’s
Accounts determined on the basis of the Participant’s number of Years of Service according to
the following schedule(s):

(1) The Elective Deferral Account, the Qualified Matching Contribution Account and the
Qualified Nonelective Contribution Account shall be 100% Vested regardless of a
Participant’s number of Years of Service.

(2) The Vested Portion of the Nonelective Contribution Account and the Vested portion of
the Matching Contribution Account shall be determined in accordance with the following
vesting schedule:

	 	 	 
	Vesting Schedule
	Years of Service	 	Percentage
	 
	 	 
	Less than 3
	 	0%
	3
	 	100%

(3) Notwithstanding the foregoing, the following vesting schedule shall be applicable to
Nonelective Contributions attributable to Plan Years beginning prior to January 1, 2007.

	 	 	 
	Vesting Schedule

Nonelective Contributions
	Years of Service	 	Percentage
	 	 	 
	Less than 5
	 	0%

	
5 or more
	 	
100%

 

51

 

(c) Nonelective top-heavy vesting schedule. Notwithstanding the vesting attributable to the
Contribution Account provided for in Section 6.4(b) above, for any Top-Heavy Plan Year, the
Vested portion of the Nonelective Contribution Account of any Participant who has an Hour of
Service during a Top-Heavy Plan Year shall be a percentage of the amount credited to the
Nonelective Contribution Account determined on the basis of the Participant’s number of Years
of Service according to the following schedule:

	 	 	 
	Top-Heavy Vesting Schedule

Nonelective Contributions

	Years of Service
	 	Percentage

	 	 	 
	1

	 	20%
	
2

	 	
40%
	
3

	 	
60%
	
4

	 	
80%
	
5

	 	
100%

(d) No reduction in Vested percentage due to change in vesting schedule. Notwithstanding the
vesting schedule above, the Vested percentage of a Participant’s Account shall not be less than
the Vested percentage attained as of the later of the effective date or adoption date of this
amendment and restatement.

(e) Time of application of vesting schedule liberalization. In the absence of any provision to
the contrary, any direct or indirect increase to a Participant’s Vested percentage (at any
point on a vesting schedule) will not apply to a Participant unless and until such Participant
completes an Hour of Service after the effective date of such amendment.

(f) 100% Vesting on partial or full Plan termination. Notwithstanding the vesting schedule
above, upon the complete discontinuance of the Employer contributions to the Plan or upon any
full or partial termination of the Plan, all amounts then credited to the account of any
affected Participant shall become 100% Vested and shall not thereafter be subject to
Forfeiture.

(g) Continuation of old schedule if 3 years of service. The computation of a Participant’s
nonforfeitable percentage of such Participant’s interest in the Plan shall not be reduced as
the result of any direct or indirect amendment to this Plan. In the event that the Plan is
amended to change or modify any vesting schedule, or if the Plan is amended in any way that
directly or indirectly affects the computation of the Participant’s nonforfeitable percentage,
or if the Plan is deemed amended by an automatic change to or from a top-heavy vesting
schedule, then each Participant with an Hour of Service after such change and who has at least
three (3) Years of Service as of the expiration date of the election period may elect to have
such Participant’s nonforfeitable percentage computed under the Plan without regard to such
amendment or change. If such a Participant fails to make such election, then such Participant
shall be subject to the new vesting schedule. The Participant’s election period shall commence
on the date the amendment is adopted or deemed to be made and shall end sixty (60) days after
the latest of:

(1) the adoption date of the amendment,

(2) the effective date of the amendment, or

(3) the date the Participant receives written notice of the amendment from the Employer or
Administrator.

 

52

 

6.5 DISTRIBUTION OF BENEFITS

(a) The Administrator, pursuant to the election of the Participant, shall direct the Trustee to
distribute to a Participant or such Participant’s Beneficiary the amount (if any) to which the
Participant (or Beneficiary) has become entitled under the Plan in one or more of the following
methods:

(1) One lump-sum payment in cash. This shall be the normal form of payment, except as
otherwise provided below.

(2) Payments over a period certain in monthly, quarterly, semiannual, or annual cash
installments. In order to provide such installment payments, the Administrator may
(A) segregate the aggregate amount thereof in a separate, federally insured savings
account, certificate of deposit in a bank or savings and loan association, money market
certificate or other liquid short-term security or (B) purchase a nontransferable annuity
Contract for a term certain (with no life contingencies) providing for such payment. The
period over which such payment is to be made shall not extend beyond the Participant’s life
expectancy (or the life expectancy of the Participant and the Participant’s designated
Beneficiary).

(3) Partial withdrawals, with a minimum of $1,000.

If at the time set for distribution of benefits hereunder, all or a portion of the
Participant’s Account is invested in Employer Stock, the portion of the Participant’s Account
so held shall be liquidated into cash for distribution to the Participant, unless the
Participant directs that the distribution be made in kind, provided, however, that the value of
a fractional share of Employer Stock shall in all events be distributed in cash.

If the value of a Terminated Participant’s Total Vested Benefit does not exceed $1,000
(including any rollover contributions and earnings thereon), the Administrator shall direct the
Trustee to cause the entire Vested benefit to be paid to such Participant in a single lump sum.

(b) Effective with respect to distributions made on or after March 28, 2005, a distribution to
a Participant who has a Total Vested Benefit which exceeds $1,000 shall require such
Participant’s written consent (or in such other form as permitted by the Internal Revenue
Service) if such distribution commences prior to the time the benefit is “immediately
distributable.” A benefit is “immediately distributable” if any part of the benefit could be
distributed to the Participant (or surviving spouse) before the Participant attains (or would
have attained if not deceased) the later of the Participant’s Normal Retirement Age or age 62.

Any such distribution may be made less than thirty (30) days after the notice required
under Regulation 1.411(a)-11(c) is given, provided that: (1) the Administrator clearly informs
the Participant that the Participant has a right to a period of at least thirty (30) days after
receiving the notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and (2) the Participant, after receiving the
notice, affirmatively elects a distribution.

(c) All annuity Contracts under this Plan shall be non-transferable when distributed.
Furthermore, the terms of any annuity Contract purchased and distributed to a Participant or
spouse shall comply with all of the requirements of the Plan.

(d) If a distribution is made to a Participant who has not severed employment and who is not
fully Vested in the Participant’s Account and the Participant may increase the Vested
percentage in such account, then, at any relevant time the Participant’s Vested portion of the
account will be equal to an amount (“X”) determined by the formula:

X
equals P(AB plus D) - D

 

53

 

For purposes of applying the formula: P is the Vested percentage at the relevant time, AB
is the account balance at the relevant time, and D is the amount of distribution, and the
relevant time is the time at which, under the Plan, the Vested percentage in the account cannot
increase.

(e) Required minimum distributions (Code Section 401(a)(9)). Notwithstanding any provision in
the Plan to the contrary, the distribution of a Participant’s benefits shall be made in
accordance with the requirements of Section 6.8.

6.6 DISTRIBUTION OF BENEFITS UPON DEATH

(a) The death benefit payable pursuant to Section 6.2 shall be paid to the Participant’s
Beneficiary within a reasonable time after the Participant’s death by either of the following
methods, as elected by the Participant (or if no election has been made prior to the
Participant’s death, by the Participant’s Beneficiary) subject, however, to the rules specified
in Section 6.8:

(1) One lump-sum payment in cash.

(2) Payment in monthly, quarterly, semi-annual, or annual cash installments over a period
to be determined by the Participant or the Participant’s Beneficiary. After periodic
installments commence, the Beneficiary shall have the right to direct the Trustee to reduce
the period over which such periodic installments shall be made, and the Trustee shall
adjust the cash amount of such periodic installments accordingly.

(3) Partial withdrawals, with a minimum of $1,000;

In the event the death benefit payable pursuant to Section 6.2 is payable in installments,
then, upon the death of the Participant, the Administrator may direct the Trustee to segregate
the death benefit into a separate account, and the Trustee shall invest such segregated account
separately, and the funds accumulated in such account shall be used for the payment of the
installments.

(b) Notwithstanding any provision in the Plan to the contrary, distributions upon the death of
a Participant shall comply with the requirements of Section 6.8.

(c) In the event that less than 100% of a Participant’s interest in the Plan is distributed to
such Participant’s spouse, the portion of the distribution attributable to the Participant’s
Voluntary Contribution Account shall be in the same proportion that the Participant’s Voluntary
Contribution Account bears to the Participant’s total interest in the Plan.

6.7 TIME OF DISTRIBUTION

Except as limited by Section 6.8, whenever a distribution is to be made, or a series of
payments are to commence, the distribution or series of payments may be made or begun as soon as
practicable. However, unless a Participant elects in writing to defer the receipt of benefits (such
election may not result in a death benefit that is more than incidental), the payment of benefits
shall begin not later than the sixtieth (60th) day after the close of the Plan Year in which the
latest of the following events occurs: (a) the date on which the Participant attains the earlier of
age 65 or the Normal Retirement Age specified herein; (b) the tenth (10th) anniversary of the year
in which the Participant commenced participation in the Plan; or (c) the date the Participant
terminates service with the Employer.

Notwithstanding the foregoing, the failure of a Participant and, if applicable, the
Participant’s spouse, to consent to a distribution that is immediately distributable (within the
meaning of Section 6.5), shall be deemed to be an election to defer the commencement of payment of
any benefit sufficient to satisfy this Section.

 

54

 

6.8 REQUIRED MINIMUM DISTRIBUTIONS

(a) General Rules

(1) Effective Date. Unless otherwise specified, the provisions of this Section will apply
for purposes of determining required minimum distributions for calendar years beginning
with the 2002 calendar year.

(2) Precedence. The requirements of this Section shall apply to any distribution of a
Participant’s interest in the Plan and take precedence over any inconsistent provisions of
the Plan.

(3) Requirements of Treasury Regulations Incorporated. All distributions required under
this Section will be determined and made in accordance with the Regulations under Code
Section 401(a)(9) and the minimum distribution incidental benefit requirement of Code
Section 401(a)(9)(G).

(b) Time and manner of distribution

(1) Required beginning date. The Participant’s entire interest will be distributed, or
begin to be distributed, to the Participant no later than the Participant’s required
beginning date.

(2) Death of Participant before distributions begin. If the Participant dies before
distributions begin, the Participant’s entire death benefit will be distributed, or begin
to be distributed, as follows:

(i) Distributions of the required minimum distributions will begin by December 31 of
the calendar year immediately following the calendar year in which the Participant
died, or, if the Participant’s surviving spouse is the Participant’s designated
beneficiary, by December 31 of the calendar year in which the Participant would have
attained age 70 1/2, if later.

(ii) If there is no beneficiary as of September 30 of the year following the year of
the Participant’s death, the distribution of the Participant’s death benefit will be
completed by December 31 of the calendar year containing the fifth anniversary of the
Participant’s death.

(iii) If the Participant’s surviving spouse is the Participant’s sole designated
beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this Section 6.8(b), other than this
paragraph, will apply as if the surviving spouse were the Participant. Thus, in all
such cases, the time at which distributions must commence (or be completed by) shall be
determined solely by reference to the year that the Participant died, and not the year
in which the Participant would have attained age 70 1/2.

For purposes of this Section 6.8(b), unless a surviving spouse is electing to commence
benefits based upon the date that the Participant would have attained age 70 1/2,
distributions are considered to begin on the Participant’s required beginning date. If the
surviving-spouse election applies, distributions are considered to begin on the date
distributions are required to begin to the surviving spouse under Section 6.8(b).

(3) Forms of distribution. Unless the Participant’s interest is distributed in a single sum
on or before the required beginning date, as of the first distribution calendar year
distributions will be made in accordance with Sections 6.8(c) and 6.8(d). All distributions
under this Section shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations thereunder.

 

55

 

(c) Required minimum distributions during Participant’s lifetime

(1) Amount of required minimum distribution for each distribution calendar year. During the
Participant’s lifetime, the minimum amount that will be distributed for each distribution
calendar year is the lesser of:

(i) the quotient obtained by dividing the Participant’s Account balance by the
distribution period in the Uniform Lifetime Table set forth in Regulation Section
1.401(a)(9)-9, using the Participant’s age as of the Participant’s birthday in the
distribution calendar year; or

(ii) if the Participant’s sole designated beneficiary for the distribution calendar
year is the Participant’s spouse and the spouse is more than 10 years younger than the
Participant, the quotient obtained by dividing the Participant’s Account balance by the
number in the Joint and Last Survivor Table set forth in Regulation Section
1.401(a)(9)-9, using the Participant’s and spouse’s attained ages as of the
Participant’s and spouse’s birthdays in the distribution calendar year.

(2) Lifetime required minimum distributions continue through year of Participant’s death.
Required minimum distributions will be determined under this Section 6.8(c) beginning with
the first distribution calendar year and up to and including the distribution calendar year
that includes the Participant’s date of death.

(d) Required minimum distributions after Participant’s death

(1) Death on or after date distributions begin.

(i) Participant survived by designated beneficiary. If the Participant dies on or after
the date distributions begin and there is a designated beneficiary, the minimum amount
that will be distributed for each distribution calendar year after the year of the
Participant’s death is the quotient obtained by dividing the Participant’s Account
balance by the longer of the remaining life expectancy of the Participant or the
remaining life expectancy of the Participant’s designated beneficiary, determined as
follows:

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

(B) If the Participant’s surviving spouse is the Participant’s sole designated
beneficiary, the remaining life expectancy of the surviving spouse is calculated
for each distribution calendar year after the year of the Participant’s death using
the surviving spouse’s age as of the spouse’s birthday in that year. For
distribution calendar years after the year of the surviving spouse’s death, the
remaining life expectancy of the surviving spouse is calculated using the age of
the surviving spouse as of the spouse’s birthday in the calendar year of the
spouse’s death, reduced by one for each subsequent calendar year.

(C) If the Participant’s surviving spouse is not the Participant’s sole designated
beneficiary, the designated beneficiary’s remaining life expectancy is calculated
using the age of the beneficiary in the year following the year of the
Participant’s death, reduced by one for each subsequent year.

(ii) No designated beneficiary. If the Participant dies on or after the date
distributions begin and there is no designated beneficiary as of September 30 of the
year after the year of the Participant’s death, the minimum amount that will be
distributed for each distribution calendar year after the year of the Participant’s
death is the quotient obtained by dividing the Participant’s Account balance by the
Participant’s remaining life expectancy calculated using the age of the Participant in
the year of death, reduced by one for each subsequent year.

 

56

 

(2) Death before date distributions begin.

(i) Participant survived by designated beneficiary. Except as provided in
Section 6.8(b)(3), if the Participant dies before the date distributions begin and
there is a designated beneficiary, the minimum amount that will be distributed for each
distribution calendar year after the year of the Participant’s death is the quotient
obtained by dividing the Participant’s Account balance by the remaining life expectancy
of the Participant’s designated beneficiary, determined as provided in Section
6.8(d)(1).

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

(iii) Death of surviving spouse before distributions to surviving spouse are required
to begin. If the Participant dies before the date distributions begin, the
Participant’s surviving spouse is the Participant’s sole designated beneficiary, and
the surviving spouse dies before distributions are required to begin to the surviving
spouse under Section 6.8(b), this Section 6.8(d)(2) will apply as if the surviving
spouse were the Participant.

(e) Definitions. For purposes of this Section, the following definitions apply:

(1) “Designated beneficiary” means the individual who is designated as the Beneficiary
under the Plan and is the designated beneficiary under Code Section 401(a)(9) and
Regulation Section 1.401(a)(9)-4, Q&A-4.

(2) “Distribution calendar year” means a calendar year for which a minimum distribution is
required. For distributions beginning before the Participant’s death, the first
distribution calendar year is the calendar year immediately preceding the calendar year
which contains the Participant’s “required beginning date.” For distributions beginning
after the Participant’s death, the first distribution calendar year is the calendar year in
which distributions are required to begin under Section 6.8(b). The required minimum
distribution for the Participant’s first distribution calendar year will be made on or
before the Participant’s “required beginning date.” The required minimum distribution for
other distribution calendar years, including the required minimum distribution for the
distribution calendar year in which the Participant’s “required beginning date” occurs,
will be made on or before December 31 of that distribution calendar year.

(3) “Life expectancy” means the life expectancy as computed by use of the Single Life Table
in Regulation Section 1.401(a)(9)-9, Q&A-1.

(4) “Participant’s account balance” means the “Participant’s account balance” as of the
last Valuation Date in the calendar year immediately preceding the Distribution calendar
year (valuation calendar year) increased by the amount of any contributions made and
allocated or Forfeitures allocated to the account balance as of dates in the valuation
calendar year after the Valuation Date and decreased by distributions made in the valuation
calendar year after the Valuation Date. For this purpose, the Administrator may exclude
contributions that are allocated to the account balance as of dates in the valuation
calendar year after the Valuation Date, but that are not actually made during the valuation
calendar year. The account balance for the valuation calendar year includes any amounts
rolled over or transferred to the Plan either in the valuation calendar year or in the
Distribution calendar year if distributed or transferred in the valuation calendar year.

 

57

 

(5) “Required beginning date” means, with respect to any Participant, April 1 of the
calendar year following the later of the calendar year in which the Participant attains age
70 1/2 or the calendar year in which the Participant retires, except that benefit
distributions to a 5-percent owner must
commence by April 1 of the calendar year following the calendar year in which the
Participant attains age 70 1/2.

(6) “5-percent owner” means a Participant who is a 5-percent owner as defined in Code
Section 416 at any time during the Plan Year ending with or within the calendar year in
which such owner attains age 70 1/2. Once distributions have begun to a 5-percent owner
under this Section they must continue to be distributed, even if the Participant ceases to
be a 5-percent owner in a subsequent year.

(f) Transition rules

(1) Rules for plans in existence before 1997. Any required minimum distribution rights
conferred on participants in order to comply with (or as a means of complying with) the
changes to Code Section 401(a)(9) made by the Small Business Jobs Protection Act of 1996
that were still in effect immediately prior to this restatement shall be preserved.

(2) Applicable regulations. Notwithstanding any Plan provision to the contrary, required
minimum distributions before 2003 were made as follows:

(i) 2001. Required minimum distributions for calendar year 2001 were made pursuant to
the proposed Regulations under Code Section 401(a)(9) published in the Federal Register
on January 17, 2001 (the “2001 Proposed Regulations”). If distributions were made in
2001 under the 1987 Proposed Regulations prior to the date in 2001 the plan began
operating under the 2001 Proposed Regulations, the special transition rule in
Announcement 2001-82, 2001-2 C.B. 123, applied.

(ii) 2002. Required minimum distributions for calendar year 2002 were made pursuant to
the 2001 Proposed Regulations.

(g) Statutory (TEFRA) Transition Rules

(1) Notwithstanding the other provisions of this Section, other than the spouse’s right of
consent afforded under the Plan, distributions may be made on behalf of any Participant,
including a five percent (5%) owner, who has made a designation in accordance with Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and in accordance with
all of the following requirements (regardless of when such distribution commences):

(i) The distribution by the Plan is one which would not have disqualified such plan
under Code Section 401(a)(9) as in effect prior to amendment by the Deficit Reduction
Act of 1984.

(ii) The distribution is in accordance with a method of distribution designated by the
Participant whose interest in the plan is being distributed or, if the Participant is
deceased, by a Beneficiary of such Participant.

(iii) Such designation was in writing, was signed by the Participant or the
Beneficiary, and was made before January 1, 1984.

(iv) The Participant had accrued a benefit under the Plan as of December 31, 1983.

(v) The method of distribution designated by the Participant or the Beneficiary
specifies the time at which distribution will commence, the period over which
distributions will be made, and in the case of any distribution upon the Participant’s
death, the Beneficiaries of the Participant listed in order of priority.

 

58

 

(2) A distribution upon death will not be covered by the transitional rule of this
subsection unless the information in the designation contains the required information
described above with respect to the distributions to be made upon the death of the
Participant.

(3) For any distribution which commences before January 1, 1984, but continues after
December 31, 1983, the Participant, or the Beneficiary, to whom such distribution is being
made, will be presumed to have designated the method of distribution under which the
distribution is being made if the method of distribution was specified in writing and the
distribution satisfies the requirements in (1)(i) and (1)(v) of this subsection.

(4) If a designation is revoked, any subsequent distribution must satisfy the requirements
of Code Section 401(a)(9) and the Regulations thereunder. If a designation is revoked
subsequent to the date distributions are required to begin, the Plan must distribute by the
end of the calendar year following the calendar year in which the revocation occurs the
total amount not yet distributed which would have been required to have been distributed to
satisfy Code Section 401(a)(9) and the Regulations thereunder, but for the Section
242(b)(2) election. For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental benefit requirements. Any
changes in the designation will be considered to be a revocation of the designation.
However, the mere substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a revocation of the
designation, so long as such substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or indirectly (for example, by
altering the relevant measuring life).

(5) In the case in which an amount is transferred or rolled over from one plan to another
plan, the rules in Regulation Section 1.401(a)(9)-8, Q&A-14 and Q&A-15, shall apply.

(h) Waiver of 2009 Required Minimum Distributions. Notwithstanding subsection 6.8(a), a
Participant or Beneficiary who would have been required to receive required minimum
distributions for 2009 but for the enactment of Code Section 401(a)(9)(H) (“2009 RMDs”), and
who would have satisfied that requirement by receiving distributions that are (1) equal to the
2009 RMDs or (2) one or more payments in a series of substantially equal distributions (that
include the 2009 RMDs) made at least annually and expected to last for the life (or life
expectancy) of the Participant, the joint lives (or joint life expectancy) of the Participant
and the Participant’s designated Beneficiary, or for a period of at least 10 years (“Extended
2009 RMDs”), will receive those distributions for 2009 unless the Participant or Beneficiary
chooses not to receive such distributions. Participants and beneficiaries described in the
preceding sentence will be given the opportunity to elect to stop receiving the distributions
described in the preceding sentence.

6.9 DISTRIBUTION FOR MINOR OR INCOMPETENT INDIVIDUAL

In the event a distribution is to be made to a minor or incompetent individual, then the
Administrator may direct that such distribution be paid to the court-appointed legal guardian or
any other person authorized under state law to receive such distribution, or if none, then in the
case of a minor Beneficiary, to a parent of such Beneficiary, or to the custodian for such
Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the
laws of the state in which said Beneficiary resides. Such a payment to the guardian, custodian or
parent of a minor or incompetent individual shall fully discharge the Trustee, Employer, and Plan
from further liability on account thereof.

 

59

 

6.10 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN

In the event that all, or any portion, of the distribution payable to a Participant or
Beneficiary hereunder shall, at the later of the Participant’s attainment of age 62 or Normal
Retirement Age, remain unpaid solely by reason of the inability of the Administrator, after sending
a registered letter, return receipt requested, to the last known address, and after further
diligent effort, to ascertain the whereabouts of such
Participant or Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. Notwithstanding the foregoing, effective with respect to distributions made
after March 28, 2005, if the Plan provides for mandatory distributions and the amount to be
distributed to a Participant or Beneficiary does not exceed $1,000, then the amount distributable
may, in the sole discretion of the Administrator, either be treated as a Forfeiture, or be paid
directly to an individual retirement account described in Code Section 408(a) or an individual
retirement annuity described in Code Section 408(b) at the time it is determined that the
whereabouts of the Participant or the Participant’s Beneficiary cannot be ascertained. In the event
a Participant or Beneficiary is located subsequent to the Forfeiture, such benefit shall be
restored, first from Forfeitures, if any, and then from an additional Employer contribution if
necessary. Upon Plan termination, the portion of the distributable amount that is an eligible
rollover distribution as defined in Plan Section 6.14 may be paid directly to an individual
retirement account described in Code Section 408(a) or an individual retirement annuity described
in Code Section 408(b). However, regardless of the preceding, a benefit that is lost by reason of
escheat under applicable state law is not treated as a Forfeiture for purposes of this Section nor
as an impermissible forfeiture under the Code.

6.11 PRE-RETIREMENT DISTRIBUTION OF EMPLOYER CONTRIBUTIONS

At such time as a Participant shall have attained age 59 1/2, the Administrator, at the
election of the Participant who has not severed employment with the Employer, shall direct the
Trustee to distribute all or a portion of the amount then credited to all accounts maintained on
behalf of the Participant.

In the event that the Administrator makes such a distribution, the Participant shall continue
to be eligible to participate in the Plan on the same basis as any other Employee. Any distribution
made pursuant to this Section shall be made in a manner consistent with Section 6.5, including, but
not limited to, all notice and consent requirements of Code Section 411(a)(11) and the Regulations
thereunder.

For purposes of this Section, a Participant shall also mean an Employee or Former Employee
with an Account Balance under the Plan.

Notwithstanding anything in this Section to the contrary, pre-retirement distributions from a
Participant’s Elective Deferral Account, Qualified Nonelective Account, or Qualified Matching
Account shall not be permitted prior to the Participant attaining age 59 1/2 or one of the other
events described in Section 4.2(d).

The following provision(s) also apply:

(a) No such distribution shall be made from an Account until such Account has become fully
Vested.

6.12 ADVANCE DISTRIBUTION FOR HARDSHIP

(a) The Administrator, at the election of the Participant whether or not currently employed as
an Employee, shall direct the Trustee to distribute to any Participant from the Vested portion
of the Participant’s Account the amount necessary to satisfy the immediate and heavy financial
need of the Participant, subject to the limitations of this Section. Any distribution made
pursuant to this Section shall be deemed to be made as of the first day of the Plan Year or, if
later, the Valuation Date immediately preceding the date of distribution. Effective with
respect to Plan Years beginning in 2006, any withdrawal made pursuant to this Section shall be
deemed to be on account of an immediate and heavy financial need of the Participant if the
withdrawal is for:

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

(2) Costs directly related to the purchase (excluding mortgage payments) of a principal
residence for the Participant;

 

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(3) Payments for burial or funeral expenses for the Participant’s deceased parent, spouse,
children or dependents (as defined in Code Section 152, and, for taxable years beginning on
or after January 1, 2005, without regard to Code Section 152(d)(1)(B));

(4) Payment of tuition, related educational fees, and room and board expenses, for up to
the next twelve (12) months of post-secondary education for the Participant, the
Participant’s spouse, children, or dependents (as defined in Code Section 152, and, for
taxable years beginning on or after January 1, 2005, without regard to Code Sections
152(b)(1), (b)(2), and (d)(1)(B));

(5) Payments necessary to prevent the eviction of the Participant from the Participant’s
principal residence or foreclosure on the mortgage on that residence; or

(6) For Plan Years beginning on or after January 1, 2006, expenses for the repair of damage
to the Participant’s principal residence that would qualify for the casualty deduction
under Code Section 165 (determined without regard to whether the loss exceeds 10% of
adjusted gross income).

(b) No distribution shall be made pursuant to this Section unless the Administrator, based upon
the Participant’s representation and such other facts as are known to the Administrator,
determines that all of the following conditions are satisfied:

(1) The distribution is not in excess of the amount of the immediate and heavy financial
need of the Participant. The amount of the immediate and heavy financial need may include
any amounts necessary to pay any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution;

(2) The Participant has obtained all distributions, other than hardship distributions, and
all nontaxable (at the time of the loan) loans currently available under all plans
maintained by the Employer;

(3) On or after December 31, 2001, the Plan, and all other plans maintained by the
Employer, provide that the Participant’s Elective Deferrals and After-Tax Voluntary
Contributions will be suspended for at least six (6) months after receipt of the hardship
distribution or, the Participant, pursuant to a legally enforceable agreement, will suspend
Elective Deferrals and After-Tax Voluntary Contributions to the Plan and all other plans
maintained by the Employer for at least six (6) months after receipt of the hardship
distribution; and

(4) For hardship distributions made prior to 2002, the Plan, and all other plans maintained
by the Employer, provide that the Participant may not make Elective Deferrals for the
Participant’s taxable year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code Section 402(g) for such next
taxable year less the amount of such Participant’s Elective Deferrals for the taxable year
of the hardship distribution.

(c) Notwithstanding the above, distributions from the Participant’s “elective account” pursuant
to this Section shall be limited in amount, as of the date of distribution, to the
Participant’s “elective account” as of the end of the last Plan Year ending before
July 1, 1989, plus the sum of the Participant’s Elective Deferrals after such date, reduced by
the amount of any previous distributions from this Account pursuant to this Section and Section
6.11. A Participant’s “elective account” shall be the amount attributable to Elective
Deferrals, Qualified Matching Contributions, and Qualified Nonelective Contributions as of the
end of the last Plan Year ending before July 1, 1989.

(d) Any distribution made pursuant to this Section shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all
notice and consent requirements of Code Section 411(a)(11) and the Regulations thereunder.

 

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(e) Hardship distributions may be made from only the following accounts:

(1) Elective Deferral Account, subject to the limitations noted above

(2) Nonelective Contribution Account

(c) Matching Contribution Account

6.13 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION

All rights and benefits, including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any alternate payee under a qualified domestic relations order.
Furthermore, a distribution to an alternate payee shall be permitted if such distribution is
authorized by a qualified domestic relations order, even if the affected Participant has not
separated from service and has not reached the earliest retirement age. For the purposes of this
Section, the terms “alternate payee,” “qualified domestic relations order” and “earliest retirement
age” shall have the meaning set forth under Code Section 414(p).

6.14 DIRECT ROLLOVER

(a) Right to direct partial rollover. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee’s election under this Section, effective for Plan
Years beginning on or after January 1, 2002, a distributee may elect, at the time and in the
manner prescribed by the Administrator, to have only a portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the distributee in a
direct rollover. However, the minimum partial rollover must equal at least $500.

(b) For purposes of this Section the following definitions shall apply:

(1) An “eligible rollover distribution” means any distribution described in Code Section
402(c)(4) and generally includes any distribution of all or any portion of the balance to
the credit of the distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the distributee and the
distributee’s Designated Beneficiary, or for a specified period of ten (10) years or more;
any distribution to the extent such distribution is required under Code Section 401(a)(9);
the portion of any other distribution(s) that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to employer
securities); and any other distribution reasonably expected to total less than $200 during
a year. 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.

Notwithstanding the above, a portion of a distribution shall not fail to be an
eligible rollover distribution merely because the portion consists of After-Tax Voluntary
Contributions which are not includible in gross income. However, such portion may be
transferred only to an individual retirement account or annuity described in Code
Section 408(a) or (b), or to a qualified defined contribution plan described in Code
Section 401(a) or 403(a) 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.

(2) An “eligible retirement plan” is an individual retirement account described in Code
Section 408(a), an individual retirement annuity described in Code Section 408(b), (other
than an endowment contract), a qualified trust (an employees’ trust) described in Code
Section 401(a) which is exempt from tax under Code Section 501(a) and which agrees to
separately account for amounts transferred into such plan from this Plan, an annuity plan
described in Code Section 403(a), an eligible deferred compensation plan described in Code
Section 457(b) which is
maintained by a state, political subdivision of a state, or any agency or instrumentality
thereof which agrees to separately account for amounts transferred into such plan from this
Plan, and an annuity contract described in Code Section 403(b) that accepts the
distributee’s eligible rollover distribution. The definition of eligible retirement plan
shall also apply in the case of a distribution to a surviving spouse, or to a spouse or
former spouse who is the alternate payee under a qualified domestic relation order, as
defined in Code Section 414(p).

 

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(3) A “distributee” includes an Employee or Former Employee. In addition, the Employee’s or
Former Employee’s surviving spouse and the Employee’s or Former Employee’s spouse or former
spouse who is the alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), are distributees with regard to the interest of the spouse or former
spouse.

(4) A “direct rollover” is a payment by the Plan to the “eligible retirement plan”
specified by the distributee.

(c) Participant Notice. A Participant entitled to an eligible rollover distribution must
receive a written explanation of his/her right to a direct rollover, the tax consequences of
not making a direct rollover, and, if applicable, any available special income tax elections.
The notice must be provided within the same 30-to-90 day timeframe applicable to the
Participant consent notice. The direct rollover notice must be provided to all Participants,
unless the total amount the Participant will receive as a distribution during the calendar year
is expected to be less than $200.

6.15 TRANSFER OF ASSETS FROM A MONEY PURCHASE PLAN

Notwithstanding any provision of this Plan to the contrary, to the extent that any optional
form of benefit under this Plan permits a distribution prior to the Employee’s attainment of Normal
Retirement Age, death, disability, or severance from employment, and prior to Plan termination, the
optional form of benefit is not available with respect to benefits attributable to assets
(including the post-transfer earnings thereon) and liabilities that are transferred, within the
meaning of Code Section 414(l), to this Plan from a money purchase pension plan qualified under
Code Section 401(a) (other than any portion of those assets and liabilities attributable to
after-tax voluntary employee contributions or to a direct or indirect rollover contribution).

6.16 CORRECTIVE DISTRIBUTIONS

Nothing in this Article shall preclude the Administrator from making a distribution to a
Participant, to the extent such distribution is made to correct a qualification defect in
accordance with the corrective procedures under any voluntary compliance program.

6.17 DISTRIBUTION OF EMPLOYER DISCRETIONARY NONELECTIVE CONTRIBUTIONS

Unless otherwise provided, at such time as a Participant shall have attained the age of 55,
the Administrator, at the election of the Participant who has not severed employment with the
Employer, shall direct the Trustee to distribute all or a portion of the Participant’s Account
attributable to NonElective Contributions in accordance with Section 4.1(d).

 

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ARTICLE VII

AMENDMENT, TERMINATION, MERGERS AND LOANS

7.1 AMENDMENT

(a) General rule on Employer amendment. The Employer shall have the right at any time to amend
this Plan, subject to the limitations of this Section. However, any amendment which affects the
rights, duties or responsibilities of the Trustee or Administrator may only be made with the
Trustee’s or Administrator’s written consent. Any such amendment shall become effective as
provided therein upon its execution. The Trustee shall not be required to execute any such
amendment unless the amendment affects the duties of the Trustee hereunder.

(b) Permissible amendments without affecting reliance. The Employer may make the modifications
described below without affecting reliance on the terms of the Plan. An Employer that amends
the Plan for any other reason may not rely on the advisory letter that the terms of the Plan
meet the qualification requirements of the Code. Permitted changes include: adding options
permitted by the Plan; adding or deleting provisions that are optional under the volume
submitter specimen plan; changing effective dates within the parameters of the volume submitter
specimen plan; correcting obvious and unambiguous typographical errors; correcting
cross-references that do not in any way change the original intended meaning of the provisions;
adding a list of benefits that must be preserved as protected benefits within the meaning of
Code Section 411(d)(6) and the regulations thereunder; amending provisions dealing with the
administration of the Trust; a change to the name of the Plan, Employer, Trustee, custodian,
Plan Administrator or any other fiduciary, the Plan Year; and any sample or model amendment
published by the IRS (or other required good-faith amendments) which specifically provide that
their adoption will not cause the plan to be treated as an individually designed plan.

(c) Sponsoring practitioner amendments. Effective March 31, 2008, the Employer (and every
Participating Employer) expressly delegates authority to the sponsoring organization of this
Volume Submitter Plan the right to amend the Plan by submitting a copy of the amendment to each
Employer (and Participating Employer) who has adopted this Volume Submitter Plan, after first
having received a ruling or favorable determination from the Internal Revenue Service that the
Volume Submitter Plan as amended qualifies under Code Section 401(a) (unless a ruling or
determination is not required by the IRS). However, the volume submitter practitioner shall
cease to have the authority to amend on behalf of an Employer that adopts an impermissible plan
type or impermissible plan provision (as described in IRS Announcement 2005-37 and any
subsequent guidance). The volume submitter practitioner will maintain a record of the Employers
that have adopted the Plan, and the practitioner will make reasonable and diligent efforts to
ensure that adopting Employers adopt new documents when necessary. This subsection supersedes
other provisions of the Plan to the extent those other provisions are inconsistent with this
subsection.

(d) Impermissible amendments. No amendment to the Plan shall be effective if it authorizes or
permits any part of the Trust Fund (other than such part as is required to pay taxes and
administration expenses) to be used for or diverted to any purpose other than for the exclusive
benefit of the Participants or their Beneficiaries or estates, or causes any reduction in the
amount credited to the account of any Participant, or causes or permits any portion of the
Trust Fund to revert to or become property of the Employer.

(e) Anti-cutback restrictions. Except as permitted by Regulations (including
Regulation 1.411(d)-4) or other IRS guidance, no Plan amendment or transaction having the
effect of a Plan amendment (such as a merger, plan transfer or similar transaction) shall be
effective if it eliminates or reduces any Section 411(d)(6) protected benefit or adds or
modifies conditions relating to Section 411(d)(6) protected benefits which results in a further
restriction on such benefits unless such “Section 411(d)(6) protected benefits” are preserved
with respect to benefits accrued as of the later of the adoption date or effective date of the
amendment. The term “Section 411(d)(6) protected benefits” means benefits described in Code
Section 411(d)(6)(A), early retirement benefits and retirement-type subsidies, and optional
forms of benefit. An amendment which has the effect of decreasing a Participant’s Account
balance with respect to benefits attributable to service before the amendment shall be treated
as reducing an accrued benefit. The preceding shall not apply to a Plan amendment that
eliminates or restricts the ability of a Participant to receive payment of his or her Account
under a particular optional
form of benefit if the amendment provides a single-sum distribution form that is otherwise
identical to the optional form of benefit being eliminated or restricted. For this purpose, a
single-sum distribution form is otherwise identical only if the single-sum distribution form is
identical in all respects to the eliminated or restricted optional form of benefit (or would be
identical except that it provides greater rights to the Participant) except with respect to the
timing of payments after commencement.

 

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7.2 TERMINATION

(a) Termination of Plan. The Employer shall have the right at any time to terminate the Plan by
delivering to the Trustee and Administrator written notice of such termination. Upon any full
or partial termination, all amounts credited to the affected Participants’ Accounts shall
become 100% Vested as provided in Section 6.4 and shall not thereafter be subject to
forfeiture.

(b) Distribution of assets. Upon the full termination of the Plan, the Employer shall direct
the distribution of the assets of the Plan to Participants in a manner which is consistent with
the provisions of Section 6.5 except that no Participant or spousal consent is required.
Distributions to a Participant shall be made in cash or through the purchase of irrevocable
nontransferable deferred commitments from an insurer. Except as permitted by Regulations, the
termination of the Plan shall not result in the reduction of Section 411(d)(6) protected
benefits in accordance with Section 7.1(e).

(c) Abandoned plan. If the Employer, in accordance with DOL guidance, abandons the Plan, then
the Trustee (or Insurer) or other party permitted to take action as a qualified terminal
administrator (QTA), may terminate the Plan in accordance with applicable Department of Labor
and IRS regulations and other guidance.

7.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS

This Plan may be merged or consolidated with, or its assets and/or liabilities may be
transferred to any other plan and trust, only if the benefits which would be received by a
Participant of this Plan, in the event of a termination of the Plan immediately after such
transfer, merger or consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or consolidation, and
such transfer, merger or consolidation does not otherwise result in the elimination or reduction of
any Section 411(d)(6) protected benefits in accordance with Section 7.1(e).

7.4 LOANS TO PARTICIPANTS

(a) Permitted loans. The Trustee (or the Administrator if the Trustee is a nondiscretionary
Trustee or if loans are treated as Participant directed investments pursuant to this Plan) may,
in the Trustee’s (or, if applicable, the Administrator’s) sole discretion, make Plan loans to
Participants or Beneficiaries under the following circumstances: (1) loans shall be made
available to Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall
not be made available to Highly Compensated Employees in an amount greater than the amount that
is made available to other Participants and Beneficiaries; (3) loans shall bear a reasonable
rate of interest; (4) loans shall be adequately secured; and (5) loans shall provide for
periodic repayment over a reasonable period of time. Furthermore, no Plan loan shall exceed a
Participant’s Vested interest in the Plan.

(b) Plan loans for Owner-Employees or Shareholder-Employees. Effective for Plan loans made
after December 31, 2001, the Plan provisions prohibiting Plan loans to any Owner-Employee or
Shareholder-Employee shall cease to apply.

(c) Prohibited assignment or pledge. An assignment or pledge of any portion of a Participant’s
interest in the Plan and a loan, pledge, or assignment with respect to any insurance Contract
purchased under the Plan, shall be treated as a Plan loan under this Section.

 

65

 

(d) Loan program. The Administrator shall be authorized to establish a Participant Loan Program
to provide for loans under the Plan. The Participant Loan Program shall be established in
accordance with Department of Labor regulation Section 2550.408(b)-1(d)(2) providing for loans
by the Plan to parties-in-interest under this Plan, such as Participants or Beneficiaries. In
order for the Administrator to implement such Participant Loan Program, a separate written
document forming a part of this Plan must be adopted, which document shall specifically
include, but need not be limited to, the following:

(1) the identity of the person or positions authorized to administer the Participant loan
program;

(2) a procedure for applying for loans;

(3) the basis on which loans will be approved or denied;

(4) limitations, if any, on the types and amounts of loans offered;

(5) the procedure under the program for determining a reasonable rate of interest;

(6) the types of collateral which may secure a Participant loan; and

(7) the events constituting default and the steps that will be taken to preserve Plan
assets in the event such default.

Such Participant Loan Program shall be contained in a separate written document which,
when properly executed, is hereby incorporated by reference and made a part of the Plan.
Furthermore, such Participant Loan Program may be modified or amended in writing from time to
time without the necessity of amending this Plan.

(e) Loan default. Notwithstanding anything in this Plan to the contrary, if a Participant or
Beneficiary defaults on a Plan loan made pursuant to this Section and such loan is secured by
the Participant’s interest in the Plan, then, to the extent provided in the Participant loan
program, a Participant’s interest may be offset by the amount subject to the security to the
extent there is a distributable event permitted by the Code or Regulations.

(f) Loans subject to Plan terms. Notwithstanding anything in this Section to the contrary, any
Plan loans made prior to the date this amendment and restatement is adopted shall be subject to
the terms of the Plan in effect at the time such loan was made.

ARTICLE VIII

TOP-HEAVY

8.1 TOP-HEAVY PLAN REQUIREMENTS

(a) Top-Heavy requirements. For any Top-Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the minimum
required allocation of Code Section 416(c) pursuant to Section 4.4 of the Plan.

8.2 DETERMINATION OF TOP-HEAVY STATUS

(a) Definition of Top-Heavy Plan. This Plan shall be a Top-Heavy Plan if any of the following
conditions exists:

(1) if the “top-heavy ratio” for this Plan exceeds sixty percent (60%) and this Plan is not
part of any “required aggregation group” or “permissive aggregation group”;

(2) if this Plan is a part of a “required aggregation group” but not part of a “permissive
aggregation group” and the “top-heavy ratio” for the group of plans exceeds sixty percent
(60%); or

(3) if this Plan is a part of a “required aggregation group” and part of a “permissive
aggregation group” and the “top-heavy ratio” for the “permissive aggregation group” exceeds
sixty percent (60%).

 

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(b) Top-heavy ratio. “Top-heavy ratio” means, with respect to a “determination date”:

(1) If the Employer maintains one or more defined contribution plans (including any
simplified employee pension plan (as defined in Code Section 408(k)) and the Employer has
not maintained any defined benefit plan which during the 5-year period ending on the
“determination date” has or has had accrued benefits, the top-heavy ratio for this plan
alone or for the “required aggregation group” or “permissive aggregation group” as
appropriate is a fraction, the numerator of which is the sum of the account balances of all
Key Employees as of the “determination date” (including any part of any account balance
distributed in the 1-year period ending on the “determination date”) (5-year period ending
on the “determination date” in the case of a distribution made for a reason other than
severance from employment, death or disability and in determining whether the Plan is
top-heavy for Plan Years beginning before January 1, 2002), and the denominator of which is
the sum of all account balances (including any part of any account balance distributed in
the 1-year period ending on the “determination date”) (5-year period ending on the
“determination date” in the case of a distribution made for a reason other than severance
from employment, death or disability and in determining whether the Plan is top-heavy for
Plan Years beginning before January 1, 2002), both computed in accordance with Code Section
416 and the Regulations thereunder.

Both the numerator and denominator of the top-heavy ratio are increased to reflect any
contribution not actually made as of the “determination date,” but which is required to be
taken into account on that date under Code Section 416 and the Regulations thereunder.

(2) If the Employer maintains one or more defined contribution plans (including any
simplified employee pension plan) and the Employer maintains or has maintained one or more
defined benefit plans which during the 5-year period ending on the “determination date” has
or has had any accrued benefits, the top-heavy ratio for any “required aggregation group”
or “permissive aggregation group” as appropriate is a fraction, the numerator of which is
the sum of account balances under the aggregated defined contribution plan or plans for all
Key Employees, determined in accordance with (1) above, and the present value of accrued
benefits under the aggregated defined benefit plan or plans for all Key Employees as of the
“determination date,” and the denominator of which is the sum of the account balances under
the aggregated defined contribution plan or plans for all participants, determined in
accordance with (1) above, and the present value of accrued benefits under the defined
benefit plan or plans for all participants as of the “determination date,” all determined
in accordance with Code Section 416 and the Regulations thereunder. The accrued benefits
under a defined benefit plan in both the numerator and denominator of the top-heavy ratio
are increased for any distribution of an accrued benefit made in the 1-year period ending
on the “determination date” (5-year period ending on the “determination date” in the case
of a distribution made for a reason other than severance from employment, death or
disability and in determining whether the Plan is top-heavy for Plan Years beginning before
January 1, 2002).

(3) For purposes of (1) and (2) above, the value of account balances and the present value
of accrued benefits will be determined as of the most recent “valuation date” that falls
within or ends with the 12-month period ending on the “determination date,” except as
provided in Code Section 416 and the Regulations thereunder for the first and second plan
years of a defined benefit plan. The account balances and accrued benefits of a participant
(i) who is not a Key Employee but who was a Key Employee in a prior year, or (ii) who has
not been credited with at least one Hour of
Service with any Employer maintaining the plan at any time during the 1-year period (5-year
period in determining whether the Plan is top-heavy for Plan Years beginning before January
1, 2002) ending on the “determination date” will be disregarded. The calculation of the
top-heavy ratio, and the extent to which distributions, rollovers, and transfers are taken
into account will be made in accordance with Code Section 416 and the Regulations
thereunder. Deductible employee contributions will not be taken into account for purposes
of computing the top-heavy ratio. When aggregating plans the value of account balances and
accrued benefits will be calculated with reference to the “determination dates” that fall
within the same calendar year.

 

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

(4) The calculation of top-heavy ratio, and the extent to which distributions, rollovers,
and transfers are taken into account, will be made in accordance with Code Section 416 and
the regulations thereunder.

(c) Determination date. “Determination date” means, for any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the first Plan Year of the Plan,
“determination date” means the last day of that Plan Year.

(d) Permissive aggregation group. “Permissive aggregation group” means the “required
aggregation group” of plans plus any other plan or plans of the Employer or any Affiliated
Employer which, when considered as a group with the required aggregation group, would continue
to satisfy the requirements of Code Sections 401(a)(4) and 410.

(e) Required aggregation group. “Required aggregation group” means: (1) each qualified plan of
the Employer or any Affiliated Employer in which at least one Key Employee participates or
participated at any time during the Plan Year containing the determination date or any of the
four preceding plan years (regardless of whether the plan has terminated), and (2) any other
qualified plan of the Employer or any Affiliated Employer which enables a plan described in (l)
to meet the requirements of Code Sections 401(a)(4) or 410.

(f) Valuation Date. “Valuation date” means the date elected by the Employer as of which account
balances or accrued benefits are valued for purposes of calculating the “top-heavy ratio.”

ARTICLE IX

MISCELLANEOUS

9.1 PARTICIPANT’S RIGHTS

This Plan shall not be deemed to constitute a contract between the Employer and any
Participant or to be a consideration or an inducement for the employment of any Participant or
Employee. Nothing contained in this Plan shall be deemed to give any Participant or Employee the
right to be retained in the service of the Employer or to interfere with the right of the Employer
to discharge any Participant or Employee at any time regardless of the effect which such discharge
shall have upon the Employee as a Participant of this Plan.

9.2 ALIENATION OF BENEFITS

(a) General rule. Subject to the exceptions provided below, and as otherwise permitted by the
Code and the Act, no benefit which shall be payable to any person (including a Participant or
the Participant’s Beneficiary) shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be void; and no such benefit shall in any
manner be liable for, or subject to, the debts, contracts, liabilities, engagements, or torts
of any such person, nor shall it be subject to attachment or legal process for or against such
person, and the same shall not be recognized, except to such extent as may be required by law.

 

68

 

(b) Exception for loans. Subsection (a) shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, by reason of a loan made pursuant to Section 7.4. At the
time a distribution is to be made to or for a Participant’s or Beneficiary’s benefit, such
proportion of the amount to be distributed as shall equal such indebtedness shall be paid to
the Plan, to apply against or discharge such indebtedness. Prior to making a payment, however,
the Participant or Beneficiary must be given written notice by the Administrator that such
indebtedness is to be so paid in whole or part from the Participant’s Account. If the
Participant or Beneficiary does not agree that the indebtedness is a valid claim against the
Vested Participant’s Account, the Participant or Beneficiary shall be entitled to a review of
the validity of the claim in accordance with procedures provided in Sections 2.8 and 2.9.

(c) Exception for QDRO. Subsection (a) shall not apply to a qualified domestic relations order
defined in Code Section 414(p), and those other domestic relations orders permitted to be so
treated by the Administrator under the provisions of the Retirement Equity Act of 1984. The
Administrator shall establish a written procedure to determine the qualified status of domestic
relations orders and to administer distributions under such qualified orders. Further, to the
extent provided under a qualified domestic relations order, a former spouse of a Participant
shall be treated as the spouse or surviving spouse for all purposes under the Plan.

(d) Exception for certain debts to Plan. Subsection (a) shall not apply to an offset to a
Participant’s accrued benefit against an amount that the Participant is ordered or required to
pay the Plan with respect to a judgment, order, or decree issued, or a settlement entered into
in accordance with Code Sections 401(a)(13)(C) and (D).

9.3 CONSTRUCTION AND INTERPRETATION OF PLAN

(a) Applicable state laws. This Plan shall be construed and enforced according to the Code, the
Act and the laws of the Commonwealth of Pennsylvania, other than its laws respecting choice of
law, to the extent not pre-empted by Federal law.

(b) Single subsections. This Plan may contain single subsections. The existence of such single
subsections shall not constitute scrivener’s errors.

(c) Separate Accounts. Unless otherwise specified by a particular provision, the term “separate
account” does not require a separate fund, only a notational entry in a recordkeeping system.

9.4 GENDER AND NUMBER

(a) Masculine and feminine. Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another gender in all
cases where they would so apply.

(b) Singular and plural. Whenever any words are used herein in the singular or plural form,
they shall be construed as though they were also used in the other form in all cases where they
would so apply.

9.5 LEGAL ACTION

In the event any claim, suit, or proceeding is brought regarding the Trust and/or Plan
established hereunder to which the Trustee, the Employer or the Administrator may be a party, and
such claim, suit, or proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, they shall be entitled to
be reimbursed from the Trust Fund for any and all costs, attorney’s fees, and other expenses
pertaining thereto incurred by them for which they shall have become liable.

 

69

 

9.6 PROHIBITION AGAINST DIVERSION OF FUNDS

(a) General rule. Except as provided below and otherwise specifically permitted by law, it
shall be impossible by operation of the Plan or of the Trust, by termination of either, by
power of revocation or amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or income of any Trust Fund
maintained pursuant to the Plan or any funds contributed thereto to be used for, or diverted
to, purposes other than the exclusive benefit of Participants or their Beneficiaries.

(b) Mistake of fact. In the event the Employer shall make an excessive contribution under a
mistake of fact pursuant to Act Section 403(c)(2)(A), the Employer may demand repayment of such
excessive contribution at any time within one (1) year following the time of payment and the
Trustees shall return such amount to the Employer within the one (1) year period. Earnings of
the Plan attributable to the contributions may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.

(c) Contribution conditioned on deductibility. Except as otherwise provided by a particular
Plan provision, any contribution made by the Employer to the Plan is conditioned upon the
deductibility of the contribution by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may, within one (1) year following the final
determination of the disallowance, whether by agreement with the Internal Revenue Service or by
final decision of a competent jurisdiction, demand repayment of such disallowed contribution
and the Trustee shall return such contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the contribution may not be returned to the Employer, but
any losses attributable thereto must reduce the amount so returned.

9.7 EMPLOYER’S AND TRUSTEE’S PROTECTIVE CLAUSE

The Employer, Administrator and Trustee, and their successors, shall not be responsible for
the validity of any Contract issued hereunder or for the failure on the part of the insurer to make
payments provided by any such Contract, or for the action of any person which may delay payment or
render a Contract null and void or unenforceable in whole or in part.

9.8 INSURER’S PROTECTIVE CLAUSE

Except as otherwise agreed upon in writing between the Employer and the insurer, an insurer
which issues any Contracts hereunder shall not have any responsibility for the validity of this
Plan or for the tax or legal aspects of this Plan. The insurer shall be protected and held harmless
in acting in accordance with any written direction of the Trustee, and shall have no duty to see to
the application of any funds paid to the Trustee, nor be required to question any actions directed
by the Trustee. Regardless of any provision of this Plan, the insurer shall not be required to take
or permit any action or allow any benefit or privilege contrary to the terms of any Contract which
it issues hereunder, or the rules of the insurer.

9.9 RECEIPT AND RELEASE FOR PAYMENTS

Any payment to any Participant, the Participant’s legal representative, Beneficiary, or to any
guardian or committee appointed for such Participant or Beneficiary in accordance with the
provisions of the Plan, shall, to the extent thereof, be in full satisfaction of all claims
hereunder against the Trustee and the Employer.

9.10 ACTION BY THE EMPLOYER

Whenever the Employer under the terms of the Plan is permitted or required to do or perform
any act or matter or thing, it shall be done and performed by a person duly authorized by its
legally constituted authority.

 

70

 

9.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY

The named Fiduciaries of this Plan are (1) the Employer, (2) the Administrator, (3) the
Trustee and (4) any Investment Manager appointed hereunder. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are specifically given them
under the Plan including, but not limited to, any agreement allocating or delegating their
responsibilities, the terms of which are incorporated herein by reference. In general, the Employer
shall have the sole responsibility for making the contributions provided for under Section 4.1; and
shall have the authority to appoint and remove the Trustee and the Administrator; to formulate the
Plan’s funding policy and method; and to amend or terminate, in whole or in part, the Plan. The
Administrator shall have the sole responsibility for the administration of the Plan, including, but
not limited to, the items specified in Article II of the Plan, as the same may be allocated or
delegated thereunder. The Administrator shall act as the named Fiduciary responsible for
communicating with the Participant according to the Participant Direction Procedures. The Trustee
shall have the sole responsibility of management of the assets held under the Trust, except to the
extent directed pursuant to Article II or with respect to those assets, the management of which has
been assigned to an Investment Manager, who shall be solely responsible for the management of the
assets assigned to it, all as specifically provided in the Plan. Each named Fiduciary warrants that
any directions given, information furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing or providing for such direction, information or action.
Furthermore, each named Fiduciary may rely upon any such direction, information or action of
another named Fiduciary as being proper under the Plan, and is not required under the Plan to
inquire into the propriety of any such direction, information or action. It is intended under the
Plan that each named Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under the Plan as specified or allocated herein. No named
Fiduciary shall guarantee the Trust Fund in any manner against investment loss or depreciation in
asset value. Any person or group may serve in more than one Fiduciary capacity.

9.12 HEADINGS

The headings and subheadings of this Plan have been inserted for convenience of reference and
are to be ignored in any construction of the provisions hereof.

9.13 APPROVAL BY INTERNAL REVENUE SERVICE

Notwithstanding anything herein to the contrary, if, pursuant to an application for
qualification filed by or on behalf of the Plan by the time prescribed by law for filing the
Employer’s return for the taxable year in which the Plan is adopted, or such later date that the
Secretary of the Treasury may prescribe, the Commissioner of Internal Revenue Service or the
Commissioner’s delegate should determine that the Plan does not initially qualify as a tax-exempt
plan under Code Sections 401 and 501, and such determination is not contested, or if contested, is
finally upheld, then if the Plan is a new plan, it shall be void ab initio and all amounts
contributed to the Plan by the Employer, less expenses paid, shall be returned within one (1) year
after the date the initial qualification is denied, and the Plan shall terminate, and the Trustee
shall be discharged from all further obligations. If the disqualification relates to an amended
plan, then the Plan shall operate as if it had not been amended.

9.14 ELECTRONIC MEDIA

The Administrator may use telephonic or electronic media to satisfy any notice requirements
required by this Plan, to the extent permissible under regulations (or other generally applicable
guidance). In addition, a Participant’s consent to an immediate distribution may be provided
through telephonic or electronic means, to the extent permissible under regulations (or other
generally applicable guidance). The Administrator also may use telephonic or electronic media to
conduct plan transactions such as enrolling Participants, making (and changing) deferral elections,
electing (and changing) investment allocations,
applying for Plan loans, and other transactions, to the extent permissible under regulations
(or other generally applicable guidance).

 

71

 

9.15 PLAN CORRECTION

The Administrator in conjunction with the Employer may undertake such correction of Plan
errors as the Administrator deems necessary, including correction to preserve tax qualification of
the Plan under Code Section 401(a) or to correct a fiduciary breach under the Act. Without limiting
the Administrator’s authority under the prior sentence, the 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 IRS Employee Plans
Compliance Resolution System (“EPCRS”) or any successor program to EPCRS. The 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
DOL Voluntary Fiduciary Correction Program (“VFC”) or any successor program to VFC. For example, to
correct an operational error, the Administrator may require the Trustee to distribute Elective
Deferrals or Vested Matching Contributions, including earnings, from the Plan where such amounts
result from an operational error other than a failure of Code Section 415, Code Section 402(g), or
a failure of the ADP Test or the ACP Test.

9.16 UNIFORMITY

All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory
manner. In the event of any conflict between the terms of this Plan and any Contract purchased
hereunder, the Plan provisions shall control.

9.17 FORFEITURE SUSPENSE ACCOUNTS FOR ADMINISTRATIVE ERRORS

As a result of administrative operational errors under the Plan (in connection with IRS
Revenue Procedure 2008-50 and any successor regulations or procedures relating to the Employee
Plans Compliance Resolution System (the “Revenue Procedure”)), (i) Forfeitures under the Plan and
(ii) excess contributions (including earnings) shall be transferred from Participants’ accounts to
a forfeiture suspense account to be used to reduce future Employer contributions under the Plan.

ARTICLE X

PARTICIPATING EMPLOYERS

10.1 ADOPTION BY OTHER EMPLOYERS

Notwithstanding anything herein to the contrary, with the consent of the Employer and Trustee,
any other corporation or entity, whether an Affiliated Employer or not, may adopt this Plan and all
of the provisions hereof, and participate herein and be known as a Participating Employer, by a
properly executed document evidencing said intent and will of such Participating Employer.

10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS

(a) Same Trustee for all. Each such Participating Employer shall be required to use the same
Trustee as provided in this Plan.

(b) Holding and investing assets. The Trustee may, but shall not be required to, commingle,
hold and invest as one Trust Fund all contributions made by Participating Employers, as well as
all increments thereof.

(c) Payment of expenses. Unless the Employer otherwise directs, any expenses of the Plan which
are to be paid by the Employer or borne by the Trust Fund shall be paid by each Participating
Employer in the same proportion that the total amount standing to the credit of all
Participants employed by such Employer bears to the total standing to the credit of all
Participants.

 

72

 

10.3 DESIGNATION OF AGENT

Each Participating Employer shall be deemed to be a party to this Plan; provided, however,
that with respect to all of its relations with the Trustee and Administrator for the purpose of
this Plan, each Participating Employer shall be deemed to have designated irrevocably the Employer
as its agent. Unless the context of the Plan clearly indicates the contrary, the word “Employer”
shall be deemed to include each Participating Employer as related to its adoption of the Plan.

10.4 EMPLOYEE TRANSFERS

In the event an Employee is transferred between Participating Employers, accumulated service
and eligibility shall be carried with the Employee involved. No such transfer shall effect a
termination of employment hereunder, and the Participating Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to such Employee in the same
manner as was the Participating Employer from whom the Employee was transferred.

10.5 PARTICIPATING EMPLOYER CONTRIBUTION AND FORFEITURES

Any contribution or Forfeiture subject to allocation during each Plan Year shall be determined
and allocated separately by each Participating Employer, and shall be allocated only among the
Participants eligible to share of the Employer or Participating Employer making the contribution or
by which the forfeiting Participant was employed. On the basis of the information furnished by the
Administrator, the Trustee shall keep separate books and records concerning the affairs of each
Participating Employer hereunder and as to the accounts and credits of the Employees of each
Participating Employer. The Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in the event of an
Employee transfer from one Participating Employer to another, the employing Employer shall
immediately notify the Trustee thereof.

10.6 AMENDMENT AND/OR RESTATEMENT

Any Participating Employer that is an Affiliated Employer hereby authorizes the Employer to
make amendments and/or restatements on its behalf, unless otherwise agreed among all affected
parties. If a Participating Employer is not an Affiliated Employer, then amendment of this Plan by
the Employer at any time when there shall be a Participating Employer shall, unless otherwise
agreed to by the affected parties, only be by the written action of each and every Participating
Employer and with the consent of the Trustee where such consent is necessary in accordance with the
terms of this Plan.

10.7 DISCONTINUANCE OF PARTICIPATION

Any Participating Employer shall be permitted to discontinue or revoke its participation in
the Plan at any time. At the time of any such discontinuance or revocation, satisfactory evidence
thereof and of any applicable conditions imposed shall be delivered to the Trustee. The Employer
shall have the right to discontinue or revoke the participation in the Plan of any Participating
Employer by providing 45 days notice to such Participating Employer. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to the Participants of
such Participating Employer to such new Trustee as shall have been designated by such Participating
Employer, in the event that it has established a separate qualified retirement plan for its
employees provided, however, that no such transfer shall be made if the result is the elimination
or reduction of any Section 411(d)(6) protected benefits as described in Section 7.1(e). If a
separate plan has not been established, at the time of such continuance or revocation for whatever
reason, the assets and liabilities, Contracts and other Trust Fund assets allocable to such
Participating Employer’s participation in this Plan shall be spun off pursuant to Code Section
414(l) and such spun off assets shall constitute a retirement plan of the Participating Employer
with such Participating Employer becoming sponsor and the individual who has signed the
Supplemental Participation Agreement on behalf of the Participating Employer becoming Trustee for
this purpose. Such individual shall agree to
this appointment by virtue of signing the Supplemental Participation Agreement. If such
individual is no longer an Employee of the Participating Employer, then the Participating Employer
shall appoint a Trustee. If no successor is designated, the Trustee shall retain such assets for
the Employees of said Participating Employer pursuant to the provisions of the Trust. In no such
event shall any part of the corpus or income of the Trust Fund as it relates to such Participating
Employer be used for or diverted for purposes other than for the exclusive benefit of the Employees
of such Participating Employer.

 

73

 

10.8 ADMINISTRATOR’S AUTHORITY

The Administrator shall have authority to make any and all necessary rules or regulations,
binding upon all Participating Employers and all Participants, to effectuate the purpose of this
Article.

10.9 PROVISIONS APPLIED SEPARATELY (OR JOINTLY) FOR PARTICIPATING NON-AFFILIATED EMPLOYERS

(a) Separate status. The Plan Administrator will apply the definition of Compensation and
perform the tests listed in this Section, separately for each Participating Employer other than
an Affiliated Employer of such Participating Employer. For this purpose, the Employees of each
Participating Employer (and its Affiliated Employers), and their allocations and accounts,
shall be treated as though they were in separate plan. Any correction action, such as
additional contributions or corrective distributions, shall only affect the Employees of the
Participating Employer (and its Affiliated Employers, if any). The tests subject to this
separate treatment are:

(1) The ADP Test.

(2) The ACP Test.

(3) Nondiscrimination testing as described in Code Section 401(a)(4) and the applicable
Regulations.

(4) Coverage testing as described in Code Section 410(b) and the Regulations.

(5) Status as a Highly Compensated Employee under Section 1.44.

(b) Joint status. The following tests shall be performed for the plan as whole, without regard
to employment by a particular Participating Employer:

(1) Applying the annual addition limitation in Section 4.9, including the related
Compensation definition.

(2) Applying the Code Section 402(g) limitation in Section 4.2.

(3) Applying the limit on Catch-Up Contributions in Section 4.2.

 

74

 

10.10 TOP-HEAVY APPLIED SEPARATELY FOR PARTICIPATING NON-AFFILIATED EMPLOYERS

The Plan will apply the Top-Heavy Plan provisions separately to each Participating Employer
other than an Affiliated Employer of such Participating Employer. The Plan will be considered
separate plans for each Participating Employer and its Employees for purposes of determining
whether such a separate plan is top-heavy under Section 8.1 or is entitled to the exemption
described in such Section. For purposes of applying this Article to a Participating Employer, the
Participating Employer and any entity which is an Affiliated Employer to that Participating
Employer shall be the “Employer” for purposes of Section 8.1, and the terms “Key Employee” and
“Non-Key Employee” shall refer only to the Employees of that Participating Employer and/or its
Affiliated Employers. If such a Participating Employer’s separate plan is top-heavy, then:

(a) Highest contribution rate. The Plan Administrator shall determine the highest Key Employee
contribution rate under Section 4.4(g) by reference to the Key Employees and their allocations
in the separate plan of that Participating Employer;

(b) Top-Heavy minimum allocation. The Plan Administrator shall determine the amount of any
required top-heavy minimum allocation separately for that separate plan under Section 4.4(g);
and

(c) Plan which will satisfy. The Participating Employer shall make any additional contributions
Section 4.4(g) requires.

10.11 HIGHLY COMPENSATED EMPLOYEE STATUS

Status as a Highly Compensated Employee under Section 1.44 shall be determined separately with
respect to each Participating Employer (and all its Affiliated Employers).

10.12 SERVICE

An Employee’s service includes all Hours of Service and Years of Service with any and all
Participating Employers and their Affiliated Employers. An Employee who terminates employment with
one Participating Employer and immediately commences employment with another Participating Employer
has not separated from service and has not had a severance from employment.

10.13 REQUIRED MINIMUM DISTRIBUTIONS

If a Participant is a 5-percent owner (under Section 6.8(e)(6)) of any Participating Employer
for which the Participant is an Employee in the Plan Year the Participant attains age 70 1/2, then
the Participant’s required beginning date under Section 6.8 shall be the April 1 of the calendar
year following the close of the calendar year in which the Participant attains age 70 1/2.

 

75

 

IN WITNESS WHEREOF, this Plan has been executed the day and year first above written.

	 	 	 	 	 
	 	The Bon-Ton Stores, Inc.

 	 
	 	/s/ BYRON BERGREN
 	 
	 	Byron Bergren, President & CEO 	 
	 	 	 
	 	     /s/ KEITH PLOWMAN
 	 
	 	Keith Plowman, Executive Vice President & CFOExhibit 4.2

Exhibit 4.2

THE BON-TON STORES, INC. RETIREMENT CONTRIBUTION PLAN

AMENDMENT FOR PENSION PROTECTION ACT AND HEART ACT

ARTICLE I

PREAMBLE

	1.1	 	Effective date of Amendment. The Employer adopts this Amendment to the Plan to reflect recent
law changes. This Amendment is effective as indicated below for the respective provisions.

	1.2	 	Superseding of inconsistent provisions. This Amendment supersedes the provisions of the Plan
to the extent those provisions are inconsistent with the provisions of this Amendment.

	1.3	 	Employer’s election. The Employer adopts all the default provisions of this Amendment except
as otherwise elected in Article II.

	1.4	 	Construction. Except as otherwise provided in this Amendment, any reference to “Section” in
this Amendment refers only to sections within this Amendment, and is not a reference to the
Plan. The Article and Section numbering in this Amendment is solely for purposes of this
Amendment, and does not relate to any Plan article, section or other numbering designations.

	1.5	 	Effect of restatement of Plan. If the Employer restates the Plan, then this Amendment shall
remain in effect after such restatement unless the provisions in this Amendment are restated
or otherwise become obsolete (e.g., if the Plan is restated onto a plan document which
incorporates PPA provisions).

ARTICLE II

EMPLOYER ELECTIONS

The Employer only needs to complete the questions in Sections 2.2 through 2.7 below in order to
override the default provisions set forth below.

	2.1	 	Default Provisions. Unless the Employer elects otherwise in this Article, the following
defaults will apply:

	 	a.	 	If the Plan has a vesting schedule for nonelective contributions that does not
meet the Pension Protection Act of 2006 (PPA), then the vesting schedule for any
Employer nonelective contributions for Participants who complete an Hour of Service in a
Plan Year beginning after December 31, 2006, will be the schedule below. Such schedule
will apply to all nonelective contributions, even those made prior to January 1, 2007.

If the Plan has a graded vesting schedule (i.e., the vesting schedule includes a vested
percentage that is more than 0% and less than 100%), then the vesting schedule will be a
6-year graded schedule (20% after 2 years of vesting service and an additional 20% for
each year thereafter).

If the Plan has a cliff vesting schedule that requires more than 3 years of vesting
service, then nonelective contributions will be nonforfeitable upon the completion of 3
years of vesting service.

	 	b.	 	Nonspousal beneficiary rollovers are allowed effective for distributions made
after 12/31/06. (See Section 2.3)

	 	c.	 	Hardship distributions for expenses of a beneficiary are not allowed.

 

 

 

	 	d.	 	The option to permit in-service distributions at age 62 (with respect to amounts
attributable to a money purchase pension plan, target benefit plan, or any other defined
contribution plan that has received a transfer of assets from a pension plan) is not
adopted.
	 
	 	e.	 	Qualified Reservist Distributions are not allowed. (See Section 2.6)

	 	f.	 	Continued benefit accruals pursuant to the Heroes Earnings Assistance and Relief
Tax Act of 2008 (HEART Act) are not provided.

	2.2	 	Vesting (Article III). The default vesting schedule applies unless a. is elected below.

	 	a.	 	o	 	 In lieu of the above default vesting provisions, the employer elects the
following schedule:

	 	1.	 	o	 	 3 year cliff (a Participant’s accrued benefit derived
from employer nonelective contributions is nonforfeitable upon the
Participant’s completion of three years of vesting service).
	 
	 	2.	 	o	 	 6 year graded schedule (20% after 2 years of vesting
service and an additional 20% for each year thereafter).
	 
	 	3.	 	o	 	 Other (must be at least as liberal as 1. or 2. above at each point in time):

	 	 	 	 
	Years of vesting service	 	Nonforfeitable percentage	
	 	 	 	
	                    
	 	                    	%
	                    
	 	                    	%
	                    
	 	                    	%
	                    
	 	                    	%
	                    
	 	                    	%

The vesting schedule set forth herein only applies to Participants who complete an Hour of
Service in a Plan Year beginning after December 31, 2006, and, unless b. is elected below,
applies to all nonelective contributions subject to a vesting schedule.

	 	b.	 	o	 	 The vesting schedule will only apply to nonelective contributions made in
Plan Years beginning after December 31, 2006 (the prior schedule will apply to
nonelective contributions made in prior Plan Years).

	2.3	 	Non-spousal rollovers (Article VII). Non-spousal rollovers are allowed after December 31,
2006 unless a. is elected below (Article VII provides that such distributions are always
allowed after December 31, 2009):

	 	a.	 	þ	 	 Use the following instead of the default (select one):

	 	1.	 	o	 	 Non-spousal rollovers are not allowed.
	 
	 	2.	 	þ	 	 Non-spousal rollovers are allowed effective October
1, 2007 (not earlier than January 1, 2007 and not later than January 1,
2010).

 

 

 

	2.4	 	Hardships (Article VIII). Hardship distributions for expenses of beneficiaries will not be
allowed unless elected below:

	 	a.	 	o	 	 Hardship distributions are allowed for beneficiary expenses (See IRS Notice
2007-7) (applies only for 401(k) or profit sharing plans that allow hardship
distributions) effective as of August 17, 2006 unless another date is elected below:

	 	1.	 	 o                      (may not be earlier than August 17,
2006).

	2.5	 	In-service distributions (Article IX). In-service distributions at age 62 will not be allowed
(except as otherwise permitted under the Plan without regard to this Amendment) unless elected
below:

	 	a.	 	o	 	 In-service distributions will be allowed for Participants at age 62
(generally applies only for money purchase (including target benefit) plans, but may
apply to any other defined contribution plans that have received a transfer of assets
from a pension plan) effective as of the first day of the 2007 Plan Year unless another
date is elected below:

	 	1.	 	o                      (may not be earlier than the first day
of the 2007 Plan Year).

AND, the following limitations apply to in-service distributions:

	 	2.	 	o	 	The Plan already provides for in-service distributions
and the restrictions set forth in the Plan (e.g., minimum amount of
distributions or frequency of distributions) are applicable to in-service
distributions at age 62.
	 
	 	3.	 	o	 	 N/A. No limitations.

	 	4.	 	o	 	 The following elections apply to in-service
distributions at age 62 (select all that apply):

	 	a.	 	o	 	 The minimum amount of a
distribution is $                     (may not exceed $1,000).

	 	b.	 	o	 	 No more than                      distribution(s) may be
made to a Participant during a Plan Year.

	 	c.	 	o	 	 Distributions may only be made from
accounts which are fully Vested.

	 	d.	 	o	 	 In-service distributions may be
made subject to the following provisions:                      (must be definitely
determinable and not subject to discretion).

	2.6	 	Qualified Reservist Distributions (Article X). Qualified Reservist distributions will not be
allowed unless elected below:

	 	a.	 	þ	 	 Qualified Reservist Distributions are allowed effective as of September 8,
2009 (may not be earlier than September 12, 2001).

	2.7	 	Continued benefit accruals (Article XV). Continued benefit accruals for the HEART Act
(Amendment Section 15.2) will not apply unless elected below:

	 	a.	 	o	 	The provisions of Amendment Section 15.2 apply.

 

 

 

ARTICLE III

NONELECTIVE CONTRIBUTION VESTING

	3.1	 	Applicability. This Article applies to Participants who complete an Hour of Service in a Plan
Year beginning after December 31, 2006, with respect to accrued benefits derived from employer
nonelective contributions made in Plan Years beginning after December 31, 2006. Unless
otherwise elected by the employer in Amendment Section 2.2 above, this Article also will apply
to all nonelective contributions subject to a vesting schedule, including nonelective
contributions allocated under the Plan terms as of a date in a Plan Year beginning before
January 1, 2007.

	3.2	 	Vesting schedule. A Participant’s accrued benefit derived from employer nonelective
contributions vests as provided in Amendment Section 2.1.a, or if applicable, Amendment
Section 2.2.

ARTICLE IV

PARTICIPANT DISTRIBUTION NOTIFICATION

	4.1	 	180-day notification period. For any distribution notice issued in Plan Years beginning after
December 31, 2006, any reference to the 90-day maximum notice period prior to distribution in
applying the notice requirements of Code §§402(f) (the rollover notice), 411(a)(11)
(Participant’s consent to distribution), and 417 (notice under the joint and survivor annuity
rules) will become 180 days.

	4.2	 	Notice of right to defer distribution. For any distribution notice issued in Plan Years
beginning after December 31, 2006, the description of a Participant’s right, if any, to defer
receipt of a distribution also will describe the consequences of failing to defer receipt of
the distribution. For notices issued before the 90th day after the issuance of Treasury
regulations (unless future Revenue Service guidance otherwise requires), the notice will
include: (i) a description indicating the investment options available under the Plan
(including fees) that will be available if the Participant defers distribution; and (ii) the
portion of the summary plan description that contains any special rules that might affect
materially a Participant’s decision to defer.

ARTICLE V

ROLLOVER OF AFTER-TAX/ROTH AMOUNTS

	5.1	 	Direct rollover to qualified plan/403(b) plan. For taxable years beginning after December 31,
2006, a Participant may elect to transfer employee (after-tax) or Roth elective deferral
contributions by means of a direct rollover to a qualified plan or to a 403(b) plan that
agrees to account separately for amounts so transferred, including accounting separately for
the portion of such distribution which is includible in gross income and the portion of such
distribution which is not includible in gross income.

ARTICLE VI

DIVESTMENT OF EMPLOYER SECURITIES

	6.1	 	Rule applicable to elective deferrals and employee contributions. For Plan Years beginning
after December 31, 2006, if any portion of the account of a Participant (including, for
purposes of this Article VI, a beneficiary entitled to exercise the rights of a Participant)
attributable to elective deferrals or employee contributions is invested in publicly-traded
Employer securities, the Participant may elect to direct the Plan to divest any such
securities, and to reinvest an equivalent amount in other investment options which satisfy the
requirements of Section 6.3.

	6.2	 	Rule applicable to Employer contributions. If any portion of a Participant’s account
attributable to nonelective or matching contributions is invested in publicly-traded Employer
securities, then a Participant who has completed at least 3 years of vesting service, or a
beneficiary of any deceased Participant entitled to exercise the right of a Participant, may
elect to direct the Plan to divest any
such securities, and to reinvest an equivalent amount in other investment options which
satisfy the requirements of Section 6.3.

 

 

 

	 	a.	 	Three-year phase-in applicable to Employer contributions. For Employer securities
acquired with nonelective or matching contributions during a Plan Year beginning before
January 1, 2007, the rule described in this Section 6.2 only applies to the percentage
of the Employer securities (applied separately for each class of securities) as follows:

	 	 	 
	Plan Year	 	Percentage
	2007
	 	33
	2008
	 	66
	2009
	 	100

	 	b.	 	Exception to phase-in for certain age 55 Participants. The 3-year phase-in rule
of Section 6.2.a does not apply to a Participant who has attained age 55 and who has
completed at least 3 years of service before the first Plan Year beginning after
December 31, 2005.

	6.3	 	Investment options. For purposes of this Article VI, other investment options must include
not less than 3 investment options, other than Employer securities, to which the Participant
may direct the proceeds of divestment of Employer securities required by this Article VI, each
of which options is diversified and has materially different risk and return characteristics.
The Plan must provide reasonable divestment and reinvestment opportunities at least quarterly.
Except as provided in regulations, the Plan may not impose restrictions or conditions on the
investment of Employer securities which the Plan does not impose on the investment of other
Plan assets, other than restrictions or conditions imposed by reason of the application of
securities laws or a condition permitted under IRS Notice 2006-107 or other applicable
guidance.

	6.4	 	Exceptions for certain plans. This Article VI does not apply to a one-participant plan, as
defined in Code §401(a)(35)(E)(iv), or to an employee stock ownership plan (“ESOP”) if: (i)
there are no contributions to the ESOP (or related earnings) attributable to elective
deferrals or matching contributions; and (ii) the ESOP is a separate plan, for purposes of
Code §414(l), from any other defined benefit plan or defined contribution plan maintained by
the same employer or employers.

	6.5	 	Treatment as publicly traded Employer securities. Except as provided in Treasury regulations
or in Code §401(a)(35)(F)(ii) (relating to certain controlled groups), a plan holding Employer
securities which are not publicly traded Employer securities is treated as holding publicly
traded Employer securities if any Employer corporation, or any member of a controlled group of
corporations which includes such Employer corporation (as defined in Code §401(a)(35)(F)(iii))
has issued a class of stock which is a publicly traded Employer security.

ARTICLE VII

DIRECT ROLLOVER OF NON-SPOUSAL DISTRIBUTION

	7.1	 	Non-spouse beneficiary rollover right. For distributions after December 31, 2009, and unless
otherwise elected in Section 2.3 of this Amendment, for distributions after December 31, 2006,
a non-spouse beneficiary who is a “designated beneficiary” under Code §401(a)(9)(E) and the
regulations thereunder, by a direct trustee-to-trustee transfer (“direct rollover”), may roll
over all or any portion of his or her distribution to an individual retirement account the
beneficiary establishes for purposes of receiving the distribution. In order to be able to
roll over the distribution, the distribution otherwise must satisfy the definition of an
eligible rollover distribution.

	7.2	 	Certain requirements not applicable. Although a non-spouse beneficiary may roll over directly
a distribution as provided in Section 7.1, any distribution made prior to January 1, 2010 is
not subject to the direct rollover requirements of Code §401(a)(31) (including Code
§401(a)(31)(B), the notice requirements of Code §402(f) or the mandatory withholding
requirements of Code §3405(c)). If a
non-spouse beneficiary receives a distribution from the Plan, the distribution is not
eligible for a “60-day” rollover.

 

 

 

	7.3	 	Trust beneficiary. If the Participant’s named beneficiary is a trust, the Plan may make a
direct rollover to an individual retirement account on behalf of the trust, provided the trust
satisfies the requirements to be a designated beneficiary within the meaning of Code
§401(a)(9)(E).

	7.4	 	Required minimum distributions not eligible for rollover. A non-spouse beneficiary may not
roll over an amount which is a required minimum distribution, as determined under applicable
Treasury regulations and other Revenue Service guidance. If the Participant dies before his or
her required beginning date and the non-spouse beneficiary rolls over to an IRA the maximum
amount eligible for rollover, the beneficiary may elect to use either the 5-year rule or the
life expectancy rule, pursuant to Treas. Reg. §1.401(a)(9)-3, A-4(c), in determining the
required minimum distributions from the IRA that receives the non-spouse beneficiary’s
distribution.

ARTICLE VIII

DISTRIBUTION BASED ON BENEFICIARY HARDSHIP

	8.1	 	Beneficiary-based distribution. If elected in Amendment Section 2.4.a, then beginning as of
the date specified in such Section, a Participant’s hardship event, for purposes of the Plan’s
safe harbor hardship distribution provisions pursuant to Treas. Reg.
§1.401(k)-1(d)(3)(iii)(B), includes an immediate and heavy financial need of the Participant’s
primary beneficiary under the Plan, that would constitute a hardship event if it occurred with
respect to the Participant’s spouse or dependent as defined under Code §152 (such hardship
events being limited to educational expenses, funeral expenses and certain medical expenses).
For purposes of this Article, a Participant’s “primary beneficiary under the Plan” is an
individual who is named as a beneficiary under the Plan and has an unconditional right to all
or a portion of the Participant’s account balance under the Plan upon the Participant’s death.

ARTICLE IX

IN-SERVICE PENSION DISTRIBUTIONS

	9.1	 	Age 62 distributions. If elected in Amendment Section 2.5.b, then beginning as of the date
specified in such Section, if the Plan is a money purchase pension plan, a target benefit
plan, or any other defined contribution plan that has received a transfer of assets from a
pension plan, a Participant who has attained age 62 and who has not separated from employment
may elect to receive a distribution of his or her vested account balance (or in case of a
transferee plan, of the transferred account balance).

ARTICLE X

QUALIFIED RESERVIST DISTRIBUTION

	10.1	 	401(k) distribution restrictions. If elected in Amendment Section 2.6, then effective as of
the date specified in such Section, the Plan permits a Participant to elect a Qualified
Reservist Distribution, as defined in this Article X.

	10.2	 	Qualified Reservist Distribution defined. A “Qualified Reservist Distribution” is any
distribution to an individual who is ordered or called to active duty after September 11,
2001, if: (i) the distribution is from amounts attributable to elective deferrals in a 401(k)
plan; (ii) the individual was (by reason of being a member of a reserve component, as defined
in section 101 of title 37, United States Code) ordered or called to active duty for a period
in excess of 179 days or for an indefinite period; and (iii) the Plan makes the distribution
during the period beginning on the date of such order or call, and ending at the close of the
active duty period.

 

 

 

ARTICLE XI

OTHER 401(k)/401(m) PLAN PROVISIONS

	11.1	 	Gap period income on distributed excess contributions and excess aggregate contributions.
This Section applies to excess contributions (as defined in Code §401(k)(8)(B)) and excess
aggregate contributions (as defined in Code §401(m)(6)(B)) made with respect to Plan Years
beginning after December 31, 2007. The Plan administrator will not calculate and distribute
allocable income for the gap period (i.e., the period after the close of the Plan Year in
which the excess contribution or excess aggregate contribution occurred and prior to the
distribution).

	11.2	 	Gap period income on distributed excess deferrals. With respect to 401(k) plan excess
deferrals (as defined in Code §402(g)) made in taxable year 2007, the Plan administrator must
calculate allocable income for the taxable year and also for the gap period (i.e., the period
after the close of the taxable year in which the excess deferral occurred and prior to the
distribution); provided that the Plan administrator will calculate and distribute the gap
period allocable income only if the Plan administrator in accordance with the Plan terms
otherwise would allocate the gap period allocable income to the Participant’s account. With
respect to 401(k) plan excess deferrals made in taxable years after 2007, gap period income
may not be distributed.

	11.3	 	Plan termination distribution availability. For purposes of determining whether the Employer
maintains an alternative defined contribution plan (described in Treas. Reg.
§1.401(k)-1(d)(4)(i)) that would prevent the Employer from distributing elective deferrals
(and other amounts, such as QNECs, that are subject to the distribution restrictions that
apply to elective deferrals) from a terminating 401(k) plan, an alternative defined
contribution plan does not include an employee stock ownership plan defined in Code
§§4975(e)(7) or 409(a), a simplified employee pension as defined in Code §408(k), a SIMPLE IRA
plan as defined in Code §408(p), a plan or contract that satisfies the requirements of Code
§403(b), or a plan that is described in Code §§457(b) or (f).

ARTICLE XII

QUALIFIED OPTIONAL SURVIVOR ANNUITY

	12.1	 	Right to Elect Qualified Optional Survivor Annuity. Effective with respect to Plan Years
beginning after December 31, 2007, a participant who elects to waive the qualified joint and
survivor annuity form of benefit, if offered under the Plan, is entitled to elect the
“qualified optional survivor annuity” at any time during the applicable election period.
Furthermore, the written explanation of the joint and survivor annuity shall explain the terms
and conditions of the “qualified optional survivor annuity.”

12.2 Definition of Qualified Optional Survivor Annuity.

	 	a.	 	General. For purposes of this Article, the term “qualified optional survivor
annuity” means an annuity:

	 	(1)	 	For the life of the participant with a survivor annuity for the life of
the spouse which is equal to the “applicable percentage” of the amount of the
annuity which is payable during the joint lives of the Participant and the spouse,
and
	 
	 	(2)	 	Which is the actuarial equivalent of a single annuity for the life of the
participant.

Such term also includes any annuity in a form having the effect of an annuity
described in the preceding sentence.

	 	b.	 	Applicable percentage. For purposes of this Section, the “applicable percentage”
is based on the survivor annuity percentage (i.e., the percentage which the survivor
annuity under the Plan’s qualified joint and survivor annuity bears to the annuity
payable during the joint lives of the participant and the spouse). If the survivor
annuity percentage is less than 75 percent, then the “applicable percentage” is 75
percent; otherwise, the “applicable percentage” is 50 percent.

 

 

 

ARTICLE XIII

DIRECT ROLLOVER TO ROTH IRA

	13.1	 	Roth IRA rollover. For distributions made after December 31, 2007, a participant may elect to
roll over directly an eligible rollover distribution to a Roth IRA described in Code §408A(b).

ARTICLE XIV

QUALIFIED DOMESTIC RELATIONS ORDERS

	14.1	 	Permissible QDROs. Effective April 6, 2007, a domestic relations order that otherwise
satisfies the requirements for a qualified domestic relations order (“QDRO”) will not fail to
be a QDRO: (i) solely because the order is issued after, or revises, another domestic
relations order or QDRO; or (ii) solely because of the time at which the order is issued,
including issuance after the annuity starting date or after the Participant’s death.

	14.2	 	Other QDRO requirements apply. A domestic relations order described in Section 14.1 is
subject to the same requirements and protections that apply to QDROs.

ARTICLE XV

HEART ACT PROVISIONS

	15.1	 	Death benefits. In the case of a death occurring on or after January 1, 2007, if a
Participant dies while performing qualified military service (as defined in Code § 414(u)),
the survivors of the Participant are entitled to any additional benefits (other than benefit
accruals relating to the period of qualified military service) provided under the Plan as if
the Participant had resumed and then terminated employment on account of death.

	15.2	 	Benefit accrual. If the Employer elects in Amendment Section 2.7 to apply this Section 15.2,
then for benefit accrual purposes, the Plan treats an individual who dies or becomes disabled
on or after January 1, 2007 (as defined under the terms of the Plan) while performing
qualified military service with respect to the Employer as if the individual had resumed
employment in accordance with the individual’s reemployment rights under USERRA, on the day
preceding death or disability (as the case may be) and terminated employment on the actual
date of death or disability.

	 	a.	 	Determination of benefits. The Plan will determine the amount of employee
contributions and the amount of elective deferrals of an individual treated as
reemployed under this Section 15.2 for purposes of applying paragraph Code §414(u)(8)(C)
on the basis of the individual’s average actual employee contributions or elective
deferrals for the lesser of: (i) the 12-month period of service with the Employer
immediately prior to qualified military service; or (ii) if service with the Employer is
less than such 12-month period, the actual length of continuous service with the
Employer.

	15.3	 	Differential wage payments. For years beginning after December 31, 2008, (i) an individual
receiving a differential wage payment, as defined by Code §3401(h)(2), is treated as an
employee of the employer making the payment, (ii) the differential wage payment is treated as
compensation, and (iii) the Plan is not treated as failing to meet the requirements of any
provision described in Code §414(u)(1)(C) by reason of any contribution or benefit which is
based on the differential wage payment.

 

 

 

	15.4	 	Severance from employment. Notwithstanding Section 15.3(i), for purposes of Code
§401(k)(2)(B)(i)(I), an individual is treated as having been severed from employment during
any period the individual is performing service in the uniformed services described in Code
§3401(h)(2)(A).

	 	a.	 	Suspension of deferrals. If an individual elects to receive a distribution by
reason of severance from employment, death or disability, the individual may not make an
elective deferral or employee contribution during the 6-month period beginning on the
date of the distribution.

	 	b.	 	Nondiscrimination requirement. Section 15.3(iii) applies only if all employees of
the Employer performing service in the uniformed services described in Code
§3401(h)(2)(A) are entitled to receive differential wage payments (as defined in Code
§3401(h)(2)) on reasonably equivalent terms and, if eligible to participate in a
retirement plan maintained by the employer, to make contributions based on the payments
on reasonably equivalent terms (taking into account Code §§410(b)(3), (4), and (5)).

* * * * * * * * * * * * * * *

This Amendment has been executed this 21st day of December, 2009.

Name of Plan: The Bon-Ton Stores, Inc. Retirement Contribution Plan

Name of Employer: The Bon-Ton Stores, Inc.

	 	 	 	 	 
	By:

	 	/s/ PAUL A. CORTESE
 

Paul A. Cortese
	 	 

 

 

 

CERTIFICATE OF ADOPTING RESOLUTION

The undersigned authorized representative of The Bon-Ton Stores, Inc. (the “Employer”) hereby
certifies that the following resolutions were duly adopted by Employer on December 21, 2009, and
that such resolutions have not been modified or rescinded as of the date hereof;

RESOLVED, the Pension Protection Act and Heart Act Amendment to The Bon-Ton Stores, Inc. Retirement
Contribution Plan (the “Amendment”) is hereby approved and adopted and that an authorized
representative of the Employer is hereby authorized and directed to execute and deliver to the
Administrator of the Plan one or more counterparts of the amendment.

The undersigned further certifies that attached hereto is a copy of the Amendment approved and
adopted in the foregoing resolution.

	 	 	 	 	 
	 	Date: December 21, 2009

	 
	 	Signed:	 	     /s/ BYRON BERGREN
 	 
	 	 	 	Byron Bergren, President & CEO 	 
	 	 	 
	 	Signed:	 	       /s/ KEITH PLOWMAN
 	 
	 	 	 	Keith Plowman, Executive Vice President & CFO	 

 

 

 

The Bon-Ton Stores, Inc. Retirement Contribution Plan

SUMMARY PLAN DESCRIPTION

MATERIAL MODIFICATIONS

I

INTRODUCTION

This is a Summary of Material Modifications regarding the The Bon-Ton Stores, Inc. Retirement
Contribution Plan (“Plan”). This is merely a summary of the most important changes to the Plan and
information contained in the Summary Plan Description (“SPD”) previously provided to you. It
supplements and amends that SPD so you should retain a copy of this document with your copy of the
SPD. If you have any questions, contact the Administrator. If there is any discrepancy between the
terms of the Plan, as modified, and this Summary of Material Modifications, the provisions of the
Plan will control.

II

SUMMARY OF CHANGES

Military Service. If you are a veteran and are reemployed under the Uniformed Services Employment
and Reemployment Rights Act of 1994, your qualified military service may be considered service with
the Employer. If you think you may be affected by these rules, please see the Plan Administrator
for further details.

Nonspousal Beneficiary Rollovers. Effective for distributions made on or after October 1, 2007, a
non-spouse beneficiary who is a “designated beneficiary” under Code §401(a)(9)(E) and the
regulations thereunder, by direct trustee-to-trustee transfer (“direct rollover”), may roll over
all or any portion of his or her distribution to an individual retirement account the beneficiary
establishes for purposes of receiving the distribution. Please see the Plan Administrator for
further details.

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