Document:

Exhibit 10.11

 

Exhibit 10.11

TOO, INC. SAVINGS AND RETIREMENT PLAN

Defined Contribution Plan 8.0

Restated January 1, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	INTRODUCTION
	 	 	 	 
	 
	 	 	 	 
	ARTICLE I
	 	 	 	FORMAT AND DEFINITIONS
	 
	 	 	 	 
	Section 1.01
	 	—	 	Format
	Section 1.02
	 	—	 	Definitions
	 
	 	 	 	 
	ARTICLE II
	 	 	 	PARTICIPATION
	 
	 	 	 	 
	Section 2.01
	 	—	 	Active Participant
	Section 2.02
	 	—	 	Inactive Participant
	Section 2.03
	 	—	 	Cessation of Participation
	Section 2.04
	 	—	 	Adopting Employers - Single Plan
	 
	 	 	 	 
	ARTICLE III
	 	 	 	CONTRIBUTIONS
	 
	 	 	 	 
	Section 3.01
	 	—	 	Employer Contributions
	Section 3.01A
	 	—	 	Voluntary Contributions
	Section 3.01B
	 	—	 	Rollover Contributions
	Section 3.02
	 	—	 	Forfeitures
	Section 3.03
	 	—	 	Allocation
	Section 3.04
	 	—	 	Contribution Limitation
	Section 3.05
	 	—	 	Excess Amounts
	Section 3.06
	 	—	 	401(k) Safe Harbor Provisions
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	INVESTMENT OF CONTRIBUTIONS
	 
	 	 	 	 
	Section 4.01
	 	—	 	Investment and Timing of Contributions
	Section 4.01A
	 	—	 	Investment in Qualifying Employer Securities
	 
	 	 	 	 
	ARTICLE V
	 	 	 	BENEFITS
	 
	 	 	 	 
	Section 5.01
	 	—	 	Retirement Benefits
	Section 5.02
	 	—	 	Death Benefits
	Section 5.03
	 	—	 	Vested Benefits
	Section 5.04
	 	—	 	When Benefits Start
	Section 5.05
	 	—	 	Withdrawal Benefits
	Section 5.06
	 	—	 	Distributions Under Qualified Domestic Relations Orders
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	DISTRIBUTION OF BENEFITS
	 
	 	 	 	 
	Section 6.01
	 	—	 	Form of Distribution
	Section 6.02
	 	—	 	Election Procedures
	Section 6.03
	 	—	 	Notice Requirements

 

 

	 	 	 	 	 
	ARTICLE VII
	 	 	 	DISTRIBUTION REQUIREMENTS
	 
	 	 	 	 
	Section 7.01
	 	—	 	Application
	Section 7.02
	 	—	 	Definitions
	Section 7.03
	 	—	 	Distribution Requirements
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	TERMINATION OF THE PLAN
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	ADMINISTRATION OF THE PLAN
	 
	 	 	 	 
	Section 9.01
	 	—	 	Administration
	Section 9.02
	 	—	 	Expenses
	Section 9.03
	 	—	 	Records
	Section 9.04
	 	—	 	Information Available
	Section 9.05
	 	—	 	Claim and Appeal Procedures
	Section 9.06
	 	—	 	Administrative Committee
	Section 9.07
	 	—	 	Exercise of Discretionary Authority
	Section 9.08
	 	—	 	Transaction Processing
	Section 9.09
	 	—	 	Voting and Tender of Qualifying Employer Securities
	 
	 	 	 	 
	ARTICLE X
	 	 	 	GENERAL PROVISIONS
	 
	 	 	 	 
	Section 10.01
	 	—	 	Amendments
	Section 10.02
	 	—	 	Direct Rollovers
	Section 10.03
	 	—	 	Mergers and Direct Transfers
	Section 10.04
	 	—	 	Provisions Relating to the Insurer and Other Parties
	Section 10.05
	 	—	 	Employment Status
	Section 10.06
	 	—	 	Rights to Plan Assets
	Section 10.07
	 	—	 	Beneficiary
	Section 10.08
	 	—	 	Nonalienation of Benefits
	Section 10.09
	 	—	 	Construction
	Section 10.10
	 	—	 	Legal Actions
	Section 10.11
	 	—	 	Small Amounts
	Section 10.12
	 	—	 	Word Usage
	Section 10.13
	 	—	 	Change in Service Method
	Section 10.14
	 	—	 	Military Service
	 
	 	 	 	 
	ARTICLE XI
	 	 	 	TOP-HEAVY PLAN REQUIREMENTS
	 
	 	 	 	 
	Section 11.01
	 	—	 	Application
	Section 11.02
	 	—	 	Definitions
	Section 11.03
	 	—	 	Modification of Vesting Requirements
	Section 11.04
	 	—	 	Modification of Contributions
	 
	 	 	 	 
	PLAN EXECUTION
	 	 	 	 

 

 

INTRODUCTION

     The Primary Employer previously established a 401(k) savings plan on October 1, 1999.

     The Primary Employer is of the opinion that the plan should be changed. It believes that the
best means to accomplish these changes is to completely restate the plan’s terms, provisions and
conditions. The restatement, effective January 1, 2005 is set forth in this document and is
substituted in lieu of the prior document with the exception of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA) good faith compliance amendment and any model amendment. Such
amendment(s) shall continue to apply to this restated plan until such provisions are integrated
into the plan or such amendment(s) are superseded by another amendment.

     The restated plan continues to be for the exclusive benefit of employees of the Employer. All
persons covered under the plan on December 31, 2004 shall continue to be covered under the restated
plan with no loss of benefits.

     It is intended that the plan, as restated, shall qualify as a profit sharing plan under the
Internal Revenue Code of 1986, including any later amendments to the Code.

 

ARTICLE I

FORMAT AND DEFINITIONS

SECTION 1.01—FORMAT.

Words and phrases defined in the DEFINITIONS SECTION of Article I shall have that defined
meaning when used in this Plan, unless the context clearly indicates otherwise.

These words and phrases have an initial capital letter to aid in identifying them as defined
terms.

SECTION 1.02—DEFINITIONS.

Account means, for a Participant, his share of the Plan Fund. Separate accounting
records are kept for those parts of his Account that result from:

	 	(a)  	Voluntary Contributions
	 
	 	(b)  	Elective Deferral Contributions
	 
	 	(c)  	Matching Contributions
	 
	 	(d)  	Other Employer Contributions
	 
	 	(e)  	Rollover Contributions

If the Participant’s Vesting Percentage is less than 100% as to any of the Employer
Contributions, a separate accounting record will be kept for any part of his Account resulting
from such Employer Contributions and, if there has been a prior Forfeiture Date, from such
Contributions made before a prior Forfeiture Date.

A Participant’s Account shall be reduced by any distribution of his Vested Account and by any
Forfeitures. A Participant’s Account shall participate in the earnings credited, expenses
charged, and any appreciation or depreciation of the Investment Fund. His Account is subject
to any minimum guarantees applicable under the Annuity Contract or other investment
arrangement and to any expenses associated therewith.

Accrual Computation Period means a consecutive 12-month period ending on the last day of each
Plan Year, including corresponding consecutive 12-month periods before October 1, 1999.

ACP Test means the nondiscrimination test described in Code Section 401(m)(2) as provided for
in subparagraph (d) of the EXCESS AMOUNTS SECTION of Article III.

ACP Test Safe Harbor means the method described in subparagraph (c) of the 401(k) SAFE HARBOR
PROVISIONS SECTION of Article III for satisfying the ACP Test with respect to Matching
Contributions.

Active Participant means an Eligible Employee who is actively participating in the Plan
according to the provisions in the ACTIVE PARTICIPANT SECTION of Article II.

Administrative Committee means the Savings and Retirement Plan Committee, or its delegate,
appointed by the Employer under the Plan or, in the absence of such appointment, the Employer.

 

Adopting Employer means an employer which is a Controlled Group member except Too Sourcing
Hong Kong Limited.

ADP Test means the nondiscrimination test described in Code Section 401(k)(3) as provided for
in subparagraph (c) of the EXCESS AMOUNTS SECTION of Article III.

ADP Test Safe Harbor means the method described in subparagraph (b) of the 401(k) SAFE HARBOR
PROVISIONS SECTION of Article III for satisfying the ADP Test.

Affiliated Service Group means any group of corporations, partnerships or other organizations
of which the Employer is a part and which is affiliated within the meaning of Code Section
414(m) and regulations thereunder. Such a group includes at least two organizations one of
which is either a service organization (that is, an organization the principal business of
which is performing services), or an organization the principal business of which is
performing management functions on a regular and continuing basis. Such service is of a type
historically performed by employees. In the case of a management organization, the Affiliated
Service Group shall include organizations related, within the meaning of Code Section
144(a)(3), to either the management organization or the organization for which it performs
management functions. The term Controlled Group, as it is used in this Plan, shall include
the term Affiliated Service Group.

Alternate Payee means any spouse, former spouse, child, or other dependent of a Participant
who is recognized by a qualified domestic relations order as having a right to receive all, or
a portion of, the benefits payable under the Plan with respect to such Participant.

Annual Compensation means, for a Plan Year, the Employee’s Compensation for the Compensation
Year ending with or within the consecutive 12-month period ending on the last day of the Plan
Year. Annual Compensation shall only include Compensation received while an Active
Participant.

Annuity Contract means the annuity contract or contracts into which the Trustee enters with
the Insurer for guaranteed benefits, for the investment of Contributions in separate accounts,
and for the payment of benefits under this Plan. The term Annuity Contract as it is used in
this Plan shall include the plural unless the context clearly indicates the singular is meant.

Annuity Starting Date means, for a Participant, the first day of the first period for which an
amount is payable as an annuity or any other form.

Beneficiary means the person or persons named by a Participant to receive any benefits under
the Plan when the Participant dies. See the BENEFICIARY SECTION of Article X.

Board of Directors means the Board of Directors of the Employer or the Executive Committee of
the Board.

Change in Control means the occurrence of any of the following:

	 	(a)  	Any “Person” (as such term is used in Section 13(d) and 14(d) of the Securities Act
of 1934, as amended (the “Exchange Act”) is or becomes the “Beneficial Owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Employer representing 25% or more of the combined voting power of the Employer’s then
outstanding securities (a 25% Shareholder) provided however, that the term 25%
Shareholder shall not include any Person if such Person would not otherwise be a 25%
Shareholder but for a reduction in the number of outstanding voting shares resulting from
a stock repurchase program or other similar plan of the Employer or from a self-tender
offer of the Employer, which plan or tender offer commenced on or after the date hereof,
provided, however, that the term “25% Shareholder” shall include such Person from and
after the first date upon which (A) such Person, since the date of the commencement of
such plan or tender

 

	 	  	offer, shall have acquired Beneficial Ownership of, in the aggregate, a number of voting shares of the Employer equal to 1% or more of the voting shares of the Employer then
outstanding, and (B) such Person, together with all affiliates and associates of such
Person, shall Beneficially Own 25% or more of the voting shares of the Employer then
outstanding. In calculating the percentage of the outstanding voting shares that are
Beneficially Owned by a Person for purposes of this definition, voting Shares that are
Beneficially Owned by such Person shall be deemed outstanding, and voting shares that
are not Beneficially Owned by such Person and that are subject to issuance upon the
exercise or conversion of outstanding conversion rights, exchange rights, rights,
warranties or options shall not be deemed outstanding. Notwithstanding the foregoing,
if the Board of Directors of the Employer determines in good faith that a Person that
would otherwise be a 25% Shareholder pursuant to the foregoing provisions of this
definition has become such inadvertently, and such person (a) promptly notifies the
Board of Directors of such status and (b) as promptly as practicable thereafter, either
divests of a sufficient number of voting shares so that such Person would no longer be a
25% Shareholder, or causes any other circumstances, such as the existence of an
agreement respecting voting shares to be eliminated such that such Person would no
longer be a 25% Shareholder as defined pursuant to this definition, then such Person
shall not be deemed to be a 25% Shareholder for any purposes of this agreement. Any
determination made by the Board of Directors of the Employer as to whether any Person is
or is not a 25% Shareholder shall be conclusive and binding; or
	 
	 	(b)  	A change in composition of the Board of Directors of the Employer occurring any
time during a consecutive two-year period as a result of which fewer than majority of the
Board of Directors are Continuing Directors (for purposes of this section, the term
“Continuing Director” means a director who is either (A) first elected or appointed as a
Director prior to May 10, 2000; or (B) subsequently elected or appointed as a director if
such director was nominated or appointed by at least a majority of the then Continuing
Directors); or
	 
	 	(c)  	Any of the following occurs:

     (i) a merger or consolidation of the Employer, other than a merger or consolidation in
which the voting securities of the Employer immediately prior to the merger or consolidation
continue to represent (either by remaining outstanding or being converted into securities of
the surviving entity) 60% or more of the combined voting power of the Employer or surviving
entity immediately after the merger or consolidation with another entity;

     (ii) a sale, exchange, or other disposition (in a single transaction or a series of
related transactions) of all or substantially all of the assets of the Employer which shall
include, without limitation, the sale of assets aggregating more than 50% of the assets of the
Employer on a consolidated basis;

     (iii) a liquidation or dissolution of the Employer;

     (iv) a reorganization, reverse stock split; or recapitalization of the Employer which
would result in any of the foregoing; or

     (v) a transaction or series of related transactions having, directly or indirectly, the
same effect of any of the foregoing.

Claimant means any person who makes a claim for benefits under this Plan. See the CLAIM AND
APPEAL PROCEDURES SECTION of Article IX.

Code means the Internal Revenue Code of 1986, as amended.

Compensation means, except for purposes of the CONTRIBUTION LIMITATION SECTION of Article III
and Article XI, the total earnings, except as modified in this definition, paid or made
available to an Employee by the Employer during any specified period.

 

“Earnings” in this definition means wages, salaries, and fees for professional services and
other amounts received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the Employer maintaining
the plan to the extent that the amounts are includible in gross income (including, but not
limited to, commissions paid salesmen, compensation for services on the basis of a percentage
of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a
non
accountable plan (as described in
section 1.62-2(c) of the regulations)), and excluding the following:

	 	(a)  	employer contributions to a plan of deferred compensation which are not included in
the Employee’s gross income for the taxable year in which contributed, or employer
contributions under a simplified employee pension plan, or any distributions from a plan
of deferred compensation;
	 
	 	(b)  	amounts realized from the exercise of a non-qualified stock option, or when
restricted stock (or property) held by the Employee either becomes freely transferable or
is no longer subject to a substantial risk of forfeiture;
	 
	 	(c)  	amounts realized from the sale, exchange or other disposition of stock acquired
under a qualified stock option; and
	 
	 	(d)  other amounts which receive special tax benefits, or contributions made by the Employer
(whether or not under a salary reduction  agreement) towards the purchase of an annuity
contract described in Code Section 403(b) (whether or not the contributions are actually
excludible from the gross income of the Employee).

For any Self-employed Individual, Compensation means Earned Income.

Compensation shall exclude reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, deferred compensation (other than elective contributions), and
welfare benefits.

Compensation shall also include elective contributions. For this purpose, elective
contributions are amounts contributed by the Employer pursuant to a salary reduction agreement
and which are not includible in the gross income of the Employee under Code Section 125,
132(f)(4), 402(e)(3), 402(h)(1)(B), or 403(b). Elective contributions also include
compensation deferred under a Code Section 457 plan maintained by the Employer and employee
contributions “picked up” by a governmental entity and, pursuant to Code Section 414(h)(2),
treated as Employer contributions.

For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer may elect to use an
alternative nondiscriminatory definition of Compensation in accordance with the regulations
under Code Section 414(s).

For Plan Years beginning on or after January 1, 1994, the annual Compensation of each
Participant taken into account for determining all benefits provided under the Plan for any
determination period shall not exceed $150,000, as adjusted for increases in the
cost-of-living in accordance with Code Section 401(a)(17)(B). The cost-of-living adjustment
in effect for a calendar year applies to any determination period beginning in such calendar
year.

If a determination period consists of fewer than 12 months, the annual limit is an amount
equal to the otherwise applicable annual limit multiplied by a fraction. The numerator of the
fraction is the number of months in the short determination period, and the denominator of the
fraction is 12.

If Compensation for any prior determination period is taken into account in determining a
Participant’s contributions or benefits for the current Plan Year, the Compensation for such
prior determination period is subject to the applicable annual compensation limit in effect
for that determination period. For this purpose, in determining contributions or benefits in
Plan Years beginning on or after January 1, 1994, the annual compensation limit in effect for
determination periods beginning before that date is $150,000.

 

Compensation means, for a Leased Employee, Compensation for the services the Leased Employee
performs for the Employer, determined in the same manner as the Compensation of Employees who
are not Leased Employees, regardless of whether such Compensation is received directly from
the Employer or from the leasing organization.

Compensation Year means the consecutive 12-month period ending on the last day of each Plan
Year, including corresponding periods before October 1, 1999.

Contributions means

Elective Deferral Contributions

Matching Contributions

Discretionary Contributions

Voluntary Contributions

Rollover Contributions

as set out in Article III, unless the context clearly indicates only specific contributions
are meant.

Controlled Group means any group of corporations, trades, or businesses of which the Employer
is a part that are under common control. A Controlled Group includes any group of
corporations, trades, or businesses, whether or not incorporated, which is either a
parent-subsidiary group, a brother-sister group, or a combined group within the meaning of
Code Section 414(b), Code Section 414(c) and regulations thereunder and, for purposes of
determining contribution limitations under the CONTRIBUTION LIMITATION SECTION of Article III,
as modified by Code Section 415(h) and, for the purpose of identifying Leased Employees, as
modified by Code Section 144(a)(3). The term Controlled Group, as it is used in this Plan,
shall include the term Affiliated Service Group and any other employer required to be
aggregated with the Employer under Code Section 414(o) and the regulations thereunder.

Custodial Agreement means an agreement which establishes custodial accounts under this Plan
which meet the requirements of Code Section 401(f).

Custodian means the party or parties named in the Custodial Agreement or any successors
thereto, provided that the custodian meets the requirements of Code Section 401(f). The term
Custodian as it is used in this Plan is deemed to include the plural unless the context
clearly indicates the singular is meant.

Direct Rollover means a payment by the Plan to the Eligible Retirement Plan specified by the
Distributee.

Discretionary Contributions means discretionary contributions made by the Employer to fund
this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.

Distributee means 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.

Earned Income means, for a Self-employed Individual, net earnings from self-employment in the
trade or business for which this Plan is established if such Self-employed Individual’s
personal services are a material income producing factor for that trade or business. Net
earnings shall be determined without regard to items not included in gross income and the
deductions properly allocable to or chargeable against such items. Net earnings shall be
reduced for the employer contributions to the Employer’s qualified retirement plan(s) to the
extent deductible under Code Section 404.

 

Net earnings shall be determined with regard to the deduction allowed to the Employer by Code
Section 164(f) for taxable years beginning after December 31, 1989.

Elective Deferral Contributions means contributions made by the Employer to fund this Plan in
accordance with elective deferral agreements between Eligible Employees and the Employer.

Elective deferral agreements shall be made, changed, or terminated according to the provisions
of the EMPLOYER CONTRIBUTIONS SECTION of Article III.

Elective Deferral Contributions shall be 100% vested and subject to the distribution
restrictions of Code Section 401(k) when made. See the WHEN BENEFITS START SECTION of Article
V.

Eligibility Break in Service means an Eligibility Computation Period in which an Employee is
credited with 500 or fewer Hours-of-Service and is not employed by the Employer on the last
day of the Plan Year. An Employee incurs an Eligibility Break in Service on the last day of
an Eligibility Computation Period in which he has an Eligibility Break in Service.

Eligibility Computation Period means a consecutive 12-month period. The first Eligibility
Computation Period begins on an Employee’s Employment Commencement Date. Later Eligibility
Computation Periods shall be consecutive 12-month periods ending on the last day of each Plan
Year that begins after his Employment Commencement Date.

To determine an Eligibility Computation Period after an Eligibility Break in Service, the Plan
shall use the consecutive 12-month period beginning on an Employee’s Reemployment Commencement
Date as if his Reemployment Commencement Date were his Employment Commencement Date.

Eligibility Service means one year of service for each Eligibility Computation Period that has
ended and in which an Employee is credited with at least 1,000 Hours-of-Service.

However, Eligibility Service is modified as follows:

An Employee’s Eligibility Service, accumulated before an Eligibility Break in Service,
shall be excluded if:

	 	(a)  	his Vesting Percentage is zero, and
	 
	 	(b)  	his latest period of consecutive Eligibility Breaks in Service equals
or exceeds the greater of (i) five years, or (ii) his prior Eligibility Service
(disregarding any Eligibility Service that was excluded because of a previous
period of Eligibility Breaks in Service).

Service with a Predecessor Employer which did not maintain this Plan included:

An Employee’s service prior to August 22, 2002 with The Limited or an
affiliate of The Limited shall be included as service with the Employer. An
Employee’s service with such Predecessor Employer shall be counted only if service
continued with the Employer without interruption. This service excludes service
performed while a proprietor or partner.

Period of Military Duty included:

A Period of Military Duty shall be included as service with the Employer
to the extent it has not already been credited. For purposes of crediting
Hours-of-Service during the Period of Military Duty, an Hour-of-Service

 

shall be credited (without regard to the 501 Hour-of-Service limitation) for each hour
an Employee would normally have been scheduled to work for the Employer during such
period.

Controlled Group service included:

An Employee’s service with a member firm of a Controlled Group while both
that firm and the Employer were members of the Controlled Group shall be included
as service with the Employer.

Eligible Employee means any Employee of the Employer, and any Adopting Employer except an
Employee of Too Sourcing Hong Kong Limited, who meets the following requirements. His
employment classification with the Employer is all of the following:

Nonbargaining class. Not represented for collective bargaining purposes by any
collective bargaining agreement between the Employer and employee representatives,
if retirement benefits were the subject of good faith bargaining and if two percent
or less of the Employees who are covered pursuant to that agreement are
professionals as defined in section 1.410(b)-9 of the regulations. For this
purpose, the term “employee representatives” does not include any organization more
than half of whose members are Employees who are owners, officers, or executives of
the Employer.

Not a nonresident alien, within the meaning of Code Section 7701(b)(1)(B), who receives
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), or who receives such earned income but it is all exempt from income
tax in the United States under the terms of an income tax convention.

Not a Leased Employee.

Not an Employee who became an Employee as the result of a Code Section
410(b)(6)(C) transaction. These Employees will be excluded during the period
beginning on the date of the transaction and ending on the last day of the first
Plan Year 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.

Eligible Retirement Plan means an individual retirement account described in Code Section
408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan
described in Code Section 403(a) or a qualified trust described in Code Section 401(a), that
accepts the Distributee’s Eligible Rollover Distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.

Eligible Rollover Distribution means 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:
(i) 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 years or more; (ii) any distribution
to the extent such distribution is required under Code Section 401(a)(9); (iii) any hardship
distribution described in Code Section 401(k)(2)(B)(i)(IV) received after December 31, 1998;
(iv) 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 (v) any other distribution(s) that is reasonably expected to total
less than $200 during a year.

Employee means an individual who is employed by the Employer or any other employer required to
be aggregated with the Employer under Code Sections 414(b), (c), (m), or (o). A Controlled
Group member is required to be aggregated with the Employer.

 

The term Employee shall include any Self-employed Individual treated as an employee of any
employer described in the preceding paragraph as provided in Code Section 401(c)(1). The term
Employee shall also include any Leased Employee deemed to be an employee of any employer
described in the preceding paragraph as provided in Code Section 414(n) or (o).

Employer means, except for purposes of the CONTRIBUTION LIMITATION SECTION of Article III, the
Primary Employer. This will also include any successor corporation or firm of the Employer
which shall, by written agreement, assume the obligations of this Plan or any Predecessor
Employer which maintained this Plan.

Employer Contributions means

Elective Deferral Contributions

Matching Contributions

Discretionary Contributions

as set out in Article III and contributions made by the Employer to fund this Plan in
accordance with the provisions of the MODIFICATION OF CONTRIBUTIONS SECTION of Article XI,
unless the context clearly indicates only specific contributions are meant.

Employment Commencement Date means the date an Employee first performs an Hour-of-Service.

Entry Date means the date an Employee first enters the Plan as an Active Participant. See the
ACTIVE PARTICIPANT SECTION of Article II.

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

Fiscal Year means the Primary Employer’s taxable year. The last day of the Fiscal Year is
January 31.

Forfeiture means the part, if any, of a Participant’s Account that is forfeited. See the
FORFEITURES SECTION of Article III.

Forfeiture Date means, as to a Participant, the date the Participant incurs five consecutive
Vesting Breaks in Service.

Highly Compensated Employee means any Employee who:

	 	(a)  	was a 5-percent owner at any time during the year or the preceding year, or
	 
	 	(b)  	for the preceding year had compensation from the Employer in excess of $80,000 and,
if the Employer so elects, was in the top-paid group for the preceding 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.

For this purpose the applicable year of the plan for which a determination is being made is
called a determination year and the preceding 12-month period is called a look-back year. If
the Employer makes a calendar year data election, the look-back year shall be the calendar
year beginning with or within the look-back year. The Plan may not use such election to
determine whether Employees are Highly Compensated Employees on account of being a 5-percent
owner.

In determining who is a Highly Compensated Employee, the Employer makes a top-paid group
election. The effect of this election is that an Employee (who is not a 5-percent owner at
any time during the determination year or the

 

look-back year) with compensation in excess of $80,000 (as adjusted) for the look-back year is
a Highly Compensated Employee only if the Employee was in the top-paid group for the look-back
year. In determining who is a Highly Compensated Employee, the Employer does not make a
calendar year data election.

Calendar year data elections and top-paid group elections, once made, apply for all subsequent
years unless changed by the Employer. If the Employer makes one election, the Employer is not
required to make the other. If both elections are made, the look-back year in determining the
top-paid group must be the calendar year beginning with or within the look-back year. These
elections must apply consistently to the determination years of all plans maintained by the
Employer which reference the highly compensated employee definition in Code Section 414(q),
except as provided in Internal Revenue Service Notice 97-45 (or superseding guidance). The
consistency requirement will not apply to determination years beginning with or within the
1997 calendar year, and for determination years beginning on or after January 1, 1998 and
before January 1, 2000, satisfaction of the consistency requirement is determined without
regard to any nonretirement plans of the Employer.

The determination of who is a highly compensated former Employee is based on the rules
applicable to determining Highly Compensated Employee status as in effect for that
determination year, in accordance with section 1.414(q)-1T, A-4 of the temporary Income Tax
Regulations and Internal Revenue Service Notice 97-45.

In determining whether an Employee is a Highly Compensated Employee for years beginning in
1997, the amendments to Code Section 414(q) stated above are treated as having been in effect
for years beginning in 1996.

The determination of who is a Highly Compensated Employee, including the determinations of the
number and identity of Employees in the top-paid group, the compensation that is considered,
and the identity of the 5-percent owners, shall be made in accordance with Code Section 414(q)
and the regulations thereunder.

Hour-of-Service means the following:

	 	(a)  	Each hour for which an Employee is paid, or entitled to payment, for performing
duties for the Employer during the applicable computation period.
	 
	 	(b)  	Each hour for which an Employee is paid, or entitled to payment, by the Employer
because of a period of time in which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty or leave of absence.
Notwithstanding the preceding provisions of this subparagraph (b), no credit will be
given to the Employee:

	 	(1)  	for more than 501 Hours-of-Service under this subparagraph (b) because
of any single continuous period in which the Employee performs no duties (whether
or not such period occurs in a single computation period); or
	 
	 	(2)  	for an Hour-of-Service for which the Employee is directly or indirectly
paid, or entitled to payment, because of a period in which no duties are performed
if such payment is made or due under a plan maintained solely for the purpose of
complying with applicable worker’s or workmen’s compensation, or unemployment
compensation, or disability insurance laws; or
	 
	 	(3)  	for an Hour-of-Service for a payment which solely reimburses the
Employee for medical or medically related expenses incurred by him.

For purposes of this subparagraph (b), 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.

	 	(c)  	Each hour for which back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer. The same Hours-of-Service shall not be credited
both under subparagraph (a) or subparagraph (b) above (as the case may be) and under this
subparagraph (c). Crediting of Hours-of-Service for back pay awarded or agreed to with
respect to periods described in subparagraph (b) above will be subject to the limitations
set forth in that subparagraph.

For Employees whose Hours-of-Service cannot be determined without undue administrative
difficulty, Hours-of-Service shall be determined on the basis of weeks worked. An Employee shall be
credited with 45 Hours-of-Service for each week in which the Employee would otherwise be credited
with at least one Hour-of-Service.

The crediting of Hours-of-Service above shall be applied under the rules of paragraphs (b) and
(c) of the Department of Labor Regulation 2530.200b-2 (including any interpretations or
opinions implementing such rules); which rules, by this reference, are specifically
incorporated in full within this Plan. The reference to paragraph (b) applies to the special
rule for determining hours of service for reasons other than the performance of duties such as
payments calculated (or not calculated) on the basis of units of time and the rule against
double credit. The reference to paragraph (c) applies to the crediting of hours of service to
computation periods.

Hours-of-Service shall be credited for employment with any other employer required to be
aggregated with the Employer under Code Sections 414(b), (c), (m), or (o) and the regulations
thereunder for purposes of eligibility and vesting. Hours-of-Service shall also be credited
for any individual who is considered an employee for purposes of this Plan pursuant to Code
Section 414(n) or (o) and the regulations thereunder.

Solely for purposes of determining whether a one-year break in service has occurred for
eligibility or vesting purposes, during a Parental Absence an Employee shall be credited with
the Hours-of-Service which otherwise would normally have been credited to the Employee but for
such absence, or in any case in which such hours cannot be determined, eight Hours-of-Service
per day of such absence. The Hours-of-Service credited under this paragraph shall be credited
in the computation period in which the absence begins if the crediting is necessary to prevent
a break in service in that period; or in all other cases, in the following computation period.

Inactive Participant means a former Active Participant who has an Account. See the INACTIVE
PARTICIPANT SECTION of Article II.

Insurer means Principal Life Insurance Company and any other insurance company or companies
named by the Trustee or Primary Employer.

Integration Level means, for a Participant, the Taxable Wage Base as in effect on the latest
Yearly Date.

If a Participant is also a participant in a plan of a Controlled Group member which uses an
integration level in determining the amount or allocation of contributions, his Integration
Level shall be adjusted based upon the ratio of the Participant’s Compensation from the
Employer to his total compensation from the Employer and the Controlled Group member.

Investment Fund means the total of Plan assets, excluding the guaranteed benefit policy
portion of any Annuity Contract. All or a portion of these assets may be held under the Trust
Agreement and Custodial Agreement.

 

The Investment Fund shall be valued at current fair market value as of the Valuation Date.
The valuation shall take into consideration investment earnings credited, expenses charged,
payments made, and changes in the values of the assets held in the Investment Fund.

The Investment Fund shall be allocated at all times to Participants, except as otherwise
expressly provided in the Plan. The Account of a Participant shall be credited with its share
of the gains and losses of the Investment Fund. That part of a Participant’s Account invested
in a funding arrangement which establishes one or more accounts or investment vehicles for
such Participant thereunder shall be credited with the gain or loss from such accounts or
investment vehicles. The part of a Participant’s Account which is invested in other funding
arrangements shall be credited with a proportionate share of the gain or loss of such
investments. The share shall be determined by multiplying the gain or loss of the investment
by the ratio of the part of the Participant’s Account invested in such funding arrangement to
the total of the Investment Fund invested in such funding arrangement.

Investment Manager means any fiduciary (other than a trustee or Named Fiduciary)

	 	(a)  	who has the power to manage, acquire, or dispose of any assets of the Plan;
	 
	 	(b)  	who (i) is registered as an investment adviser under the Investment Advisers Act of
1940; (ii) is not registered as an investment adviser under such Act by reason of
paragraph (1) of section 203A(a) of such Act, is registered as an investment adviser
under the laws of the state (referred to in such paragraph (1)) in which it maintains its
principal office and place of business, and, at the time it last filed the registration
form most recently filed by it with such state in order to maintain its registration
under the laws of such state, also filed a copy of such form with the Secretary of Labor,
(iii) is a bank, as defined in that Act; or (iv) is an insurance company qualified to
perform services described in subparagraph (a) above under the laws of more than one
state; and
	 
	 	(c)  	who has acknowledged in writing being a fiduciary with respect to the Plan.

Late Retirement Date means the day of any month which is after a Participant’s Normal
Retirement Date and on which retirement benefits begin. If a Participant continues to work
for the Employer after his Normal Retirement Date, his Late Retirement Date shall be the
earliest day of the month on or after the date he ceases to be an Employee. An earlier or a
later Retirement Date may apply if the Participant so elects. An earlier Retirement Date may
apply if the Participant is age 70 1/2. See the WHEN BENEFITS START SECTION of Article V.

Leased Employee means any person (other than an employee of the recipient) who, pursuant to an
agreement between the recipient and any other person (“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.
Contributions or benefits provided by the leasing organization to a Leased Employee, which are
attributable to service performed for the recipient employer, shall be treated as provided by
the recipient employer.

A Leased Employee shall not be considered an employee of the recipient if:

	 	(a)  	such employee is covered by a money purchase pension plan providing (i) a
nonintegrated employer contribution rate of at least 10 percent of compensation, as
defined in Code Section 415(c)(3), but for years beginning before January 1 1998,
including amounts contributed pursuant to a salary reduction agreement which are
excludible from the employee’s gross income under Code Sections 125, 402(e)(3),
402(h)(1)(B), or 403(b), (ii) immediate participation, and (iii) full and immediate
vesting, and
	 
	 	(b)  	Leased Employees do not constitute more than 20 percent of the recipient’s
nonhighly compensated work force.

 

Matching Contributions means contributions made by the Employer to fund this Plan which are
contingent on a Participant’s Elective Deferral Contributions. See the EMPLOYER CONTRIBUTIONS
SECTION of Article III.

Maximum Integration Rate means the amount determined according to the following schedule:

	 	 	 	 	 
	INTEGRATION         	 	MAXIMUM	 
	     LEVEL                  	 	INTEGRATION RATE	 
	100% of TWB
	 	 	5.7	%
	Less than 100%, but
more than 80% of TWB
	 	 	5.4	%
	More than 20% of TWB, but
not more than 80% of TWB
	 	 	4.3	%
	Not more than 20% of TWB
	 	 	5.7	%

“TWB” as used in this definition means the Taxable Wage Base as in effect on the latest Yearly
Date.

On any date the portion of the rate of tax under Code Section 3111(a) (in effect on the latest
Yearly Date) which is attributable to old age insurance exceeds 5.7%, such rate shall be
substituted for 5.7%. 5.4% and 4.3% shall be increased proportionately.

Monthly Date means each Yearly Date and the same day of each following month during the Plan
Year beginning on such Yearly Date.

Named Fiduciary means the person or persons who have authority to control and manage the
operation and administration of the Plan.

The Named Fiduciary is the Administrative Committee.

Nonhighly Compensated Employee means an Employee of the Employer who is not a Highly
Compensated Employee.

Nonvested Account means the excess, if any, of a Participant’s Account over his Vested
Account.

Normal Retirement Age means the age at which the Participant’s normal retirement benefit
becomes nonforfeitable if he is an Employee. A Participant’s Normal Retirement Age is 65.

Normal Retirement Date means the date the Participant reaches his Normal Retirement Age.
Unless otherwise provided in this Plan, a Participant’s retirement benefits shall begin on a
Participant’s Normal Retirement Date if he has ceased to be an Employee on such date and has a
Vested Account. Even if the Participant is an Employee on his Normal Retirement Date, he may
choose to have his retirement benefit begin on such date. See the WHEN BENEFITS START SECTION
of Article V.

Owner-employee means a Self-employed Individual who, in the case of a sole proprietorship,
owns the entire interest in the unincorporated trade or business for which this Plan is
established. If this Plan is established for a partnership, an Owner-employee means a
Self-employed Individual who owns more than 10 percent of either the capital interest or
profits interest in such partnership.

Parental Absence means an Employee’s absence from work:

	 	(a)  	by reason of pregnancy of the Employee,
	 
	 	(b)  	by reason of birth of a child of the Employee,

 

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

Participant means either an Active Participant or an Inactive Participant.

Period of Military Duty means, for an Employee

	 	(a)  	who served as a member of the armed forces of the United States, and
	 
	 	(b)  	who was reemployed by the Employer at a time when the Employee had a right to
reemployment in accordance with seniority rights as protected under Chapter 43 of Title
38 of the U. S. Code,

the period of time from the date the Employee was first absent from active work for the
Employer because of such military duty to the date the Employee was reemployed.

Plan means the 401(k) savings plan of the Employer set forth in this document, including any
later amendments to it.

Plan Administrator means the person or persons who administer the Plan.

The Plan Administrator is the Administrative Committee.

Plan Fund means the total of the Investment Fund and the guaranteed benefit policy portion of
any Annuity Contract. The Investment Fund shall be valued as stated in its definition. The
guaranteed benefit policy portion of any Annuity Contract shall be determined in accordance
with the terms of the Annuity Contract and, to the extent that such Annuity Contract allocates
contract values to Participants, allocated to Participants in accordance with its terms. The
total value of all amounts held under the Plan Fund shall equal the value of the aggregate
Participants’ Accounts under the Plan.

Plan Year means a period beginning on a Yearly Date and ending on the day before the next
Yearly Date.

Predecessor Employer means a firm of which the Employer was once a part (e.g., due to a
spinoff or change of corporate status) or a firm absorbed by the Employer because of a merger
or acquisition (stock or asset, including a division or an operation of such company) which
maintained this Plan or which is named below:

The Limited

Primary Employer means Too, Inc.

Qualified Matching Contributions means Matching Contributions which are 100% vested and
subject to the distribution restrictions of Code Section 401(k) when made. See the EMPLOYER
CONTRIBUTIONS SECTION of Article III and the WHEN BENEFITS START SECTION of Article V.

Qualifying Employer Securities means any security which is issued by the Employer or any
Controlled Group member and which meets the requirements of Code Section 409(l) and ERISA
Section 407(d)(5). This shall also include any securities that satisfied the requirements of
the definition when these securities were assigned to the Plan.

Qualifying Employer Securities Fund means that part of the assets of the Trust Fund that are
designated to be held primarily or exclusively in Qualifying Employer Securities for the
purpose of providing benefits for Participants.

 

Reemployment Commencement Date means the date an Employee first performs an Hour-of-Service
following an Eligibility Break in Service.

Reentry Date means the date a former Active Participant reenters the Plan. See the ACTIVE
PARTICIPANT SECTION of Article II.

Retirement Date means the date a retirement benefit will begin and is a Participant’s Normal
or Late Retirement Date, as the case may be.

Rollover Contributions means the Rollover Contributions which are made by an Eligible Employee
or an Inactive Participant according to the provisions of the ROLLOVER CONTRIBUTIONS SECTION
of Article III.

Section 16 Person means (i) any member of the Board of Directors of the Employer; (ii) the
president, principal financial officer, principal accounting officer (or, if there is no such
accounting officer, the controller), any vice-president in charge of a principal business
unit, division or function, of the Employer, any other officer of the Employer who performs a
policy-making function, or any other person who performs similar policy-making function for
the Employer; or (iii) any person who is the beneficial owner of more than 10% of the
Employer’s equity securities that are registered pursuant to Section 12 of the Securities
Exchange Act of 1934. The chief financial officer of the Employer shall designate those
individuals who are Section 16 Persons and deliver a list of the Section 16 Persons eligible
to participate in the Plan to the Custodian from time to time or at the request of the
Custodian. Such list of Section 16 Persons will be conclusive on the Custodian and the sole
source of determining who is a Section 16 Person, and the Custodian shall not be required to
further investigate whether a Participant is a Section 16 Person.

Self-employed Individual means, with respect to any Fiscal Year, an individual who has Earned
Income for the Fiscal Year (or who would have Earned Income but for the fact the trade or
business for which this Plan is established did not have net profits for such Fiscal Year).

Taxable Wage Base means the contribution and benefit base under section 230 of the Social
Security Act.

Totally and Permanently Disabled means that a Participant is disabled, as a result of sickness
or injury, to the extent that he is prevented from engaging in any substantial gainful
activity, and is eligible for and receives a disability benefit under Title II of the Federal
Social Security Act or which qualifies as a total disability as defined under the long term
disability benefit plan maintained by the Employer for periods after the disability extension
period.

Trust Agreement means an agreement or agreements of trust between the Primary Employer and
Trustee established for the purpose of holding and distributing the Trust Fund under the
provisions of the Plan. The Trust Agreement may provide for the investment of all or any
portion of the Trust Fund in the Annuity Contract or any other investment arrangement.

Trust Fund means the total funds held under an applicable Trust Agreement. The term Trust
Fund when used within a Trust Agreement shall mean only the funds held under that Trust
Agreement.

Trustee means the party or parties named in the applicable Trust Agreement. The term Trustee
as it is used in this Plan is deemed to include the plural unless the context clearly
indicates the singular is meant.

Valuation Date means the date on which the value of the assets of the Investment Fund is
determined. The value of each Account which is maintained under this Plan shall be determined
on the Valuation Date. In each Plan Year, the Valuation Date shall be the last day of the
Plan Year. At the discretion of the Plan Administrator, Trustee, Insurer, or Custodian
(whichever applies), assets of the Investment Fund may be valued more frequently. These dates
shall also be Valuation Dates.

 

Vested Account means the vested part of a Participant’s Account. The Participant’s Vested
Account is determined as follows.

If the Participant’s Vesting Percentage is 100%, his Vested Account equals his Account.

If the Participant’s Vesting Percentage is less than 100%, his Vested Account equals the sum
of (a) and (b) below:

	 	(a)  	The part of the Participant’s Account that results from Employer Contributions made
before a prior Forfeiture Date and all other Contributions which were 100% vested when
made.
	 
	 	(b)  	The balance of the Participant’s Account in excess of the amount in (a) above
multiplied by his Vesting Percentage.

If the Participant has withdrawn any part of his Account resulting from Employer
Contributions, other than the vested Employer Contributions included in (a) above, the amount
determined under this subparagraph (b) shall be equal to P(AB
+ D) - D as defined below:

	         P            The Participant’s Vesting Percentage.
	 

	         AB         The balance of the Participant’s Account in excess of the amount in (a) above.
	 
	         D            The amount of the withdrawal resulting from Employer Contributions, other than the vested Employer Contributions included
in (a) above.

The Participant’s Vested Account is nonforfeitable.

Vesting Break in Service means a Vesting Computation Period in which an Employee is credited
with 250 or fewer Hours-of-Service. An Employee incurs a Vesting Break in Service on the last
day of a Vesting Computation Period in which he has a Vesting Break in Service.

Vesting Computation Period means a consecutive 12-month period ending on the last day of each
Plan Year, including corresponding consecutive 12-month periods before October 1, 1999.

Vesting Percentage means the percentage used to determine the nonforfeitable portion of a
Participant’s Account attributable to Employer Contributions which were not 100% vested when
made.

A Participant’s Vesting Percentage is shown in the following schedule opposite the number of
whole years of his Vesting Service.

	 	 	 
	VESTING SERVICE		VESTING
	(whole years)		PERCENTAGE
	Less than 3	 	   0
	3	 	 20
	4	 	 40
	5	 	  60
	6	 	  80
	7 or more	 	100

The Vesting Percentage for a Participant who is an Employee on or after the date he reaches
Normal Retirement Age shall be 100%. The Vesting Percentage for a Participant who is an
Employee on the date he becomes Totally and Permanently Disabled or dies shall be 100%. On
and after May 10, 2000, the Vesting Percentage for a Participant upon the occurrence of a
Change in Control shall be 100%.

 

If the schedule used to determine a Participant’s Vesting Percentage is changed, the new
schedule shall not apply to a Participant unless he is credited with an Hour-of-Service on or
after the date of the change and the Participant’s nonforfeitable percentage on the day before
the date of the change is not reduced under this Plan. The amendment provisions of the
AMENDMENTS SECTION of Article X regarding changes in the computation of the Vesting Percentage
shall apply.

Vesting Service means one year of service for each Vesting Computation Period in which an
Employee is credited with at least 500 Hours-of-Service.

However, Vesting Service is modified as follows:

Rule of parity service excluded:

An Employee’s Vesting Service, accumulated before a Vesting Break in
Service, shall be excluded if:

	 	(a)  	his Vesting Percentage is zero, and
	 
	 	(b)  	his latest period of consecutive Vesting Breaks in Service equals or
exceeds the greater of (i) five years, or (ii) his prior Vesting Service
(disregarding any Vesting Service that was excluded because of a previous period of
Vesting Breaks in Service).

Service with a Predecessor Employer which did not maintain this Plan included:

An Employee’s service prior to August 22, 2002 with The Limited or an
affiliate of The Limited shall be included as service with the Employer. An
Employee’s service with such Predecessor Employer shall be counted only if service
continued with the Employer without interruption. This service excludes service
performed while a proprietor or partner.

Period of Military Duty included:

A Period of Military Duty shall be included as service with the Employer
to the extent it has not already been credited. For purposes of crediting
Hours-of-Service during the Period of Military Duty, an Hour-of-Service shall be
credited (without regard to the 501 Hour-of-Service limitation) for each hour an
Employee would normally have been scheduled to work for the Employer during such
period.

Controlled Group service included:

An Employee’s service with a member firm of a Controlled Group while both
that firm and the Employer were members of the Controlled Group shall be included
as service with the Employer.

Voluntary Contributions means the portion of the Participant’s Account resulting from
after-tax contributions made while a Participant of The Limited Plan that were not required as a
condition of employment, of participation, or for obtaining additional benefits from the Employer
Contributions. See the VOLUNTARY CONTRIBUTIONS BY PARTICIPANTS SECTION of Article III.

Yearly Date means October 1, 1999 and each following January 1.

Years of Service means an Employee’s Vesting Service disregarding any modifications which
exclude service.

 

ARTICLE II

PARTICIPATION

SECTION 2.01—ACTIVE PARTICIPANT.

	 	(a)  	An Employee shall first become an Active Participant (begin active participation in
the Plan) on the first day of the month following the date on which he is an Eligible
Employee and meets both of the eligibility requirements set forth below. This date is
his Entry Date.

	 	(1)  	He has completed one year of Eligibility Service before his Entry Date.
	 
	 	(2)  	He is age 21 or older.

	 	   	The requirements in items (1) and (2) above are waived on October 1, 1999 for Active
Participants of The Limited Plan. This date shall be an Entry Date if the Eligible
Employee has met all the other eligibility requirements.
	 
	 	   	Each Employee who was an Active Participant under the Plan on December 31, 2004 shall
continue to be an Active Participant if he is still an Eligible Employee on January 1,
2005 and his Entry Date shall not change.
	 
	 	   	If service with a Predecessor Employer is counted for purposes of
Eligibility Service, an Employee shall be credited with such service on the date he
becomes an Employee and shall become an Active Participant on the earliest Monthly
Date on which he is an Eligible Employee and has met all of the eligibility
requirements above. This date is his Entry Date.
	 
	 	   	If a person has been an Eligible Employee who has met all of the
eligibility requirements above, but is not an Eligible Employee on the date which
would have been his Entry Date, he shall become an Active Participant on the date
he again becomes an Eligible Employee. This date is his Entry Date.
	 
	 	   	In the event an Employee who is not an Eligible Employee becomes an
Eligible Employee, such Eligible Employee shall become an Active Participant
immediately if such Eligible Employee has satisfied the eligibility requirements
above and would have otherwise previously become an Active Participant had he met
the definition of Eligible Employee. This date is his Entry Date.

	 	(b)  	An Inactive Participant shall again become an Active Participant (resume active
participation in the Plan) on the date he again performs an Hour-of-Service as an
Eligible Employee. This date is his Reentry Date.
	 
	 	   	Upon again becoming an Active Participant, he shall cease to be an Inactive
Participant.
	 
	 	(c)  	A former Participant shall again become an Active Participant (resume active
participation in the Plan) on the date he again performs an Hour-of-Service as an
Eligible Employee. This date is his Reentry Date.

     There shall be no duplication of benefits for a Participant under this Plan because of more
than one period as an Active Participant.

SECTION 2.02—INACTIVE PARTICIPANT.

     An Active Participant shall become an Inactive Participant (stop accruing benefits under
the Plan) on the earlier of the following:

 

	 	(a)  	the date the Participant ceases to be an Eligible Employee, or
	 
	 	(b)  	the effective date of complete termination of the Plan under Article VIII.

	   	An Employee or former Employee who was an Inactive Participant under the Plan on December 31,
2004 shall continue to be an Inactive Participant on January 1, 2005. Eligibility for any
benefits payable to the Participant or on his behalf and the amount of the benefits shall be
determined according to the provisions of the prior document, unless otherwise stated in this
document.

SECTION 2.03—CESSATION OF PARTICIPATION.

     A Participant shall cease to be a Participant on the date he is no longer an Eligible
Employee and his Account is zero.

SECTION 2.04—ADOPTING
EMPLOYERS - SINGLE PLAN.

     Each Controlled Group member, except Too Sourcing Hong Kong Limited, is an Adopting
Employer. Each Adopting Employer participates with the Employer in this Plan.

     The Employer has the right to amend the Plan. An Adopting Employer does not have the right to
amend the Plan.

     If the Adopting Employer did not maintain its plan before its date of adoption, its date of
adoption shall be the Entry Date for any of its Employees who have met the requirements in the
ACTIVE PARTICIPANT SECTION of Article II as of that date. Service with and Compensation from an
Adopting Employer shall be included as service with and Compensation from the Employer. Transfer
of employment, without interruption, between an Adopting Employer and another Adopting Employer or
the Employer shall not be considered an interruption of service. The Employer’s Fiscal Year
defined in the DEFINITIONS SECTION of Article I shall be the Fiscal Year used in interpreting this
Plan for Adopting Employers.

     Contributions made by an Adopting Employer shall be treated as Contributions made by the
Employer. Forfeitures arising from those Contributions shall be used for the benefit of all
Participants.

     An employer shall not be an Adopting Employer if it ceases to be a Controlled Group member.
Such an employer may continue a retirement plan for its Employees in the form of a separate
document.

     If (i) an employer ceases to be an Adopting Employer and (ii) the Adopting Employer does not
continue a retirement plan for the benefit of its Employees, partial termination may result and the
provisions of Article VIII shall apply.

ARTICLE III

CONTRIBUTIONS

SECTION 3.01—EMPLOYER CONTRIBUTIONS.

     Employer Contributions shall be made without regard to current or accumulated net income,
earnings or profits of the Employer. Notwithstanding the foregoing, the Plan shall continue to be
designed to qualify as a profit sharing plan for purposes of Code Sections 401(a), 402, 412, and
417. Such Contributions shall be equal to the Employer Contributions as described below:

	 	(a)  	The amount of each Elective Deferral Contribution for a Participant shall be equal
to a portion of Compensation as specified in the elective deferral agreement. An
Employee who is eligible to participate in the Plan may file an elective deferral
agreement with the Employer. The Participant shall modify or terminate the elective

 

	 	   	deferral agreement by filing a new elective deferral agreement. The elective deferral
agreement may not be made retroactively and shall remain in effect until modified or
terminated.
	 
	 	   	The elective deferral agreement to start or modify Elective Deferral
Contributions shall be effective on the first day of the first pay period following
the pay period in which the Participant’s Entry Date (Reentry Date, if applicable)
or any following Monthly Date occurs. The elective deferral agreement must be
entered into on or before the date it is effective.
	 
	 	   	The elective deferral agreement to stop Elective Deferral Contributions may
be entered into on any date. Such elective deferral agreement shall be effective
on the first day of the pay period following the pay period in which the elective
deferral agreement is entered into.
	 
	 	   	Elective Deferral Contributions must be a whole percentage of Compensation and cannot be
less than 1% nor more than 50% of Compensation.
	 
	 	   	Elective Deferral Contributions are fully (100%) vested and nonforfeitable.
	 
	 	   	For a given Plan Year, employees whose annual base salary is $130,000 or
greater as of the November 1 of the preceding Plan Year are not eligible for
Elective Deferral Contributions for such Plan Year. However, any Employee who is
excluded from eligibility for Elective Deferral Contributions due to the $130,000
limitation but would otherwise be eligible and such Employee has a decrease in
annual base salary below $130,000 during the current Plan Year, such individual
will be eligible to make Elective Deferral Contributions on the next Monthly Date.

	 	(b)  	The Employer shall make Matching Contributions in an amount equal to 100% of
Elective Deferral Contributions. Elective Deferral Contributions which are over 4% of
Compensation won’t be matched.
	 
	 	   	Matching Contributions are calculated based on Elective Deferral Contributions and
Compensation for the pay period. Matching Contributions are made for all persons
who were Active Participants at any time during that pay period.

	 	(2)  	The Employer may make additional Matching Contributions if the total
Matching Contributions determined below are greater than the amount of Matching
Contributions determined in (1) above for the Plan Year. Additional Matching
Contributions, if any, shall be made for all persons who were Active Participants
at any time during the Plan Year.
	 
	 	   	Total Matching Contributions for the Plan Year shall be a percentage of Elective
Deferral Contributions and shall be calculated based on Elective Deferral
Contributions and Compensation for the Plan Year. The percentage shall be
determined by the Employer. The percentage must be equal to or greater than the
percentage specified in (1) above.
	 
	 	   	Elective Deferral Contributions which are over a percentage of Compensation won’t
be matched. The percentage is the percentage specified in (1) above or a greater
percentage as determined by the Employer.
	 
	 	   	The amount of additional Matching Contributions, if any, shall be determined by
subtracting the Matching Contributions determined in (1) above for the Plan Year
from total Matching Contributions for the Plan Year.

	 	   	For a given Plan Year, employees whose annual base salary is $130,000 or
greater as of the November 1 of the preceding Plan Year are not eligible for
Matching Contributions for such Plan Year. However, any Employee

 

	 	   	who is excluded from eligibility for Matching Contributions due to the $130,000
limitation but would otherwise be eligible and such Employee has a decrease in annual
base salary below $130,000 during the current Plan Year, such individual will be
eligible for Matching Contributions.
	 
	 	   	Matching Contributions made before January 1, 2005 are 100% vested except for those
Participants who terminated employment prior to January 1, 2005, which will follow
the prior schedule. Matching Contributions made on and after January 1, 2005 are
Qualified Matching Contributions. These Contributions are 100% vested and subject
to the distribution restrictions of Code Section 401(k) when made.
	 
	 	(c)  	Discretionary Contributions may be made for each Plan Year in an amount determined
by the Employer.
	 
	 	   	Discretionary Contributions are subject to the Vesting Percentage.

     No Participant shall be permitted to have Elective Deferral Contributions, as defined in the
EXCESS AMOUNTS SECTION of this article, made under this Plan, or any other qualified plan
maintained by the Employer, during any taxable year, in excess of the dollar limitation contained
in Code Section 402(g) in effect at the beginning of such taxable year.

     An elective deferral agreement (or change thereto) must be made in such manner and in
accordance with such rules as the Employer may prescribe (including by means of voice response or
other electronic system under circumstances the Employer permits) and may not be made
retroactively.

     Employer Contributions are allocated according to the provisions of the ALLOCATION SECTION of
this article.

     The Employer may make all or any portion of the following Contributions, which are to be
invested in Qualifying Employer Securities, to the Trustee in the form of Qualifying Employer
Securities:

     Discretionary Contributions

     A portion of the Plan assets resulting from Employer Contributions (but not more than the
original amount of those Contributions) may be returned if the Employer Contributions are made
because of a mistake of fact or are more than the amount deductible under Code Section 404
(excluding any amount which is not deductible because the Plan is disqualified). The amount
involved must be returned to the Employer within one year after the date the Employer Contributions
are made by mistake of fact or the date the deduction is disallowed, whichever applies. Except as
provided under this paragraph and Article VIII, the assets of the Plan shall never be used for the
benefit of the Employer and are held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying reasonable expenses of administering the
Plan.

SECTION 3.01A—VOLUNTARY CONTRIBUTIONS BY PARTICIPANTS.

     No Voluntary Contributions may be made on or after October 1, 1999.

     The part of the Participant’s Account resulting from Voluntary Contributions is fully (100%)
vested and nonforfeitable at all times.

SECTION 3.01B—ROLLOVER CONTRIBUTIONS.

     A Rollover Contribution may be made by an Eligible Employee or an Inactive Participant if
the following conditions are met:

	 	(a)  	The Contribution is of amounts distributed from a plan that satisfies the
requirements of Code Section 401(a) or from a “conduit” individual retirement account
described in Code Section 408(d)(3)(A). In the case of an

 

	 	   	Inactive Participant, the Contribution must be of an amount distributed from another
plan of the Employer, or a plan of a Controlled Group member, that satisfies the
requirements of Code Section 401(a).

	 	(b)  	The Contribution is of amounts that the Code permits to be transferred to a plan
that meets the requirements of Code Section 401(a).
	 
	 	(c)  	The Contribution is made in the form of a direct rollover under Code Section
401(a)(31) or is a rollover made under Code Section 402(c) or 408(d)(3)(A) within 60 days
after the Eligible Employee or Inactive Participant receives the distribution.
	 
	 	(d)  	The Eligible Employee or Inactive Participant furnishes evidence satisfactory to
the Plan Administrator that the proposed rollover meets conditions (a), (b), and (c)
above.

     A Rollover Contribution shall be allowed in cash only and must be made according to procedures
set up by the Plan Administrator.

     If the Eligible Employee is not an Active Participant when the Rollover Contribution is made,
he shall be deemed to be an Active Participant only for the purpose of investment and distribution
of the Rollover Contribution. Employer Contributions shall not be made for or allocated to the
Eligible Employee until the time he meets all of the requirements to become an Active Participant.

     Rollover Contributions made by an Eligible Employee or an Inactive Participant shall be
credited to his Account. The part of the Participant’s Account resulting from Rollover
Contributions is fully (100%) vested and nonforfeitable at all times. A separate accounting record
shall be maintained for that part of his Rollover Contributions consisting of voluntary
contributions which were deducted from the Participant’s gross income for Federal income tax
purposes.

SECTION 3.02—FORFEITURES.

     The Nonvested Account of a Participant shall be forfeited as of the earlier of the
following:

	 	(a)  	the date the Participant dies (if prior to such date he had ceased to be an
Employee), or

	 	(b)  	the Participant’s Forfeiture Date.

     All or a portion of a Participant’s Nonvested Account shall be forfeited before such earlier
date if, after he ceases to be an Employee, he receives, or is deemed to receive, a distribution of
his entire Vested Account or a distribution of his Vested Account derived from Employer
Contributions which were not 100% vested when made, under the RETIREMENT BENEFITS SECTION of
Article V, the VESTED BENEFITS SECTION of Article V, or the SMALL AMOUNTS SECTION of Article X.
The forfeiture shall occur as of the date the Participant receives, or is deemed to receive, the
distribution. If a Participant receives, or is deemed to receive, his entire Vested Account, his
entire Nonvested Account shall be forfeited. If a Participant receives a distribution of his
Vested Account from Employer Contributions which were not 100% vested when made, but less than his
entire Vested Account from such Contributions, the amount to be forfeited shall be determined by
multiplying his Nonvested Account from such Contributions by a fraction. The numerator of the
fraction is the amount of the distribution derived from Employer Contributions which were not 100%
vested when made and the denominator of the fraction is his entire Vested Account derived from such
Contributions on the date of distribution.

     A Forfeiture shall also occur as provided in the EXCESS AMOUNTS SECTION of this article.

     Forfeitures shall be determined at least once during each Plan Year. Forfeitures may first be
used to pay administrative expenses. Forfeitures of Matching Contributions which relate to excess
amounts as provided in the EXCESS AMOUNTS SECTION of this article, which have not been used to pay
administrative expenses, shall be applied to reduce the earliest Employer Contributions made after
the Forfeitures are determined. Any other Forfeitures which have not been used to pay

 

administrative expenses shall be applied to reduce the earliest Employer Contributions made after
the Forfeitures are determined. Upon their application to reduce Employer Contributions,
Forfeitures shall be deemed to be Employer Contributions.

     If a Participant again becomes an Eligible Employee after receiving a distribution which
caused all or a portion of his Nonvested Account to be forfeited, he shall have the right to repay
to the Plan the entire amount of the distribution he received (excluding any amount of such
distribution resulting from Contributions which were 100% vested when made). The repayment must be
made in a single sum (repayment in installments is not permitted) before the earlier of the date
five years after the date he again becomes an Eligible Employee or the end of the first period of
five consecutive Vesting Breaks in Service which begin after the date of the distribution.

     If the Participant makes the repayment above, the Plan Administrator shall restore to his
Account an amount equal to his Nonvested Account which was forfeited on the date of distribution,
unadjusted for any investment gains or losses. If no amount is to be repaid because the
Participant was deemed to have received a distribution, or only received a distribution of
Contributions which were 100% vested when made, and he again performs an Hour-of-Service as an
Eligible Employee within the repayment period, the Plan Administrator shall restore the
Participant’s Account as if he had made a required repayment on the date he performed such
Hour-of-Service. Restoration of the Participant’s Account shall include restoration of all Code
Section 411(d)(6) protected benefits with respect to that restored Account, according to applicable
Treasury regulations. Provided, however, the Plan Administrator shall not restore the Nonvested
Account if (i) a Forfeiture Date has occurred after the date of the distribution and on or before
the date of repayment and (ii) that Forfeiture Date would result in a complete forfeiture of the
amount the Plan Administrator would otherwise restore.

     The Plan Administrator shall restore the Participant’s Account by the close of the Plan Year
following the Plan Year in which repayment is made. Permissible sources for the restoration of the
Participant’s Account are Forfeitures or special Employer Contributions. Such special Employer
Contributions shall be made without regard to profits. The repaid and restored amounts are not
included in the Participant’s Annual Additions, as defined in the CONTRIBUTION LIMITATION SECTION
of this article.

     If the Plan Administrator cannot ascertain the whereabouts of any person to whom a payment is
due under the Plan, the Plan Administrator may place the amount of the payment in a segregated
account. If a segregated account is an interest bearing account, the interest, which may be net of
expenses, shall be credited to the segregated account. If a segregated account holds The Limited
Stock, any dividends may be treated as earnings of the Trust Fund or of the segregated account, at
the option of the Plan Administrator. After two years from the date such payment is due, the Plan
Administrator may mail a notice of the payment to the last known address of such person as shown on
the records of the Plan and all affiliates. If such person has not made claim for the payment
within three months after the date of the mailing of the notice or if the notice is returned
undeliverable, then the payment and all remaining payments which would otherwise be due to such
person shall be canceled and treated as a Forfeiture. If such person later makes a claim for
payment, the amount so canceled shall be restored and paid to such person, adjusted for any gains
or losses.

SECTION 3.03—ALLOCATION.

     Elective Deferral Contributions are calculated based on Compensation for the pay period.
Such Contributions shall be allocated when made and credited to the Participant’s Account. Elective
Deferral Contributions are made for all persons who were Active Participants at any time during
that pay period.

     Matching Contributions are calculated based on Elective Deferral Contributions and
Compensation for the pay period. Such Contributions shall be allocated when made and credited to
the person’s Account. Matching Contributions are made for all persons who were Active Participants
at any time during that pay period. Additional Matching Contributions are made for all persons who
were Active Participants at any time during Plan Year.

 

     A person meets the allocation requirements for Discretionary Contributions if he is an Active
Participant on the last day of the Plan Year and has at least 500 Hours-of-Service during the
latest Accrual Computation Period ending on or before that date.

     Subject to the overall permitted disparity limits, Discretionary Contributions shall be
allocated as of the last day of the Plan Year using Annual Compensation for the Plan Year. The
amount allocated shall be determined as follows:

	 	(a)  	The Employer shall allocate Discretionary Contributions for Active Participants
with less than five years of Vesting Service to the Trust Fund, in cash (or other
property, to the extent permitted by law), for each Plan Year during which this Plan is
in effect, an amount equal to (i) the sum of (A) 3% of Annual Compensation not in excess
of the Taxable Wage Base and (B) 6% of Annual Compensation in excess of the Taxable Wage
Base for all Active Participants who complete 500 Hours-of-Service during the Plan Year
and are Active Participants on the last day of the calendar year, or (ii) such other
greater or lesser amount as the Employer, in its absolute discretion, shall determine
prior to the date on which the Discretionary Contributions are required to be allocated.
The Employer will notify the Trustee, in writing, of the amount of the Discretionary
Contributions for each group of Active Participants for each Plan Year. Discretionary
Contributions shall be allocated to the Account of all persons who complete 500
Hours-of-Service during the Plan Year and are Active Participants on the last day of the
calendar year (i) first, by allocating such Discretionary Contributions to each Active
Participant having Annual Compensation in excess of the Taxable Wage Base according to
the relative amounts of such excess Annual Compensation, but in no event more than the
lesser of 3% or the base contribution of such excess Annual Compensation and (ii) second,
by allocating the remaining Discretionary Contributions to all Active Participants
according to their relative amounts of Annual Compensation. For purposes of this section,
the term “base contribution percentage” means the percentage of Annual Compensation
allocated to an Active Participant as a Discretionary Contribution with respect to Annual
Compensation not in excess of the Taxable Wage Base.
	 
	 	(b)  	The Employer shall allocate Discretionary Contributions for Active Participants
with five or more years of Vesting Service to the Trust Fund in cash for each Plan Year
during which this Plan is in effect an amount equal to (a) 1% of Annual Compensation for
all for all Active Participants who complete 500 Hours-of-Service during the Plan Year,
are Active Participants on the last day of the calendar year and have completed five or
more years of Vesting Service as of the last day of the Plan Year, or (b) such greater or
lesser amount as the Employer, in its absolute discretion, shall determine prior to the
date on which the Discretionary Contributions are required to be allocated. Discretionary
Contributions shall be allocated to the Account of all persons who complete 500
Hours-of-Service during the Plan Year, are Active Participants on the last day of the
calendar year and have completed five or more years of Vesting Service as of the last day
of the Plan Year, according to their relative amounts of Annual Compensation.

CUMULATIVE PERMITTED DISPARITY LIMIT: Effective for Plan Years beginning on or after January 1,
1995, the cumulative permitted disparity limit for a person is 35 total cumulative permitted
disparity years. Total cumulative permitted disparity years means the number of years credited to
the person 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 or any
other employer required to be aggregated with the Employer under Code Sections 414(b), (c), (m), or
(o). For purposes of determining the person’s cumulative permitted disparity limit, all years
ending in the same calendar year are treated as the same year. If the person has not benefited
under a defined benefit or target benefit plan maintained for any year beginning on or after
January 1, 1994, the person has no cumulative permitted disparity limit.

     If Leased Employees are Eligible Employees, in determining the amount of Employer
Contributions allocated to a person who is a Leased Employee, contributions provided by the leasing
organization which are attributable to services such Leased Employee performs for the Employer
shall be treated as provided by the Employer. Those contributions shall not be duplicated under
this Plan.

 

SECTION 3.04—CONTRIBUTION LIMITATION.

	 	(a)  	Definitions. For the purpose of determining the contribution limitation set
forth in this section, the following terms are defined.
	 
	 	   	Annual Additions means the sum of the following amounts credited to a Participant’s
account for the Limitation Year:

	 	(1)  	employer contributions;
	 
	 	(2)  	employee contributions; and
	 
	 	(3)  	forfeitures.

	 	   	Annual Additions to a defined contribution plan shall also include the following:

	 	(4)  	amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Code Section 415(l)(2), which are part of a pension or
annuity plan maintained by the Employer,
	 
	 	(5)  	amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable to
post-retirement medical benefits, allocated to the separate account of a key
employee, as defined in the course of employment with the Employer maintaining the
plan to the extent that the amounts are includible in gross income (including, but
not limited to, commissions paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements or other expense allowances under a
nonaccountable plan (as described in section 1.62-2(c) of the regulations)), and
excluding the following:
	 
	 	(1)  	employer contributions to a plan of deferred compensation which are not
included in the Employee’s gross income for the taxable year in which contributed,
or employer contributions under a simplified employee pension plan, or any
distributions from a plan of deferred compensation;
	 
	 	(2)  	amounts realized from the exercise of a non-qualified stock option, or
when restricted stock (or property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
	 
	 	(3)  	amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
	 
	 	(4)  	other amounts which received special tax benefits, or contributions
made by the Employer (whether or not under a salary reduction agreement) towards
the purchase of an annuity contract described in Code Section 403(b) (whether or
not the contributions are actually excludible from the gross income of the
Employee).

	 	   	For any Self-employed Individual, Compensation shall mean Earned Income.
	 
	 	   	For purposes of applying the limitations of this section, Compensation for
a Limitation Year is the Compensation actually paid or made available in gross
income during such Limitation Year.
	 
	 	   	For Limitation Years beginning after December 31, 1997, for purposes of
applying the limitations of this section, Compensation paid or made available
during such Limitation Year shall include any elective deferral

 

'

	 	   	(as defined in Code Section 402(g)(3)), and any amount which is contributed or deferred
by the Employer at the election of the Employee and which is not includible in the gross
income of the Employee by reason of Code Section 125, 132(f)(4), or 457.
	 
	 	   	Defined Contribution Dollar Limitation means, for Limitation Years beginning after
December 31, 1994, $30,000, as adjusted under Code Section 415(d).
	 
	 	   	Employer means the employer that adopts this Plan, and all members of a controlled group
of corporations (as defined in Code Section 414(b) as modified by Code Section
415(h)), all commonly controlled trades or businesses (as defined in Code Section
415(c) as modified by Code Section 415(h)) or affiliated service groups (as defined
in Code Section 414(m)) of which the adopting employer is a part, and any other
entity required to be aggregated with the employer pursuant to regulations under
Code Section 414(o).
	 
	 	   	Excess Amount means the excess of the Participant’s Annual Additions for the Limitation
Year over the Maximum Permissible Amount.
	 
	 	   	Limitation Year means the consecutive 12-month period ending on the last day of each
Plan Year, including corresponding consecutive 12-month periods before October 1,
1999.
	 
	 	   	If the Limitation Year is other than the calendar year, execution of this
Plan (or any amendment to this Plan changing the Limitation Year) constitutes the
Employer’s adoption of a written resolution electing the Limitation Year. If the
Limitation Year is amended to a different consecutive 12-month period, the new
Limitation Year must begin on a date within the Limitation Year in which the
amendment is made.
	 
	 	   	Maximum Permissible Amount means the maximum Annual Addition that may be contributed or
allocated to a Participant’s Account under the Plan for any Limitation Year. This
amount shall not exceed the lesser of:

	 	(1)  	The Defined Contribution Dollar Limitation, or
	 
	 	(2)  	25 percent of the Participant’s Compensation for the Limitation Year.

	 	   	The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section 401(h) or
419A(f)(2)) which is otherwise treated as an Annual Addition under Code Section
415(l)(1) or 419A(d)(2).

	 	   	If a short Limitation Year is created because of an amendment changing the
Limitation Year to a different consecutive 12-month period, the Maximum Permissible
Amount will not exceed the Defined Contribution Dollar Limitation multiplied by the
following fraction:

Number of months in the short Limitation Year

12

	 	(b)  	If the Participant does not participate in, and has never participated in, another
qualified plan
maintained by the Employer or a welfare benefit fund, as defined in Code Section 419(e),
maintained by the Employer, or an individual medical account, as defined in Code Section
415(l)(2), maintained by the Employer, or a simplified employee pension, as defined in
Code Section 408(k), maintained by the Employer, which provides an Annual Addition, the
amount of Annual Additions which may be credited to the Participant’s Account for any
Limitation Year shall not exceed the lesser of the Maximum Permissible Amount or any
other limitation contained in this Plan. If the Employer Contribution that would
otherwise be contributed or allocated to the Participant’s Account would cause the
Annual Additions for the Limitation Year to exceed the Maximum

 

	 	   	Permissible Amount, the amount contributed or allocated shall be reduced so that the
Annual Additions for the Limitation Year will equal the Maximum Permissible Amount.
	 
	 	(c)  	Prior to determining the Participant’s actual 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 Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated.
	 
	 	(d)  	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 Compensation for the Limitation Year.
	 
	 	(e)  	If a reasonable error in estimating a Participant’s Compensation for the Limitation
Year, 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 individual under
the limits of Code Section 415, or under other facts and circumstances allowed by the
Internal Revenue Service, there is an Excess Amount, the excess will be disposed of as
follows:

	 	(1)  	Any Elective Deferral Contributions that are not the basis for Matching
Contributions (plus attributable earnings), to the extent they would reduce the
Excess Amount, will be distributed to the Participant.
	 
	 	(2)  	If after the application of (1) above an Excess Amount still exists,
any Elective Deferral Contributions that are the basis for Matching Contributions
(plus attributable earnings), to the extent they would reduce the Excess Amount,
will be distributed to the Participant. Concurrently with the distribution of such
Elective Deferral Contributions, any Matching Contributions which relate to any
Elective Deferral Contributions distributed in the preceding sentence, to the
extent such application would reduce the Excess Amount, will be applied as provided
in (3) or (4) below:
	 
	 	(3)  	If after the application of (2) above an Excess Amount still exists,
and the Participant is covered by the Plan at the end of the Limitation Year, the
Excess Amount in the Participant’s Account will be used to reduce Employer
Contributions for such Participant in the next Limitation Year, and each succeeding
Limitation Year if necessary.
	 
	 	(4)  	If after the application of (2) above an Excess Amount still exists,
and the Participant is not covered by the Plan at the end of the Limitation Year,
the Excess Amount will be held unallocated in a suspense account. The 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.
	 
	 	(5)  	If a suspense account is in existence at any time during a Limitation
Year pursuant to this (e), it will participate in the allocation of investment
gains or losses. If a suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense account must be allocated
and reallocated to Participant’s Accounts before any Employer Contributions may be
made to the Plan for that Limitation Year. Excess Amounts held in a suspense
account may not be distributed to Participants or former Participants.

	 	(f)  	This (f) applies if, in addition to this Plan, the Participant is covered under
another qualified defined contribution plan maintained by the Employer, a welfare benefit
fund maintained by the Employer, an individual medical account maintained by the
Employer, or a simplified employee pension maintained by the Employer which provides an
Annual Addition during any Limitation Year. The Annual Additions which may be credited
to a Participant’s Account under this Plan for any such Limitation Year will not exceed
the Maximum Permissible Amount, reduced by the Annual Additions credited to a
Participant’s account under the other qualified defined contribution plans, welfare
benefit funds, individual medical accounts, and simplified employee pensions for the same
Limitation Year. If the Annual Additions with respect to the Participant under

 

	 	  	ther qualified defined contribution plans, welfare benefit funds, individual medical
accounts, and simplified employee pensions maintained by the Employer are less than the
Maximum Permissible Amount, and the Employer Contribution that would otherwise be
contributed or allocated to the Participant’s Account under this Plan would cause the
Annual Additions for the Limitation Year to exceed this limitation, the amount
contributed or allocated will be reduced so that the Annual Additions under all such
plans and funds for the Limitation Year will equal the Maximum Permissible Amount. If
the Annual Additions with respect to the Participant under such other qualified defined
contribution plans, welfare benefit funds, individual medical accounts, and simplified
employee pensions in the aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the Participant’s Account under
this Plan for the Limitation Year.
	 
	 	(g)  	Prior to determining the Participant’s actual Compensation for the Limitation Year,
the Employer may determine the Maximum Permissible Amount for a Participant in the manner
described in (c) above.
	 
	 	(h)  	As soon as 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 Compensation for the Limitation Year.
	 
	 	(i)  	If pursuant to (h) above or as a result of the allocation of forfeitures or as a
result of 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 individual under
the limits of Code Section 415, a Participant’s Annual Additions under this Plan and such
other plans would result in an Excess Amount for a Limitation Year, the Excess Amount
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, regardless of the actual allocation date.
	 
	 	(j)  	If an Excess Amount was allocated to a Participant on an allocation date of this
Plan which coincides with an allocation date of another plan, the Excess Amount
attributed to this Plan will be the product of:

	 	(1)  	the total Excess Amount allocated as of such date, times
	 
	 	(2)  	the ratio of (i) the Annual Addition allocated to the Participant for
the Limitation Year as of such date under this Plan to (ii) the total Annual
Additions allocated to the Participant for the Limitation Year as of such date
under this and all other qualified defined contribution plans.

	 	(k)  	Any Excess Amount attributed to this Plan will be disposed of in the manner
described in (e) above.

SECTION 3.05—EXCESS AMOUNTS.

	 	(a)  	Definitions. For the purposes of this section, the following terms are
defined:
	 
	 	   	ACP means the average (expressed as a percentage) of the Contribution
Percentages of the Eligible Participants in a group.
	 
	 	   	ADP means the average (expressed as a percentage) of the Deferral
Percentages of the Eligible Participants in a group.
	 
	 	   	Aggregate Limit means the greater of:

	 	(1)  	The sum of:

 

	 	(i)  	125 percent of the greater of the ADP of the Nonhighly
Compensated Employees for the prior Plan Year or the ACP of the Nonhighly
Compensated Employees under the plan subject to Code Section 401(m) for the
Plan Year beginning with or within the prior Plan Year of the cash or
deferred arrangement, and
	 
	 	(ii)  	the lesser of 200 percent or 2 percent plus the lesser of
such ADP or ACP.

	 	(2)  	The sum of:

	 	(i)  	125 percent of the lesser of the ADP of the Nonhighly
Compensated Employees for the prior Plan Year or the ACP of the Nonhighly
Compensated Employees under the plan subject to Code Section 401(m) for the
Plan Year beginning with or within the prior Plan Year of the cash or
deferred arrangement, and
	 
	 	(ii)  	the lesser of 200 percent or 2 percent plus the greater of
such ADP or ACP.

	 	   	If the Employer has elected to use the current year testing method, then,
in calculating the Aggregate Limit for a particular Plan Year, the Nonhighly
Compensated Employees’ ADP and ACP for that Plan Year, instead of the prior Plan
Year, is used.
	 
	 	   	Contribution Percentage means the ratio (expressed as a percentage) of the Eligible
Participant’s Contribution Percentage Amounts to the Eligible Participant’s
Compensation for the Plan Year (whether or not the Eligible Participant was an
Eligible Participant for the entire Plan Year). For an Eligible Participant for
whom such Contribution Percentage Amounts for the Plan Year are zero, the
percentage is zero.
	 
	 	   	Contribution Percentage Amounts means the sum of the Participant Contributions and
Matching Contributions (that are not Qualified Matching Contributions taken into
account for purposes of the ADP Test) made under the Plan on behalf of the Eligible
Participant for the Plan Year. Such Contribution Percentage Amounts shall not
include Matching Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the Contributions to which they relate are
Excess Elective Deferrals, Excess Contributions, or Excess Aggregate Contributions.
Under such rules as the Secretary of the Treasury shall prescribe, in determining
the Contribution Percentage the Employer may elect to include Qualified Nonelective
Contributions under this Plan which were not used in computing the Deferral
Percentage. The Employer may also elect to use Elective Deferral Contributions in
computing the Contribution Percentage so long as the ADP Test is met before the
Elective Deferral Contributions are used in the ACP Test and continues to be met
following the exclusion of those Elective Deferral Contributions that are used to
meet the ACP Test.
	 
	 	   	Deferral Percentage means the ratio (expressed as a percentage) of Elective Deferral
Contributions under this Plan on behalf of the Eligible Participant for the Plan
Year to the Eligible Participant’s Compensation for the Plan Year (whether or not
the Eligible Participant was an Eligible Participant for the entire Plan Year).
The Elective Deferral Contributions used to determine the Deferral Percentage shall
include Excess Elective Deferrals (other than Excess Elective Deferrals of
Nonhighly Compensated Employees that arise solely from Elective Deferral
Contributions made under this Plan or any other plans of the Employer or a
Controlled Group member), but shall exclude Elective Deferral Contributions that
are used in computing the Contribution Percentage (provided the ADP Test is
satisfied both with and without exclusion of these Elective Deferral
Contributions). Under such rules as the Secretary of the Treasury shall prescribe,
the Employer may elect to include Qualified Nonelective Contributions and Qualified
Matching Contributions under this Plan in computing the Deferral Percentage. For
an Eligible Participant for whom such contributions on his behalf for the Plan Year
are zero, the percentage is zero.

 

	 	   	Elective Deferral Contributions means any employer contributions made to a plan at the
election of a participant, in lieu of cash compensation, and shall include
contributions made pursuant to a salary reduction agreement or other deferral
mechanism. With respect to any taxable year, a participant’s Elective Deferral
Contributions are 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 described in Code Section 401(k), any salary reduction simplified
employee pension plan described 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 plan described under Code Section 501(c)(18), and any
employer contributions made on behalf of a participant for the purchase of an
annuity contract under Code Section 403(b) pursuant to a salary reduction
agreement. Elective Deferral Contributions shall not include any deferrals
properly distributed as excess annual additions.
	 
	 	   	Eligible Participant means, for purposes of determining the Deferral Percentage, any
Employee who is otherwise entitled to make Elective Deferral Contributions under
the terms of the Plan for the Plan Year. Eligible Participant means, for purposes
of determining the Contribution Percentage, any Employee who is eligible (i) to
make a Participant Contribution or an Elective Deferral Contribution (if the
Employer takes such contributions into account in the calculation of the
Contribution Percentage), or (ii) to receive a Matching Contribution (including
forfeitures) or a Qualified Matching Contribution. If a Participant 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 as an Eligible Participant on behalf of whom no Participant Contributions
are made.
	 
	 	   	Excess Aggregate Contributions means, with respect to any Plan Year, the excess of:

	 	(1)  	The aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made on behalf of
Highly Compensated Employees for such Plan Year, over
	 
	 	(2)  	The maximum Contribution Percentage Amounts permitted by the ACP Test
(determined by hypothetically reducing contributions made on behalf of Highly
Compensated Employees in order of their Contribution Percentages beginning with the
highest of such percentages).

	 	   	Such determination shall be made after first determining Excess Elective
Deferrals and then determining Excess Contributions.
	 
	 	   	Excess Contributions means, with respect to any Plan Year, the excess of:

	 	(1)  	The aggregate amount of employer contributions actually taken into
account in computing the Deferral Percentage of Highly Compensated Employees for
such Plan Year, over
	 
	 	(2)  	The maximum amount of such contributions permitted by the ADP Test
(determined by hypothetically reducing contributions made on behalf of Highly
Compensated Employees in the order of the Deferral Percentages, beginning with the
highest of such percentages).

	 	   	Such determination shall be made after first determining Excess Elective
Deferrals.
	 
	 	   	Excess Elective Deferrals means those Elective Deferral Contributions that are
includible in a Participant’s gross income under Code Section 402(g) to the extent
such Participant’s Elective Deferral Contributions for a taxable year exceed the
dollar limitation under such Code section. Excess Elective Deferrals shall be
treated as Annual Additions, as defined in the CONTRIBUTION LIMITATION SECTION of
this article, under the Plan, unless such amounts are distributed no later than the
first April 15 following the close of the Participant’s taxable year.

 

	 	   	Matching Contributions means employer contributions made to this or any other defined
contribution plan, or to a contract described in Code Section 403(b), on behalf of
a participant on account of a Participant Contribution made by such participant, or
on account of a participant’s Elective Deferral Contributions, under a plan
maintained by the Employer or a Controlled Group member.
	 
	 	   	Participant Contributions means contributions made to the plan by or on behalf of a
participant that are included in the participant’s gross income in the year in
which made and that are maintained under a separate account to which the earnings
and losses are allocated.
	 
	 	   	Qualified Matching Contributions means Matching Contributions which are subject to the
distribution and nonforfeitability requirements under Code Section 401(k) when
made.
	 
	 	   	Qualified Nonelective Contributions means any employer contributions (other than
Matching Contributions) which an employee may not elect to have paid to him in cash
instead of being contributed to the plan and which are subject to the distribution
and nonforfeitability requirements under Code Section 401(k) when made.
	 
	 	(b)  	Excess Elective Deferrals. A Participant may assign to this Plan any
Excess Elective Deferrals made during a taxable year of the Participant by notifying the
Plan Administrator in writing on or before the first following March 1 of the amount of
the Excess Elective Deferrals to be assigned to the Plan. A Participant is deemed to
notify the Plan Administrator of any Excess Elective Deferrals that arise by taking into
account only those Elective Deferral Contributions made to this Plan and any other plan
of the Employer or a Controlled Group member. The Participant’s claim for Excess
Elective Deferrals shall be accompanied by the Participant’s written statement that if
such amounts are not distributed, such Excess Elective Deferrals will exceed the limit
imposed on the Participant by Code Section 402(g) for the year in which the deferral
occurred. The Excess Elective Deferrals assigned to this Plan cannot exceed the Elective
Deferral Contributions allocated under this Plan for such taxable year.
	 
	 	   	Notwithstanding any other provisions of the Plan, Elective Deferral Contributions in an
amount equal to the Excess Elective Deferrals assigned to this Plan, plus any
income and minus any loss allocable thereto, shall be distributed no later than
April 15 to any Participant to whose Account Excess Elective Deferrals were
assigned for the preceding year and who claims Excess Elective Deferrals for such
taxable year.
	 
	 	   	The Excess Elective Deferrals shall be adjusted for income or loss. The
income or loss allocable to such Excess Elective Deferrals shall be equal to the
income or loss allocable to the Participant’s Elective Deferral Contributions for
the taxable year in which the excess occurred multiplied by a fraction. The
numerator of the fraction is the Excess Elective Deferrals. The denominator of the
fraction is the closing balance without regard to any income or loss occurring
during such taxable year (as of the end of such taxable year) of the Participant’s
Account resulting from Elective Deferral Contributions.
	 
	 	   	Any Matching Contributions which were based on the Elective Deferral Contributions which
are distributed as Excess Elective Deferrals, plus any income and minus any loss
allocable thereto, shall be forfeited.
	 
	 	(c)  	ADP Test. As of the end of each Plan Year after Excess Elective Deferrals
have been determined, the Plan must satisfy the ADP Test. The ADP Test shall be
satisfied using the prior year testing method, unless the Employer has elected to use the
current year testing method.

	 	(1)  	Prior Year Testing Method. The ADP for a Plan Year for
Eligible Participants who are Highly Compensated Employees for each Plan Year and
the prior year’s ADP for Eligible Participants who were Nonhighly Compensated
Employees for the prior Plan Year must satisfy one of the following tests:

 

	 	(i)  	The ADP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the prior
year’s ADP for Eligible Participants who were Nonhighly Compensated Employees
for the prior Plan Year multiplied by 1.25; or
	 
	 	(ii)  	The ADP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year:

	 	A.  	shall not exceed the prior year’s ADP for
Eligible Participants who were Nonhighly Compensated Employees for the
prior Plan Year multiplied by 2, and
	 
	 	B.  	the difference between such ADPs is not more
than 2.

	 	   	If this is not a successor plan, for the first Plan Year the Plan permits any
Participant to make Elective Deferral Contributions, for purposes of the foregoing
tests, the prior year’s Nonhighly Compensated Employees’ ADP shall be 3 percent,
unless the Employer has elected to use the Plan Year’s ADP for these Eligible
Participants.

	 	(2)  	Current Year Testing Method. The ADP for a Plan Year for
Eligible Participants who are Highly Compensated Employees for each Plan Year and
the ADP for Eligible Participants who are Nonhighly Compensated Employees for the
Plan Year must satisfy one of the following tests:

	 	(i)  	The ADP for a Plan Year for Eligible Participants who are

Highly Compensated Employees for the Plan Year shall not exceed the ADP for
Eligible Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25; or
	 
	 	(ii)  	The ADP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year:

	 	A.  	shall not exceed the ADP for Eligible
Participants who are Nonhighly Compensated Employees for the Plan Year
multiplied by 2, and
	 
	 	B.  	the difference between such ADP’s is not more
than 2.

	 	   	If the Employer has elected to use the current year testing method, that election
cannot be changed unless (i) the Plan has been using the current year testing
method for the preceding five Plan Years, or if less, the number of Plan Years the
Plan has been in existence; or (ii) the Plan otherwise meets one of the conditions
specified in Internal Revenue Service Notice 98-1 (or superseding guidance) for
changing from the current year testing method.

	 	   	A Participant is a Highly Compensated Employee for a particular Plan Year
if he meets the definition of a Highly Compensated Employee in effect for that Plan
Year. Similarly, a Participant is a Nonhighly Compensated Employee for a
particular Plan Year if he does not meet the definition of a Highly Compensated
Employee in effect for that Plan Year.
	 
	 	   	The Deferral Percentage for any Eligible Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have Elective
Deferral Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if treated as Elective Deferral Contributions for
purposes of the ADP Test) allocated to his account under two or more arrangements
described in Code Section 401(k) that are maintained by the Employer or a
Controlled Group member shall be determined as if such Elective Deferral
Contributions (and, if applicable, such Qualified Nonelective Contributions or
Qualified Matching Contributions, or both) were made under a single arrangement.
If a Highly Compensated Employee participates

 

	 	   	in two or more cash or deferred arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar year shall be treated as a
single arrangement. The foregoing notwithstanding, certain plans shall be treated as
separate if mandatorily disaggregated under the regulations of Code Section 401(k).
	 
	 	   	In the event this Plan satisfies the requirements of Code Section 401(k),
401(a)(4), 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 Deferral
Percentage of Employees as if all such plans were a single plan. Any adjustments
to the Nonhighly Compensated Employee ADP for the prior year shall be made in
accordance with Internal Revenue Service Notice 98-1 (or superseding guidance),
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 testing method for the ADP Test.
	 
	 	   	For purposes of the ADP Test, Elective Deferral Contributions, Qualified
Nonelective Contributions, and Qualified Matching Contributions must be made before
the end of the 12-month period immediately following the Plan Year to which the
contributions relate.
	 
	 	   	The Employer shall maintain records sufficient to demonstrate satisfaction
of the ADP Test and the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
	 
	 	   	If the Plan Administrator should determine during the Plan Year that the
ADP Test is not being met, the Plan Administrator may limit the amount of future
Elective Deferral Contributions of the Highly Compensated Employees.
	 
	 	   	Notwithstanding any other provisions of this Plan, Excess Contributions, plus any income
and minus any loss allocable thereto, shall be distributed no later than the last
day of each Plan Year to Participants to whose Accounts such Excess Contributions
were allocated for the preceding Plan Year. Excess Contributions are allocated to
the Highly Compensated Employees with the largest amounts of employer contributions
taken into account in calculating the ADP Test for the year in which the excess
arose, beginning with the Highly Compensated Employee with the largest amount of
such employer contributions and continuing in descending order until all of the
Excess Contributions have been allocated. For purposes of the preceding sentence,
the “largest amount” is determined after distribution of any Excess Contributions.
If such excess amounts are distributed more than 2 1/2 months after the last day of
the Plan Year in which such excess amounts arose, a 10 percent excise tax shall be
imposed on the employer maintaining the plan with respect to such amounts.
	 
	 	   	Excess Contributions shall be treated as Annual Additions, as defined in the
CONTRIBUTION LIMITATION SECTION of this article.
	 
	 	   	The Excess Contributions shall be adjusted for income or loss. The income
or loss allocable to such Excess Contributions allocated to each Participant shall
be equal to the income or loss allocable to the Participant’s Elective Deferral
Contributions (and, if applicable, Qualified Nonelective Contributions or Qualified
Matching Contributions, or both) for the Plan Year in which the excess occurred
multiplied by a fraction. The numerator of the fraction is the Excess
Contributions. The denominator of the fraction is the closing balance without
regard to any income or loss occurring during such Plan Year (as of the end of such
Plan Year) of the Participant’s Account resulting from Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if such contributions are included in the ADP Test).
	 
	 	   	Excess Contributions allocated to a Participant shall be distributed from the
Participant’s Account resulting from Elective Deferral Contributions. If such
Excess Contributions exceed the balance in the Participant’s Account resulting from
Elective Deferral Contributions, the balance shall be distributed from the
Participant’s

 

	 	   	Account resulting from Qualified Matching Contributions (if applicable) and Qualified
Nonelective Contributions, respectively.
	 
	 	   	Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited.

	 	(d)  	ACP Test. As of the end of each Plan Year, the Plan must satisfy the ACP
Test. The ACP Test shall be satisfied using the prior year testing method, unless the
Employer has elected to use the current year testing method.

	 	(1)  	Prior Year Testing Method. The ACP for a Plan Year for
Eligible Participants who are Highly Compensated Employees for each Plan Year and
the prior year’s ACP for Eligible Participants who were Nonhighly Compensated
Employees for the prior Plan Year must satisfy one of the following tests:

	 	(i)  	The ACP for the Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the prior
year’s ACP for Eligible Participants who were Nonhighly Compensated Employees
for the prior Plan Year multiplied by 1.25; or
	 
	 	(ii)  	The ACP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year:

	 	A.  	shall not exceed the prior year’s ACP for
Eligible Participants who were Nonhighly Compensated Employees for the
prior Plan Year multiplied by 2, and
	 
	 	B.  	the difference between such ACPs is not more
than 2.

	 	   	If this is not a successor plan, for the first Plan Year the Plan permits any
Participant to make Participant Contributions, provides for Matching
Contributions, or both, for purposes of the foregoing tests, the prior year’s
Nonhighly Compensated Employees’ ACP shall be 3 percent, unless the Employer has
elected to use the Plan Year’s ACP for these Eligible Participants.

	 	(2)  	Current Year Testing Method. The ACP for a Plan Year for
Eligible Participants who are Highly Compensated Employees for each Plan Year and
the ACP for Eligible Participants who are Nonhighly Compensated Employees for the
Plan Year must satisfy one of the following tests:

	 	(i)  	The ACP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the ACP for
Eligible Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25; or
	 
	 	(ii)  	The ACP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year:

	 	A.  	shall not exceed the ACP for Eligible
Participants who are Nonhighly Compensated Employees for the Plan Year
multiplied by 2, and
	 
	 	B.  	the difference between such ACPs is not more
than 2.

	 	   	If the Employer has elected to use the current year testing method, that election
cannot be changed unless (i) the Plan has been using the current year testing
method for the preceding five Plan Years, or if less, the number of Plan Years the
Plan has been in existence; or (ii) the Plan otherwise meets one of the

 

	 	   	conditions specified in Internal Revenue Service Notice 98-1 (or superseding
guidance) for changing from the current year testing method.

	 	   	A Participant is a Highly Compensated Employee for a particular Plan Year
if he meets the definition of a Highly Compensated Employee in effect for that Plan
Year. Similarly, a Participant is a Nonhighly Compensated Employee for a
particular Plan Year if he does not meet the definition of a Highly Compensated
Employee in effect for that Plan Year.
	 
	 	   	Multiple Use. If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the ACP Test maintained by the
Employer or a Controlled Group member, and the sum of the ADP and ACP of those
Highly Compensated Employees subject to either or both tests exceeds the Aggregate
Limit, then the Contribution Percentage of those Highly Compensated Employees who
also participate in a cash or deferred arrangement will be reduced in the manner
described below for allocating Excess Aggregate Contributions so that the limit is
not exceeded. The amount by which each Highly Compensated Employee’s Contribution
Percentage is reduced shall be treated as an Excess Aggregate Contribution. The
ADP and ACP of the Highly Compensated Employees are determined after any
corrections required to meet the ADP Test and ACP Test and are deemed to be the
maximum permitted under such tests for the Plan Year. Multiple use does not occur
if either the ADP or ACP of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP, respectively, of the Nonhighly Compensated
Employees.
	 
	 	   	The Contribution Percentage for any Eligible Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have Contribution
Percentage Amounts allocated to his account under two or more plans described in
Code Section 401(a) or arrangements described in Code Section 401(k) that are
maintained by the Employer or a Controlled Group member shall be determined as if
the total of such Contribution Percentage Amounts was made under each plan. If a
Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement. The foregoing notwithstanding, certain plans shall be treated as
separate if mandatorily disaggregated under the regulations of Code Section 401(m).
	 
	 	   	In the event this Plan satisfies the requirements of Code Section 401(m),
401(a)(4), 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 Contribution
Percentage of Employees as if all such plans were a single plan. Any adjustments
to the Nonhighly Compensated Employee ACP for the prior year shall be made in
accordance with Internal Revenue Service Notice 98-1 (or superseding guidance),
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 testing method for the ACP Test.
	 
	 	   	For purposes of the ACP Test, Participant Contributions are considered to
have been made in the Plan Year in which contributed to the Plan. Matching
Contributions and Qualified Nonelective Contributions will be considered to have
been made for a Plan Year if made no later than the end of the 12-month period
beginning on the day after the close of the Plan Year.
	 
	 	   	The Employer shall maintain records sufficient to demonstrate satisfaction
of the ACP Test and the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
	 
	 	   	Notwithstanding any other provisions of this Plan, Excess Aggregate Contributions, plus
any income and minus any loss allocable thereto, shall be forfeited, if not vested,
or distributed, if vested, no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Aggregate Contributions were allocated
for the preceding Plan Year. Excess Aggregate Contributions are allocated to the
Highly Compensated Employees with the largest Contribution Percentage Amounts taken
into account in calculating the ACP Test for the year in

 

	 	   	which the excess arose, beginning with the Highly Compensated Employee with the largest
amount of such Contribution Percentage Amounts and continuing in descending order until
all of the Excess Aggregate Contributions have been allocated. For purposes of the
preceding sentence, the “largest amount” is determined after distribution of any Excess
Aggregate Contributions. If such Excess Aggregate Contributions are distributed more
than 2 1/2 months after the last day of the Plan Year in which such excess amounts
arose, a 10 percent excise tax shall be imposed on the employer maintaining the plan
with respect to such amounts.

	 	   	Excess Aggregate Contributions shall be treated as Annual Additions, as defined in the
CONTRIBUTION LIMITATION SECTION of this article.
	 
	 	   	The Excess Aggregate Contributions shall be adjusted for income or loss.
The income or loss allocable to such Excess Aggregate Contributions allocated to
each Participant shall be equal to the income or loss allocable to the
Participant’s Contribution Percentage Amounts for the Plan Year in which the excess
occurred multiplied by a fraction. The numerator of the fraction is the Excess
Aggregate Contributions. The denominator of the fraction is the closing balance
without regard to any income or loss occurring during such Plan Year (as of the end
of such Plan Year) of the Participant’s Account resulting from Contribution
Percentage Amounts.
	 
	 	   	Excess Aggregate Contributions allocated to a Participant shall be distributed from the
Participant’s Account resulting from Participant Contributions that are not
required as a condition of employment or participation or for obtaining additional
benefits from Employer Contributions. If such Excess Aggregate Contributions
exceed the balance in the Participant’s Account resulting from such Participant’s
Contributions, the balance shall be forfeited, if not vested, or distributed, if
vested, on a pro-rata basis from the Participant’s Account resulting from
Contribution Percentage Amounts.

	 	(e)  	Employer Elections. The Employer has made an election to use the current
year testing method.

SECTION 3.06—401(k) SAFE HARBOR PROVISIONS.

	 	(a)  	Rules of Application.

	 	(1)  	The provisions of this section apply on and after January 1, 2005. Any
provisions relating to the ADP Test in the EXCESS AMOUNTS SECTION of this article
do not apply for any Plan Year in which the provisions of this section apply unless
the plan is amended to revoke the 401(k) provisions during the Plan Year in
accordance with (e) below. Any provisions relating to the ACP Test in the EXCESS
AMOUNTS SECTION of this article do not apply with respect to Matching Contributions
for any Plan Year in which the provisions of this section apply unless the Plan is
amended to revoke the 401(k) provisions during the Plan Year in accordance with (e)
below.
	 
	 	(2)  	The provisions of this section shall not apply to future Plan Years
unless the Plan Year is 12 months long.
	 
	 	(3)  	To the extent that any other provision of the Plan is inconsistent with
the provisions of this section, the provisions of this section shall govern.

	 	(b)  	ADP Test Safe Harbor.

	 	(1)  	Contributions. The Plan is satisfying the ADP Test Safe Harbor
using Qualified Matching Contributions as provided in the EMPLOYER CONTRIBUTIONS
SECTION of this article.
	 
	 	(2)  	Notice Requirement. At least 30 days, but not more than 90
days, before the beginning of the Plan Year, the Employer shall provide each Active
Participant a comprehensive notice of his rights and obligations

 

	 	   	under the Plan, including a description of the Qualified Matching Contributions
that will be made to the Plan to satisfy the ADP Test Safe Harbor.
	 
	 	   	The notice shall be written in a manner calculated to be understood by the average
Active Participant.
	 
	 	   	If an Employee becomes an Active Participant after the 90th day before the
beginning of the Plan Year and does not receive this notice for that reason, the
notice must be provided no more than 90 days before he becomes an Active
Participant but not later than the date he becomes an Active Participant.
	 
	 	(3)  	Election Periods. In addition to any other election periods
provided under the Plan, each Active Participant may make or modify a deferral
election during the 30-day period immediately following receipt of the notice
described in (2) above.

	 	(c)  	ACP Test Safe Harbor. Matching Contributions are limited as provided in
the EMPLOYER CONTRIBUTIONS SECTION of this article.
	 
	 	(d)  	ACP Test.

	 	(1)  	Application. The Plan does not provide for Participant
Contributions, as defined in the EXCESS AMOUNTS SECTION of this article. Any
provisions relating to the ACP Test in the EXCESS AMOUNTS SECTION of this article
shall not apply for any Plan Year in which the provisions of this section apply
unless the Plan is amended to revoke the 401(k) safe harbor provisions during the
Plan Year in accordance with (e) below.
	 
	 	(2)  	Multiple Use. The provisions of the EXCESS AMOUNTS SECTION of
this article regarding the Aggregate Limit, as defined in the EXCESS AMOUNTS
SECTION of this article, shall not apply.

	 	(e)  	Revocation of 401(k) Safe Harbor Provisions. The Employer may amend the
Plan to revoke the 401(k) safe harbor provisions during any Plan Year. Active
Participants shall be provided a supplemental notice that explains the consequences of
the amendment, informs them of the effective date of the elimination of the Qualified
Matching Contributions and gives them a reasonable opportunity (including a reasonable
period) to change the amount of their Elective Deferral Contributions. The effective
date of the revocation cannot be earlier than the later of (i) 30 days after the Active
Participants are given such notice, and (ii) the date the amendment revoking such
provisions is adopted.
	 
	 	   	If the 401(k) safe harbor provisions are revoked, the Employer shall perform the ADP
Test and ACP Test for the entire Plan Year using the current year testing method
described in the EXCESS AMOUNTS SECTION of this article. The Employer shall make the
Qualified Matching Contributions for the period prior to the effective date of the
revocation.

 

ARTICLE IV

INVESTMENT OF CONTRIBUTIONS

SECTION 4.01—INVESTMENT AND TIMING OF CONTRIBUTIONS.

     The handling of Contributions is governed by the provisions of the Trust Agreement, the
Annuity Contract, the Custodial Agreement, and any other funding arrangement in which the Plan Fund
is or may be held or invested. To the extent permitted by the Trust Agreement, Annuity Contract,
Custodial Agreement, or other funding arrangement, the parties named below shall direct the
Contributions to the guaranteed benefit policy portion of the Annuity Contract, any of the
investment options available under the Annuity Contract, or any of the investment vehicles
available under the Trust Agreement or Custodial Agreement and may request the transfer of amounts
resulting from those Contributions between such investment options and investment vehicles or the
transfer of amounts between the guaranteed benefit policy portion of the Annuity Contract and such
investment options and investment vehicles. A Participant may not direct the Trustee, Insurer, or
Custodian to invest the Participant’s Account in collectibles. Collectibles mean any work of art,
rug or antique, metal or gem, stamp or coin, alcoholic beverage, or other tangible personal
property specified by the Secretary of the Treasury. However, for tax years beginning after
December 31, 1997, certain coins and bullion as provided in Code Section 408(m)(3) shall not be
considered collectibles. To the extent that a Participant who has investment direction fails to
give timely direction, the Primary Employer shall direct the investment of his Account. If the
Primary Employer has investment direction, such Account shall be invested ratably in the guaranteed
benefit policy portion of the Annuity Contract, the investment options available under the Annuity
Contract, or the investment vehicles available under the Trust Agreement and Custodial Agreement in
the same manner as the Accounts of all other Participants who do not direct their investments. The
Primary Employer shall have investment direction for amounts which have not been allocated to
Participants. To the extent an investment is no longer available, the Primary Employer may require
that amounts currently held in such investment be reinvested in other investments.

     At least annually, the Named Fiduciary shall review all pertinent Employee information and
Plan data in order to establish the funding policy of the Plan and to determine appropriate methods
of carrying out the Plan’s objectives. The Named Fiduciary shall inform the Trustee and any
Investment Manager of the Plan’s short-term and long-term financial needs so the investment policy
can be coordinated with the Plan’s financial requirements.

	 	(a)  	Employer Contributions other than Elective Deferral Contributions: The Participant
shall direct the investment of such Employer Contributions and transfer of amounts
resulting from those Contributions.
	 
	 	(b)  	Elective Deferral Contributions: The Participant shall direct the investment of
Elective Deferral Contributions and transfer of amounts resulting from those
Contributions.
	 
	 	(d)  	Rollover Contributions: The Participant shall direct the investment of Rollover
Contributions and transfer of amounts resulting from those Contributions.

     However, the Named Fiduciary may delegate to the Investment Manager investment discretion for
Contributions and amounts which are not subject to Participant direction.

     The Employer shall pay to the Insurer, Trustee, or Custodian, as applicable, the Elective
Deferral Contributions and Qualified Matching Contributions for each Plan Year not later than the
end of the 12-month period immediately following the Plan Year for which they are deemed to be
paid.

     However, the Employer shall pay to the Insurer, Trustee, or Custodian, as applicable, the
Qualified Matching Contributions calculated based on Elective Deferral Contributions and
Compensation for the pay period not later than the last day of the following Plan-year Quarter.

 

     All Contributions are forwarded by the Employer to the Trustee to be deposited in the Trust
Fund, to the Insurer to be deposited under the Annuity Contract, or to the Custodian to be held
under the terms of the Custodial Agreement, as applicable. Contributions that are accumulated
through payroll deduction shall be paid to the Trustee, Insurer, or Custodian, as applicable, by
the earlier of (i) the date the Contributions can reasonably be segregated from the Employer’s
assets, or (ii) the 15th business day of the month following the month in which the Contributions
would otherwise have been paid in cash to the Participant.

SECTION 4.01A—INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.

     All or some portion of the Participant’s Account may be invested in Qualifying Employer
Securities. Once an investment in the Qualifying Employer Securities Fund is made available to
Participants, it shall continue to be available unless the Plan is amended to disallow such
available investment. In the absence of an election to invest in Qualifying Employer Securities,
Participants shall be deemed to have elected to have their Accounts invested wholly in other
investment options of the Investment Fund. Once an election is made, it shall be considered to
continue until a new election is made.

     In the case of a Participant who is a Section 16 Person:

	 	(a)  	a transfer of funds from the Too, Inc. Common Stock Fund to another
Investment Fund may only be effected by such Participant pursuant to an election
made at least six months following the date of the most recent election by such
Participant, with respect to any employee benefit plan of the Employer, to effect a
Discretionary Transaction (as that term is defined in Rule 16b-3 under the
Securities Exchange Act of 1934) that is an acquisition of Too, Inc. Stock.
	 
	 	(b)  	a transfer of funds into the Too, Inc. Common Stock Fund from another
Investment Fund may only be effected by such Participant pursuant to an election
made at least six months following the date of the most recent election of the
Participant, with the respect to an employee benefit plan of the Employer, to
effect a Discretionary Transaction that is a disposition of Too, Inc. Stock.

     Participants who previously participated in The Limited Plan, whose account under that plan
was invested in whole or in part in The Limited Stock Common Stock Fund and whose account under The
Limited Plan has been transferred to this Plan shall be permitted to continue to hold The Limited
Stock in their Accounts until they direct the Trustee to sell such stock and invest the proceeds in
one or more of the other Investment Funds available under the Plan. Participants shall not be
entitled to direct that future contributions to their Accounts be invested in The Limited Stock or
to have amounts initially invested in one or more of the other Investment Funds reinvested in The
Limited Stock. Cash dividends paid on The Limited Stock held in Participants’ Accounts shall be
reinvested in The Limited Stock.

     For purposes of determining the annual valuation of the Plan, and for reporting to
Participants and regulatory authorities, the assets of the Plan shall be valued at least annually
on the Valuation Date which corresponds to the last day of the Plan Year. The fair market value of
Qualifying Employer Securities shall be determined on such Valuation Date. The prices of
Qualifying Employer Securities as of the date of the transaction shall apply for purposes of
valuing distributions and other transactions of the Plan to the extent such value is representative
of the fair market value of such securities in the opinion of the Plan Administrator. The value of
a Participant’s Account held in the Qualifying Employer Securities Fund may be expressed in units.

     If the Qualifying Employer Securities are not publicly traded, or if an extremely thin market
exists for such securities so that reasonable valuation may not be obtained from the market place,
then such securities must be valued at least annually by an independent appraiser who is not
associated with the Plan Administrator, the Trustee, or any person related to any fiduciary under
the Plan. The independent appraiser may be associated with a person who is merely a contract
administrator with respect to the Plan, but who exercises no discretionary authority and is not a
plan fiduciary.

 

     If there is a public market for Qualifying Employer Securities of the type held by the Plan,
then the Plan Administrator may use as the value of the securities the price at which such
securities trade in such market. If the Qualifying Employer Securities do not trade on the
relevant date, or if the market is very thin on such date, then the Plan Administrator may use for
the valuation the next preceding trading day on which the trading prices are representative of the
fair market value of such securities in the opinion of the Plan Administrator.

     Cash dividends payable on the Qualifying Employer Securities shall be reinvested in additional
shares of such securities. In the event of any cash or stock dividend or any stock split, such
dividend or split shall be credited to the Accounts based on the number of shares of Qualifying
Employer Securities credited to each Account as of the payable date of such dividend or split.

     All purchases of Qualifying Employer Securities shall be made at a price, or prices, which, in
the judgement of the Plan Administrator, do not exceed the fair market value of such securities.

     In the event that the Trustee acquires Qualifying Employer Securities by purchase from a
“disqualified person” as defined in Code Section 4975(e)(2) or from a “party-in-interest” as
defined in ERISA Section 3(14), the terms of such purchase shall contain the provision that in the
event there is a final determination by the Internal Revenue Service, the Department of Labor, or
court of competent jurisdiction that the fair market value of such securities as of the date of
purchase was less than the purchase price paid by the Trustee, then the seller shall pay or
transfer, as the case may be, to the Trustee an amount of cash or shares of Qualifying Employer
Securities equal in value to the difference between the purchase price and such fair market value
for all such shares. In the event that cash or shares of Qualifying Employer Securities are paid
or transferred to the Trustee under this provision, such securities shall be valued at their fair
market value as of the date of such purchase, and interest at a reasonable rate from the date of
purchase to the date of payment or transfer shall be paid by the seller on the amount of cash paid.

     The Plan Administrator may direct the Trustee to sell, resell, or otherwise dispose of
Qualifying Employer Securities to any person, including the Plan Administrator, provided that any
such sales to any disqualified person or party-in-interest, including the Plan Administrator, will
be made at not less than the fair market value and no commission will be charged. Any such sale
shall be made in conformance with ERISA Section 408(e).

     The Plan Administrator is responsible for compliance with any applicable Federal or state
securities law with respect to all aspects of the Plan. If the Qualifying Employer Securities or
interest in this Plan are required to be registered in order to permit investment in the Qualifying
Employer Securities Fund as provided in this section, then such investment will not be effective
until the later of the effective date of the Plan or the date such registration or qualification is
effective. The Plan Administrator, at its own expense, will take or cause to be taken any and all
such actions as may be necessary or appropriate to effect such registration or qualification.
Further, if the Trustee is directed to dispose of any Qualifying Employer Securities held under the
Plan under circumstances which require registration or qualification of the securities under
applicable Federal or state securities laws, then the Plan Administrator will, at its own expense,
take or cause to be taken any and all such action as may be necessary or appropriate to effect such
registration or qualification. The Plan Administrator is responsible for all compliance
requirements under Section 16 of the Securities Act.

     The Plan is intended as described above to constitute a plan described in ERISA Section 404(c)
and if the Plan invests in Qualifying Employer Securities, then the Administrative Committee is the
fiduciary designated under this Plan to establish procedures designed to safeguard the
confidentiality of information relating to the purchase, holding and sale of the Qualifying
Employer Securities and the exercise of voting tender and similar rights by Participants and
Beneficiaries. The Administrative Committee is designated as the fiduciary responsible for
insuring that the confidentiality procedures required by ERISA Section 404(c) are sufficient. If
the Administrative Committee determines that there exists a potential for undue Employer influence
upon Participants and Beneficiaries with regard to the direct or indirect exercise of shareholder
rights the Administrative Committee shall appoint an independent fiduciary to carry out activities
necessary to avoid such potential undue influence.

 

ARTICLE V

BENEFITS

SECTION 5.01—RETIREMENT BENEFITS.

     On a Participant’s Retirement Date, his Vested Account shall be distributed to him
according to the distribution of benefits provisions of Article VI and the provisions of the SMALL
AMOUNTS SECTION of Article X.

SECTION 5.02—DEATH BENEFITS.

     If a Participant dies before his Annuity Starting Date, his Vested Account shall be
distributed according to the distribution of benefits provisions of Article VI and the provisions
of the SMALL AMOUNTS SECTION of Article X.

SECTION 5.03—VESTED BENEFITS.

     If an Inactive Participant’s Vested Account is not payable under the SMALL AMOUNTS
SECTION of Article X, he may elect, but is not required, to receive a distribution of his Vested
Account after he ceases to be an Employee. A distribution under this paragraph shall be a
retirement benefit and shall be distributed to the Participant according to the distribution of
benefits provisions of Article VI.

     A Participant may not elect to receive a distribution under the provisions of this section
after he again becomes an Employee until he subsequently ceases to be an Employee and meets the
requirements of this section.

     If an Inactive Participant does not receive an earlier distribution, upon his Retirement Date
or death, his Vested Account shall be distributed according to the provisions of the RETIREMENT
BENEFITS SECTION or the DEATH BENEFITS SECTION of Article V.

     The Nonvested Account of an Inactive Participant who has ceased to be an Employee shall remain
a part of his Account until it becomes a Forfeiture. However, if he again becomes an Employee so
that his Vesting Percentage can increase, the Nonvested Account may become a part of his Vested
Account.

SECTION 5.04—WHEN BENEFITS START.

	 	(a)  	Unless otherwise elected, benefits shall begin before the 60th day following the
close of the Plan Year in which the latest date below occurs:

	 	(1)  	The date the Participant attains age 65 (or Normal Retirement Age, if
earlier).
	 
	 	(2)  	The 10th anniversary of the Participant’s Entry Date.
	 
	 	(3)  	The date the Participant ceases to be an Employee.

	 	   	Notwithstanding the foregoing, the failure of a Participant to consent to a distribution
while a benefit is immediately distributable, within the meaning of the ELECTION
PROCEDURES SECTION of Article VI, shall be deemed to be an election to defer the
start of benefits sufficient to satisfy this section.
	 
	 	   	The Participant may elect to have his benefits begin after the latest date
for beginning benefits described above, subject to the following provisions of this
section. The Participant shall make the election in writing. Such election must
be made before his Normal Retirement Date or the date he ceases to be an Employee,
if later. The

 

	 	   	election must describe the form of distribution and the date benefits will begin. The
Participant shall not elect a date for beginning benefits or a form of distribution that
would result in a benefit payable when he dies which would be more than incidental
within the meaning of governmental regulations.
	 
	 	   	Benefits shall begin on an earlier date if otherwise provided in the Plan. For example,
the Participant’s Retirement Date or Required Beginning Date, as defined in the
DEFINITIONS SECTION of Article VII.

	 	(b)  	The Participant’s Vested Account which results from Elective Deferral Contributions
and Qualified Matching Contributions may not be distributed to a Participant or to his
Beneficiary (or Beneficiaries) in accordance with the Participant’s or Beneficiary’s (or
Beneficiaries’) election, earlier than separation from service, death, or disability.
Such amount may also be distributed upon:

	 	(1)  	Termination of the Plan, as permitted in Article VIII.
	 
	 	(2)  	The disposition by the Employer, if the Employer is a corporation, to
an unrelated corporation of substantially all of the assets, within the meaning of
Code Section 409(d)(2), used in a trade or business of the Employer if the Employer
continues to maintain the Plan after the disposition, but only with respect to
Employees who continue employment with the corporation acquiring such assets.
	 
	 	(3)  	The disposition by the Employer, if the Employer is a corporation, to
an unrelated entity of the Employer’s interest in a subsidiary, within the meaning
of Code Section 409(d)(3), if the Employer continues to maintain the Plan, but only
with respect to Employees who continue employment with such subsidiary.
	 
	 	(4)  	The hardship of the Participant as permitted in the WITHDRAWAL BENEFITS
SECTION of this article.
	 
	 	All distributions that may be made pursuant to one or more of the foregoing
distributable events will be a retirement benefit and shall be distributed to the
Participant according to the distribution of benefit provisions of Article VI. In
addition, distributions that are triggered by (1), (2) and (3) above must be made
in a lump sum. A lump sum shall include a distribution of an annuity contract.

SECTION 5.05—WITHDRAWAL BENEFITS.

     A Participant, who has been an Active Participant for at least five years and is fully
vested in his account, may withdraw any part of his Vested Account which results from the following
Contributions:

	   	Matching Contributions

Rollover Contributions

Discretionary Contributions

Qualified Matching Contributions may not be withdrawn.

The percentage of a Participant’s Account available for withdrawal is the percentage set forth in
the table below, less the percentage of the Participant’s account previously withdrawn:

	 	 	 
	YEARS OF VESTING		WITHDRAWAL
	SERVICE		PERCENTAGE
	Less than 7
	 	  0
	7 or more but less than 10
	 	10

 

	 	 	 
	YEARS OF VESTING		WITHDRAWAL
	SERVICE		PERCENTAGE
	10 or more but less than 15	 	20
	15 or more
	 	30

     A Participant may make such a withdrawal at any time. Withdrawals must be made in multiples
of five percentage points.

     A Participant may withdraw any part of his Vested Account which results from the following
Contributions in the event of hardship due to an immediate and heavy financial need: Elective
Deferral Contributions, Matching Contributions and Discretionary Contributions. Qualified Matching
Contributions may not be withdrawn. Withdrawals from the Participant’s Account resulting from
Elective Deferral Contributions shall be limited to the amount of the Participant’s Elective
Deferral Contributions plus income allocable thereto credited to his Account as of December 31,
1988. Immediate and heavy financial need shall be limited to: (i) expenses incurred or necessary
for medical care, described in Code Section 213(d), of the Participant, the Participant’s spouse,
or any dependents of the Participant (as defined in Code Section 152); (ii) purchase (excluding
mortgage payments) of a principal residence for the Participant; (iii) payment of tuition, related
educational fees, and room and board expenses, for the next 12 months of post-secondary education
for the Participant, his spouse, children, or dependents; (iv) the need to prevent the eviction of
the Participant from his principal residence or foreclosure on the mortgage of the Participant’s
principal residence; or (v) any other distribution which is deemed by the Commissioner of Internal
Revenue to be made on account of immediate and heavy financial need as provided in Treasury
regulations.

     No withdrawal shall be allowed which is not necessary to satisfy such immediate and heavy
financial need. Such withdrawal shall be deemed necessary only if all of the following
requirements are met: (i) the distribution is not in excess of the amount of the immediate and
heavy financial need (including amounts necessary to pay any Federal, state, or local income taxes
or penalties reasonably anticipated to result from the distribution); (ii) the Participant has
obtained all distributions, other than hardship distributions, and all nontaxable loans currently
available under all plans maintained by the Employer; (iii) the Plan, and all other plans
maintained by the Employer, provide that the Participant’s elective contributions and participant
contributions will be suspended for at least 6 months after receipt of the hardship distribution;
and (iv) the Plan, and all other plans maintained by the Employer, provide that the Participant may
not make elective contributions 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 contributions for
the taxable year of the hardship distribution. The Plan will suspend elective contributions and
participant contributions for 6 months and limit elective deferrals as provided in the preceding
sentence. A Participant shall not cease to be an Eligible Participant, as defined in the EXCESS
AMOUNTS SECTION of Article III, merely because his elective contributions or participant
contributions are suspended.

     A cash withdrawal pursuant to this section that requires a liquidation of the Participant’s
interest in the Too, Inc. Common Stock Fund, may only be made by a Participant who is a Section 16
Person if such withdrawal is elected by such Participant at least six months following the
Participant’s most recent election, with respect to any employee benefit plan of the Employer, to
effect a Discretionary Transaction (as that term is defined in Rule 16b-3 under the Securities
Exchange Act of 1934) that is an acquisition of Too, Inc. Stock.

     A request for withdrawal shall be made in such manner and in accordance with such rules as the
Employer will prescribe for this purpose (including by means of voice response or other electronic
means under circumstances the Employer permits). Withdrawals shall be a retirement benefit and
shall be distributed to the Participant according to the distribution of benefits provisions of
Article VI. A forfeiture shall not occur solely as a result of a withdrawal.

SECTION 5.06—DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS.

     The Plan specifically permits distributions to an Alternate Payee under a qualified
domestic relations order as defined in Code Section 414(p), at any time, irrespective of whether
the Participant has attained his earliest retirement age, as defined in Code Section 414(p), under
the Plan. A distribution to an Alternate Payee before the Participant has attained his earliest

 

retirement age is available only if the order specifies that distribution shall be made prior to
the earliest retirement age or allows the Alternate Payee to elect a distribution prior to the
earliest retirement age.

     Nothing in this section shall permit a Participant to receive a distribution at a time
otherwise not permitted under the Plan nor shall it permit the Alternate Payee to receive a form of
payment not permitted under the Plan.

     The benefit payable to an Alternate Payee shall be subject to the provisions of the SMALL
AMOUNTS SECTION of Article X if the value of the benefit does not exceed $5,000.

     The Plan Administrator shall establish reasonable procedures to determine the qualified status
of a domestic relations order. Upon receiving a domestic relations order, the Plan Administrator
shall promptly notify the Participant and the Alternate Payee named in the order, in writing, of
the receipt of the order and the Plan’s procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic relations order, the Plan
Administrator shall determine the qualified status of the order and shall notify the Participant
and each Alternate Payee, in writing, of its determination. The Plan Administrator shall provide
notice under this paragraph by mailing to the individual’s address specified in the domestic
relations order, or in a manner consistent with Department of Labor regulations. The Plan
Administrator may treat as qualified any domestic relations order entered into before January 1,
1985, irrespective of whether it satisfies all the requirements described in Code Section 414(p).

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

     The Plan shall make payments or distributions required under this section by separate benefit
checks or other separate distribution to the Alternate Payee(s).

 

ARTICLE VI

DISTRIBUTION OF BENEFITS

SECTION 6.01—AUTOMATIC FORMS OF DISTRIBUTION.

     Unless an optional form of benefit is selected pursuant to a qualified election within
the election period (see the ELECTION PROCEDURES SECTION of this article), the automatic form of
benefit payable to or on behalf of a Participant is determined as follows:

	 	(a)  	Retirement Benefits. The automatic form of retirement benefit for a
Participant who does not die before his Annuity Starting Date for that portion of a
Participant’s Account which is not held in the Qualifying Employer Securities Fund shall
be a single sum payment. The automatic form of retirement benefit for that portion of a
Participant’s Account which is held in the Qualifying Employer Securities Fund shall be a
single sum payment unless the Participant elects to receive a distribution in kind.
	 
	 	(b)  	Death Benefits. The automatic form of death benefit for a Participant who
dies before his Annuity Starting Date shall be a single-sum payment to the Participant’s
Beneficiary.

SECTION 6.02—OPTIONAL FORMS OF DISTRIBUTION.

	 	(a)  	Retirement Benefits. The only form of retirement benefit for that portion of
a Participant’s Account which is not held in the Qualifying Employer Securities Fund is a
single sum payment. The optional forms of retirement benefit for that portion of a
Participant’s Account which is held in the Qualifying Employer Securities Fund are a
single sum payment and a distribution in kind.

	 	   	Election of an optional form is subject to the qualified election provisions of the
ELECTION PROCEDURES SECTION of this article and the distribution requirements of
Article VII.

	 	(b)  	Death Benefits. The only form of death benefit is a single-sum payment.

SECTION 6.03—ELECTION PROCEDURES.

     The Participant or spouse shall make any election under this section in writing. The
Plan Administrator may require such individual to complete and sign any necessary documents as to
the provisions to be made. Any election permitted under (a) and (b) below shall be subject to the
qualified election provisions of (c) below.

	 	(a)  	Retirement Benefits. A Participant may elect to have retirement benefits
from that portion of his Account which is held in the Qualifying Employer Securities Fund
distributed under any of the optional forms of retirement benefit available in the
OPTIONAL FORMS OF DISTRIBUTION SECTION of this article.
	 
	 	(b)  	Death Benefits. A Participant may elect his Beneficiary.
	 
	 	(c)  	Qualified Election. The Participant may make an election at any time
during the election period. The Participant may revoke the election made (or make a new
election) at any time and any number of times during the election period. An election is
effective only if it meets the consent requirements below.

	(1)  	Election Period for Retirement Benefits. The Participant may make an election as to
retirement benefits at any time before the Annuity Starting Date.

 

	 	(2)  	Election Period for Death Benefits. A Participant may make an
election as to death benefits at any time before he dies.
	 
	 	(3)  	Consent to Election. If the Participant’s Vested Account
exceeds $5,000, any benefit which is immediately distributable requires the consent
of the Participant.
	 
	 	   	The consent of the Participant to a benefit which is immediately distributable
must not be made before the date the Participant is provided with the notice of
the ability to defer the distribution. Such consent shall be made in writing.
	 
	 	   	The consent shall not be made more than 90 days before the Annuity Starting Date.
The consent of the Participant shall not be required to the extent that a
distribution is required to satisfy Code Section 401(a)(9) or Code Section 415.
	 
	 	   	In addition, upon termination of this Plan, if the Plan does not offer an annuity
option (purchased from a commercial provider), and if the Employer (or any entity
within the same Controlled Group) does not maintain another defined contribution
plan (other than an employee stock ownership plan as defined in Code Section
4975(e)(7)), the Participant’s Account balance will, without the Participant’s
consent, be distributed to the Participant. However, if any entity within the
same Controlled Group maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7)) then the
Participant’s Account will be transferred, without the Participant’s consent, to
the other plan if the Participant does not consent to an immediate distribution.
	 
	 	   	A benefit is immediately distributable if any part of the benefit could be
distributed to the Participant before the Participant attains the older of Normal
Retirement Age or age 62.
	 
	 	   	Spousal consent is needed to name a Beneficiary other than the Participant’s
spouse. If a Participant names a Beneficiary other than his spouse, the spouse
has the right to limit consent only to a specific Beneficiary. The spouse can
relinquish such right. Such consent shall be in writing. The spouse’s consent
shall be witnessed by a plan representative or notary public. The spouse’s
consent must acknowledge the effect of the election, including that the spouse had
the right to limit consent only to a specific Beneficiary and that the
relinquishment of such right was voluntary. Unless the consent of the spouse
expressly permits designations by the Participant without a requirement of further
consent by the spouse, the spouse’s consent must be limited to the Beneficiary,
class of Beneficiaries, or contingent Beneficiary named in the election.
	 
	 	   	Spousal consent is not required, however, if the Participant establishes to the
satisfaction of the plan representative that the consent of the spouse cannot be
obtained because there is no spouse or the spouse cannot be located. A spouse’s
consent under this paragraph shall not be valid with respect to any other spouse.
A Participant may revoke a prior election without the consent of the spouse. Any
new election will require a new spousal consent, unless the consent of the spouse
expressly permits such election by the Participant without further consent by the
spouse. A spouse’s consent may be revoked at any time within the Participant’s
election period.

SECTION 6.04—NOTICE REQUIREMENTS.

     Optional Forms of Retirement Benefit and Right to Defer. The Plan Administrator
shall furnish to the Participant a written explanation of the optional forms of retirement benefit
in the OPTIONAL FORMS OF DISTRIBUTION SECTION of this article, including the material features and
relative values of these options, in a manner that would satisfy the notice

 

requirements of Code Section 417(a)(3) and the right of the Participant to defer distribution until
the benefit is no longer immediately distributable.

     The Plan Administrator shall furnish the written explanation by a method reasonably calculated
to reach the attention of the Participant no less than 30 days, and no more than 90 days, before
the Annuity Starting Date.

     However, distribution may begin less than 30 days after the notice described in this
subparagraph is given, provided the Plan Administrator clearly informs the Participant that he has
a right to a period of at least 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
the Participant, after receiving the notice, affirmatively elects a distribution.

 

ARTICLE VII

DISTRIBUTION REQUIREMENTS

SECTION 7.01—APPLICATION.

	   	The optional forms of distribution are only those provided in Article VI. An optional
form of distribution shall not be permitted unless it meets the requirements of this article.
The timing of any distribution must meet the requirements of this article.

SECTION 7.02—DEFINITIONS.

	   	For purposes of this article, the following terms are defined:
	 
	   	Applicable Life Expectancy means Life Expectancy (or Joint and Last Survivor Expectancy)
calculated using the attained age of the Participant (or Designated Beneficiary) as of the
Participant’s (or Designated Beneficiary’s) birthday in the applicable calendar year reduced
by one for each calendar year which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the Applicable Life Expectancy shall be
the Life Expectancy so recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if Life Expectancy is being recalculated, such succeeding
calendar year.
	 
	   	Designated Beneficiary means the individual who is designated as the beneficiary under the
Plan in accordance with Code Section 401(a)(9) and the regulations thereunder.
	 
	   	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 pursuant to (e) of the DISTRIBUTION REQUIREMENTS SECTION of this article.
	 
	   	5-percent Owner means a 5-percent owner as defined in Code Section 416. A Participant is
treated as a 5-percent Owner for purposes of this article if such Participant is a 5-percent
Owner at any time during the Plan Year ending with or within the calendar year in which such
owner attains age 70 1/2.
	 
	   	In addition, a Participant is treated as a 5-percent Owner for purposes of this article if
such Participant becomes a 5-percent Owner in a later Plan Year. Such Participant’s Required
Beginning Date shall not be later than the April 1 of the calendar year following the calendar
year in which such later Plan Year ends.
	 
	   	Once distributions have begun to a 5-percent Owner under this article, they must continue to
be distributed, even if the Participant ceases to be a 5-percent Owner in a subsequent year.
	 
	   	Joint and Last Survivor Expectancy means joint and last survivor expectancy computed using the
expected return multiples in Table VI of section 1.72-9 of the Income Tax Regulations.
	 
	   	Unless otherwise elected by the Participant by the time distributions are required to begin,
life expectancies shall be recalculated annually. Such election shall be irrevocable as to
the Participant and shall apply to all subsequent years. The life expectancy of a nonspouse
Beneficiary may not be recalculated.
	 
	   	Life Expectancy means life expectancy computed using the expected return multiples in Table V
of section 1.72-9 of the Income Tax Regulations.

 

	   	Unless otherwise elected by the Participant (or spouse, in the case of distributions described
in (e)(2)(ii) of the DISTRIBUTION REQUIREMENTS SECTION of this article) by the time
distributions are required to begin, life expectancy shall be recalculated annually. Such
election shall be irrevocable as to the Participant (or spouse) and shall apply to all
subsequent years. The life expectancy of a nonspouse Beneficiary may not be recalculated.
	 
	   	Participant’s Benefit means:

	 	(a)  	The Account balance as of the last Valuation Date in the calendar year immediately
preceding the Distribution Calendar Year (valuation calendar year) increased by the
amount of any contributions or forfeitures allocated to the Account balance as of the
dates in the valuation calendar year after the Valuation Date and decreased by
distributions made in the valuation calendar year after the Valuation Date.
	 
	 	(b)  	Exception for Second Distribution Calendar Year. For purposes of (a)
above, if any portion of the minimum distribution for the first Distribution Calendar
Year is made in the second Distribution Calendar Year on or before the Required Beginning
Date, the amount of the minimum distribution made in the second Distribution Calendar
Year shall be treated as if it had been made in the immediately preceding Distribution
Calendar Year.

	   	Required Beginning Date means, for a Participant who is a 5-percent Owner, the April 1 of the
calendar year following the calendar year in which he attains age 70 1/2.
	 
	   	Required Beginning Date means, for any Participant who is not a 5-percent Owner, the April 1
of the calendar year following the later of the calendar year in which he attains age 70 1/2
or the calendar year in which he retires.
	 
	   	The preretirement age 70 1/2 distribution option is only eliminated with respect to
Participants who reach age 70 1/2 in or after a calendar year that begins after the later of
December 31, 1998, or the adoption date of the amendment which eliminated such option. The
preretirement age 70 1/2 distribution is an optional form of benefit under which benefits
payable in a particular distribution form (including any modifications that may be elected
after benefits begin) begin at a time during the period that begins on or after January 1 of
the calendar year in which the Participant attains age 70 1/2 and ends April 1 of the
immediately following calendar year.
	 
	   	The options available for Participants who are not 5-percent Owners and attained age 70 1/2 in
calendar years before the calendar year that begins after the later of December 31, 1998, or
the adoption date of the amendment which eliminated the preretirement age 70 1/2 distribution
shall be the following. Any such Participant attaining age 70 1/2 in years after 1995 may
elect by April 1 of the calendar year following the calendar year in which he attained age 70
1/2 (or by December 31, 1997 in the case of a Participant attaining age 70 1/2 in 1996) to
defer distributions until the calendar year following the calendar year in which he retires.
Any such Participant attaining age 70 1/2 in years prior to 1997 may elect to stop
distributions which are not purchased annuities and recommence by the April 1 of the calendar
year following the year in which he retires. There shall be a new Annuity Starting Date upon
recommencement.

SECTION 7.03—DISTRIBUTION REQUIREMENTS.

	 	(a)  	General Rules.

	 	(1)  	The requirements of this article shall apply to any distribution of a
Participant’s interest and shall take precedence over any inconsistent provisions
of this Plan. Unless otherwise specified, the provisions of this article apply to
calendar years beginning after December 31, 1984.

 

	 	(2)  	All distributions required under this article shall be determined and
made in accordance with the proposed regulations under Code Section 401(a)(9),
including the minimum distribution incidental benefit requirement of section
1.401(a)(9)-2 of the proposed regulations.
	 
	 	(3)  	With respect to distributions under the Plan made on or after June 14,
2001, for calendar years beginning on or after January 1, 2001, the Plan will apply
the minimum distribution requirements of Code Section 401(a)(9) in accordance with
the regulations under Code Section 401(a)(9) that were proposed on January 17, 2001
(the 2001 Proposed Regulations), notwithstanding any provision of the Plan to the
contrary. If the total amount of required minimum distributions made to a
Participant for 2001 prior to June 14, 2001, are equal to or greater than the
amount of required minimum distributions determined under the 2001 Proposed
Regulations, then no additional distributions are required for such Participant for
2001 on or after such date. If the total amount of required minimum distributions
made to a Participant for 2001 prior to June 14, 2001, are less than the amount
determined under the 2001 Proposed Regulations, then the amount of required minimum
distributions for 2001 on or after such date will be determined so that the total
amount of required minimum distributions for 2001 is the amount determined under
the 2001 Proposed Regulations. These provisions shall continue in effect until the
last calendar year beginning before the effective date of final regulations under
Code Section 401(a)(9) or such other date as may be published by the Internal
Revenue Service.

	 	(b)  	Required Beginning Date. The entire interest of a Participant must be
distributed or begin to be distributed no later than the Participant’s Required Beginning
Date.

	 	(c)  	Limits on Distribution Periods. As of the first Distribution Calendar
Year, distributions, if not made in a single sum, may only be made over one of the
following periods (or combination thereof):

	 	(1)  	the life of the Participant,
	 
	 	(2)  	the life of the Participant and a Designated Beneficiary,
	 
	 	(3)  	a period certain not extending beyond the Life Expectancy of the
Participant, or
	 
	 	(4)  	a period certain not extending beyond the Joint and Last Survivor
Expectancy of the Participant and a Designated Beneficiary.

	 	(d)  	Determination of Amount to be Distributed Each Year. If the Participant’s
interest is to be distributed in other than a single sum, the following minimum
distribution rules shall apply on or after the Required Beginning Date:

	 	(1)  	Individual Account.

	 	(i)  	If a Participant’s Benefit is to be distributed over

	 	A.  	a period not extending beyond the Life
Expectancy of the Participant or the Joint Life and Last Survivor
Expectancy of the Participant and the Participant’s Designated
Beneficiary, or
	 
	 	B.  	a period not extending beyond the Life
Expectancy of the Designated Beneficiary,

	 	   	the amount required to be distributed for each
calendar year beginning with the distributions for the first
Distribution Calendar Year, must be at least equal to the quotient
obtained by dividing the Participant’s Benefit by the Applicable Life
Expectancy.

 

	 	(ii)  	For calendar years beginning before January 1, 1989, if the
Participant’s spouse is not the Designated Beneficiary, the method of
distribution selected must assure that at least 50 percent of the present
value of the amount available for distribution is paid within the Life
Expectancy of the Participant.
	 
	 	(iii)  	For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for the
first Distribution Calendar Year shall not be less than the quotient obtained
by dividing the Participant’s Benefit by the lesser of:

	 	A.  	the Applicable Life Expectancy, or
	 
	 	B.  	if the Participant’s spouse is not the
Designated Beneficiary, the applicable divisor determined from the
table set forth in Q&A-4 of section 1.401(a)(9)-2 of the proposed
regulations.

	 	   	Distributions after the death of the Participant shall be distributed using
the Applicable Life Expectancy in (1)(i) above as the relevant divisor
without regard to section 1.401(a)(9)-2 of the proposed regulations.

	 	(iv)  	The minimum distribution required for the Participant’s
first Distribution Calendar Year must be made on or before the Participant’s
Required Beginning Date. The minimum distribution for other calendar years,
including the minimum distribution for the Distribution Calendar Year in
which the Participant’s Required Beginning Date occurs, must be made on or
before December 31 of that Distribution Calendar Year.

	 	(2)  	Other Forms. If the Participant’s Benefit is distributed in
the form of an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of Code Section
401(a)(9) and the proposed regulations thereunder.

	 	(e)  	Death Distribution Provisions.

	 	(1)  	Distribution Beginning Before Death. If the Participant dies
after distribution of his interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method of
distribution being used prior to the Participant’s death.
	 
	 	(2)  	Distribution Beginning After Death.

	 	(i)  	If the Participant dies before distribution of his interest
begins, distribution of the Participant’s entire interest shall be completed
by December 31 of the calendar year containing the fifth anniversary of the
Participant’s death except to the extent that an election is made to receive
distributions in accordance with A or B below:

	 	A.  	if any portion of the Participant’s interest is
payable to a Designated Beneficiary, distributions may be made over the
life or over a period certain not greater than the Life Expectancy of
the Designated Beneficiary beginning on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died;
	 
	 	B.  	if the Designated Beneficiary is the
Participant’s surviving spouse, the date distributions are required to
begin in accordance with A above shall not be earlier than the later
of:

 

	 	1.  	December 31 of the calendar year
immediately following the calendar year in which the Participant
died, or
	 
	 	2.  	December 31 of the calendar year in
which the Participant would have attained age 70 1/2.

	 	(ii)  	If the Participant has not made an election pursuant to
this (e)(2) by the time of his death, the Participant’s Designated
Beneficiary must elect the method of distribution no later than the earlier
of:

	 	A.  	December 31 of the calendar year in which
distributions would be required to begin under this subparagraph, or
	 
	 	B.  	December 31 of the calendar year which contains
the fifth anniversary of the date of death of the Participant.

	 	(iii)  	If the Participant has no Designated Beneficiary, or if
the Designated Beneficiary does not elect a method of distribution,
distribution of the Participant’s entire interest must be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant’s death.

	 	(3)  	For purposes of (e)(2) above, if the surviving spouse dies after the
Participant, but before payments to such spouse begin, the provisions of (e)(2)
above, with the exception of (e)(2)(i)(B) therein, shall be applied as if the
surviving spouse were the Participant.
	 
	 	(4)  	For purposes of this (e), distribution of a Participant’s interest is
considered to begin on the Participant’s Required Beginning Date (or if (e)(3)
above is applicable, the date distribution is required to begin to the surviving
spouse pursuant to (e)(2) above). If distribution in the form of an annuity
irrevocably begins to the Participant before the Required Beginning Date, the date
distribution is considered to begin is the date distribution actually begins.

 

ARTICLE VIII

TERMINATION OF THE PLAN

     The Employer expects to continue the Plan indefinitely but reserves the right to
terminate the Plan in whole or in part at any time upon giving written notice to all parties
concerned. Complete discontinuance of Contributions constitutes complete termination of the Plan.

     The Account of each Participant shall be fully (100%) vested and nonforfeitable as of the
effective date of complete termination of the Plan. The Account of each Participant who is
included in the group of Participants deemed to be affected by the partial termination of the Plan
shall be fully (100%) vested and nonforfeitable as of the effective date of the partial termination
of the Plan. The Participant’s Account shall continue to participate in the earnings credited,
expenses charged, and any appreciation or depreciation of the Investment Fund until his Vested
Account is distributed.

     A Participant’s Account which does not result from the Contributions listed below may be
distributed to the Participant after the effective date of the complete termination of the Plan:

Elective Deferral Contributions

Qualified Matching Contributions

     A Participant’s Account resulting from such Contributions may be distributed upon complete
termination of the Plan, but only if neither the Employer nor any Controlled Group member maintain
or establish a successor defined contribution plan (other than an employer stock ownership plan as
defined in Code Section 4975(e)(7), a simplified employee pension plan as defined in Code Section
408(k) or a SIMPLE IRA plan as defined in Code Section 408(p)) and such distribution is made in a
lump sum. A distribution under this article shall be a retirement benefit and shall be distributed
to the Participant according to the provisions of Article VI.

     The Participant’s entire Vested Account shall be paid in a single sum to the Participant as of
the effective date of complete termination of the Plan if (i) the requirements for distribution of
Elective Deferral Contributions in the above paragraph are met and (ii) consent of the Participant
is not required in the ELECTION PROCEDURES SECTION of Article VI to distribute a benefit which is
immediately distributable. This is a small amounts payment. The small amounts payment is in full
settlement of all benefits otherwise payable.

     Upon complete termination of the Plan, no more Employees shall become Participants and no more
Contributions shall be made.

     The assets of this Plan shall not be paid to the Employer at any time, except that, after the
satisfaction of all liabilities under the Plan, any assets remaining may be paid to the Employer.
The payment may not be made if it would contravene any provision of law.

 

ARTICLE IX

ADMINISTRATION OF THE PLAN

SECTION 9.01—ADMINISTRATION.

     Subject to the provisions of this article, the Plan Administrator has complete control of
the administration of the Plan. The Plan Administrator has all the powers necessary for it to
properly carry out its administrative duties. Not in limitation, but in amplification of the
foregoing, the Plan Administrator has complete discretion to construe or interpret the provisions
of the Plan, including ambiguous provisions, if any, and to determine all questions that may arise
under the Plan, including all questions relating to the eligibility of Employees to participate in
the Plan and the amount of benefit to which any Participant or Beneficiary may become entitled.
The Plan Administrator’s decisions upon all matters within the scope of its authority shall be
final.

     Unless otherwise set out in the Plan or Annuity Contract, the Plan Administrator may delegate
recordkeeping and other duties which are necessary for the administration of the Plan to any person
or firm which agrees to accept such duties. The Plan Administrator shall be entitled to rely upon
all tables, valuations, certificates and reports furnished by the consultant or actuary appointed
by the Plan Administrator and upon all opinions given by any counsel selected or approved by the
Plan Administrator.

     The Plan Administrator shall receive all claims for benefits by Participants, former
Participants and Beneficiaries. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits under the
provisions of the Plan. The Plan Administrator may establish rules and procedures to be followed
by Claimants in filing claims for benefits, in furnishing and verifying proofs necessary to
determine age, and in any other matters required to administer the Plan.

SECTION 9.02—EXPENSES.

     Expenses of the Plan, to the extent that the Employer does not pay such expenses, may be
paid out of the assets of the Plan provided that such payment is consistent with ERISA. Such
expenses include, but are not limited to, expenses for bonding required by ERISA; expenses for
recordkeeping and other administrative services; fees and expenses of the Trustee, Custodian, or
Annuity Contract; expenses for investment education service; and direct costs that the Employer
incurs with respect to the Plan.

SECTION 9.03—RECORDS.

     All acts and determinations of the Plan Administrator shall be duly recorded. All these
records, together with other documents necessary for the administration of the Plan, shall be
preserved in the Plan Administrator’s custody.

     Writing (handwriting, typing, printing), photostating, photographing, microfilming, magnetic
impulse, mechanical or electrical recording, or other forms of data compilation shall be acceptable
means of keeping records.

 

SECTION 9.04—INFORMATION AVAILABLE.

     Any Participant in the Plan or any Beneficiary may examine copies of the Plan
description, latest annual report, any bargaining agreement, this Plan, the Annuity Contract or any
other instrument under which the Plan was established or is operated. The Plan Administrator shall
maintain all of the items listed in this section in its office, or in such other place or places as
it may designate in order to comply with governmental regulations. These items may be examined
during reasonable business hours. Upon the written request of a Participant or Beneficiary
receiving benefits under the Plan, the Plan Administrator shall furnish him with a copy of any of
these items. The Plan Administrator may make a reasonable charge to the requesting person for the
copy.

SECTION 9.05—CLAIM AND APPEAL PROCEDURES.

     A Claimant must submit any necessary forms and needed information when making a claim for
benefits under the Plan.

         If a claim for benefits under the Plan is wholly or partially denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits under the Plan has
been denied. The notice must be furnished within 90 days of the date that the claim is received by
the Plan without regard to whether all of the information necessary to make a benefit determination
is received. The Claimant shall be notified in writing within this initial 90-day period if
special circumstances require an extension of the time needed to process the claim. The notice
shall indicate the special circumstances requiring an extension of time and the date by which the
Plan Administrator’s decision is expected to be rendered. In no event shall such extension exceed
a period of 90 days from the end of the initial 90-day period.

     The Plan Administrator’s notice to the Claimant shall:

	 	(a)  	specify the reason or reasons for the denial;
	 
	 	(b)  	reference the specific Plan provisions on which the denial is based;
	 
	 	(c)  	describe any additional material and information needed for the Claimant to
perfect his claim for benefits;
	 
	 	(d)  	explain why the material and information is needed; and
	 
	 	(e)  	inform the Claimant of the Plan’s appeal procedures and the time limits
applicable to such procedures, including a statement of the 

    Claimant’s right to bring a
civil action under ERISA section 502(a) following an adverse benefit determination on
appeal.

     Any appeal made by a Claimant must be made in writing to the Plan Administrator within 60 days
after receipt of the Plan Administrator’s notice of denial of benefits. If the Claimant appeals to
the Plan Administrator, the Claimant may submit written comments, documents, records, and other
information relating to the claim for benefits. The Claimant shall be provided, upon request and
free of charge, reasonable access to, and copies of, all documents, records, and other information
relevant to the Claimant’s claim for benefits. The Plan Administrator shall review the claim
taking into account all comments, documents, records, and other information submitted by the
Claimant relating to the claim, without regard to whether such information was submitted or
considered in the initial benefit determination.

     The Plan Administrator shall provide adequate written notice to the Claimant of the Plan’s
benefit determination on review. The notice must be furnished within 60 days of the date that the
request for review is received by the Plan without regard to whether all of the information
necessary to make a benefit determination on review is received. The Claimant shall be notified in
writing within this initial 60-day period if special circumstances require an extension of the time
needed to process the claim. The notice shall indicate the special circumstances requiring an
extension of time and the date by which the
Plan Administrator expects to render the determination on review. In no event shall such extension
exceed a period of 60 days from the end of the initial 60-day period.

 

     In the event the benefit determination is being made by a committee or board of trustees that
hold regularly scheduled meetings at least quarterly, the above paragraph shall not apply. The
benefit determination must be made by the date of the meeting of the committee or board that
immediately follows the Plan’s receipt of a request for review, unless the request for review is
filed within 30 days preceding the date of such meeting. In such case, the benefit determination
must be made by the date of the second meeting following the Plan’s receipt of the request for
review. The date of the receipt of the request for review shall be determined without regard to
whether all of the information necessary to make a benefit determination on review is received.
The Claimant shall be notified in writing within this initial period if special circumstances
require an extension of the time needed to process the claim. The notice shall indicate the
special circumstances requiring an extension of time and the date by which the committee or board
expects to render the determination on review. In no event shall such benefit determination be
made later than the third meeting of the committee or board following the Plan’s receipt of the
request for review. The Plan Administrator shall provide adequate written notice to the Claimant
of the Plan’s benefit determination on review as soon as possible, but not later than five days
after the benefit determination is made.

     If the claim for benefits is wholly or partially denied on review, the Plan Administrator’s
notice to the Claimant shall:

	 	(a)  	specify the reason or reasons for the denial;
	 
	 	(b)  	reference the specific Plan provisions on which the denial is based;
	 
	 	(c)  	include a statement that the Claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all

     documents, records, and other
information relevant to the Claimant’s claim for benefits; and
	 
	 	(d)  	include a statement of the Claimant’s right to bring a civil action under ERISA
section 502(a).

     A Claimant may authorize a representative to act on the Claimant’s behalf with respect to a
benefit claim or appeal of an adverse benefit determination. Such authorization shall be made by
completion of a form furnished for that purpose. In the absence of any contrary direction from the
Claimant, all information and notifications to which the Claimant is entitled shall be directed to
the authorized representative.

     The Plan Administrator shall perform periodic examinations, reviews, or audits of benefit
claims to determine whether claims determinations are made in accordance with the governing Plan
documents and, where appropriate, Plan provisions have been consistently applied with respect to
similarly situated Claimants.

SECTION 9.06—ADMINISTRATIVE COMMITTEE.

     The Administrative Committee shall be a committee of not less than three and not more
than five members who shall serve at the pleasure of the Board of Directors. Any Administrative
Committee member may be dismissed or may resign at any time, with or without cause, upon 10 days’
written notice. Vacancies arising by reason of the death, resignation or removal of an
Administrative Committee member shall be filled by the Board of Directors. If the Board of
Directors fails to act, and in any event until the Board of Directors so acts, the remaining
members of the Administrative Committee may appoint an interim Administrative Committee member to
fill any vacancy occurring on the Administrative Committee.

     The Administrative Committee may act by majority vote of those present taken in a meeting if
all members of the Administrative Committee have received at least 10 days’ written notice of such
meeting or have waived notice and a quorum of a majority of all members is present. The
Administrative Committee may also act by majority consent in writing without a meeting.

 

     The Administrative Committee may delegate to any of its members or any other person the
authority to sign any documents on its behalf or to perform ministerial acts, but no such member or
person shall perform any act involving the exercise of any discretion without first obtaining the
concurrence of a majority of the members of the Administrative Committee, even though he alone may
sign any document required by third parties. The Administrative Committee may elect one of its
number to serve as chairman. The chairman shall preside at all meetings of the Administrative
Committee or shall delegate such responsibility to another Administrative Committee member. The
Administrative Committee may elect one or more persons to serve as secretary or assistant secretary
of the Administrative Committee. The secretary or assistant secretary may, but need not, be a
member of the Administrative Committee. All third parties may rely on any communication signed by
the secretary or assistant secretary, acting as such, as an official communication from the
Administrative Committee.

     The Administrative Committee may delegate to any division of the discretionary authority to
make decisions relating to Plan administration, within limits and guidelines from time to time
established by the Administrative Committee. The delegated discretionary authority shall be
exercised by the division’s senior human resources officer, or his delegate. Within the scope of
the delegated discretionary authority, such officer or person shall act in the place of the
Administrative Committee and his decisions shall be treated as decisions of the Administrative
Committee.

     The Administrative Committee shall have the right to hire such professional assistants and
consultants as it, in its sole discretion, deems necessary or advisable, including, but not limited
to investment managers and/or advisors, accountants, actuaries, attorneys, consultants, clerical
and office personnel, and medical practitioners. To the extent that the costs for such assistants
and advisors are not paid by the Employer, they shall be paid from the Trust Fund as an expense of
the Trust Fund at the direction of the Administrative Committee.

     The Administrative Committee shall arrange for such bonding as it is required by law, but no
bonding in excess of the amount required by law shall be required under the Plan.

     The members of the Administrative Committee shall serve without compensation for their
services, but all expenses of the members in connection with administering the Plan shall be paid
or reimbursed by the Trust Fund, except to the extend paid by the Employer.

     Each member of the Administrative Committee shall be indemnified by the Employer against
costs, expenses and liabilities (other than amounts paid in settlements to which the Employer does
not consent) reasonably incurred by him in connection with any action to which he may be a party by
reason of his service as a member of the Administrative Committee except in relation to matters as
to which he be adjudged in such action to be personally guilty of negligence or willful misconduct
in the performance of his duties. The foregoing right to indemnification shall be in addition to
such other rights as the Administrative Committee member may enjoy as a matter of law or by reason
of insurance coverage of any kind, or otherwise. Service as an Administrative Committee member
shall be deemed in partial fulfillment of the member’s function as an associate, office and/or
director of the Employer, if he serves in such capacity as well.

SECTION 9.07—EXERCISE OF DISCRETIONARY AUTHORITY.

     The Employer, Plan Administrator, and any other person or entity who has authority with
respect to the management, administration, or investment of the Plan may exercise that authority in
its/his full discretion, subject only to the duties imposed under ERISA. This discretionary
authority includes, but is not limited to, the authority to make any and all factual determinations
and interpret all terms and provisions of the Plan documents relevant to the issue under
consideration. The exercise of authority will be binding upon all persons; will be given deference
in all courts of law; and will not be overturned or set aside by any court of law unless found to
be arbitrary and capricious or made in bad faith.

SECTION 9.08—TRANSACTION PROCESSING.

     Transactions (including, but not limited to, investment directions, trades, loans, and
distributions) shall be processed as soon as administratively practicable after proper directions
are received from the Participant or such other parties. No

 

guarantee is made by the Plan, Plan
Administrator, Custodian, Trustee, Insurer, or Employer that such transactions will be processed on
a daily or other basis, and no guarantee is made in any respect regarding the processing time of
such transactions.

     Notwithstanding any other provision of the Plan, the Employer, the Plan Administrator, the
Custodian, or the Trustee reserves the right to not value an investment option on any given
Valuation Date for any reason deemed appropriate by the Employer, the Plan Administrator, the
Custodian, or the Trustee.

     Administrative practicality will be determined by legitimate business factors (including, but
not limited to, failure of systems or computer programs, failure of the means of the transmission
of data, force majeure, 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) and in no
event will be deemed to be less than 14 days. The processing date of a transaction shall be
binding for all purposes of the Plan and considered the applicable Valuation Date for any
transaction.

SECTION 9.09—VOTING AND TENDER OF QUALIFYING EMPLOYER SECURITIES.

     The Plan Administrator (or the Named Fiduciary or the Investment Manager as designated by
the Plan Administrator) will have the voting rights for Qualifying Employer Securities. Before
each meeting of shareholders, the Plan Administrator shall cause to be sent to each person with
power to control such voting rights a copy of any notice and any other information provided to
shareholders and, if applicable, a form for instructing the Trustee how to vote at such meeting (or
any adjournment thereof) the number of full and fractional shares subject to such person’s voting
control. The Trustee may establish a deadline in advance of the meeting by which such forms must
be received in order to be effective.

     Notwithstanding the foregoing, the Plan Administrator may, in its sole discretion and at any
time or from time to time, permit Participants and Beneficiaries to direct the manner in which all
or the vested portion of any Employer Stock allocated to their Accounts shall be voted on such
matters as the Plan Administrator permits. Upon timely receipt of directions under this section
from the Plan Administrator, Participant or Beneficiary, the Trustee shall vote all Employer Stock
as directed. If the Trustee does not receive timely directions from the Plan Administrator,
Participant or Beneficiary under this section, the Trustee shall not vote the Employer Stock with
respect to which direction was not given.

     Tender rights or exchange offers for Qualifying Employer Securities will be passed through to
Participants.

     As soon as practicable after the commencement of a tender or exchange offer for Qualifying
Employer Securities, the Plan Administrator shall cause each person with power to control the
response to such tender or exchange offer to be advised in writing the terms of the offer and, if
applicable, to be provided with a form for instructing the Trustee, or for revoking such
instruction, to tender or exchange shares of Qualifying Employer Securities, to the extent
permitted under the terms of such offer. In advising such persons of the terms of the offer, the
Employer may include statements from the board of directors setting forth its position with respect
to the offer.

     If some or all of the Participants have not directed or have not timely directed the Trustee
on how to tender, then the Trustee shall not tender, sell, convey or transfer any Qualifying
Employer Securities held in such person’s Account in response to any tender or exchange offer.

     If the tender or exchange offer is limited so that all of the shares that the Trustee has been
directed to tender or exchange cannot be sold or exchanged, the shares that each Participant
directed to be tendered or exchanged shall be deemed to have been sold or exchanged in the same
ratio that the number of shares actually sold or exchanged bears to the total number of shares that
the Trustee was directed to tender or exchange.

     The Trustee shall hold the Participant’s individual directions with respect to tender
decisions in confidence and, except as required by law, shall not divulge or release such
individual directions to anyone associated with the Plan
Administrator. The Plan Administrator may require verification of the Trustee’s compliance with the directions
received from Participants by

 

any independent auditor selected by the Plan Administrator, provided
that such auditor agrees to maintain the confidentiality of such individual directions.

     The Plan Administrator may develop procedures to facilitate the exercise of votes, tender
rights votes or tender rights, such as the use of facsimile transmissions for the Participants
located in physically remote areas.

 

ARTICLE X

GENERAL PROVISIONS

SECTION 10.01—AMENDMENTS.

     The Employer may amend this Plan at any time, including any remedial retroactive changes
(within the time specified by Internal Revenue Service regulations), to comply with any law or
regulation issued by any governmental agency to which the Plan is subject.

     An amendment may not diminish or adversely affect any accrued interest or benefit of
Participants or their Beneficiaries nor allow reversion or diversion of Plan assets to the Employer
at any time, except as may be required to comply with any law or regulation issued by any
governmental agency to which the Plan is subject.

     No amendment to this Plan shall be effective to the extent that it has the effect of
decreasing a Participant’s accrued benefit. However, a Participant’s Account may be reduced to the
extent permitted under Code Section 412(c)(8). For purposes of this paragraph, a Plan amendment
which has the effect of decreasing a Participant’s Account with respect to benefits attributable to
service before the amendment shall be treated as reducing an accrued benefit. Furthermore, if the
vesting schedule of the Plan is amended, in the case of an Employee who is a Participant as of the
later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee’s right to his employer-derived accrued
benefit shall not be less than his percentage computed under the Plan without regard to such
amendment.

     No amendment to the Plan shall be effective to eliminate or restrict an optional form of
benefit with respect to benefits attributable to service before the amendment except as provided in
the MERGERS AND DIRECT TRANSFERS SECTION of this article and below:

	 	(a)  	The Plan is amended to eliminate or restrict the ability of a Participant to
receive payment of his Account balance under a particular optional form of benefit and
the amendment satisfies the conditions in (1) and (2) below:

	 	(1)  	The amendment provides a single sum distribution form that is otherwise
identical to the optional form of benefit eliminated or restricted. For purposes
of this condition (1), a single sum distribution form is otherwise identical only
if it 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.
	 
	 	(2)  	The amendment provides that the amendment shall not apply to any
distribution with an Annuity Starting Date earlier than the earlier of:

	 	(i)  	the 90th day after the date the Participant receiving the
distribution has been furnished a summary that reflects the amendment and
that satisfies the ERISA requirements at 29 CFR 2520.104b-3 relating to a
summary of material modifications, or
	 
	 	(ii)  	the first day of the second Plan Year following the Plan
Year in which the amendment is adopted.

	 	(b)  	The Plan is amended to eliminate or restrict in-kind distributions and the
conditions in Q&A 2(b)(2)(iii) in section 1.411(d)-4 of the regulations are met.

 

     If, as a result of an amendment, an Employer Contribution is removed that is not 100%
immediately vested when made, the applicable vesting schedule shall remain in effect after the date
of such amendment. The Participant shall not become immediately 100% vested in such Contributions
as a result of the elimination of such Contribution except as otherwise specifically provided in
the Plan.

     An amendment shall not decrease a Participant’s vested interest in the Plan. If an amendment
to the Plan, or a deemed amendment in the case of a change in top-heavy status of the Plan as
provided in the MODIFICATION OF VESTING REQUIREMENTS SECTION of Article XI, changes the computation
of the percentage used to determine that portion of a Participant’s Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly), each Participant
or former Participant

	 	(c)  	who has completed at least three Years of Service on the date the election period
described below ends (five Years of Service if the Participant does not have at least one
Hour-of-Service in a Plan Year beginning after December 31, 1988) and
	 
	 	(d)  	whose nonforfeitable percentage will be determined on any date after the date of
the change may elect, during the election period, to have the nonforfeitable percentage
of his Account that results from Employer Contributions determined without regard to the
amendment. This election may not be revoked. If after the Plan is changed, the
Participant’s nonforfeitable percentage will at all times be as great as it would have
been if the change had not been made, no election needs to be provided. The election
period shall begin no later than the date the Plan amendment is adopted, or deemed
adopted in the case of a change in the top-heavy status of the Plan, and end no earlier
than the 60th day after the latest of the date the amendment is adopted (deemed adopted)
or becomes effective, or the date the Participant is issued written notice of the
amendment (deemed amendment) by the Employer or the Plan Administrator.

SECTION 10.02—DIRECT ROLLOVERS.

     Notwithstanding any provision of the Plan to the contrary that would otherwise limit a
Distributee’s election under this section, a Distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

     Any part of a distribution made under Section 10.11 (or which is a small amounts payment under
Article VIII at complete termination of the Plan) which is an Eligible Rollover Distribution, which
is equal to or more than $1,000, and for which the Distributee has not elected to either have such
distribution paid to him or to an Eligible Retirement Plan shall be rolled over to an Individual
Retirement Account with a properly accredited and regulated financial institution.

     Any part of a distribution made under Section 10.11 (or for which a small amounts payment made
under Article VIII at complete termination of the Plan) which is an Eligible Rollover Distribution,
which is less than $1,000, and for which the Distributee has not elected to either have such
distribution paid to him or to an Eligible Retirement Plan shall be paid to the Distributee.

SECTION 10.03—MERGERS AND DIRECT TRANSFERS.

     The Plan may not be merged or consolidated with, nor have its assets or liabilities
transferred to, any other retirement plan, unless each Participant in the plan would (if the plan
then terminated) receive a benefit immediately after the merger, consolidation, or transfer which
is equal to or greater than the benefit the Participant would have been entitled to receive
immediately before the merger, consolidation, or transfer (if this Plan had then terminated). The
Employer may enter into merger agreements or direct transfer of assets agreements with the
employers under other retirement plans which are qualifiable under Code Section 401(a), including
an elective transfer, and may accept the direct transfer of plan assets, or may transfer plan
assets, as a party to any such agreement. The Employer shall not consent to, or be a party to a
merger,

 

consolidation, or transfer of assets with a plan which is subject to the survivor annuity
requirements of Code Section 401(a)(11) if such action would result in a survivor annuity feature
being maintained under this Plan.

     Notwithstanding any provision of the Plan to the contrary, to the extent any optional form of
benefit under the Plan permits a distribution prior to the Employee’s retirement, 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 voluntary employee
contributions).

     The Plan may accept a direct transfer of plan assets on behalf of an Eligible Employee. If
the Eligible Employee is not an Active Participant when the transfer is made, the Eligible Employee
shall be deemed to be an Active Participant only for the purpose of investment and distribution of
the transferred assets. Employer Contributions shall not be made for or allocated to the Eligible
Employee, until the time he meets all of the requirements to become an Active Participant.

     The Plan shall hold, administer, and distribute the transferred assets as a part of the Plan.
The Plan shall maintain a separate account for the benefit of the Employee on whose behalf the Plan
accepted the transfer in order to reflect the value of the transferred assets.

     Unless a transfer of assets to the Plan is an elective transfer as described below, the Plan
shall apply the optional forms of benefit protections described in the AMENDMENTS SECTION of this
article to all transferred assets.

     A Participant’s protected benefits may be eliminated upon transfer between qualified defined
contribution plans if the conditions in Q&A 3(b)(1) in section 1.411(d)-4 of the regulations are
met. The transfer must meet all of the other applicable qualification requirements.

     A Participant’s protected benefits may be eliminated upon transfer between qualified plans
(both defined benefit and defined contribution) if the conditions in Q&A 3(c)(1) in section
1.411(d)-4 of the regulations are met. Beginning January 1, 2002, if the Participant is eligible
to receive an immediate distribution of his entire nonforfeitable accrued benefit in a single sum
distribution that would consist entirely of an eligible rollover distribution under Code Section
401(a)(31), such transfer will be accomplished as a direct rollover under Code Section 401(a)(31).
The rules applicable to distributions under the plan would apply to the transfer, but the transfer
would not be treated as a distribution for purposes of the minimum distribution requirements of
Code Section 401(a)(9).

SECTION 10.04—PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.

     The obligations of an Insurer shall be governed solely by the provisions of the Annuity
Contract. The Insurer shall not be required to perform any act not provided in or contrary to the
provisions of the Annuity Contract. Each Annuity Contract when purchased shall comply with the
Plan. See the CONSTRUCTION SECTION of this article.

     Any issuer or distributor of investment contracts or securities is governed solely by the
terms of its policies, written investment contract, prospectuses, security instruments, and any
other written agreements entered into with the Trustee or Custodian with regard to such investment
contracts or securities.

     Such Insurer, issuer or distributor is not a party to the Plan, nor bound in any way by the
Plan provisions. Such parties shall not be required to look to the terms of this Plan, nor to
determine whether the Employer, the Plan Administrator, the Trustee, the Custodian, or the Named
Fiduciary have the authority to act in any particular manner or to make any contract or agreement.

     Until notice of any amendment or termination of this Plan or a change in Trustee or Custodian
has been received by the Insurer at its home office or an issuer or distributor at their principal
address, they are and shall be fully protected in assuming that

 

the Plan has not been amended or terminated and in dealing with any party acting as Trustee or
Custodian according to the latest information which they have received at their home office or
principal address.

SECTION 10.05—EMPLOYMENT STATUS.

     Nothing contained in this Plan gives an Employee the right to be retained in the
Employer’s employ or to interfere with the Employer’s right to discharge any Employee.

SECTION 10.06—RIGHTS TO PLAN ASSETS.

     An Employee shall not have any right to or interest in any assets of the Plan upon
termination of employment or otherwise except as specifically provided under this Plan, and then
only to the extent of the benefits payable to such Employee according to the Plan provisions.

     Any final payment or distribution to a Participant or his legal representative or to any
Beneficiaries of such Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the Insurer, the Trustee, the
Custodian, and the Employer arising under or by virtue of the Plan.

SECTION 10.07—BENEFICIARY.

     Each Participant may name a Beneficiary to receive any death benefit that may arise out
of his participation in the Plan. The Participant may change his Beneficiary from time to time.
Unless a qualified election has been made, for purposes of distributing any death benefits before
the Participant’s Retirement Date, the Beneficiary of a Participant who has a spouse shall be the
Participant’s spouse. The Participant’s Beneficiary designation and any change of Beneficiary
shall be subject to the provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the name of the
Beneficiary on a form furnished for that purpose.

     With the Employer’s consent, the Plan Administrator may maintain records of Beneficiary
designations for Participants before their Retirement Dates. In that event, the written
designations made by Participants shall be filed with the Plan Administrator. If a Participant
dies before his Retirement Date, the Plan Administrator shall certify to the Insurer the
Beneficiary designation on its records for the Participant.

     If there is no Beneficiary named or surviving when a Participant dies, the Participant’s
Beneficiary shall be the Participant’s surviving spouse, or where there is no surviving spouse, the
executor or administrator of the Participant’s estate.

SECTION 10.08—NONALIENATION OF BENEFITS.

     Benefits payable under the Plan are not subject to the claims of any creditor of any
Participant, Beneficiary or spouse. A Participant, Beneficiary or spouse does not have any rights
to alienate, anticipate, commute, pledge, encumber, or assign any of such benefits. The preceding
sentences shall also apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a Participant according to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations order, as defined in Code
Section 414(p), or any domestic relations order entered before January 1, 1985. The preceding
sentences shall not apply to any offset of a Participant’s benefits provided under the Plan against
an amount the Participant is required to pay the Plan with respect to a judgement, order, or decree
issued, or a settlement entered into, on or after August 5, 1997, which meets the requirements of
Code Sections 401(a)(13)(C) or (D).

SECTION 10.09—CONSTRUCTION.

 

     The validity of the Plan or any of its provisions is determined under and construed
according to Federal law and, to the extent permissible, according to the laws of the state in
which the Employer has its principal office. In case any provision of this Plan is held illegal or
invalid for any reason, such determination shall not affect the remaining provisions of this Plan,
and the Plan shall be construed and enforced as if the illegal or invalid provision had never been
included.

     In the event of any conflict between the provisions of the Plan and the terms of any Annuity
Contract issued hereunder, the provisions of the Plan control.

SECTION 10.10—LEGAL ACTIONS.

     No person employed by the Employer; no Participant, former Participant, or their
Beneficiaries; nor any other person having or claiming to have an interest in the Plan is entitled
to any notice of process. A final judgment entered in any such action or proceeding shall be
binding and conclusive on all persons having or claiming to have an interest in the Plan.

SECTION 10.11—SMALL AMOUNTS.

     If consent of the Participant is not required for a benefit which is immediately
distributable in the ELECTION PROCEDURES SECTION of Article VI, a Participant’s entire Vested
Account shall be paid in a single sum as of the earliest of his Retirement Date, the date he dies,
or the date he ceases to be an Employee for any other reason (the date the Employer provides notice
to the record keeper of the Plan of such event, if later). For purposes of this section, if the
Participant’s Vested Account is zero, the Participant shall be deemed to have received a
distribution of such Vested Account. If a Participant would have received a distribution under the
first sentence of this paragraph but for the fact that the Participant’s consent was needed to
distribute a benefit which is immediately distributable, and if at a later time consent would not
be needed to distribute a benefit which is immediately distributable and such Participant has not
again become an Employee, such Vested Account shall be paid in a single sum. This is a small
amounts payment.

     If a small amounts payment is made as of the date the Participant dies, the small amounts
payment shall be made to the Participant’s Beneficiary. If a small amounts payment is made while
the Participant is living, the small amounts payment shall be made to the Participant. The small
amounts payment is in full settlement of benefits otherwise payable.

     No other small amounts payments shall be made.

SECTION 10.12—WORD USAGE.

     The masculine gender, where used in this Plan, shall include the feminine gender and the
singular words, as used in this Plan, may include the plural, unless the context indicates
otherwise.

     The words “in writing” and “written,” where used in this Plan, shall include any other forms,
such as voice response or other electronic system, as permitted by any governmental agency to which
the Plan is subject.

SECTION 10.13—CHANGE IN SERVICE METHOD.

	 	(a)  	Change of Service Method Under This Plan. If this Plan is amended to change
the method of crediting service from the elapsed time method to the hours method for any
purpose under this Plan, the Employee’s service shall be equal to the sum of (1), (2),
and (3) below:

	 	(1)  	The number of whole years of service credited to the Employee under the
Plan as of the date the change is effective.

 

	 	(2)  	One year of service for the computation period in which the change is
effective if he is credited with the required number of Hours-of-Service. If an
Employee was credited with a fractional part of a year of service as of the date of
change using the elapsed time method, for the portion of such computation period
ending on the date of change the Employee will be credited with the greater of his
actual Hours-of-Service or an equivalent number of Hours-of-Service based on the
fractional part of a year of service credited as of the date of change. The
Employee shall be credited with 190 Hours-of-Service for each month of service in
such fractional part of a year.
	 
	 	(3)  	The Employee’s service determined under this Plan using the hours
method after the end of the computation period in which the change in service
method was effective.

	 	   	If this Plan is amended to change the method of crediting service from the
hours method to the elapsed time method for any purpose under this Plan, the
Employee’s service shall be equal to the sum of (4), (5), and (6) below:

	 	(4)  	The number of whole years of service credited to the Employee under the
Plan as of the beginning of the computation period in which the change in service
method is effective.
	 
	 	(5)  	The greater of (i) the service that would be credited to the Employee
for that entire computation period using the elapsed time method or (ii) the
service credited to him under the Plan as of the date the change is effective.
	 
	 	(6)  	The Employee’s service determined under this Plan using the elapsed
time method after the end of the applicable computation period in which the change
in service method was effective.

	 	(b)  	Transfers Between Plans with Different Service Methods. If an Employee has
been a participant in another plan of the Employer which credited service under the
elapsed time method for any purpose which under this Plan is determined using the hours
method, then the Employee’s service shall be equal to the sum of (1), (2), and (3) below:

	 	(1)  	The number of whole years of service credited to the Employee under the
other plan as of the date he became an Eligible Employee under this Plan.
	 
	 	(2)  	One year of service for the applicable computation period in which he
became an Eligible Employee if he is credited with the required number of
Hours-of-Service. If an Employee was credited with a fractional part of a year of
service as of the date he became an Eligible Employee using the elapsed time
method, for the portion of such computation period ending on the date he became an
Eligible Employee the Employee will be credited with the greater of his actual
Hours-of-Service or an equivalent number of Hours-of-Service based on the
fractional part of a year of service credited as of the date he became an Eligible
Employee. The Employee shall be credited with 190 Hours-of-Service for each month
of service in such fractional part of a year.
	 
	 	(3)  	The Employee’s service determined under this Plan using the hours
method after the end of the computation period in which he became an Eligible
Employee.

	 	   	If an Employee has been a participant in another plan of the Employer
which credited service under the hours method for any purpose which under this Plan
is determined using the elapsed time method, then the Employee’s service shall be
equal to the sum of (4), (5), and (6) below:

 

	 	(4)  	The number of whole years of service credited to the Employee under the
other plan as of the beginning of the computation period under that plan in which
he became an Eligible Employee under this Plan.
	 
	 	(5)  	The greater of (i) the service that would be credited to the Employee
for that entire computation period using the elapsed time method or (ii) the
service credited to him under the other plan as of the date he became an Eligible
Employee under this Plan.
	 
	 	(6)  	The Employee’s service determined under this Plan using the elapsed
time method after the end of the applicable computation period under the other plan
in which he became an Eligible Employee.

     If an Employee has been a participant in a Controlled Group member’s plan which credited
service under a different method than is used in this Plan, in order to determine entry and
vesting, the provisions in (b) above shall apply as though the Controlled Group member’s plan were
a plan of the Employer.

     Any modification of service contained in this Plan shall be applicable to the service
determined pursuant to this section.

SECTION 10.14—MILITARY SERVICE.

     Notwithstanding any provision of this Plan to the contrary, the Plan shall provide
contributions, benefits, and service credit with respect to qualified military service in
accordance with Code Section 414(u).

 

ARTICLE XI

TOP-HEAVY PLAN REQUIREMENTS

SECTION 11.01—APPLICATION.

     The provisions of this article shall supersede all other provisions in the Plan to the
contrary.

     For the purpose of applying the Top-heavy Plan requirements of this article, all members of
the Controlled Group shall be treated as one Employer. The term Employer, as used in this article,
shall be deemed to include all members of the Controlled Group, unless the term as used clearly
indicates only the Employer is meant.

     The accrued benefit or account of a participant which results from deductible employee
contributions shall not be included for any purpose under this article.

     The minimum vesting and contribution provisions of the MODIFICATION OF VESTING REQUIREMENTS
and MODIFICATION OF CONTRIBUTIONS SECTIONS of this article shall not apply to any Employee who is
included in a group of Employees covered by a collective bargaining agreement which the Secretary
of Labor finds to be a collective bargaining agreement between employee representatives and one or
more employers, including the Employer, if there is evidence that retirement benefits were the
subject of good faith bargaining between such representatives. For this purpose, the term
“employee representatives” does not include any organization more than half of whose members are
employees who are owners, officers, or executives.

SECTION 11.02—DEFINITIONS.

     For purposes of this article the following terms are defined:

     Aggregation Group means:

	 	(a)  	each of the Employer’s qualified plans in which a Key Employee is a participant
during the Plan Year containing the Determination Date (regardless of whether the plan
was terminated) or one of the four preceding Plan Years,
	 
	 	(b)  	each of the Employer’s other qualified plans which allows the plan(s) described in
(a) above to meet the nondiscrimination requirement of Code Section 401(a)(4) or the
minimum coverage requirement of Code Section 410, and
	 
	 	(c)  	any of the Employer’s other qualified plans not included in (a) or (b) above which
the Employer desires to include as part of the Aggregation Group. Such a qualified plan
shall be included only if the Aggregation Group would continue to satisfy the
requirements of Code Section 401(a)(4) and Code Section 410.

The plans in (a) and (b) above constitute the “required” Aggregation Group. The plans in (a),
(b), and (c) above constitute the “permissive” Aggregation Group.

Compensation means compensation as defined in the CONTRIBUTION LIMITATION SECTION of Article
III. For purposes of determining who is a Key Employee in years beginning before January 1,
1998, Compensation shall include, in addition to compensation as defined in the CONTRIBUTION
LIMITATION SECTION of Article III, elective contributions. Elective contributions are amounts
excludible from the gross income of the Employee under Code Sections 125, 402(e)(3),
402(h)(1)(B), or 403(b), and contributed by the Employer, at the Employee’s election, to

 

a Code Section 401(k) arrangement, a simplified employee pension, cafeteria plan, or
tax-sheltered annuity. Elective contributions also include amounts deferred under a Code
Section 457 plan maintained by the Employer.

Determination Date means as to any plan, 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, the last day of
that year.

Key Employee means any Employee or former Employee (and the Beneficiaries of such Employee)
who at any time during the determination period was:

	 	(a)  	an officer of the Employer if such individual’s annual Compensation exceeds 50
percent of the dollar limitation under Code Section 415(b)(1)(A),
	 
	 	(b)  	an owner (or considered an owner under Code Section 318) of one of the ten largest
interests in the Employer if such individual’s annual Compensation exceeds 100 percent of
the dollar limitation under Code Section 415(c)(1)(A),
	 
	 	(c)  	a 5-percent owner of the Employer, or
	 
	 	(d)  	a 1-percent owner of the Employer who has annual Compensation of more than
$150,000.

The determination period is the Plan Year containing the Determination Date and the four
preceding Plan Years.

The determination of who is a Key Employee shall be made according to Code Section 416(i)(1)
and the regulations thereunder.

Non-key Employee means any Employee who is not a Key Employee.

Present Value means the present value of a participant’s accrued benefit under a defined
benefit plan. For purposes of establishing Present Value to compute the Top-heavy Ratio, any
benefit shall be discounted only for 7.5% interest and mortality according to the 1971 Group
Annuity Table (Male) without the 7% margin but with projection by Scale E from 1971 to the
later of (a) 1974, or (b) the year determined by adding the age to 1920, and wherein for
females the male age six years younger is used.

Top-heavy Plan means a plan which is top-heavy for any plan year beginning after December 31,
1983. This Plan shall be top-heavy if any of the following conditions exist:

	 	(a)  	The Top-heavy Ratio for this Plan exceeds 60 percent and this Plan is not part of
any required Aggregation Group or permissive Aggregation Group.
	 
	 	(b)  	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 required Aggregation Group exceeds 60
percent.
	 
	 	(c)  	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 60
percent.

Top-heavy Ratio means:

	 	(a)  	If the Employer maintains one or more defined contribution plans (including any
simplified employee pension plan) and the Employer has not maintained any defined benefit
plan which during the five-year period ending on the Determination Date(s) has or has had
accrued benefits, the Top-heavy Ratio for this Plan alone or for the required 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(s)
(including any part of any account

 

	 	   	balance distributed in the five-year period ending on the Determination Date(s)), and
the denominator of which is the sum of all account balances (including any part of any
account balance distributed in the five-year period ending on the Distribution Date(s)),
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.
	 
	 	(b)  	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 five-year period ending on the Determination
Date(s) has or has had accrued benefits, the Top-heavy Ratio for any required or
permissive Aggregation Group, as appropriate, is a fraction, the numerator of which is
the sum of the account balances under the aggregated defined contribution plan or plans
of all Key Employees determined in accordance with (a) 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(s), 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 (a) above, and the Present Value of accrued benefits under
the defined benefit plan or plans for all participants as of the Determination Date(s),
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
five-year period ending on the Determination Date.
	 
	 	(c)  	For purposes of (a) and (b) 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 an hour of service with any employer
maintaining the plan at any time during the five-year period 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.
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).

SECTION 11.03—MODIFICATION OF VESTING REQUIREMENTS.

     If a Participant’s Vesting Percentage determined under Article I is not at least as great
as his Vesting Percentage would be if it were determined under a schedule permitted in Code Section
416, the following shall apply. During any Plan Year in which the Plan is a Top-heavy Plan, the
Participant’s Vesting Percentage shall be the greater of the Vesting Percentage determined under
Article I or the schedule below.

	 	 	 
	VESTING SERVICE	 	NONFORFEITABLE
	   (whole years)	 	PERCENTAGE
	Less than 2
	 	0
	2
	 	20
	3
	 	40
	4
	 	60

 

	 	 	 
	VESTING SERVICE	 	NONFORFEITABLE
	     (whole years)	 	PERCENTAGE
	5
	 	80
	6 or more
	 	100

     The schedule above shall not apply to Participants who are not credited with an
Hour-of-Service after the Plan first becomes a Top-heavy Plan. The Vesting Percentage determined
above applies to the portion of the Participant’s Account which is multiplied by a Vesting
Percentage to determine his Vested Account, including benefits accrued before the effective date of
Code Section 416 and benefits accrued before this Plan became a Top-heavy Plan.

     If, in a later Plan Year, this Plan is not a Top-heavy Plan, a Participant’s Vesting
Percentage shall be determined under Article I. A Participant’s Vesting Percentage determined
under either Article I or the schedule above shall never be reduced and the election procedures of
the AMENDMENTS SECTION of Article X shall apply when changing to or from the schedule as though the
automatic change were the result of an amendment.

     The part of the Participant’s Vested Account resulting from the minimum contributions required
pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of this article (to the extent required to be
nonforfeitable under Code Section 416(b)) may not be forfeited under Code Section 411(a)(3)(B) or
(D).

SECTION 11.04—MODIFICATION OF CONTRIBUTIONS.

     During any Plan Year in which this Plan is a Top-heavy Plan, the Employer shall make a
minimum contribution as of the last day of the Plan Year for each Employee who is an Employee on
the last day of the Plan Year and who was an Active Participant at any time during the Plan Year.
An Employee is not required to have a minimum number of Hours-of-Service or minimum amount of
Compensation in order to be entitled to this minimum. An Employee who fails to be an Active
Participant merely because his Compensation is less than a stated amount or merely because of a
failure to make mandatory participant contributions or, in the case of a cash or deferred
arrangement, elective contributions shall be treated as if he were an Active Participant. The
minimum is the lesser of (a) or (b) below:

	 	(a)  	3 percent of such person’s Compensation for such Plan Year.
	 
	 	(b)  	The “highest percentage” of Compensation for such Plan Year at which the Employer’s
contributions are made for or allocated to any Key Employee. The highest percentage
shall be determined by dividing the Employer Contributions made for or allocated to each
Key Employee during the Plan Year by the amount of his Compensation for such Plan Year,
and selecting the greatest quotient (expressed as a percentage). To determine the
highest percentage, all of the Employer’s defined contribution plans within the
Aggregation Group shall be treated as one plan. The minimum shall be the amount in (a)
above if this Plan and a defined benefit plan of the Employer are required to be included
in the Aggregation Group and this Plan enables the defined benefit plan to meet the
requirements of Code Section 401(a)(4) or 410.

     For purposes of (a) and (b) above, Compensation shall be limited by Code Section 401(a)(17).

     If the Employer’s contributions and allocations otherwise required under the defined
contribution plan(s) are at least equal to the minimum above, no additional contribution shall be
required. If the Employer’s total contributions and allocations are less than the minimum above,
the Employer shall contribute the difference for the Plan Year.

     The minimum contribution applies to all of the Employer’s defined contribution plans in the
aggregate which are Top-heavy Plans. A minimum contribution under a profit sharing plan shall be
made without regard to whether or not the Employer has profits.

     If a person who is otherwise entitled to a minimum contribution above is also covered under
another defined contribution plan of the Employer’s which is a Top-heavy Plan during that same Plan
Year, any additional contribution required to meet the minimum above shall be provided in this
Plan.

 

     If a person who is otherwise entitled to a minimum contribution above is also covered under a
defined benefit plan of the Employer’s which is a Top-heavy Plan during that same Plan Year, the
minimum benefits for him shall not be duplicated. The defined benefit plan shall provide an annual
benefit for him on, or adjusted to, a straight life basis equal to the lesser of:

	 	(c)  	2 percent of his average compensation multiplied by his years of service, or
	 
	 	(d)  	20 percent of his average compensation.

     Average compensation and years of service shall have the meaning set forth in such defined
benefit plan for this purpose.

     For purposes of this section, any employer contribution made according to a salary reduction
or similar arrangement and employer contributions which are matching contributions, as defined in
Code Section 401(m), shall not apply in determining if the minimum contribution requirement has
been met, but shall apply in determining the minimum contribution required.

     The requirements of this section shall be met without regard to any Social Security
contribution.

 

     By executing this Plan, the Primary Employer acknowledges having counseled to the extent
necessary with selected legal and tax advisors regarding the Plan’s legal and tax implications.

     Executed this                      day of                                                                                 ,                    .

	 	 	 	 	 
	

	 	 	 	TOO, INC.
	 
	 	 	 	 
	

	 	 	 	By:
	 

	 	

	 	 
	 
	 	 	 	 
	 

	 	

	 	 

	 	 	 
	

	 	Title      
	 
	 	 
	

	 	Defined Contribution Plan 8.0<PAGE>

                                                                    Exhibit 10.1

      UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PINNACLE WEST
ENERGY CORPORATION (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

      THIS NOTE IS A BOOK-ENTRY SECURITY AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY. THIS NOTE IS EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN, AND NO TRANSFER OF THIS NOTE
(OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF
THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.

      THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES LAWS. NEITHER
THIS NOTE NOR ANY INTEREST HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT IT IS NOT A "U.S. PERSON" (AS DEFINED IN REGULATION S
("REGULATION S") UNDER THE SECURITIES ACT) AND IS ACQUIRING THIS NOTE OUTSIDE
THE UNITED STATES, (2) AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE
PRIOR TO THE DATE WHICH IS 40 DAYS AFTER THE ORIGINAL ISSUE DATE OF THE NOTES
(THE "REGULATION S RESTRICTED PERIOD") EXCEPT (A) TO PINNACLE WEST ENERGY
CORPORATION OR PINNACLE WEST CAPITAL CORPORATION, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A ("RULE 144A")
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, IN EACH CASE TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,

<PAGE>

(D) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT PINNACLE WEST
ENERGY, PINNACLE WEST CAPITAL AND THE FISCAL AGENT SHALL HAVE THE RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM.

THIS NOTE AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME
TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER
TRANSFERS OF THIS NOTE TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR
THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER
OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS NOTE SHALL BE DEEMED BY
THE ACCEPTANCE OF THIS NOTE TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.

                        PINNACLE WEST ENERGY CORPORATION

                           Floating Rate Note due 2007

         Unconditionally Guaranteed by Pinnacle West Capital Corporation

No. 2                                                                      $0.00
                                                CUSIP No. U72353AA0/USU72353AA03

      Pinnacle West Energy Corporation, a corporation duly organized and
existing under the laws of Arizona (herein called the "Company" which term
includes any successor person), for value received, hereby promises to pay to
Cede & Co., as nominee of The Depository Trust Company, or registered assigns,
the principal sum of Zero Dollars on April 1, 2007 (the "Maturity Date"), and to
pay interest at the rate set forth below on the outstanding principal amount
hereof from time to time from and including April 11, 2005 or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, quarterly in arrears on April 1, July 1, October 1 and
January 1 of each year prior to the Maturity Date, commencing July 1, 2005, and
on the Maturity Date (each, an "Interest Payment Date"), until the principal
hereof is paid or made available for payment and at the same per annum rate set
forth below on any overdue principal and on any overdue installment of interest.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date shall, as provided herein, be paid to the person in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on the fifteenth calendar day

                                       2
<PAGE>

preceding each Interest Payment Date (each a "Regular Record Date"); PROVIDED,
HOWEVER, that interest payable on the Maturity Date, or any redemption date,
shall be payable to the person to whom the principal amount of this Note is
payable. Any interest payable on any Interest Payment Date other than the
Maturity Date and not so punctually paid or duly provided for shall forthwith
cease to be payable to the person in whose name this Note is registered at the
close of business on such Regular Record Date and shall instead be payable to
the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on a special record date for the payment of
such interest to be fixed by the Company, notice whereof shall be given to the
registered holder of this Note (or one or more predecessor Notes) not less than
ten days prior to such special record date. Principal of this Note shall be
payable against surrender hereof at the corporate trust office of the Fiscal
Agent (as defined below) or at such other office or agency of the Company as may
be designated by it for such purpose in the Borough of Manhattan, The City of
New York.

      "Business Day" means any day other than a Saturday or a Sunday or a day on
which banking institutions in The City of New York or London, England are
authorized or required by law or executive order to remain closed or a day on
which the corporate trust office of the Fiscal Agent is closed for business.

      "Calculation Agent" means The Bank of New York Trust Company, N.A. or its
successor appointed by the Company, acting as calculation agent.

      "Interest Determination Date" means the second London Business Day
immediately preceding the first day of the relevant Interest Period.

      "Interest Period" means the period commencing on an Interest Payment Date
for this Note (or commencing on the issue date for this Note, if no interest has
been paid or duly made available for payment since that date) and ending on the
day before the next succeeding Interest Payment Date or the Maturity Date, as
the case may be, for this Note.

      "LIBOR" for any Interest Determination Date will be the London interbank
offered rate for deposits in U.S. dollars having an index maturity of three
months for a period commencing on the second London Business Day immediately
following such Interest Determination Date (the "Three Month Deposits") in
amounts of not less than $1,000,000, as such rate appears on Telerate Page 3750,
at approximately 11:00 a.m., London time, on such Interest Determination Date.

      "London Business Day" means a day on which dealings in deposits in U.S.
dollars are transacted, or with respect to any future date, are expected to be
transacted, in the London interbank market.

      "Telerate Page 3750" means the display designated on page "3750" on
Moneyline Telerate (or such other page as may replace the 3750 page on that
service or such other service or services as may be nominated by the British
Bankers' Association for the purpose of displaying London interbank offered
rates for U.S. dollar deposits).

                                       3
<PAGE>

      Payment of the principal of and any interest on this Note will be made at
the corporate trust office of the Fiscal Agent, or at such other office or
agency of the Company as may be designated by it for such purpose, in the
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; PROVIDED, HOWEVER, that, at the option of the
Company payment of interest may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the Note Register; and
PROVIDED, FURTHER, HOWEVER, that in the case of Notes held by a depository (as
defined in Section 1 hereof) or its nominee, payments of principal and interest
shall be made by wire transfer of immediately available funds to an account
designated by such depository.

      If any Interest Payment Date, other than the Maturity Date, falls on a day
that is not a Business Day, the Interest Payment Date will be the next
succeeding Business Day, except if that Business Day is in the next succeeding
calendar month, the Interest Payment Date will be the next preceding Business
Day, in either case, without any interest or other payment in respect of such
adjustment. If the Maturity Date of the Notes or any redemption date falls on a
day that is not a Business Day, the payment of principal and interest (to the
extent payable with respect to the principal amount being redeemed if on a
redemption date) will be made on the next succeeding Business Day, and no
interest on such payment shall accrue for the period from and after the Maturity
Date or such redemption date.

      This Note is one of a duly authorized series of securities of the Company,
issued under a Fiscal and Paying Agency Agreement, dated as of April 1, 2005
(the "Fiscal Agency Agreement"), duly executed and delivered by the Company and
Pinnacle West Capital Corporation (the "Guarantor") to The Bank of New York
Trust Company, N.A., a national banking association, as Fiscal and Paying Agent
(the "Fiscal Agent"). All terms that are used but not defined in this Note and
that are defined in the Fiscal Agency Agreement shall have the meanings set
forth therein.

      This Note is entitled to the benefits of the Guarantee endorsed on this
Note (the "Guarantee"). Reference is hereby made to the Guarantee for a
statement of the rights, duties, and obligations thereunder of the Guarantor and
the holders of the Notes.

      The Notes are not redeemable prior to October 1, 2005. The Notes will be
redeemable at the Company's option in whole or in part, beginning on October 1,
2005 and on the first day of each month thereafter, prior to maturity of the
Notes, at a redemption price equal to 100% of the principal amount of the Notes
to be redeemed plus accrued and unpaid interest thereon to the date of
redemption (the "Redemption Amount").

      If the Company elects to redeem less than all the Notes and the Notes are
at the time represented by a global security, then the depository shall select
by lot the particular interest to be redeemed. If the Company elects to redeem
less than all of the Notes, and the Notes are not represented by a global
security, then the Fiscal Agent shall select the particular Notes to be redeemed
in a manner it deems appropriate. In order to redeem the

                                       4
<PAGE>

Notes, the Company will give not less than 15 days prior notice mailed to each
holder of Notes to be redeemed at its registered address by first-class mail.

      If at the time of mailing of any notice of redemption the Company shall
not have deposited with the Fiscal Agent an amount in cash sufficient to redeem
all of the Notes called for redemption and any accrued interest to such date
fixed for redemption, such notice shall state that it is subject to the receipt
of the redemption moneys from the Company by the Fiscal Agent on or before the
date fixed for redemption and such notice shall be of no effect unless such
moneys are so received on or before such date. In the event the Company does not
provide such moneys, the notice of redemption shall be of no force and effect,
and the Guarantor will not be required to provide such moneys for the redemption
of the Notes.

      If notice has been given as provided herein and funds for the redemption
of the Notes called for redemption shall have been made available on the
redemption date referred to in such notice, such Notes will cease to bear
interest on the date fixed for such redemption specified in such notice and the
only right of the holders of such Notes will be to receive payment of the
redemption price.

      The Notes will not be subject to any sinking fund.

      The Notes will bear interest for each Interest Period at a per annum rate
determined by the Calculation Agent as described below (the "Rate of Interest").
The per annum interest rate will be equal to LIBOR on the relevant Interest
Determination Date plus 0.50%; PROVIDED, HOWEVER, that in certain circumstances
described below, the interest rate will be determined by the Calculation Agent
in an alternative manner without reference to LIBOR. Promptly upon such
determination, the Calculation Agent will notify the Fiscal Agent of the
interest rate for the new Interest Period. The interest rate determined by the
Calculation Agent, absent manifest error, shall be binding and conclusive upon
the beneficial owners and holders of the Notes, the Company, the Guarantor, and
the Fiscal Agent.

      If the following circumstances exist on any Interest Determination Date,
the Calculation Agent shall determine the interest rate for the Notes as
follows:

            (1)   In the event LIBOR cannot be determined from the Moneyline
      Telerate service as described herein as of approximately 11:00 a.m. London
      time on such Interest Determination Date, the Calculation Agent shall
      request the principal London offices of each of four major banks in the
      London interbank market selected by the Calculation Agent (after
      consultation with the Company) to provide a quotation of the rate (the
      "Rate Quotation") at which Three Month Deposits in amounts of not less
      than $1,000,000 are offered by it to prime banks in the London interbank
      market, at approximately 11:00 a.m. London time on such Interest
      Determination Date, that is representative of single transactions at such
      time (the "Representative Amounts"). If at least two Rate Quotations are
      provided, the interest rate will be the arithmetic mean of the Rate
      Quotations obtained by the Calculation Agent, plus 0.50%.

                                       5
<PAGE>

            (2)   In the event LIBOR cannot be determined from the Moneyline
      Telerate service as described herein and fewer than two Rate Quotations
      are available as provided in (1) above, the interest rate will be the
      arithmetic mean of the rates quoted at approximately 11:00 a.m. New York
      City time on such Interest Determination Date, by three major banks in New
      York City, selected by the Calculation Agent (after consultation with the
      Company), for loans in Representative Amounts in U.S. dollars to leading
      European banks, having an index maturity of three months for a period
      commencing on the second London Business Day immediately following such
      Interest Determination Date, plus 0.50% PROVIDED, HOWEVER, that if fewer
      than three banks selected by the Calculation Agent are quoting such rates,
      the interest rate for the applicable Interest Period will be the same as
      the interest rate in effect for the immediately preceding Interest Period.

      Interest on the Notes will be calculated on the basis of the actual number
of days for which interest is payable in the relevant Interest Period, divided
by 360. All dollar amounts resulting from such calculations will be rounded, if
necessary, to the nearest cent with one-half cent rounded upward.

      Upon the request of a holder of the Notes, the Calculation Agent will
provide to such holder the interest rate in effect on the date of such request
and, if determined, the interest rate for the next Interest Period.

      No liability shall (in the absence of gross negligence, willful misconduct
or bad faith) attach to the Calculation Agent in connection with the exercise or
non-exercise by it of its powers, duties and discretions.

      1.    REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The Company
shall cause to be kept at an office or agency to be maintained by the Company a
register (the register maintained in such office being herein referred to as the
"Note Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Notes and of
transfers of Notes. The corporate trust department of the Fiscal Agent is hereby
appointed "Note Registrar" for the purpose of registering Notes and transfers of
Notes as herein provided. The Company may appoint co-registrars and may change
any Note Registrar or co-registrar without notice.

      Notes shall be exchangeable pursuant to this Section 1 for Notes
registered in the name of, and a transfer of a Note may be registered to, any
person other than DTC or its successor depository (DTC or such successor being
referred to as a "depository") for such Note or its nominee only if (i) such
depository notifies the Company that it is unwilling or unable to continue as
depository for such Note or if at any time such depository ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and a successor depository is not appointed by the Company within 90
days, (ii) there shall have occurred and be continuing an Event of Default (as
defined below) with respect to the Notes or (iii) the Company, in its sole
discretion, elects to terminate the book-entry system. Upon the occurrence of
any one or more of the conditions specified in clauses (i), (ii) or (iii) of the
preceding sentence, such Note shall

                                       6
<PAGE>

be exchanged for Notes registered in the names of, and the transfer of such Note
shall be registered to, such persons (including persons other than the
depository with respect to such Notes and its nominee) as such depository shall
direct, in each case subject to Section 3 hereof.

      Subject to the terms of the Fiscal Agency Agreement and the limitations
applicable to Book-Entry Global Notes, Notes may be presented for exchange or
for registration of transfer (duly endorsed or with the form of transfer
endorsed thereon duly executed) at the office of the Fiscal Agent or at the
office of any other transfer agent designated by the Company for such purpose.
Such transfer or exchange shall be effected upon the Fiscal Agent or such other
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. The Company may at any time
designate additional transfer agents or rescind the designation of any transfer
agent or approve a change in the office through which any transfer agent acts;
PROVIDED, HOWEVER, that there shall at all times be a transfer agent in the
Borough of Manhattan, The City of New York. No service charge will be made for
any registration of transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

      The Notes and any certificates for Notes issued in exchange for Notes or a
beneficial interest therein will bear the third and fourth legends set forth in
this Note. The holder of a certificated Note may transfer such Note, subject to
compliance with the provisions of such legends, as provided in the preceding
paragraph. Upon the transfer, exchange or replacement of Notes bearing such
legends, or upon specific request for removal of such legends on a Note, the
Company will deliver only Notes bearing such legends, or will refuse to remove
such legends, as the case may be, unless there is delivered to the Company such
satisfactory evidence, which may include an opinion of counsel, as may
reasonably be required by the Company, that neither such legend nor the
restrictions on transfer set forth therein are required to ensure compliance
with the provisions of the Securities Act and other applicable laws.

      2.    ACTS BY HOLDERS.

            (a)   Any request, demand, authorization, direction, notice,
      consent, waiver or other action provided by the Notes or the Fiscal Agency
      Agreement to be given or taken by holders may be embodied in and evidenced
      by one or more instruments of substantially similar tenor signed by such
      holders in person or by an agent duly appointed in writing; and, except as
      otherwise expressly provided in the Notes or the Fiscal Agency Agreement,
      such action shall become effective when such instrument or instruments are
      delivered to the Fiscal Agent and, where it is hereby expressly required,
      to the Company. Such instrument or instruments (and the action embodied
      therein and evidenced thereby) are herein sometimes referred to as the
      "Act" of the holders signing such instrument or instruments. Proof of
      execution of any such instrument or of a writing appointing any such agent
      shall be sufficient for any purpose of the Notes and the Fiscal Agency

                                       7
<PAGE>

      Agreement and conclusive in favor of the Fiscal Agent and the Company, if
      made in the manner provided in this Section.

            (b)   The fact and date of the execution by any person of any such
      instrument or writing may be proved by the affidavit of a witness of such
      execution or by a certificate of a notary public or other officer
      authorized by law to take acknowledgments of deeds, certifying that the
      individual signing such instrument or writing acknowledged to him the
      execution thereof. Where such execution is by a signer acting in a
      capacity other than his or her individual capacity, such certificate or
      affidavit shall also constitute sufficient proof of his or her authority.
      The fact and date of the execution of any such instrument or writing, or
      the authority of the person executing the same, may also be proved in any
      other manner which the Fiscal Agent deems sufficient.

            (c)   The Company may set any day as the record date for the purpose
      of determining the holders of outstanding Notes entitled to make any
      request or demand or give any authorization, direction, notice, consent or
      waiver or take other action, provided or permitted by the Notes and the
      Fiscal Agency Agreement to be made, given or taken by holders of the
      Notes.

            With regard to any record date set pursuant to the immediately
      preceding paragraph, the holders of outstanding Notes on such record date
      (or their duly appointed agents), and only such persons, shall be entitled
      to take relevant action, whether or not such holders remain holders after
      such record date. With regard to any action that may be taken hereunder
      only by holders of a requisite principal amount of outstanding Notes (or
      their duly appointed agents) and for which a record date is set pursuant
      to the immediately preceding paragraph, the Company, may at its option,
      set an expiration date after which no such action purported to be taken by
      any holder shall be effective unless taken on or prior to such expiration
      date by holders of the requisite principal amount of outstanding Notes on
      such record date (or their duly appointed agents). On or prior to any
      expiration date set pursuant to this paragraph, the Company may, on one or
      more occasions at its option, extend such expiration date to any later
      date. Nothing in this paragraph shall prevent any holder (or any duly
      appointed agent thereof) from taking, after any expiration date, any
      action identical to, or, at any time, any action contrary to or different
      from, any action previously taken, or purported to have been previously
      taken hereunder by such holder, in which event the Company may set a
      record date in respect thereof pursuant to this paragraph. Notwithstanding
      the foregoing, the Company shall not set a record date for, and the
      provisions of this paragraph shall not apply with respect to, any action
      to be taken by holders pursuant to Section 6 hereof.

            Upon receipt by the Fiscal Agent of notice of any default, any
      declaration of acceleration, or any rescission and annulment of any such
      declaration, or of any direction in accordance with Section 6 hereof, a
      record date shall automatically and without any other action by any person
      be set for the purpose of determining the holders of outstanding Notes
      entitled to join in such notice, declaration, or

                                       8
<PAGE>

      rescission and annulment, or direction, as the case may be, which record
      date shall be the close of business on the date the Fiscal Agent receives
      such notice, declaration, rescission and annulment or direction, as the
      case may be. The holders of outstanding Notes on such record date (or
      their duly appointed agent), and only such persons, shall be entitled to
      join in such notice, declaration, rescission and annulment, or direction,
      as the case may be, whether or not such holders remain holders after such
      record date; PROVIDED, THAT, unless such notice, declaration, rescission
      and annulment, or direction, as the case may be, shall have become
      effective by virtue of holders of the requisite principal amount of
      outstanding Notes on such record date (or their duly appointed agents)
      having joined therein on or prior to the 90th day after such record date,
      such notice of default, declaration, or rescission and annulment or
      direction given or made by the holders, as the case may be, shall
      automatically and without any action by any person be canceled and of no
      further effect. Nothing in this paragraph shall prevent a holder (or a
      duly appointed agent thereof) from giving, before or after the expiration
      of such 90-day period, a notice of default, a declaration of acceleration,
      a rescission and annulment of a declaration of acceleration or a
      direction, contrary to or different from, or, after the expiration of such
      period, identical to, a previously given notice, declaration, rescission
      and annulment, or direction, as the case may be, that has been canceled
      pursuant to the proviso to the preceding sentence, in which event a new
      record date in respect thereof shall be set pursuant to this paragraph.

            (d)   The ownership of the Notes shall be proved by the Note
      Register.

            (e)   Any request, demand, authorization, direction, notice,
      consent, waiver, or other Act of the holder of any Note shall bind every
      future holder of the same Note and the holder of every Note issued upon
      the registration of transfer thereof or in exchange therefor or in lieu
      thereof in respect of anything done, omitted or suffered to be done by the
      Fiscal Agent or the Company in reliance thereon, whether or not notation
      of such action is made upon such Note.

      3.    DENOMINATIONS. The Notes are issuable only in registered form
without coupons in denominations of $100,000 and integral multiples of $1,000 in
excess thereof.

      4.    PERSONS DEEMED OWNERS. The Company, the Fiscal Agent and any agent
of the Company or the Fiscal Agent may treat the person in whose name this Note
is registered as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes whatsoever, whether or not this Note shall
be overdue, and neither the Company, the Fiscal Agent nor any such agent shall
be affected by notice to the contrary.

      5.    AMENDMENTS AND WAIVERS. Without the consent of any holder of the
Notes, the Company or, as applicable, the Guarantor, and the Fiscal Agent, at
any time and from time to time, may modify or amend the terms of the Notes or
the Guarantee and enter into one or more agreements supplemental to the Fiscal
Agency Agreement, in form satisfactory to the Fiscal Agent, for any of the
following purposes:

                                       9
<PAGE>

            (a)   to evidence the succession of another person to the Company or
      the Guarantor and the assumption by any such successor of the covenants of
      the Company herein or of the Guarantor in the Guarantee and of the Company
      or the Guarantor, as the case may be, in the Fiscal Agency Agreement; or

            (b)   to add to the covenants of the Company or of the Guarantor for
      the benefit of the holders of the Notes; or

            (c)   to add any additional Events of Default; or

            (d)   to secure the Notes; or

            (e)   to evidence and provide for the acceptance of appointment by a
      successor Fiscal Agent with respect to the Notes; or

            (f)   to amend the restrictions on transfer applicable to the Notes;
      or

            (g)   to cure any ambiguity or to correct or supplement any
      provision which may be inconsistent with any other provision herein, in
      the Guarantee, or in the Fiscal Agency Agreement, or to correct or
      supplement any defective provision contained herein, in the Guarantee, or
      in the Fiscal Agency Agreement, provided that such action pursuant to this
      clause (g) shall not adversely affect the interests of the holders of the
      Notes.

      With the consent of the holders of not less than a majority of the
aggregate principal amount of the outstanding Notes, by Act of said holders
delivered to the Company and the Fiscal Agent, the Company or, as applicable,
the Guarantor, and the Fiscal Agent, at any time and from time to time, may
amend the terms of the Notes or the Guarantee or the rights of the holders of
the Notes or enter into an agreement supplemental to the Fiscal Agency
Agreement; PROVIDED, HOWEVER, that no such amendment or supplemental agreement
shall, without the consent of the holder of each outstanding Note affected
thereby,

                  (1)   change the stated maturity of the principal of, or any
            installment of interest on, any Note, or reduce the principal amount
            thereof or the rate of interest thereon, or change any place of
            payment where, or the coin or currency in which, any Note or
            interest thereon is payable, or impair the right to institute suit
            for the enforcement of any such payment on or after the stated
            maturity thereof,

                  (2)   reduce the percentage in principal amount of the
            outstanding Notes, the consent of whose holders is required for any
            such amendment or supplemental agreement or the consent of whose
            holders is required for any waiver of compliance provided for herein
            or in the Fiscal Agency Agreement,

                  (3)   change the Guarantor's payment obligations under the
            Guarantee; or

                                       10
<PAGE>

                  (4)   modify any of the provisions of this Section 5 or
            Section 7, except to increase any such percentage or to provide that
            certain other provisions of the Notes cannot be modified or waived
            without the consent of the holder of each outstanding Note affected
            thereby.

      It shall not be necessary for any Act of holders under this Section 5 to
approve the particular form of any proposed amendment or supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof.

      Upon the execution of any agreement supplement to the Fiscal Agency
Agreement, the Notes, or the Guarantee as permitted by this Section 5, the
Fiscal Agency Agreement, the Notes, and the Guarantee shall be modified in
accordance therewith, and such supplemental agreement shall form a part of the
Fiscal Agency Agreement, the Notes, and the Guarantee as the same pertains to
the Notes, for all purposes, and every holder of the Notes theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

      6.    DEFAULTS AND REMEDIES. The occurrence of any of the following events
shall constitute an Event of Default with respect to the Notes:

            (a)   default by the Company (or by the Guarantor under the
      Guarantee) in the payment of (i) the principal of any of the Notes when
      the same becomes due and payable or (ii) the Redemption Amount on the date
      fixed for redemption in the case of any Note called for redemption; or

            (b)   default by the Company (or by the Guarantor under the
      Guarantee) in the payment of any installment of interest upon any of the
      Notes when the same becomes due and payable, and continuance of such
      default for a period of 30 days; or

            (c)   default for 90 days after notice to the Company by the Fiscal
      Agent or to the Company and the Fiscal Agent by the holders of at least
      25% in aggregate principal amount of the Notes then outstanding in the
      performance of any of the other covenants or agreements in the Notes; or

            (d)   default for 90 days after notice to the Guarantor by the
      Fiscal Agent or to the Guarantor and the Fiscal Agent by the holders of at
      least 25% in aggregate principal amount of the Notes then outstanding in
      the performance of any covenants or agreements in the Guarantee (other
      than those related to payment as set forth above); or

            (e)   the Guarantee ceases to be in full force and effect (other
      than in accordance with its terms) or the Guarantor denies or disaffirms
      its obligations under the Guarantee; or

            (f)   a decree or order by a court having jurisdiction in the
      premises shall have been entered adjudging the Company or the Guarantor
      bankrupt or insolvent, or approving as properly filed a petition seeking
      reorganization of the

                                       11
<PAGE>

      Company or the Guarantor under the Federal Bankruptcy Code or any other
      similar applicable Federal or State law, and such decree or order shall
      have continued undischarged and unstayed for a period of 90 days; or a
      decree or order of a court having jurisdiction in the premises for the
      appointment of a receiver or liquidator or trustee or assignee in the
      bankruptcy or insolvency of the Company or the Guarantor or of its
      property, or for the winding up or liquidation of its affairs, shall have
      been entered, and such decree or order shall have continued undischarged
      and unstayed for a period of 90 days; or

            (g)   the Company or the Guarantor shall institute proceedings to be
      adjudicated bankrupt, or shall consent to the filing of a bankruptcy
      proceeding against it, or shall file a petition or answer or consent
      seeking reorganization under the Federal Bankruptcy Code or any other
      similar Federal or State law, or shall consent to the filing of any such
      petition or shall consent to the appointment of a receiver or liquidator
      or trustee or assignee in bankruptcy or insolvency of it or of its
      property, or shall make an assignment for the benefit of creditors or
      shall admit in writing its inability to pay its debts generally as they
      become due.

      If an Event of Default occurs and is continuing, the holders of at least
25% in principal amount of the Notes then outstanding may declare all the Notes
and interest accrued thereon to be due and payable immediately. Holders of a
majority in principal amount of the Notes then outstanding may waive an Event of
Default and rescind any related declaration except as provided in Section 7(a)
hereof. The Fiscal Agent may withhold from holders of Notes notice of any
continuing default, except in respect of a default in the payment of principal
of or interest on the Notes, if it determines that withholding such notice is in
their interest.

      7.    WAIVERS.

            (a)   The holders of not less than a majority in principal amount of
      the outstanding Notes may on behalf of the holders of all of the Notes
      waive any past default hereunder and/or in the Guarantee with respect to
      the Notes and its consequences, except a default not theretofore cured

                  (1)   in the payment of the principal of or interest on any
            Note, or

                  (2)   in respect of a covenant or provision which under
            Section 5 cannot be modified or amended without the consent of the
            holder of each outstanding Note affected.

      Upon any such waiver, such default shall cease to exist, and any Event of
      Default arising therefrom shall be deemed to have been cured, for every
      purpose of the Notes and the Guarantee; but no such waiver shall extend to
      any subsequent or other default or impair any right consequent thereon.

            (b)   The Company and the Guarantor may omit in any particular
      instance to comply with any term, provision or condition set forth in the
      Notes,

                                       12
<PAGE>

      the Guarantee or the Fiscal Agency Agreement with respect to the Notes if
      before the time for such compliance the holders of at least a majority in
      principal amount of the outstanding Notes shall, by act of such holders,
      either waive such compliance in such instance or generally waive
      compliance with such term, provision or condition, but (i) without the
      consent of the holder of each Note affected thereby, no such waiver shall
      extend to or affect any term, provision or condition which under Section 5
      cannot be modified or amended without the consent of the holder of each
      outstanding Note affected, and (ii) no such waiver shall extend to or
      affect any term, provision or condition except to the extent so expressly
      waived, and, until such waiver shall become effective, the obligations of
      the Company and the Guarantor and any duties of the Fiscal Agent in
      respect of any such term, provision or condition shall remain in full
      force and effect.

      8.    COMPANY MAY MERGE OR CONSOLIDATE ONLY ON CERTAIN TERMS. The Company
covenants that it will not merge or consolidate with any other corporation
except that the Company may merge or consolidate with any other corporation,
provided that (i) either the Company shall be the continuing corporation or the
successor corporation (if other than the Company) shall be a corporation
organized under the laws of the United States of America or a State thereof or
the District of Columbia and such corporation shall expressly assume the due and
punctual payment of the principal of and interest on all the Notes, according to
their tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Note and the Fiscal Agency Agreement to be
performed by the Company, by supplemental agreement in form reasonably
satisfactory to the Fiscal Agent, executed and delivered to the Fiscal Agent by
such corporation, and (ii) the Company or such successor corporation, as the
case may be, shall not, immediately after such merger or consolidation be in
default in the performance of any such covenant or condition.

      Upon any consolidation of the Company with, or merger of the Company into,
any other person in accordance with this Section 8, the successor person formed
by such consolidation or into which the Company is merged shall succeed to, and
be substituted for, and may exercise every right and power of the Company under
this Note and the Fiscal Agency Agreement with the same effect as if such
successor person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor person shall be relieved of all obligations
and covenants under the Notes and the Fiscal Agency Agreement.

      As a condition to any merger or consolidation, the Guarantor must reaffirm
its obligations under the Guarantee.

      9.    UNCLAIMED AMOUNTS. Any money deposited with the Fiscal Agent in
trust for the payment of the principal of or interest on any Note and remaining
unclaimed for twelve months after such principal or interest has become due and
payable shall be paid to the Company upon its request; and the holder of such
Note shall thereafter, as an unsecured general creditor, look only to the
Company and the Guarantor pursuant to the Guarantee for payment thereof, and all
liability of the Fiscal Agent with respect to such money shall thereupon cease.

                                       13
<PAGE>

      10.   MUTILATED, DESTROYED, LOST AND STOLEN NOTES. If any Note becomes
mutilated or defaced or is apparently destroyed, lost or stolen, the Fiscal
Agent shall, subject to the provisions of this Section 10, authenticate and
deliver a new Note in exchange and substitution for the mutilated or defaced
Note or in lieu of and in substitution for the apparently destroyed, lost or
stolen Note.

      Application for the authentication and delivery of a substitute Note
pursuant to this Section 10 may be made at the office of the Fiscal Agent. If
the applicant for any substitute Note shall furnish to the Company and the
Fiscal Agent (i) in the case of any such request in case of destruction, loss or
theft, such security or indemnity as may be required by the Company or the
Fiscal Agent in their sole discretion to indemnify and defend and to save each
of them and any agent of either of them harmless, and (ii) in the case of any
request for a substitute Note in case of destruction, loss or theft, evidence to
the satisfaction of the Company and the Fiscal Agent of the apparent
destruction, loss or theft of such Note and of the ownership thereof, then, in
the absence of notice to the Company or the Fiscal Agent that such Note has been
acquired by a bona fide purchaser, the Company shall execute and the Fiscal
Agent shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Note, a new Note of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

      In case any such mutilated, destroyed, lost or stolen Note has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Note, pay such Note.

      Upon the issuance of any substitute Note under this Section 10, the
Company may require the payment of a sum sufficient to cover any tax, assessment
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Fiscal Agent) connected
therewith.

      Every new Note issued pursuant to this Section in lieu of any destroyed,
lost or stolen Note shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Note
shall be at any time enforceable by anyone, and shall be entitled to all the
benefits of the Fiscal Agency Agreement equally and proportionately with any and
all other Notes.

      The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.

      11.   NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Fiscal Agency Agreement, or
for any claim based on, in respect of or by reason of such obligations or their
creation. Each holder (and each beneficial owner) of a Note by accepting such
Note (or acquisition of a beneficial interest therein) waives and releases all
such liability. Such waiver and release are part of the consideration for the
issuance of the Notes.

                                       14
<PAGE>

      THIS NOTE SHALL FOR ALL PURPOSES BE GOVERNED BY, AND INTERPRETED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

      This Note shall not be valid or obligatory for any purpose until the
certificate of authentication hereon shall have been signed by the Fiscal Agent
under the Fiscal Agency Agreement.

                                       15
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this instrument to be signed in
its corporate name, manually or by facsimile, by an authorized representative
and a facsimile of its corporate seal to be affixed hereunto or imprinted
hereon, attested by the manual or facsimile signature of its Secretary or one of
its Associate Secretaries.

                                                PINNACLE WEST ENERGY CORPORATION

Attest: /s/ Betsy A. Pregulman                  By: /s/ Barbara M. Gomez
        -------------------------                   ----------------------------
        Associate Secretary                     Name: Barbara M. Gomez
                                                Title: Treasurer

Dated: April 11, 2005

                  FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION

      This is one of the Notes referred to in the within-mentioned Fiscal Agency
Agreement.

                                                THE BANK OF NEW YORK TRUST
                                                COMPANY, N.A., as Fiscal Agent

                                                By: /s/ Sandee' Parks
                                                    ----------------------------
                                                       Authorized Signatory

                                       16

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