Document:

Exhibit
10.3

Standardized
401(k) Profit Sharing Plan

ADOPTION AGREEMENT FOR

MOREHEAD PLAN ADMINISTRATORS, LTD.

STANDARDIZED 401(K) PROFIT SHARING

PLAN AND TRUST

The undersigned Employer adopts Morehead Plan Administrators, Ltd.
Prototype Standardized 401(k) Profit Sharing Plan and Trust and elects the
following provisions:

CAUTION: Failure to properly fill out this
Adoption Agreement may result in disqualification of the Plan.

EMPLOYER INFORMATION

(An amendment to the
Adoption Agreement is not needed solely to reflect a change in the information
in this Employer Information Section.)

	
  1.

  	
  EMPLOYER’S NAME, ADDRESS
  AND TELEPHONE NUMBER

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Bradford Federal Savings
  Bank

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  6900 York Road

  
	
   

  	
   

  	
  Street

  
	
   

  	
   

  	
  Baltimore

  	
   

  	
  Maryland

  	
   

  	
  21212

  
	
   

  	
   

  	
  City

  	
   

  	
  State

  	
   

  	
  Zip

  
	
   

  	
  Telephone:

  	
  (410) 377-9600

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  EMPLOYER’S TAXPAYER
  IDENTIFICATION NUMBER

  	
  52-0253320

  	
   

  
	
   

  	
   

  
	
  3.

  	
  TYPE OF ENTITY

  
	
   

  	
  a.

  	
  x

  	
  Corporation (including
  Tax-exempt or Non-profit Corporation)

  
	
   

  	
  b.

  	
  o

  	
  Professional Service
  Corporation

  
	
   

  	
  c.

  	
  o

  	
  S Corporation

  
	
   

  	
  d.

  	
  o

  	
  Limited Liability Company
  that is taxed as:

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  a partnership or sole
  proprietorship

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  a Corporation

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  an S Corporation

  
	
   

  	
  e.

  	
  o

  	
  Sole Proprietorship

  
	
   

  	
  f.

  	
  o

  	
  Partnership (including
  Limited Liability)

  
	
   

  	
  g.

  	
  o

  	
  Other:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AND, the Employer is a
  member of (select all that apply):

  
	
   

  	
  h.

  	
  o

  	
  a controlled group

  
	
   

  	
  i.

  	
  o

  	
  an affiliated service group

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  EMPLOYER FISCAL YEAR means
  the 12 consecutive month period:

  
	
   

  	
  Beginning on

  	
  January 1

  	
  (e.g., January 1st)

  
	
   

  	
   

  	
                month
                day

  	
   

  
	
   

  	
  and ending on

  	
  December 31

  	
   

  
	
   

  	
   

  	
                month
                day

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PLAN
  INFORMATION

  
	
  (An amendment to the
  Adoption Agreement is not needed solely to reflect a change in the
  information in Questions 9, through 11.)

  
	
   

  	
   

  
	
  5.

  	
  PLAN NAME:

  
	
   

  	
   

  
	
   

  	
  Bradford Federal Savings
  Bank 401(k) Profit Sharing Plan

  	
   

  
															

 

© Copyright 2001 Morehead Plan Administrators, Ltd.

 1
 

 

	
  6.

  	
  EFFECTIVE
  DATE

  
	
   

  	
  a.

  	
  x

  	
  This
  is a new Plan effective as of January 1, 2002   (hereinafter
  called the “Effective Date”).

  
	
   

  	
  b.

  	
  o

  	
  This
  is an amendment and restatement of a  previously
  established qualified plan of the Employer which was originally effective              
  (hereinafter called the “Effective Date”). The effective date of this
  amendment and restatement is              .

  
	
   

  	
  c.

  	
  o

  	
  FOR
  GUST RESTATEMENTS: This is an amendment and restatement of a previously
  established qualified plan of the Employer to bring the Plan into compliance
  with GUST (GATT, USERRA, SBJPA and TRA ‘97). The original Plan effective date
  was              
  (hereinafter called the “Effective Date”). Except as specifically provided in
  the Plan, the effective date of this amendment and restatement is              .

  
	
   

  	
   

  	
   

  	
  (May
  enter a restatement date that is the first day of the current Plan Year. The
  Plan contains appropriate retroactive effective dates with respect to
  provisions for the appropriate laws.)

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  PLAN
  YEAR means the 12 consecutive month period:

  
	
   

  	
   

  
	
   

  	
  Beginning
  on

  	
   

  	
  January
  1st

  	
  (e.g.,
  January 1st)

  
	
   

  	
   

  	
   

  	
   

  	
                month
                day

  	
   

  
	
   

  	
  and
  ending on

  	
   

  	
  December
  31st

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
                month
                day

  	
   

  
	
   

  	
   

  
	
   

  	
  EXCEPT
  that there will be a Short Plan Year:

  
	
   

  	
  a.

  	
  x

  	
  N/A

  	
   

  	
   

  
	
   

  	
  b.

  	
  o

  	
  beginning
  on 

  	
   

  	
  (e.g.,
  July 1, 2000)

  
	
   

  	
   

  	
   

  	
   

  	
             month        day,         year

  	
   

  
	
   

  	
   

  	
   

  	
  and
  ending on

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
             month        day,         year

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  VALUATION
  DATE means:

  
	
   

  	
  a.

  	
  x

  	
  Every
  day that the Trustee, any transfer agent appointed by the Trustee or the
  Employer, and any stock exchange used by such agent are open for business
  (daily valuation).

  
	
   

  	
  b.

  	
  o

  	
  The
  last day of each Plan Year.

  
	
   

  	
  c.

  	
  o

  	
  The
  last day of each Plan Year half (semi-annual).

  
	
   

  	
  d.

  	
  o

  	
  The
  last day of each Plan Year quarter.

  
	
   

  	
  e.

  	
  o

  	
  Other
  (specify day or dates):

  	
   

  	
  (must
  be at least once each Plan Year).

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  PLAN
  NUMBER assigned by the Employer

  
	
   

  	
  a.

  	
  o

  	
  001

  
	
   

  	
  b.

  	
  x

  	
  002

  
	
   

  	
  c.

  	
  o

  	
  003

  
	
   

  	
  d.

  	
  o

  	
  Other:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  TRUSTEES:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  x

  	
  Individual Trustee(s) who
  serve as discretionary Trustee(s) over assets not subject to control by a
  corporate Trustee.

  
														

 

	
  Name(s)

  	
   

  	
  Title(s)

  
	
   Dallas
  Arthur

  	
   

  	
   

  
	
   Cindy
  Houston

  	
   

  	
   

  
	
   Vincent
  Sortino

  	
   

  	
   

  

 

	
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address and Telephone
  number

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  x

  	
  Use Employer address and
  telephone number.

  
	
   

  	
   

  	
  2.

  	
  o

  	
  Use address and telephone
  number below:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
  Street

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  City

  	
   

  	
  State

  	
   

  	
  Zip

  
	
   

  	
   

  	
  Telephone:

  	
   

  	
   

  
											

 

 2
 

 

	
   

  	
  b.

  	
  o

  	
  Corporate Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Street

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  City

  	
   

  	
  State

  	
   

  	
  Zip

  
	
   

  	
   

  	
   

  	
  Telephone:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  AND,  the
  corporate Trustee shall serve as:

  
	
   

  	
   

  	
   

  	
  1.

  	
  o  

  	
  a directed (nondiscretionary) Trustee over all Plan
  assets except for the following:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  a discretionary Trustee over all Plan assets except
  for the following:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, shall a separate trust
  agreement be used with this Plan?

  
	
   

  	
  c.

  	
  o

  	
  Yes

  
	
   

  	
  d.

  	
  x

  	
  No

  
	
   

  	
  NOTE:

  	
  If Yes is selected, an executed copy of the trust
  agreement between the Trustee and the Employer must be attached to this Plan.
  The Plan and trust agreement will be read and construed together. The
  responsibilities, rights and powers of the Trustee shall be those specified
  in the trust agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  PLAN ADMINISTRATOR’S NAME,
  ADDRESS AND TELEPHONE NUMBER:

  (If none is named, the Employer will become the Administrator.)

  
	
   

  	
  a.

  	
  x

  	
  Employer (Use Employer
  address and telephone number).

  
	
   

  	
  b

  	
  o

  	
  Use name, address and
  telephone number below:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Street

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  City

  	
   

  	
  State

  	
   

  	
  Zip

  
	
   

  	
   

  	
   

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  CONSTRUCTION OF PLAN

  
	
   

  	
  This Plan shall be governed
  by the laws of the state or commonwealth where the Employer’s (or, in the
  case of a corporate Trustee, such Trustee’s) principal place of business is
  located unless another state or commonwealth is specified:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  ELIGIBILITY
  REQUIREMENTS

  
	
   

  
	
  13.

  	
  ELIGIBLE EMPLOYEES (Plan
  Section 1.18)

  
	
   

  	
  FOR ALL PURPOSES OF THE
  PLAN (EXCEPT AS ELECTED IN d. or c. BELOW FOR EMPLOYER CONTRIBUTIONS) means
  all Employees (including Leased Employees) EXCEPT:

  
	
   

  	
  NOTE:

  	
  If different exclusions
  apply to Elective Deferrals than to other Employer contributions, complete
  this part a.-b. for the Elective Deferral component of the Plan.

  
	
   

  	
  a.

  	
  x

  	
  N/A. No exclusions.

  
	
   

  	
  b.

  	
  o

  	
  The following are excluded,
  except that if b.3, is selected, such Employees will be included (select all
  that apply):

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  Union Employees (as defined
  in Plan Section 1.18)

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  Non-resident aliens (as
  defined in Plan Section 1.18)

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  Employees who became
  Employees as the result of a “Code Section 410(b)(6)(C) transaction” (as
  defined in Plan Section 1.18)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOWEVER, different exclusions
  will apply (select c. OR d. and/or e.):

  
	
   

  	
  c.

  	
  x

  	
  N/A. The options elected in
  a.-b. above apply for all purposes of the Plan.

  
	
   

  	
  d.

  	
  o

  	
  For purposes of all
  Employer contributions (other than Elective Deferrals and matching
  contributions).

  
	
   

  	
  e.

  	
  o

  	
  For purposes of Employer
  matching contributions.

  
																												

 

 3
 

 

	
   

  	
  IF d. OR c. IS SELECTED,
  the following exclusions apply for such purposes (select f. or g.):

  
	
   

  	
  f.

  	
  x

  	
  N/A. No exclusions.

  
	
   

  	
  g.

  	
  o

  	
  The following are excluded,
  except that  if g. 3. is
  selected, such Employees will be included (select all that apply):

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  Union Employees (as defined
  in Plan Section 1.18)

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  Non-resident aliens (as
  defined in Plan Section 1.18)

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  Employees who became
  Employees as the result of a “Code Section 410(b)(6)(C) transaction” (as
  defined in Plan Section 1.18)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  THE FOLLOWING AFFILIATED
  EMPLOYER. (Plan Section 1.6) will adopt this Plan as a Participating Employer
  (if there is more than one, or if Affiliated Employers adopt this Plan after
  the date the Adoption Agreement is executed, attach a list to this Adoption
  Agreement of such Affiliated Employers including their names, addresses,
  taxpayer identification numbers and types of entities):

  
	
   

  	
  NOTE:

  	
  Regardless of the election
  below. Employees of an Affiliated Employer are generally treated as Employees
  of the Employer. However, if the transition rule for certain acquisitions and
  dispositions applies (Code Section 410(b)(6)(C)), then Employees of the
  Affiliated Employer will not be considered Employees of the Employer until
  the expiration of the transition period unless the Affiliated Employer
  actually adopts the Plan prior to such date.

  
	
   

  	
  a.

  	
  x

  	
  N/A

  
	
   

  	
  b.

  	
  o

  	
  Name of First Affiliated
  Employer:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Street

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  City

  	
   

  	
  State

  	
   

  	
  Zip

  
	
   

  	
   

  	
   

  	
  Telephone:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Taxpayer Identification
  Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, the Affiliated
  Employer is:

  
	
   

  	
  c.

  	
  o

  	
  Corporation (including
  Tax-exempt, Non-profit or Professional Service Corporation)

  
	
   

  	
  d.

  	
  o

  	
  S Corporation

  
	
   

  	
  e.

  	
  o

  	
  Limited Liability Company
  that is taxed as:

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  a partnership or sole
  proprietorship

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  a Corporation

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  an S Corporation

  
	
   

  	
  f.

  	
  o

  	
  Sole Proprietorship

  
	
   

  	
  g.

  	
  o

  	
  Partnership (including
  Limited Liability)

  
	
   

  	
  h.

  	
  o

  	
  Other:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  CONDITIONS OF ELIGIBILITY
  (Plan Section 3.1)

  
	
   

  	
  Any Eligible Employee will
  be eligible to participate in the Plan upon satisfaction of the following:

  
	
   

  	
  NOTE:

  	
  If the Year(s) of Service
  selected is or includes a fractional year, an Employee will not be required
  to complete any specified number of Hours of Service to receive credit for
  such fractional year. If expressed in months of service, an Employee will not
  be required to complete any specified number of Hours of Service in a
  particular month, unless elected in b.4. or i.4. below.

  
	
   

  	
   

  	
   

  
	
   

  	
  ELIGIBILITY FOR ALL
  PURPOSES OF THE PLAN (EXCEPT AS ELECTED IN e.-k. BELOW FOR EMPLOYER
  CONTRIBUTIONS) (select a. or all that apply of b., c.. and d.):

  
	
   

  	
  NOTE:

  	
  If different conditions
  apply to Elective Deferrals than to other Employer contributions, complete
  this part a.-d. for the Elective Deferral component of the Plan.

  
	
   

  	
  a.

  	
  o

  	
  No age or service required.
  (Go to c.-g. below)

  
	
   

  	
  b.

  	
  x

  	
  Completion of the following
  service requirement which is based on Years of Service (or Periods of Service
  if the Elapsed Time Method is elected):

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  No service requirement

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  1/2 Year of Service or
  Period of Service

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  1 Year of Service or Period
  of Service

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
                (not to exceed 1,000) Hours of Service
  within               (not to exceed 12) months from the Eligible Employee’s employment
  commencement date. If an Employee does not complete the stated Hours of
  Service during the specified time period, the Employee is subject to the Year
  of Service requirement in b.3. above.

  
	
   

  	
   

  	
   

  	
  5.

  	
  x

  	
  Other: 

  	
  Three (3)Months of Service

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (may not exceed one (1)
  Year of Service or Period of Service)

  
																				

 

 4
 

 

	
   

  	
  c.

  	
  x

  	
  Attainment of
  age:

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  No age
  requirement

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  20 1/2

  
	
   

  	
   

  	
   

  	
  3.

  	
  x

  	
  21

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
  Other:              
  (may not exceed 21)

  
	
   

  	
  d.

  	
  o

  	
  The service and/or age requirements specified above shall be waived
  with respect to any Eligible Employee  who was employed on               and such Eligible Employee shall enter the
  Plan as of such date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  The requirements to be waived are (select one or both):

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  service
  requirement (will let part-time Eligible Employees in Plan)

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  age requirement

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOWEVER, DIFFERENT ELIGIBILITY CONDITIONS WILL APPLY (select e. OR f.
  and/or g.);

  
	
   

  	
  e.

  	
  x

  	
  N/A. The options elected in a.-d. above apply for all purposes of the
  Plan.

  
	
   

  	
  f.

  	
  o

  	
  For purposes of all Employer contributions (other than Elective
  Deferrals and matching contributions).

  
	
   

  	
  g.

  	
  o

  	
  For purposes of Employer matching contributions.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If f. OR g. IS SELECTED, the following eligibility conditions apply
  for such purposes: 

  
	
   

  	
  h.

  	
  o

  	
  No age or service requirements

  
	
   

  	
  i.

  	
  o

  	
  Completion of the following service requirement which is based on
  Years of Service (or Periods of Service if the Elapsed Time Method is
  elected):

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  No service requirement

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  1/2 Year of Service or Period of Service

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  1 Year of Service or Period of Service

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
                (not to exceed 1,000) Hours of Service
  within               (not to exceed 12) months from the Eligible
  Employee’s employment commencement date. If an Employee does not complete the
  stated Hours of Service during the specified time period, the Employee is
  subject to the Year of Service requirement in i.3. above.

  
	
   

  	
   

  	
   

  	
  5.

  	
  o

  	
  1 1/2 Years of Service or Periods of Service

  	
   

  
	
   

  	
   

  	
   

  	
  6.

  	
  o

  	
  2 Years of Service or Periods of Service

  	
   

  
	
   

  	
   

  	
   

  	
  7.

  	
  o

  	
  Other:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (may not exceed two (2) Years of Service or Periods of Service)

  	
   

  
	
   

  	
   

  	
   

  	
  NOTE:

  	
  If more  than one (1) Year of
  Service is elected 100% immediate vesting is required.

  
	
   

  	
  j.

  	
  o

  	
  Attainment of
  age:

  	
   

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  No age
  requirement 

  	
   

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  20 1/2

  	
   

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  21

  	
   

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
  Other:               (may not exceed 21)

  	
   

  
	
   

  	
  k.

  	
  o

  	
  The service and/or age requirements specified above shall be waived
  with respect to any Eligible Employee who was employed on               and such Eligible Employee shall enter the
  Plan as of such date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  The requirements to be waived are (select one or both):

  	
   

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  service requirement (will let part-time Eligible Employees in Plan)

  	
   

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  age requirement

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2)

  	
   

  
	
   

  	
  An Eligible Employee who has satisfied the eligibility requirements
  will become a Participant for all purposes of the Plan (except as elected in
  g.-p. below for Employer contributions):

  
	
   

  	
  NOTE:

  	
  If different entry dates apply to Elective Deferrals than to other
  Employer contributions, complete this part a.-f. for the Elective Deferrals
  component of the Plan.

  
	
   

  	
  a.

  	
  o

  	
  the day on which such requirements are satisfied.

  
	
   

  	
  b.

  	
  o

  	
  the first day of the month coinciding with or next following the date
  on which such requirements are satisfied.

  
	
   

  	
  c.

  	
  x

  	
  the first day of the Plan Year quarter coinciding with or next
  following the date on which such requirements are satisfied.

  
	
   

  	
  d.

  	
  o

  	
  the earlier of the first day of the seventh month or the first day of
  the Plan Year coinciding with or next following the date on which such
  requirements are satisfied.

  
	
   

  	
  e.

  	
  o

  	
  the first day of the Plan Year next following the date on which such
  requirement’s are satisfied, (Eligibility must be 1/2 Year of Service (or
  Period of Service) or less and age must be 20 1/2 or less.)

  
	
   

  	
  f.

  	
  o

  	
  other:                                                                                                                                                             ,

  
	
   

  	
   

  	
   

  	
  provided that an Eligible Employee who has satisfied the maximum age (21)
  and service requirements (one (1) Year or Period of Service) and who is
  otherwise entitled to participate, shall commence participation no later than
  the earlier of (a) 6 months after such requirements are satisfied, or (b) the
  first day of the first Plan Year after such requirements are satisfied,
  unless the Employee separates from service before such participation date.

  
														

 

 5
 

 

	
   

  	
  HOWEVER, different entry dates will apply (select g. OR h. and/or i.):

  
	
   

  	
  g.

  	
  x

  	
  N/A. The options elected in a.-f. above apply for all purposes of the
  Plan.

  
	
   

  	
  h. 

  	
  o

  	
  For purposes of all Employer contributions (other than Elective
  Deferrals and matching contributions).

  
	
   

  	
  i.

  	
  o

  	
  For purposes of Employer matching contributions.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IF h. OR i. IS SELECTED, the following entry dates apply for such
  purposes (select one):

  
	
   

  	
  j.

  	
  o

  	
  the first day of the month coinciding with or next following the date
  on which such requirements are satisfied.

  
	
   

  	
  k.

  	
  o

  	
  the first day of the Plan Year quarter coinciding with or next
  following the date on which such requirements are satisfied.

  
	
   

  	
  l.

  	
  o

  	
  the first day of the Plan Year in which such requirements are
  satisfied.

  
	
   

  	
  m.

  	
  o

  	
  the first day of the Plan Year in which such requirements are
  satisfied, if such requirements are satisfied in the first 6 months of the Plan
  Year, or as of the first day of the next succeeding Plan Year if such
  requirements are satisfied in the last 6 months of the Plan Year.

  
	
   

  	
  n.

  	
  o

  	
  the earlier of the first day of the seventh month or the first day of
  the Plan Year coinciding with or next  following the date on which such requirements are satisfied.

  
	
   

  	
  o.

  	
  o

  	
  the first day of the Plan Year next following the date on which such
  requirements are satisfied. (Eligibility  must be 1/2 (or 1 1/2 if 100% immediate
  Vesting is selected) Year of Service (or Period of Service) or less and age
  must be 20 1/2 or less.)

  
	
   

  	
  p.

  	
  o

  	
  other:                                                                                                                                                             .

  
	
   

  	
   

  	
   

  	
  provided that an Eligible Employee who has satisfied the maximum age
  (21) and service requirements (one (1) Year or Period of Service (or more
  than one (1) year if full and immediate vesting)) and who is otherwise
  entitled to participate, shall commence participation no later than the
  earlier of (a) 6 months after such requirements are satisfied, or (b) the
  first day of the first Plan Year after such requirements are satisfied,
  unless the Employee separates from services before such participation date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SERVICE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  RECOGNITION OF SERVICE WITH PREDECESSOR EMPLOYER (Plan Sections 1.57
  and 1.85)

  
	
   

  	
  a.

  	
  x

  	
  No service with a predecessor Employer shall be recognized.

  
	
   

  	
  b.

  	
  o

  	
  Service with              will be recognized except as follows
  (select 1. or all that apply of 2. through 4.):

  
	
   

  	
   

  	
  1.

  	
  o

  	
  N/A. no
  limitations.

  	
   

  
	
   

  	
   

  	
  2.

  	
  o

  	
  service will only be recognized for vesting purposes.

  	
   

  
	
   

  	
   

  	
  3.

  	
  o

  	
  service will only be recognized for eligibility purposes.

  	
   

  
	
   

  	
   

  	
  4.

  	
  o

  	
  service prior to             will not be recognized.

  	
   

  
	
   

  	
   

  	
  NOTE:

  	
  If the predecessor Employer maintained this qualified Plan, then Years
  of Service (and/or Periods of Service) with such predecessor Employer shall
  be recognized pursuant to Plan Sections 1.57 and 1.85 and b.1. will apply.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  SERVICE CREDITING METHOD (Plan Sections 1.57 and 1.85)

  
	
   

  	
  NOTE: If no elections are made in this Section, then the Hours of Service
  Method will be used and the provisions set forth in the definition of Year of Service in Plan Section 1.85 will
  apply.

  
	
   

  	
  ELAPSED TIME METHOD shall be used for the following purposes (select
  all that apply):

  
	
   

  	
  a.

  	
  x

  	
  N/A. Plan only uses the Hours of Service Method.

  
	
   

  	
  b.

  	
  o

  	
  all purposes. (If selected, skip to Question 19.)

  
	
   

  	
  c.

  	
  o

  	
  eligibility to participate.

  
	
   

  	
  d.

  	
  o

  	
  vesting.

  
	
   

  	
  e.

  	
  o

  	
  sharing in allocations or contributions.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOURS OF SERVICE METHOD shall be used for the following purposes
  (select all that apply):  

  
	
   

  	
  f.

  	
  o

  	
  N/A. Plan only uses the Elapsed Time Method.

  
	
   

  	
  g.

  	
  x

  	
  eligibility to participate in the Plan. The eligibility computation
  period after the initial eligibility computation period shall.

  
	
   

  	
   

  	
   

  	
  1.

  	
  x

  	
  shift to the Plan Year after the initial computation period.

  	
   

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  be based on the date an Employee first performs an Hour of Service
  (initial computation period) and subsequent computation periods shall be
  based on each anniversary date thereof.

  	
   

  
	
   

  	
  h.

  	
  x

  	
  vesting. The vesting computation period shall be.

  
	
   

  	
   

  	
   

  	
  1.

  	
  x

  	
  the Plan Year.

  	
   

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  the date an Employee first performs an Hour of Service and each
  anniversary thereof.

  
	
   

  	
  i.

  	
  x

  	
  sharing in allocations or contribution (the computation period shall
  be the Plan Year).

  
													

 

 6
 

 

	
  

  	
  AND, IF THE HOURS OF
  SERVICE METHOD IS BEING USED, the Hours of Service will be determined on the
  basis of the method selected below. Only one method may be selected. The
  method selected below will be applied to (select j. or k.):

  
	
   

  	
  j.

  	
  x
  

  	
  all Employees. 

  
	
   

  	
  k.

  	
  o

  	
  salaried Employees only (for hourly Employees,
  actual Hours of Service will be used).

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ON THE BASIS OF:

  
	
   

  	
  l.

  	
  x

  	
  actual hours for which an Employee is paid or
  entitled to payment.

  
	
   

  	
  m. 

  	
  o

  	
  days worked. An Employee will be credited with ten
  (10) Hours of Service if under the Plan such Employee would be credited with
  at least one (1) Hour or Service during the day.

  
	
   

  	
  n.

  	
  o

  	
  weeks worked. An Employee will be credited with
  forty-five (45) Hours of Service if under the Plan such Employee would be
  credited with at least one (1) Hour of Service during the week.

  
	
   

  	
  o.

  	
  o

  	
  semi-monthly payroll periods worked. An Employee
  will be credited with ninety-five (95) Hours of Service if under the Plan such Employee would be credited with at least one (1) Hour
  of Service during the semi-monthly payroll period.

  
	
   

  	
  p.

  	
  o

  	
  months worked. An Employee
  will be credited with one hundred ninety (190) Hours of Service if under the
  Plan such Employee would be credited with at least one (1) Hour of Service
  during the month.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, a Year of Service
  means the applicable computation period during which an Employee has
  completed at least:

  
	
   

  	
  q.

  	
  x

  	
  1000 (may not be more than 1,000) Hours of
  Service (if left blank, the Plan will use 1,000 Hours of Service).

  
	
   

  	
   

  
	
  VESTING

  
	
   

  	
   

  
	
  19.

  	
  VESTING OF PARTICIPANT’S
  INTEREST (Plan Section 6.4(b))

  
	
   

  	
  Vesting for Employer
  Contributions (except as otherwise elected in j. – q. below for matching
  contributions). The vesting schedule, based on a Participant’s Years of
  Service (or Periods of Service if the Elapsed Time Method is elected), shall
  be as follows:

  
	
   

  	
  a.

  	
  x

  	
  100% upon entering Plan,
  (Required if eligibility requirement is greater than one (1) Year of Service
  or Period of Service.)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  o

  	
  3 Year Cliff:

  	
   

  
						

 

	
  0-2 years

  	
   

  	
  0

  	
  %

  
	
  3 years

  	
   

  	
  100

  	
  %

  

 

	
   

  	
  c.

  	
  o

  	
  5 Year Cliff:

  	
   

  	
   

  	
   

  

 

	
  0-4 years

  	
   

  	
  0

  	
  %

  
	
  5 years

  	
   

  	
  100

  	
  %

  

 

	
   

  	
  d.

  	
  o

  	
  6 Year Graded:

  	
   

  

 

	
  0-1 years

  	
   

  	
  0

  	
  %

  
	
  2 years

  	
   

  	
  20

  	
  %

  
	
  3 years

  	
   

  	
  40

  	
  %

  
	
  4 years

  	
   

  	
  60

  	
  %

  
	
  5 years

  	
   

  	
  80

  	
  %

  
	
  6 years

  	
   

  	
  100

  	
  %

  

 

	
   

  	
  e.

  	
  o

  	
  4 Year Graded:

  	
   

  	
   

  	
   

  

 

	
  1 year 

  	
   

  	
  25

  	
  %

  
	
  2 years

  	
   

  	
  50

  	
  %

  
	
  3 years

  	
   

  	
  75

  	
  %

  
	
  4 years

  	
   

  	
  100

  	
  %

  

 

	
   

  	
  f.

  	
  o

  	
  5 Year Graded:

  	
   

  

 

	
  1 year 

  	
   

  	
  20

  	
  %

  
	
  2 years

  	
   

  	
  40

  	
  %

  
	
  3 years

  	
   

  	
  60

  	
  %

  
	
  4 years

  	
   

  	
  80

  	
  %

  
	
  5 years

  	
   

  	
  100

  	
  %

  

 

	
   

  	
  g.

  	
  o

  	
  7 Year Graded:

  	
   

  	
   

  	
   

  

 

	
  0-2 years

  	
   

  	
  0

  	
  %

  
	
  3 years

  	
   

  	
  20

  	
  %

  
	
  4 years

  	
   

  	
  40

  	
  %

  
	
  5 years

  	
   

  	
  60

  	
  %

  
	
  6 years

  	
   

  	
  80

  	
  %

  
	
  7 years

  	
   

  	
  100

  	
  %

  

 

	
   

  	
  h.

  	
  o

  	
  Other - Must be at least as
  liberal as either c. or g. above.

  

 

	
  Service

  	
   

  	
  Percentage

  
	
   

  	
   

  	
   

  
	
    

  	
   

  	
   

  
	
         

  	
   

  	
         

  

 

 7
 

 

	
  

  	
  VESTING FOR EMPLOYER
  MATCHING CONTRIBUTIONS

  
	
   

  	
  The vesting schedule for
  Employer matching contributions, based on a Participant’s Years of Service
  (or Periods of Service if the Elapsed Time Method is elected) shall be as
  follows:

  
	
   

  	
  i.

  	
  x

  	
  N/A. There are no matching
  contributions subject to a vesting schedule OR the schedule in a.-h. above
  shall also  apply to matching
  contributions.

  
	
   

  	
  j.

  	
  o

  	
  100% upon entering Plan.
  (Required if eligibility requirement is greater than one (1) Year of Service
  or Period of Service.)

  
	
   

  	
  k.

  	
  o

  	
  3 Year Cliff

  
	
   

  	
  l.

  	
  o

  	
  5 Year Cliff

  
	
   

  	
  m.

  	
  o

  	
  6 Year Graded

  
	
   

  	
  n.

  	
  o

  	
  4 Year Graded

  
	
   

  	
  o.

  	
  o

  	
  5 Year Graded

  
	
   

  	
  p.

  	
  o

  	
  7 Year Graded

  
	
   

  	
  q.

  	
  o

  	
  Other - Must be at least as
  liberal as either l. or p. above.

  

 

	
  Service

  	
   

  	
  Percentage

  
	
   

  	
   

  	
   

  
	
    

  	
   

  	
   

  
	
         

  	
   

  	
         

  

 

	
  20.

  	
  FOR AMENDED PLANS (Plan
  Section 6.4(f))

  
	
   

  	
  If the  vesting schedule has been amended to a
  less favorable schedule, enter the pre-amended schedule below:

  
	
   

  	
  a.

  	
  o

  	
  Vesting schedule has not
  been amended, amended schedule is more favorable in all years or prior
  schedule was immediate 100% vesting.

  
	
   

  	
  b.

  	
  o

  	
  Pre-amended schedule:

  

 

	
  Service

  	
   

  	
  Percentage

  
	
   

  	
   

  	
   

  
	
    

  	
   

  	
   

  
	
         

  	
   

  	
         

  

 8
 

 

	
  21.

  	
  TOP HEAVY
  VESTING (Plan Section 6.4(c))

  
	
   

  	
  If this Plan
  becomes a Top Heavy Plan, the following vesting schedule, based on number of
  Years of Service (or Periods of Service if the Elapsed Time Method is
  elected), shall apply and shall be treated as a Plan amendment pursuant to
  this Plan. Once effective, this schedule shall also apply to any
  contributions made before the Plan became a Top Heavy Plan and shall continue
  to apply if the Plan ceases to be a Top Heavy Plan unless an amendment is
  made to change the vesting schedule.

  
	
   

  	
  a.

  	
  x

  	
  N/A (the regular
  vesting schedule already satisfies one of the minimum top heavy schedules).

  
	
   

  	
  b.

  	
  o

  	
  6 Year Graded:

  

 

	
  0-1 year 

  	
   

  	
  0

  	
  %

  
	
  2 years

  	
   

  	
  20

  	
  %

  
	
  3 years

  	
   

  	
  40

  	
  %

  
	
  4 years

  	
   

  	
  60

  	
  %

  
	
  5 years

  	
   

  	
  80

  	
  %

  
	
  6 years

  	
   

  	
  100

  	
  %

  

 

	
   

  	
  c.

  	
  o

  	
  3 Year Cliff:

  	
   

  	
   

  

 

	
  0-2 years

  	
   

  	
  0

  	
  %

  
	
  3 years

  	
   

  	
  100

  	
  %

  

 

	
   

  	
  d.

  	
  o

  	
  Other - Must be
  at least as liberal as either b. or c. above.

  

 

	
  Service

  	
   

  	
  Percentage

  
	
   

  	
   

  	
   

  
	
    

  	
   

  	
   

  
	
         

  	
   

  	
         

  

 

	
   

  	
  NOTE:

  	
  This Section
  does not apply to the account balances of any Participant who does not have
  an Hour of Service after the Plan has initially become top heavy. Such
  Participant’s Account balance attributable to Employer contributions and
  Forfeitures will be determined without regard to this Section.

  
	
   

  	
   

  
	
  22.

  	
  EXCLUDED VESTING
  SERVICE

  
	
   

  	
  a.

  	
  x

  	
  No exclusions.

  
	
   

  	
  b.

  	
  o

  	
  Service prior to
  the Effective Date of the Plan or a predecessor plan.

  
	
   

  	
  c.

  	
  o

  	
  Service prior to
  the time an Employee has attained age 18.

  
	
   

  	
   

  
	
  23.

  	
  VESTING FOR
  DEATH AND TOTAL AND PERMANENT DISABILITY

  
	
   

  	
  Regardless of
  the vesting schedule. Participants shall become fully Vested upon (select a.
  or all that apply of b. and c.)

  
	
   

  	
  a.

  	
  x

  	
  N/A. Apply
  vesting schedule, or all contributions to the Plan are fully Vested.

  
	
   

  	
  b.

  	
  o

  	
  Death.

  
	
   

  	
  c.

  	
  o

  	
  Total and Permanent Disability.

  
	
   

  	
   

  
	
  24.

  	
  NORMAL
  RETIREMENT AGE (“NRA”) (Plan Section 1.45) means the:

  
	
   

  	
  a.

  	
  x

  	
  date of a
  Participant’s 65 birthday (not to exceed 65th).

  
	
   

  	
  b.

  	
  o

  	
  later of a
  Participant’s             
  birthday (not to exceed 65th) or the             
  (not to exceed 5th) anniversary of the first day of the Plan Year in which
  participation in the Plan commenced.

  
	
   

  	
   

  
	
  25.

  	
  NORMAL
  RETIREMENT DATE (Plan Section 1.46) means the:

  
	
   

  	
  a.

  	
  o

  	
  Participant’s
  “NRA”.

  
	
   

  	
  OR (select one)

  
	
   

  	
  b.

  	
  x

  	
  first day of the
  month coinciding with or next following the Participant’s “NRA”.

  
	
   

  	
  c.

  	
  o

  	
  first day of the
  month nearest the Participant’s “NRA”.

  
	
   

  	
  d.

  	
  o

  	
  Anniversary Date
  coinciding with or next following the Participant’s “NRA”.

  
	
   

  	
  e.

  	
  o

  	
  Anniversary Date
  nearest the Participant’s “NRA”.

  
	
   

  	
   

  
	
  26.

  	
  EARLY RETIREMENT
  DATE (Plan Section 1.15) means the:

  
	
   

  	
  a.

  	
  x

  	
  No Early
  Retirement provision provided.

  
	
   

  	
  b.

  	
  o

  	
  date on which
  Participant.

  
	
   

  	
  c.

  	
  o

  	
  first day of the
  month coinciding with or next following the date on which a Participant.

  
	
   

  	
  d.

  	
  o

  	
  Anniversary Date
  coinciding with or next following the date on which a Participant.

  
							

 

 9
 

 

	
   

  	
  AND, if b. c., or d. is selected... 

  
	
   

  	
  e.

  	
  o

  	
  attains age             .

  
	
   

  	
  f.

  	
  o

  	
  attains age              and competes at least              Years of Service (or Periods of Service)
  for vesting purposes.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, if b., c. or d. is selected, shall a Participant become fully Vested
  upon attainment of the Early Retirement Date?

  
	
   

  	
  g.

  	
  o

  	
  Yes

  
	
   

  	
  h.

  	
  o

  	
  No

  
	
   

  	
   

  	
   

  	
   

  
	
  COMPENSATION

  
	
   

  	
   

  
	
  27.

  	
  COMPENSATION (Plan Section 1.11) with respect to any Participant
  means;

  
	
   

  	
  a.

  	
  x

  	
  Wages, tips and other compensation on Form W-2.

  
	
   

  	
  b.

  	
  o

  	
  Section 3401(a) wages (wages for withholding
  purposes).

  
	
   

  	
  c.

  	
  o

  	
  415 safe-harbor compensation.

  
	
   

  	
   

  
	
   

  	
  COMPENSATION shall be based on the following determination period;

  
	
   

  	
  d.

  	
  x

  	
  the Plan Year.

  
	
   

  	
  e.

  	
  o

  	
  the Fiscal Year coinciding with or ending within the Plan Year.

  
	
   

  	
  f.

  	
  o

  	
  the calendar year coinciding with or ending within the Plan Year.

  
	
   

  	
  NOTE:

  	
  The Limitation Year for Code Section 415 purposes
  shall be the same as the determination period for Compensation unless an
  alternative period is specified:             
  (must be a consecutive twelve month period).

  
	
   

  	
   

  
	
   

  	
  ADJUSTMENTS TO COMPENSATION

  
	
   

  	
  g.

  	
  o

  	
  N/A. No adjustments.

  
	
   

  	
  h.

  	
  x

  	
  Compensation shall be adjusted by: (select all that apply)

  
	
   

  	
  1.

  	
  x

  	
  including compensation which is not currently
  includible in the Participant’s gross income by reason of the application of
  Code Sections 125 (cafeteria plan). 132(f)(4) (qualified transportation
  fringe). 402(c)(3) (401(k) plan), 402(h)(1)(B) (simplified employee pension
  plan), 414(h) (employer pickup contributions under a governmental plan). 403(b)
  (tax sheltered annuity) or 457(b) (eligible deferred compensation plan)

  
	
   

  	
  2.

  	
  x

  	
  excluding reimbursements or other expense
  allowances, fringe benefits (cash or non-cash), moving expenses, deferred
  compensation (other than deferrals specified in 1. above) and welfare
  benefits

  
	
   

  	
  3.

  	
  x

  	
  excluding Compensation paid during the determination
  period while not a Participant in the component of the Plan for which the
  definition is being used

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOWEVER, FOR SALARY DEFERRAL AND MATCHING PURPOSES Compensation shall be
  adjusted by (for salary deferral purposes the Plan automatically includes
  amounts in h.l. above):

  
	
   

  	
  i.

  	
  o

  	
  N/A. No adjustments or same adjustments as  in above

  
	
   

  	
  j.

  	
  x

  	
  Compensation shall be adjusted by: (select all that apply)

  
	
   

  	
  1.

  	
  x

  	
  excluding reimbursements or other expense
  allowances, fringe benefits (cash or non-cash), moving expenses, deferred
  compensation (other than deferrals specified in h.l. above) and welfare
  benefits

  
	
   

  	
  2.

  	
  x

  	
  excluding Compensation paid during the determination period while not
  a Participant in the component of the Plan for which the definition is being
  used

  
	
   

  	
   

  	
   

  	
   

  
	
  CONTRIBUTIONS AND ALLOCATIONS

  
	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
  SALARY REDUCTION ARRANGEMENT - ELECTIVE DEFERRALS (Plan Section 12.2)

  Each Participant may elect to have Compensation deferred by:

  
	
   

  	
  a.

  	
  o

  	
          %.

  
	
   

  	
  b.

  	
  o

  	
  up to         %.

  
	
   

  	
  c.

  	
  o

  	
  from         %
  to         %.

  
	
   

  	
  d.

  	
  x

  	
  up to the maximum percentage allowable not to exceed the limits of
  Code Sections 401(k), 402(g), 404 and 415.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, Participants who are Highly Compensated Employees determined as
  of the beginning of  a Plan Year
  may only elect to defer Compensation by:

  
	
   

  	
  e.

  	
  x

  	
  Same limits as specified above.

  
	
   

  	
  f.

  	
  o

  	
  The percentage equal to the
  deferral limit in effect under Code Section 402(g)(3) for the calendar year
  that begins with or within the Plan Year divided by the annual compensation
  limit in effect for the Plan Year under Code Section 401(a)(17).

   

  
	
   

  	
  MAY PARTICIPANTS make a special salary deferral election with respect
  to bonuses?

  
	
   

  	
  g.

  	
  x

  	
  No.

  
	
   

  	
  h.

  	
  o

  	
  Yes, a Participant may elect to defer up to        % of any bonus.

  
								

 

 10
 

 

	
   

  	
  PARTICIPANTS MAY commence
  salary deferrals on the effective date of participation and on January 1st, April 1st July 1st and October 1st
  (must be at least once each calendar year).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Participants may modify
  salary deferral elections:

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  As of each payroll period

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  On the first day of the month

  
	
   

  	
   

  	
   

  	
  3.

  	
  x

  	
  On the first day of each  Plan Year quarter

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
  On the first day  of
  the Plan Year or the first day of the 7th month of the Plan Year

  
	
   

  	
   

  	
   

  	
  5.

  	
  o

  	
  Other:          (must be at
  least once each calendar year)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AUTOMATIC ELECTION: Shall Participants who do not
  affirmatively elect to receive cash or have a specified amount contributed to
  the Plan automatically have Compensation deferred?

  
	
   

  	
  i.

  	
  x

  	
  No.

  
	
   

  	
  j.

  	
  o

  	
  Yes, by          % of Compensation.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SHALL THERE BE a special
  effective date for the salary deferral component of the Plan?

  
	
   

  	
  k.

  	
  x

  	
  No.

  
	
   

  	
  l.

  	
  o

  	
  Yes, the effective date of
  the salary deferral component or the Plan is             (enter month day, year).

  
	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
  SIMPLE 401(k) PLAN ELECTION (Plan Section 13.1)

  
	
   

  	
  Shall the simple 401(k) provisions of Article XIII
  apply?

  
	
   

  	
  a.

  	
  x

  	
  No. The simple 401(k)
  provisions will not apply.

  
	
   

  	
  b.

  	
  o

  	
  Yes, The simple 401(k)
  provisions will apply.

  
	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
  401(k) SAFE HARBOR
  PROVISIONS (Plan Section 12.8)

  
	
   

  	
  Will the ADP and/or ACP
  test safe harbor provisions be used? (select a, b, or c.)

  
	
   

  	
  a.

  	
  o

  	
  No, (If selected, skip to
  Question 31.)

  
	
   

  	
  b.

  	
  o

  	
  Yes, but only the ADP (and
  NOT the ACP) Test Safe Harbor provisions will be  used.

  
	
   

  	
  c.

  	
  x

  	
  Yes, both the ADP and  ACP Test Safe Harbor provisions will be
  used.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  IF c. is selected, does the
  Plan permit matching contributions in addition to any safe harbor
  contributions elected in d. or e. below?

  
	
   

  	
   

  	
   

  	
  1.

  	
  x

  	
  No or N/A. Any matching
  contributions, other than any Safe Harbor Matching Contributions elected in
  d. below, will be suspended in any Plan Year in which the safe harbor
  provisions are used.

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  Yes, the Employer may make
  matching contributions in addition to any Safe Harbor Matching contributions
  elected in d. below. (If elected, complete the provisions of the Adoption
  Agreement relating to matching contributions (i.e., Questions 31. and 32.)
  that will apply in addition to any elections made in d. below, NOTE:
  Regardless of any election made in Question 31., the Plan automatically
  provides that only Elective Deferrals up to 6%  of Compensation are taken into account in applying the
  match set forth in that Question and that the maximum discretionary matching
  contribution that may be made on behalf of any Participant is 4% of
  Compensation.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE EMPLOYER WILL MAKE THE
  FOLLOWING ADP TEST SAFE HARBOR CONTRIBUTION FOR THE PLAN YEAR:

  
	
   

  	
  NOTE:

  	
  The ACP Test Safe Harbor is
  automatically satisfied if the only matching contribution made to the Plan is
  either (1) a Basic Matching Contribution or (2) an Enhanced Matching
  Contribution that does not provide a match on Elective Deferrals in excess of
  6% of Compensation.

  
	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  x

  	
  Safe Harbor Matching
  Contribution (select l. or 2. AND 3.)

  
	
   

  	
   

  	
   

  	
  1.

  	
  x

  	
  Basic
  Matching Contribution.
  The Employer will make Matching Contributions to the account of each
  “Eligible Participant” in an amount equal to the sum of 100% of the amount of
  the Participant’s Elective Deferrals that do not exceed 3% of the Participant’s
  Compensation, plus 50% of the amount of the Participant’s Elective Deferrals
  that exceed 3% of the Participant’s Compensation but do not exceed 5% of the
  Participant’s Compensation.

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  Enhanced
  Matching Contribution.
  The Employer will make Matching Contributions to the account of each
  “Eligible Participant” in an amount equal to the sum of:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  a.

  	
  o

  	
              % (may not be less than 100%) of the
  Participant’s Elective Deferrals that do not exceed             % (if over 6% or if left blank, the ACP test
  will still apply) of the Participant’s Compensation, plus

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  b.

  	
  o

  	
              % of the Participant’s Elective Deferrals
  that exceed            % of the Participant’s Compensation but do
  not exceed            % (if over 6% or if left  blank, the ACP test will still apply)
  of the Participant’s Compensation.

  
															

 

 11

	
   

  	
   

  	
   

  	
   

  	
   

  	
  NOTE:

  	
  a. and b. must be completed
  so that, at any rate of Elective Deferrals, the matching contribution is at
  least equal to the matching contribution receivable if the Employer were
  making Basic Matching Contributions, but the rate of match cannot increase as
  deferrals increase. For example, if a. is completed to provide a match equal
  to 100% of deferrals up to 4% of Compensation, then b. need not be completed.

  
	
   

  	
   

  	
   

  	
  3.

  	
  x

  	
  The safe harbor matching
  contribution will be determined on the following basis (and Compensation for
  such purpose will be based on the applicable period):

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  a.

  	
  o

  	
  the entire Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  b.

  	
  x

  	
  each payroll period.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  c.

  	
  o

  	
  all payroll periods ending
  with or within each month.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  d.

  	
  o

  	
  all payroll periods ending
  with or within the Plan Year quarter.

  
	
   

  	
  e.

  	
  o

  	
  Nonelective Safe Harbor
  Contributions (select one)

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  The Employer will make a
  Safe Harbor Nonelective Contribution to the account of each “Eligible
  Participant” in an amount equal to             %
  (may not be less than 3%) of the Employee’s Compensation for the Plan Year.

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  The Employer will make a
  Safe Harbor Nonelective Contribution to another defined contribution plan
  maintained by the Employer (specify the name of the other plan):             .

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FOR PURPOSES OF THE ADP
  Test Safe Harbor contribution, the term “Eligible Participant” means any
  Participant who is eligible to make Elective Deferrals with the following
  exclusions:

  
	
   

  	
  f.

  	
  o

  	
  Highly Compensated
  Employees.

  
	
   

  	
  g.

  	
  o

  	
  Employees who have not
  satisfied the greatest minimum age and service conditions permitted under
  Code Section 410(a).

  
	
   

  	
  h.

  	
  o

  	
  Other:                                                                                                                                                   
  (must be a category that could be excluded under the permissive or mandatory
  disaggregation rules of Regulations 1.401 (k)-1(b)(3) and 1.401(m)-1(b)(3)).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SPECIAL EFFECTIVE DATE OF
  ADP AND ACP TEST SAFE HARBOR PROVISIONS

  
	
   

  	
  i.

  	
  x

  	
  N/A. The safe harbor provisions
  are effective as of the later of the Effective Date of this Plan or, if this
  is an amendment or restatement, the effective date of the amendment or
  restatement.

  
	
   

  	
  j.

  	
  o

  	
  The ADP and ACP Test Safe
  Harbor provisions are effective for the Plan Year beginning:

  
	
   

  	
   

  	
   

  	
                                                                                              (enter the first day of the Plan Year
  for which the provisions are (or, for GUST updates, were) effective and, if
  necessary, enter any other special effective dates that apply with respect to
  the provisions).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
  FORMULA FOR DETERMINING
  EMPLOYER MATCHING CONTRIBUTIONS (Plan Section 12.1(a)(2))

  
	
   

  	
  NOTE:

  	
  Regardless of any election
  below, if the ACP test safe harbor is being used (i.e., Question 30.c. is
  selected), then the Plan automatically provides that only Elective Deferrals
  up to 6% of Compensation are taken into account in applying the match set
  forth below and that the maximum discretionary matching contribution that may
  be made on behalf of any Participant is 4% of Compensation.

  
	
   

  	
  a.

  	
  x

  	
  N/A. There will not be any
  matching contributions (Skip to Question 33).

  
	
   

  	
  b.

  	
  o

  	
  The Employer... (select 1,
  or 2.)

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  may make matching
  contributions equal to a discretionary percentage, to be determined by the
  Employer, of the Participant’s Elective Deferrals.

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  will make matching
  contributions equal to           %
  (e.g., 50) of the Participant’s Elective Deferrals, plus:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  a.

  	
  o

  	
  N/A.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  b.

  	
  o

  	
  an additional discretionary
  percentage, to be determined by the Employer.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  AND, in determining the matching contribution
  above, only Elective Deferrals up to the percentage or dollar amount
  specified below will be matched: 

  (select 3. and/or 4.OR 5.)

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
                  % of a Participant’s Compensation.

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
  $                .

  
	
   

  	
   

  	
   

  	
  5.

  	
  o

  	
  a discretionary percentage
  of a Participant’s Compensation or a discretionary dollar amount, the
  percentage or dollar amount to be determined by the Employer on a uniform
  basis to all Participants.

  
	
   

  	
  c.

  	
  o

  	
  The Employer may make
  matching contributions equal to a discretionary percentage, to be determined
  by the Employer, of each tier, to be determined by the Employer, of the
  Participant’s Elective Deferrals.

  
	
   

  	
  d.

  	
  o

  	
  The Employer will make
  matching contributions equal to the sum of          %
  of the portion of the Participant’s Elective Deferrals which do not exceed             %
  of the Participant’s Compensation or $                plus           % of the
  portion of the Participant’s Elective Deferrals which exceed           %
  of the Participant’s Compensation or $            ,
  but does not exceed               %
  of the Participant’s Compensation or $              .
  

  
	
   

  	
  NOTE:

  	
  If c. or d. above is
  elected, the rate of matching contributions must decrease as a Participant’s
  Elective Deferrals or Years of Service (or Periods of Service) increase.

  
										

 

 12
 

 

	
   

  	
  PERIOD OF DETERMINING MATCHING CONTRIBUTIONS

  
	
   

  	
  Matching contributions will be determined on the following basis (and
  any Compensation or dollar limitation used in determining the match will be
  based on the applicable period):

  
	
   

  	
  e.

  	
  o

  	
  the entire Plan Year.

  
	
   

  	
  f.

  	
  o

  	
  each payroll period.

  
	
   

  	
  g.

  	
  o

  	
  all payroll periods ending within each month.

  
	
   

  	
  h.

  	
  o

  	
  all payroll periods ending with or within the Plan Year quarter.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE MATCHING CONTRIBUTION MADE ON BEHALF OF ANY PARTICIPANT for any
  Plan Year will not exceed:

  
	
   

  	
  i.

  	
  o

  	
  N/A.

  
	
   

  	
  j.

  	
  o

  	
  $                    .

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MATCHING CONTRIBUTIONS WILL BE MADE ON BEHALF OF:

  
	
   

  	
  k.

  	
  o

  	
  all Participants.

  
	
   

  	
  l.

  	
  o

  	
  only Non-Highly Compensated Employees.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SHALL THE MATCHING CONTRIBUTIONS BE QUALIFIED MATCHING CONTRIBUTIONS?

  
	
   

  	
  m.

  	
  o

  	
  Yes. If elected, ALL matching contributions will be fully Vested and
  will be subject to restrictions on withdrawals. In addition, Qualified
  Matching Contributions may be used in either the ADP or ACP test.

  
	
   

  	
  n.

  	
  o

  	
  No.

  
	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
  ONLY PARTICIPANTS WHO SATISFY THE FOLLOWING CONDITIONS WILL BE
  ELIGIBLE TO SHARE IN THE ALLOCATION OF MATCHING CONTRIBUTIONS:

  
	
   

  	
   

  
	
   

  	
  REQUIREMENTS FOR PARTICIPANTS WHO ARE ACTIVELY EMPLOYED AT THE END OF
  THE PLAN YEAR: Participants who are actively employed at the end of the Plan
  Year will share in allocations regardless of the service completed during
  such Plan Year.

  
	
   

  	
   

  
	
   

  	
  REQUIREMENTS FOR PARTICIPANTS WHO ARE NOT ACTIVELY EMPLOYED AT THE END
  OF THE PLAN YEAR (except as provided in c. through e. below)

  
	
   

  	
  a.

  	
  o

  	
  A Participant must complete more than                 
  Hours of Service (not more than 500) or, if the Elapsed Time Method is
  elected.                     
  months of service (not more than there (3)).

  
	
   

  	
  b.

  	
  o

  	
  Participants will share in such allocations, regardless of service.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PARTICIPANTS WHO ARE NOT ACTIVELY EMPLOYED AT THE END OF THE PLAN YEAR
  due to the following
  shall be eligible to share in the allocation of matching contributions
  regardless of the above conditions (select all that apply):

  
	
   

  	
  c.

  	
  o

  	
  Death.

  
	
   

  	
  d.

  	
  o

  	
  Total and Permanent Disability.

  
	
   

  	
  e.

  	
  o

  	
  Early or Normal Retirement.

  
	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
  FORMULA FOR DETERMINING EMPLOYER’S PROFIT SHARING CONTRIBUTION (Plan
  Section 12.1(a)(3))

  
	
   

  	
  a.

  	
  x

  	
  N/A. No Employer Profit Sharing Contributions may be made (other than
  top heavy minimum contributions) (Skip to Question 34.)

  
	
   

  	
  b.

  	
  o

  	
  Discretionary, to be determined by the Employer, not limited to
  current or accumulated Net Profits.

  
	
   

  	
  c.

  	
  o

  	
  Discretionary, to be determined by the Employer, out of current or
  accumulated Net Profits.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CONTRIBUTION ALLOCATIONS  

  If b. or c. above is selected, the Employer’s discretionary profit sharing
  contribution for a Plan Year will be allocated as follows:

  
	
   

  	
   

  
	
   

  	
  d.

  	
  o

  	
  NON-INTEGRATED ALLOCATION

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  In the same ratio as each Participant’s Compensation bears to the
  total of such Compensation of all Participants.

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  In the same dollar amount to all Participants (per capita).

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  In the same dollar amount per Hour of Service completed by each
  Participant.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
  o

  	
  INTEGRATED ALLOCATION

  In accordance with Plan Section 4.3(b)(2). based on a Participant’s
  Compensation in excess of:

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  The Taxable Wage Base.

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
                    
  % (not to exceed 100%) of the Taxable Wage Base. (See Note below)

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  80% of the Taxable Wage Base plus $1,00.

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
  $                (not greater than the Taxable Wage Base). (See Note below)

  

 

 13
 

 

	
   

  	
   

  	
   

  	
  NOTE: 

  	
  The integration percentage of 5.7% shall be reduced to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  1.

  	
  4.3% if 2. or 4, above is more than 20% and less than or equal to 80%
  of the Taxable Wage Base.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  2.

  	
  5.4% if 3. is elected or if 2. or 4,above is more than 80% of the Taxable Wage Base.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
  QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 12.l(a)(4))

  
	
   

  	
  NOTE:

  	
  Regardless of any election made in this Question, the Plan
  automatically permits Qualified Non-Elective Contributions to correct a
  failed ADP or ACP test.

  
	
   

  	
  a.

  	
  x

  	
  N/A. There will be no additional Qualified Non-Elective Contributions
  except as otherwise provided in the Plan.

  
	
   

  	
  b.

  	
  o

  	
  The Employer will make a Qualified Non-Elective Contribution equal to      %
  of the total Compensation of those Participants eligible to Share in the
  allocations.

  
	
   

  	
  c.

  	
  o

  	
  The Employer may make a Qualified Non-Elective Contribution in an
  amount to be determined by the Employer, to be allocated in proportion to the
  Compensation of those Participants eligible to share in the allocations.

  
	
   

  	
  d.

  	
  o

  	
  The Employer may make a Qualified Non-Elective Contribution in an
  amount to be determined by the Employer, to be allocated equally to  all Participants eligible to share in
  the allocations (per capita).

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, if b., c. or d. is selected, the Qualified Non-Elective Contributions
  above will be made on behalf of:

  
	
   

  	
  e.

  	
  o

  	
  all Participants.

  
	
   

  	
  f.

  	
  o

  	
  only Non-Highly Compensated Employees.

  
	
   

  	
   

  	
   

  	
   

  
	
  35.

  	
  REQUIREMENTS TO SHARE IN ALLOCATIONS OF EMPLOYER DISCRETIONARY PROFIT
  SHARING CONTRIBUTION, QUALIFIED NON-ELECTIVE CONTRIBUTIONS (other than
  Qualified Non-Elective Contributions under Plan Sections l2.5(c) and 12.7(g))
  AND FORFEITURES

  
	
   

  	
   

  
	
   

  	
  REQUIREMENTS FOR PARTICIPANTS WHO ARE ACTIVELY EMPLOYED AT THE END OF
  THE PLAN YEAR: Participants who are actively employed at the end of the Plan
  Year will share in allocations regardless of the service completed during
  such Plan Year.

  
	
   

  	
   

  
	
   

  	
  REQUIREMENTS FOR PARTICIPANTS WHO ARE NOT ACTIVELY EMPLOYED AT THE END
  OF THE PLAN YEAR (except as provided in d. through f. below)

  
	
   

  	
  a.

  	
  x

  	
  N/A. Plan does not permit such contributions and all contributions
  under the Plan are fully Vested.

  
	
   

  	
  b.

  	
  o

  	
  A Participant must complete more than         
  Hours of Service (not more than 500) (or      
  months of service (not more than three (3)) if the Elapsed Time Method is
  elected).

  
	
   

  	
  c.

  	
  o

  	
  Participants will share in such allocations, regardless of service.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PARTICIPANTS WHO ARE NOT ACTIVELY EMPLOYED AT THE END OF THE PLAN YEAR
  due to the following will be eligible to share in the allocations regardless
  of the above conditions (select all that apply):

  
	
   

  	
  d.

  	
  o

  	
  Death.

  
	
   

  	
  e.

  	
  o

  	
  Total and Permanent Disability.

  
	
   

  	
  f.

  	
  o

  	
  Early or Normal Retirement.

  
	
   

  	
   

  	
   

  	
   

  
	
  36.

  	
  FORFEITURES (Plan Sections 1.27 and 4.3(e))

  
	
   

  	
  Except as provided in Plan  Section
  1.27, a Forfeiture will occur (if no election is made, a. will apply):

  
	
   

  	
  a.

  	
  x

  	
  as of the earlier of (l) the last day of the Plan Year in which the
  Former Participant incurs five (5) consecutive 1-Year Breaks in Service, or
  (2) the distribution of the entire Vested portion of the Participant’s
  Account.

  
	
   

  	
  b.

  	
  o

  	
  as of the last day of the Plan Year in which the Former Participant
  incurs five (5) consecutive 1-Year Breaks in Service.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Will Forfeitures first be used to pay any administrative expenses?

  
	
   

  	
  c.

  	
  o

  	
  Yes.

  
	
   

  	
  d.

  	
  x

  	
  No.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, EXCEPT as otherwise provided below with respect to Forfeitures
  attributable to matching contributions, any remaining Forfeitures will be...

  
	
   

  	
  e.

  	
  o

  	
  added to any Employer discretionary contribution.

  
	
   

  	
  f.

  	
  x

  	
  used to reduce any Employer contribution.

  
	
   

  	
  g.

  	
  o

  	
  added to any Employer matching contribution and allocated as an
  additional matching contribution.

  
	
   

  	
  h.

  	
  o

  	
  allocated to all Participants eligible to share in the allocations in
  the same proportion that each Participant’s Compensation for the Plan Year
  bears to  the Compensation of all
  Participants for such year.

  

 

 14
 

 

	
  FORFEITURES
  OF MATCHING CONTRIBUTIONS WILL BE...

  
	
   

  	
  i

  	
  x

  	
  N/A. Same as above or no
  matching contributions.

  
	
   

  	
  j.

  	
  o

  	
  used to reduce the
  Employer’s matching contribution.

  
	
   

  	
  k.

  	
  o

  	
  added to any Employer
  matching contribution and allocated as an additional matching contribution.

  
	
   

  	
  l.

  	
  o

  	
  added to any Employer
  discretionary profit sharing contribution.

  
	
   

  	
  m.

  	
  o

  	
  allocated to all
  Participants eligible to share in the matching allocations (regardless of
  whether a Participant elected any salary reductions) in proportion to each
  such Participant’s Compensation for the year.

  
	
   

  	
  n.

  	
  o

  	
  allocated to all Non-Highly
  Compensated Employees eligible to share in the matching allocations
  (regardless of whether a Participant elected any salary reductions) in
  proportion to each such Participant’s Compensation for the year.

  
	
   

  	
   

  	
   

  
	
  37.

  	
  ALLOCATIONS OF EARNINGS
  (Plan Section 4.3(c))

  
	
   

  	
  Allocations of earnings
  with respect to amounts which are not subject to Participant directed
  investments and which are contributed to the Plan after the previous
  Valuation Date will be determined...

  
	
   

  	
  a.

  	
  x

  	
  N/A. All assets in the Plan
  are subject to Participant investment direction.

  
	
   

  	
  b.

  	
  o

  	
  by using a weighted average
  based on the amount of time that has passed between the date a contribution
  or distribution  was made and the
  date of the prior Valuation Date.

  
	
   

  	
  c.

  	
  o

  	
  by treating one-half of all
  such contributions as being a part of the Participant’s nonsegregated account
  balance as of the previous Valuation Date.

  
	
   

  	
  d.

  	
  o

  	
  by using the method
  specified in Plan Section 4.3(c) (balance forward method).

  
	
   

  	
  e.

  	
  o

  	
  other:

  	
   

  
	
   

  	
   

  	
   

  	
  (must be a definite
  predetermined formula that is not based on Compensation and that satisfies
  the nondiscrimination requirements of Regulation 1.401 (a)(4)-4 and is
  applied uniformly to all Participants).

  
	
   

  	
   

  	
   

  
	
  38.

  	
  LIMITATIONS ON ALLOCATIONS
  (Plan Section 4.4)

  
	
   

  	
  If any Participant is
  covered under another qualified defined contribution plan maintained by the
  Employer, other than a Master or Prototype Plan, or if the Employer maintains
  a welfare benefit fund, as defined in Code Section 419(c), or an individual
  medical account, as defined in Code Section 415(1)(2), under which amounts
  are treated as Annual Additions with respect to any Participant in this Plan:

  
	
   

  	
  a.

  	
  x

  	
  N/A. The Employer does not
  maintain another qualified defined contribution plan other than a paired
  plan.

  
	
   

  	
  b.

  	
  o

  	
  The provisions of Plan
  Section 4.4(b) will apply as if the other plan were a Master or Prototype
  Plan.

  	 

	
   

  	
  c.

  	
  o

  	
  Specify the method under
  which the plans will limit total Annual Additions to the Maximum Permissible
  Amount, and will properly reduce any Excess Amounts, in a manner that
  precludes Employer discretion:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTE:

  	
  If b. or c. is selected, an
  Employer may not rely on the opinion letter issued by the Internal Revenue
  Service that this Plan is qualified under Code Section 401.

  
	
   

  	
   

  	
   

  
	
   

  	
  IF ANY PARTICIPANT is a
  Participant in a qualified defined benefit plan maintained by the Employer:

  
	
   

  	
  d.

  	
  o

  	
  N/A. The Employer does not
  maintain, and has never maintained, a qualified defined benefit plan OR the
  provisions of  Code Section 415(c)
  no longer apply to the Plan.

  
	
   

  	
  e.

  	
  x

  	
  N/A. The provisions of Code
  Section 415(c) no longer apply to this Plan effective with respect to
  Limitation Years beginning after December 31, 1999, or if later          
  (if a later date is entered, this Plan will not be considered a  safe harbor plan under Code Section
  401(a)(4) and the Regulations thereunder).

  
	
   

  	
  f.

  	
  o

  	
  In any Limitation Year, the
  Annual Additions credited to the Participant under this Plan may not cause
  the sum of the Defined Benefit. Plan Fraction and the Defined Contribution
  Fraction to exceed 1.0. If the Employer’s contribution that would  otherwise be made on the Participant’s
  behalf during the Limitation Year would cause the 1.0 limitation to be
  exceeded, the rate of contribution under this Plan will be reduced so that
  the sum of the fractions equals 1.0. If the 1.0 limitation is exceeded
  because of an Excess Amount, such Excess Amount will be reduced in accordance
  with Section 4.5 of the Plan.

  
	
   

  	
  g.

  	
  o

  	
  Specify the method under
  which the plans involved will satisfy the 1.0 limitation in a manner that
  precludes Employer
  discretion:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTE:

  	
  If f. or g. is selected, an  Employer may not rely on the opinion
  letter  issued by the Internal Revenue
  Service that this Plan is qualified under Code Section 401.

  
												

 

 15
 

 

	
  DISTRIBUTIONS

  	 

	
   

  	
   

  
	
  39.

  	
  FORM OF DISTRIBUTIONS (Plan
  Sections 6.5 and 6.6)

  
	
   

  	
  Distributions under
  the  Plan may be made in (select all
  that apply)...

  
	
   

  	
  a.

  	
  x

  	
  lump-sums.

  
	
   

  	
  b.

  	
  x

  	
  substantially equal
  installments.

  
	
   

  	
  c.

  	
  o

  	
  partial withdrawals
  provided the minimum withdrawal) is $            .

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, pursuant to Plan
  Section 6.12.

  
	
   

  	
  d.

  	
  x

  	
  no annuities are allowed
  (Plan Section 6.12(b) will apply and the joint and survivor rules of Code
  Sections 401(a)(11) and 417 will not apply to the Plan).

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  AND, if this is an amendment that is eliminating
  annuities, then an annuity form of payment is not available with respect to
  distributions that have an Annuity Starting Date beginning on or after:

  
	
   

  	
   

  	
   

  	
  1.

  	
  x

  	
  N/A

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
            
  (may not be retroactive date), except that regardless of the date entered,
  the amendment will not be effective prior to the time set forth in Plan
  Section 8.1(c).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
  o

  	
  annuities are allowed as
  the normal form of distribution (Plan 
  Section  6.12  will not apply and the joint and survivor
  rules of Code Sections 401(a)(11) and 417 will automatically apply). If
  elected, the Pre-Retirement Survivor Annuity (minimum spouse’s death benefit)
  will be equal to:

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  100% of Participant’s
  interest in the Plan.

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  50% of Participant’s
  interest in the Plan.

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
            %
  (may not be less than 50%) of a Participant’s interest in the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  AND, the normal form of the Qualified Joint and
  Survivor Annuity will be joint and 50% survivor annuity unless otherwise
  elected below:

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
  N/A.

  
	
   

  	
   

  	
   

  	
  5.

  	
  o

  	
  Joint and 100% survivor
  annuity.

  
	
   

  	
   

  	
   

  	
  6.

  	
  o

  	
  Joint and 75% survivor
  annuity.

  
	
   

  	
   

  	
   

  	
  7.

  	
  o

  	
  Joint and 66 2/3  % survivor annuity.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTE:

  	
  If only a portion the Plan
  assets may be distributed in an annuity form of payment, then select d. AND
  c. and the assets subject to the joint and survivor annuity provisions will
  be those assets attributable to (specify):           
  (e.g., the money purchase pension plan that was merged into this plan).

  
	
   

  	
   

  	
   

  
	
   

  	
  AND, distributions may be
  made in...

  
	
   

  	
  f.

  	
  o

  	
  cash only (except for
  insurance or annuity contracts).

  
	
   

  	
  g.

  	
  x

  	
  cash or property.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  40.

  	
  CONDITIONS FOR
  DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT

  
	
   

  	
  Distributions upon
  termination of employment pursuant to Plan Section 6.4(a) of the Plan will
  not be made unless the  following
  conditions have been satisfied:

  
	
   

  	
  a.

  	
  o

  	
  No distributions may be
  made until a Participant has reached Early or Normal Retirement Date.

  
	
   

  	
  b.

  	
  x

  	
  Distributions may be made
  as soon as administratively feasible at the participant’s election.

  
	
   

  	
  c.

  	
  o

  	
  The Participant has
  incurred           
  1-Year Break(s) in Service (or Period(s) of Severance if the Elapsed Time
  Method is elected).

  
	
   

  	
  d.

  	
  o

  	
  Distributions may be made
  at the Participant’s election as soon as administratively feasible after the
  Plan Year coincident with or next following termination of employment.

  
	
   

  	
  e.

  	
  o

  	
  Distributions may be made
  at the Participant’s election as soon asadministratively feasible after the Plan year quarter coincident with
  or next following termination of employment.

  
	
   

  	
  f.

  	
  o

  	
  Distributions may be made
  at the Participant’s election as soon as administratively feasible after the
  Valuation Date coincident with or next following termination of the
  employment.

  
	
   

  	
  g.

  	
  o

  	
  Distributions may be made
  at the Participant’s election as soon as administratively feasible           
  months following terminations of employment.

  
	
   

  	
  h.

  	
  o

  	
  Other:

  	
   

  
	
   

  	
   

  	
   

  	
  (must be objective
  conditions which are ascertainable and are not subject to Employer discretion
  except as otherwise permitted in Regulation 1.411(d)-4 and may not exceed the
  limits of Code Section 401(a)(14) as set forth in Plan Section 6.7).

  
	
   

  	
   

  
	
  41.

  	
  INVOLUNTARY DISTRIBUTIONS

  
	
   

  	
  Will involuntary
  distributions of amounts less than $5.000 be made in accordance with the
  provisions of Sections 6.4, 6.5 and 6.6?

  
	
   

  	
  a.

  	
  x

  	
  Yes

  
	
   

  	
  b.

  	
  o

  	
  No

  
										

 

 16
 

 

	
  42.

  	
  MINIMUM DISTRIBUTION TRANSITIONAL RULES (Plan Section 6.5(c))

  
	
   

  	
  NOTE:

  	
  This Section does not apply to (1) a new Plan or (2) an amendment or
  restatement of an existing Plan that never contained the provisions of Code
  Section 401(a)(9) as in effect prior to the amendments made by the Small
  Business Job Protection Act of 1996 (SBJPA).

  
	
   

  	
  The “required beginning date” for a Participant who is not a “five
  percent (5%) owner” is:

  
	
   

  	
  a.

  	
  x

  	
  N/A. (This is a new Plan or this Plan has never included the pre-SBJPA
  provisions.)

  
	
   

  	
  b.

  	
  o

  	
  April 1st of the calendar year following the year in which the
  Participant attains age 70 1/2. (The pre-SBJPA rules will continue to apply.)

  
	
   

  	
  c.

  	
  o

  	
  April 1st of the calendar year following the later of the year in
  which the Participant attains age 70 1/2 or retires (the post-SBJPA rules),
  with the following exceptions (select one or both and if no election is made,
  both will apply effective as of January 1, 1996):

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  A Participant who was  already
  receiving required minimum distributions under the pre-SBJPA rules as of                     
  (not earlier than January 1, 1996) may elect to stop receiving distributions
  and have them recommence in accordance with the post-SBJPA rules. Upon the
  recommencement of distributions, if the Plan permits annuities as a form of
  distribution then the following will apply:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  a.

  	
  o

  	
  N/A. Annuity distributions are not permitted.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  b.

  	
  o

  	
  Upon the recommencement of distributions, the original Annuity
  Starting Date will be retained.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  c.

  	
  o

  	
  Upon the recommencement of distributions, a new Annuity Starting Date
  is created.

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  A Participant who had not begun receiving required minimum
  distributions as of                     
  (not earlier than January 1, 1996) may elect to defer commencement of
  distributions until retirement. The option to defer the commencement of
  distributions (i.e., to elect to receive in-service distributions upon
  attainment of age 70 1/2) will apply to all such Participants unless the
  option below is elected:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  a.

  	
  o

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  b.

  	
  o

  	
  The in-service distribution option is eliminated with respect to
  Participants who attain age 70 1/2 in or after the calendar year that begins
  after the later of (1) December 31, 1998, or (2) the adoption date of the
  amendment and restatement to bring the Plan into compliance with SBJPA. (This
  option may only be elected if the amendment to eliminate the in-service
  distribution is adopted no later than the last day of the remedial amendment
  period that applies to the Plan for changes under SBJPA.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  43.

  	
  DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h))

  
	
   

  	
  Distributions upon the death of a Participant prior to receiving any
  benefits shall...

  
	
   

  	
  a.

  	
  x

  	
  be made pursuant to the election of the Participant or beneficiary.

  
	
   

  	
  b.

  	
  o

  	
  begin within 1 year of death for a designated beneficiary and be
  payable over the life (or over a period not exceeding the life expectancy) of
  such beneficiary, except that if the beneficiary is the Participant’s spouse,
  begin prior to December 31st of the year in which the Participant would have
  attained age 70 1/2.

  
	
   

  	
  c.

  	
  o

  	
  be made within 5 (or if lesser             )
  years of death for all beneficiaries.

  
	
   

  	
  d.

  	
  o

  	
  be made within 5 (or if lesser             )
  years of death for all beneficiaries, except that if the beneficiary is the
  Participant’s spouse, begin prior to December 31st of the year in which the
  Participant would have attained age 70 1/2 and be payable over the life (or
  over a period not exceeding the life expectancy) of such surviving spouse.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  44.

  	
  HARDSHIP DISTRIBUTIONS (Plan Sections 6.11 and/or 12.9)

  
	
   

  	
  a.

  	
  o

  	
  No hardship distributions are permitted.

  
	
   

  	
  b.

  	
  x

  	
  Hardship distributions are permitted from the following accounts
  (select all that apply):

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  All accounts.

  
	
   

  	
   

  	
   

  	
  2.

  	
  x

  	
  Participant’s Elective Deferral Account.

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  Participant’s Account attributable to Employer matching contributions.

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
  Participant’s Account attributable to Employer profit sharing
  contributions.

  
	
   

  	
   

  	
   

  	
  5.

  	
  x

  	
  Participant’s Rollover Account.

  
	
   

  	
   

  	
   

  	
  6.

  	
  o

  	
  Participant’s Transfer Account.

  
	
   

  	
   

  	
   

  	
  7.

  	
  o

  	
  Participant’s Voluntary Contribution Account.

  
	
   

  	
  NOTE:

  	
  Distributions from a Participant’s Elective Deferral Account are
  limited to the portion of such account attributable to such Participant’s
  Elective Deferrals (and earnings attributable thereto up to December 31,
  1988). Hardship distributions are not permitted from a Participant’s
  Qualified Non-Elective Account (including any 401(k) Safe Harbor
  Contributions) or Qualified Matching Contribution Account.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, shall the safe harbor hardship rules of Plan Section 12.9 apply
  to distributions made from all accounts? (Note: The safe harbor hardship
  rules automatically apply to hardship distributions of Elective Deferrals.)

  
	
   

  	
  c.

  	
  x

  	
  No or N/A. The provisions of Plan Section 6.11 apply to hardship
  distributions from all accounts other than a Participant’s Elective Deferral
  Account.

  
	
   

  	
  d.

  	
  o

  	
  Yes. The provisions of Plan Section 12.9 apply to all hardship
  distributions.

  

 

 17
 

 

	
   

  	
  AND, are distributions restricted to those accounts in which a
  Participant is fully Vested?

  
	
   

  	
  e.

  	
  x

  	
  Yes. distributions may only be made from accounts which are fully
  Vested.

  
	
   

  	
  f.

  	
  o

  	
  No. (If elected, the fraction at Plan Section 6.5(h) shall apply in
  determining vesting of the portion of the account balance not withdrawn).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, the minimum hardship distribution shall be...

  
	
   

  	
  g.

  	
  x

  	
  N/A. There is no minimum.

  
	
   

  	
  h.

  	
  o

  	
  $                    (may not exceed $1,000).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  45.

  	
  IN-SERVICE DISTRIBUTIONS (Plan Section 6.10)

  
	
   

  	
  a.

  	
  x

  	
  In-service distributions may not be made (except as otherwise elected
  for Hardship Distributions).

  
	
   

  	
  b.

  	
  o

  	
  In-service distributions may be made to a Participant who has not
  separated from service provided any of the following condition have been
  satisfied (select all that apply):

  
	
   

  	
   

  	
   

  	
  1.

  	
  o

  	
  the Participant has attained age               .

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  the Participant has reached Normal Retirement Age.

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  the Participant has been a  Participant
  in the Plan for at least               
  years (may not be less than five (5)).

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
  the amounts being distributed have accumulated in the Plan for at
  least two (2) years.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, in-service distributions are permitted from the following
  accounts (select all that apply):

  
	
   

  	
  c.

  	
  o

  	
  All accounts.

  
	
   

  	
  d.

  	
  o

  	
  Participant’s Elective Deferral Account.

  
	
   

  	
  e.

  	
  o

  	
  Qualified Matching Contribution Account and portion of Participant’s
  Account attributable to Employer matching contributions.

  
	
   

  	
  f.

  	
  o

  	
  Participant’s Account attributable toEmployer profit sharing contributions.

  
	
   

  	
  g.

  	
  o

  	
  Qualified Non-Elective Contribution Account.

  
	
   

  	
  h.

  	
  o

  	
  Participant’s Rollover Account.

  
	
   

  	
  i.

  	
  o

  	
  Participant’s Transfer Account.

  
	
   

  	
  j.

  	
  o

  	
  Participant’s Voluntary Contribution Account.

  
	
   

  	
  NOTE:

  	
  Distributions from a Participant’s Elective Deferral Account.
  Qualified Matching Contribution Account and Qualified Non-Elective Account
  (including 401(k) Safe Harbor Contributions) are subject to restrictions and
  generally may not be distributed prior to age 59 1/2.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, are distributions restricted to those accounts in which a
  Participant is fully Vested?

  
	
   

  	
  k.

  	
  o

  	
  Yes. distributions may only be made from accounts which are fully
  Vested.

  
	
   

  	
  l.

  	
  o

  	
  No. (If elected, the fraction at Plan Section 6.5(h) will apply in
  determining vesting of the portion of the account balance not withdrawn.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, the minimum distribution shall be...

  
	
   

  	
  m.

  	
  o

  	
  N/A. There is no minimum.

  
	
   

  	
  n.

  	
  o

  	
  $                    
  (may not exceed $1,000).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NONDISCRIMINATION TESTING

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  46.

  	
  HIGHLY COMPENSATED EMPLOYEE (Plan Section 1.31)

  
	
   

  	
  NOTE:

  	
  If this is a GUST restatement, complete the questions in this section
  retroactively to the first Plan Year beginning after 1996.

  
	
   

  	
   

  	
   

  
	
   

  	
  Top-Paid Group Election.
  Will the top-paid group election be made? (The election made below for the
  latest year will continue to apply to subsequent Plan  Years unless a different election is made.)

  
	
   

  	
  a.

  	
  o

  	
  Yes. for the Plan Year beginning in:                     .

  
	
   

  	
  b.

  	
  x

  	
  No. for the Plan Year beginning in: January 1, 2002.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Calendar Year Data Election. Will the calendar year data election be
  used?

  
	
   

  	
  (The election made below for the latest year will continue to apply to
  subsequent Plan Years unless a different election is made.)

  
	
   

  	
  c.

  	
  o

  	
  Yes. for the Plan Year beginning in:                     .

  
	
   

  	
  d.

  	
  x

  	
  No. for the Plan Year beginning in: January 1, 2002.

  

 

 18
 

 

	
  47.

  	
  ADP AND ACP TESTS (Plan Sections 12.4 and 12.6). The ADP ratio and ACP
  ratio for Non-Highly Compensated Employees  will
  be based on the  following. The
  election made below for the latest year will continue to apply to subsequent
  Plan Years unless the Plan is amended to a different election.

  
	
   

  	
  a.

  	
  x

  	
  N/A. This Plan satisfies the  ADP
  Test Safe Harbor rules and there are no contributions subject to an ACP test
  or for all Plan Years beginning in or after the Effective Date of the Plan
  or, in the case of an amendment and restatement, for all Plan Years to which
  the amendment and restatement relates.

  
	
   

  	
  b.

  	
  o

  	
  PRIOR YEAR TESTING: The prior year ratio will be used for the Plan
  Year beginning in           .
  (Note: If  this election  is made for first year the Code Section
  401(k) or 401(m) feature is added to this Plan (unless this Plan is a
  successor plan),  the amount
  taken  into account as the ADP
  and ACP of Non-Highly Compensated Employees for the preceding  Plan Year will be 3%.)

  
	
   

  	
  c.

  	
  o

  	
  CURRENT YEAR TESTING: The current year ratio will be used for the Plan
  Year beginning in           .

  
	
   

  	
  NOTE:

  	
  In any Plan  Year where
  the ADP Test Safe Harbor is being used but not the ACP Test Safe Harbor, then
  c. above must be used if an ACP test applies for such Plan Year.

  
	
   

  	
   

  	
   

  
	
  TOP HEAVY REQUIREMENTS

  
	
   

  	
   

  
	
  48.

  	
  TOP HEAVY  DUPLICATIONS
  (Plan  Section 4.3(i)): When a
  Non-Key Employee is a Participant in this Plan and a Defined Benefit Plan
  maintained by the Employer, indicate which method shall be utilized to avoid
  duplication of top heavy minimum benefits: (If b., c., d. or e. is elected,
  f. must be completed.)

  
	
   

  	
  a.

  	
  o

  	
  N/A. The Employer does not maintain a Defined Benefit Plan other than
  a paired plan. (Go to next Question)

  
	
   

  	
  b.

  	
  o

  	
  The full top heavy minimum will be provided in each plan (if selected,
  Plan Section 4.3(i) shall not apply).

  
	
   

  	
  c.

  	
  o

  	
  5% defined contribution minimum.

  
	
   

  	
  d.

  	
  x

  	
  2% defined benefit minimum.

  
	
   

  	
  e.

  	
  o

  	
  Specify the method under which the Plans will provide top heavy
  minimum benefits for Non-Key Employees that will preclude Employer discretion
  and avoid inadvertent omissions:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTE:

  	
  If c. or d. is selected and both plans do not cover the same
  Employees, or if e. is selected, then an Employer may not rely on the opinion
  letter issued by the Internal Revenue Service that this Plan is qualified
  under Code Section 401.

  
	
   

  	
   

  	
   

  
	
   

  	
  AND, the “Present Value of Accrued Benefit” (Plan Section 9.2) for Top
  Heavy purposes shall be based on...

  
	
   

  	
  f.

  	
  x

  	
  Interest rate: 7.5%

  
	
   

  	
   

  	
   

  	
  Mortality Table: GATT Mortality Table as promulgated by Rev. Rul.
  95-6

  
	
   

  	
   

  	
   

  	
   

  
	
  49.

  	
  TOP HEAVY DUPLICATIONS (Plan Section 4.3(f)): When a Non-Key Employee  is a Participant in this Plan and
  another defined contribution plan maintained by the Employer, indicate which
  method shall be utilized to avoid duplication of top heavy minimum benefits:

  
	
   

  	
  a.

  	
  x

  	
  N/A. The Employer does not 
  maintain another qualified defined contribution plan other than a
  paired plan.

  
	
   

  	
  b.

  	
  o

  	
  The full top heavy minimum will be provided in each plan.

  
	
   

  	
  c.

  	
  o

  	
  A minimum, non-integrated contribution of 3% of each Non-Key
  Employee’s 415 Compensation shall be provided in the Money Purchase Plan (or
  other plan subject to Code Section 412), where the Employer maintains two (2)
  or more non-paired Defined Contribution Plans.

  
	
   

  	
  d.

  	
  o

  	
  Specify the method under which the Plans will provide top heavy
  minimum benefits for Non-Key Employees that will preclude Employer discretion
  and avoid inadvertent omissions, including any adjustments required under
  Code Section 415:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTE:

  	
  If c. is selected and both plans do not cover the same Employees, or
  if d. is selected, then an Employer may not rely on the opinion  letter  issued
  by the Internal Revenue Service that this Plan is qualified under Code
  Section 401.

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  50.

  	
  LOANS TO PARTICIPANTS (Plan Section 7.6) 

  
	
   

  	
  a.

  	
  o

  	
  Loans are not permitted.

  
	
   

  	
  b.

  	
  x

  	
  Loans are permitted.

  
							

 

 19
 

 

	
   

  	
  IF loans are permitted (select all that apply)...

  
	
   

  	
  c.

  	
  x

  	
  loans will be treated as a Participant directed investment.

  
	
   

  	
  d.

  	
  o

  	
  loans will only be made for hardship or financial necessity.

  
	
   

  	
  e.

  	
  x

  	
  the minimum loan will be $1,000 (may not exceed $1,000).

  
	
   

  	
  f.

  	
  x

  	
  a Participant may only have one (1) (e.g., one (1)) loan(s)
  outstanding at any time.

  
	
   

  	
  g.

  	
  x

  	
  all outstanding loan balances will become due and
  payable in their entirely upon the occurrence of a distributable event (other
  than satisfaction of the conditions for an in-service distribution).

  
	
   

  	
  h.

  	
  x

  	
  loans will only
  be permitted from the following accounts (select all that apply):

  
	
   

  	
   

  	
   

  	
  1.

  	
  x

  	
  All accounts.

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  Participant’s Elective Deferral Account.

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  Qualified Matching Contribution Account and/or
  portion of Participant’s Account attributable to Employer matching
  contributions.

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
  Participant’s Account attributable to Employer profit sharing
  contributions.

  
	
   

  	
   

  	
   

  	
  5.

  	
  o

  	
  Qualified Non-Elective Contribution Account.

  
	
   

  	
   

  	
   

  	
  6.

  	
  o

  	
  Participant’s Rollover Account.

  
	
   

  	
   

  	
   

  	
  7.

  	
  o

  	
  Participant’s Transfer Account.

  
	
   

  	
   

  	
   

  	
  8.

  	
  o

  	
  Participant’s Voluntary Contribution Account.

  
	
   

  	
  NOTE:

  	
  Department of Labor Regulations require the adoption of a separate
  written loan program setting forth the requirements outlined in Plan Section
  7.6.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  51.

  	
  DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.10)

  
	
   

  	
  a.

  	
  o

  	
  Participant directed investments are not permitted.

  
	
   

  	
  b.

  	
  x

  	
  Participant directed investments are permitted for the following accounts
  (select all that apply):

  
	
   

  	
   

  	
   

  	
  1.

  	
  x

  	
  All accounts.

  
	
   

  	
   

  	
   

  	
  2.

  	
  o

  	
  Participant’s Elective Deferral Account.

  
	
   

  	
   

  	
   

  	
  3.

  	
  o

  	
  Qualified Matching Contribution Account and/or
  portion of Participant’s Account attributable to Employer matching
  contributions.

  
	
   

  	
   

  	
   

  	
  4.

  	
  o

  	
  Participant’s Profit Sharing Account.

  
	
   

  	
   

  	
   

  	
  5.

  	
  o

  	
  Qualified Non-Elective Contribution Account.

  
	
   

  	
   

  	
   

  	
  6.

  	
  o

  	
  Participant’s Rollover Account.

  
	
   

  	
   

  	
   

  	
  7.

  	
  o

  	
  Participant’s Transfer Account.

  
	
   

  	
   

  	
   

  	
  8.

  	
  o

  	
  Participant’s Voluntary Contribution Account.

  
	
   

  	
   

  	
   

  	
  9.

  	
  o

  	
  Other:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, is it intended that the Plan comply with Act Section 404(c) with
  respect to the accounts subject to Participant investment direction?

  
	
   

  	
  c.

  	
  x

  	
  No.

  
	
   

  	
  d.

  	
  o

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, will voting rights on directed investments be  passed through to Participants?

  
	
   

  	
  e.

  	
  x

  	
  No, Employer stock is not an alternative OR Plan is not intended to
  comply with Act Section 404(c).

  
	
   

  	
  f.

  	
  o

  	
  Yes, for Employer stock only.

  
	
   

  	
  g.

  	
  o

  	
  Yes, for all investments.

  
	
   

  	
   

  	
   

  	
   

  
	
  52.

  	
  ROLLOVERS (Plan Section 4.6)

  
	
   

  	
  a.

  	
  o

  	
  Rollovers will not be accepted by this Plan.

  
	
   

  	
  b.

  	
  x

  	
  Rollovers will be accepted by this Plan.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, if b. is elected,
  rollovers may be accepted...

  
	
   

  	
  c.

  	
  o

  	
  from any Eligible Employee, even if not a Participant.

  
	
   

  	
  d.

  	
  x

  	
  from Participants only.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AND, distributions from a Participant’s Rollover Account may be
  made...

  
	
   

  	
  e.

  	
  o

  	
  at any time.

  
	
   

  	
  f.

  	
  x

  	
  only when the Participant is otherwise entitled to a distribution
  under the Plan.

  
	
   

  	
   

  	
   

  	
   

  
	
  53.

  	
  AFTER-TAX VOLUNTARY EMPLOYEE CONTRIBUTIONS (Plan Section 4.8) 

  
	
   

  	
  a.

  	
  x

  	
  After-tax voluntary Employee contributions will not be allowed.

  
	
   

  	
  b.

  	
  o

  	
  After-tax voluntary Employee contributions will be allowed.

  
	
   

  	
   

  	
   

  	
   

  
	
  54.

  	
  LIFE INSURANCE (Plan Section 7.5)

  
	
   

  	
  a.

  	
  x

  	
  Life insurance may not be purchased.

  
	
   

  	
  b.

  	
  o

  	
  Life insurance may be purchased at the option of the Administrator.

  
	
   

  	
  c.

  	
  o

  	
  Life insurance may be purchased  at
  the option of the Participant.

  

 

 20
 

 

	
  AND, if b. or c. is elected, the purchase of initial or additional
  life insurance will be subject to the following limitations (select all that
  apply):

  
	
  d.

  	
  o

  	
  N/A, no limitations.

  
	
  e.

  	
  o

  	
  each initial Contract will have a minimum face amount of $          .

  
	
  f.

  	
  o

  	
  each additional Contract will have a minimum face amount of $          .

  
	
  g.

  	
  o

  	
  the Participant has completed           
  Years of Service (or Periods of Service).

  
	
  h.

  	
  o

  	
  the Participant has completed           
  Years of Service (or Periods of Service) while a Participant in the Plan.

  
	
  i.

  	
  o

  	
  the Participant is under age           
  on the Contract issue date.

  
	
  j.

  	
  o

  	
  the maximum amount of all Contracts on  behalf of a Participant may not exceed $          .

  
	
  k.

  	
  o

  	
  the maximum face amount of any life insurance Contract will be $          .

  

 

 21
 

The adopting Employer may rely on an opinion letter issued by the
Internal Revenue Service as evidence that the plan is qualified under Code Section
401 except to the extent provided in Rev. Proc. 2000-20, 2000-6 I.R.B. 553 and
Announcement 2001-77, 2001-30 I.R.B.

An
Employer who has ever maintained or who later adopts any plan (including  a welfare benefit fund, as defined in
Code Section 419(c), which provides post-retirement medical benefits allocated
to separate accounts for key employees, as defined in Code Section 419A(d)(3),
or an individual medical account, as  defined
in Code Section 415(1)(2)) in addition to this Plan may not rely on the opinion
letter issued by the National Office of the Internal Revenue Service with
respect to the requirements of Code Sections 415 and 416.

If
the Employer who adopts or maintains multiple plans wishes to obtain reliance
with respect to the requirements of Code Sections 415 and 416, application for
a determination letter must be made to Employee Plan Determinations of the
Internal Revenue Service.

The
Employer may not rely on the opinion letter in certain circumstances, which are
specified in the opinion letter issued with respect to the plan or in Revenue
Procedure 2000-20 and Announcement 2001-77.

This
Adoption Agreement may be used only in conjunction with basic Plan document
#01. This Adoption Agreement and the basic Plan document shall together be
known as Morehead Plan Administrators. Ltd. Prototype Standardized 401(k)
Profit Sharing Plan and Trust #01-006.

The
adoption of this Plan, its qualification by the IRS, and the related tax
consequences are the responsibility of the Employer and its independent tax and
legal advisors.

Morehead
Plan  Administrators, Ltd. will
notify the Employer of any amendments made to the  Plan or of the discontinuance or abandonment of the Plan.
Furthermore, in order to be eligible to receive such notification, we agree to
notify Morehead Plan Administrators, Ltd. of any change in address.

This
Plan may not be used, and shall not be deemed to be a Prototype Plan, unless an
authorized representative of Morehead Plan Administrators, Ltd. has
acknowledged the use of the Plan. Such acknowledgment is for administerial
purposes only. It acknowledges that the Employer is using the Plan but does not
represent that this Plan, including the choices selected on the Adoption  Agreement, has been  reviewed by a representative of the sponsor
or constitutes a qualified retirement plan.

Morehead
Plan Administrators, Ltd.

	
  By:

  	
   

  	
   

  

 

With
regard to any questions regarding the provisions of the Plan, adoption of the
Plan, or the effect of an opinion letter from the IRS, call or write (this
information  must be completed by
the sponsor of this Plan or its designated representative):

	
  Name:

  	
   

  	
  Morehead Plan Administrators, Ltd.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  817 East Morehead Street, Suite 300

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Charlotte   North Carolina   28202

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
  (704) 376-4420

  	
   

  	
   

  	
   

  	
   

  

 

 22
 

 

The Employer and Trustee
hereby cause this Plan to be executed on January 1, 2002.

Furthermore,
this Plan may not be used unless acknowledged by Morehead Plan Administrators,
Ltd. or its authorized representative.

EMPLOYER:

BRADFORD
FEDERAL SAVINGS BANK

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  o

  	
  The signature of the Trustee appears on a separate
  trust agreement attached to the Plan,

  

OR

	
  /s/ Dallas
  Arthur

  	
   

  
	
  DALLAS ARTHUR

  	
  TRUSTEE

  	
   

  
				

 

	
  /s/ Cindy
  Houston

  	
   

  
	
  CINDY HOUSTON

  	
  TRUSTEE

  	
   

  
				

 

	
  /s/ Vincent
  Sortino

  	
   

  
	
  VINCENT SORTINO

  	
  TRUSTEE

  	
   

  
				

 

	
  PARTICIPATING EMPLOYER

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  PARTICIPATING EMPLOYER (attach additional signature pages as
  necessary):

  

 

 

	
  By:

  	
   

  	
   

  

 

 23

 

 

 

 

 

 

 

Bradford Bank

401(k) Profit Sharing Plan

Plan Document

 

 

TABLE  OF
CONTENTS

ARTICLE I

DEFINITIONS

 

ARTICLE II

ADMINISTRATION

	
  2.1

  	
   

  	
  POWERS AND
  RESPONSIBILITIES OF THE EMPLOYER

  	
   

  	
  21

  	
   

  
	
  2.2

  	
   

  	
  DESIGNATION OF
  ADMINISTRATIVE AUTHORITY

  	
   

  	
  22

  	
   

  
	
  2.3

  	
   

  	
  ALLOCATION AND
  DELEGATION OF RESPONSIBILITIES

  	
   

  	
  22

  	
   

  
	
  2.4

  	
   

  	
  POWERS AND DUTIES OF
  THE ADMINISTRATOR

  	
   

  	
  22

  	
   

  
	
  2.5

  	
   

  	
  RECORDS AND REPORTS

  	
   

  	
  24

  	
   

  
	
  2.6

  	
   

  	
  APPOINTMENT OF ADVISERS

  	
   

  	
  24

  	
   

  
	
  2.7

  	
   

  	
  INFORMATION FROM
  EMPLOYER

  	
   

  	
  24

  	
   

  
	
  2.8

  	
   

  	
  PAYMENT
  OF EXPENSES

  	
   

  	
  24

  	
   

  
	
  2.9

  	
   

  	
  MAJORITY ACTIONS

  	
   

  	
  25

  	
   

  
	
  2.10

  	
   

  	
  CLAIMS PROCEDURE

  	
   

  	
  25

  	
   

  
	
  2.11

  	
   

  	
  CLAIMS REVIEW PROCEDURE

  	
   

  	
  25

  	
   

  

 

ARTICLE III

ELIGIBILITY

	
  3.1

  	
   

  	
  CONDITIONS OF
  ELIGIBILITY

  	
   

  	
  26

  	
   

  
	
  3.2

  	
   

  	
  EFFECTIVE DATE OF
  PARTICIPATION

  	
   

  	
  26

  	
   

  
	
  3.3

  	
   

  	
  DETERMINATION
  OF ELIGIBILITY

  	
   

  	
  27

  	
   

  
	
  3.4

  	
   

  	
  TERMINATION OF
  ELIGIBILITY

  	
   

  	
  27

  	
   

  
	
  3.5

  	
   

  	
  REHIRED EMPLOYEES AND BREAKS
  IN SERVICE

  	
   

  	
  27

  	
   

  
	
  3.6

  	
   

  	
  ELECTION NOT TO
  PARTICIPATE

  	
   

  	
  28

  	
   

  
	
  3.7

  	
   

  	
  CONTROL OF ENTITIES BY OWNER-EMPLOYEE

  	
   

  	
  28

  	
   

  

 

ARTICLE IV

CONTRIBUTION AND ALLOCATION

	
  4.1

  	
   

  	
  FORMULA FOR DETERMINING
  EMPLOYER’S CONTRIBUTION

  	
   

  	
  29

  	
   

  
	
  4.2

  	
   

  	
  TIME OF PAYMENT OF
  EMPLOYER’S CONTRIBUTION

  	
   

  	
  29

  	
   

  
	
  4.3

  	
   

  	
  ALLOCATION OF
  CONTRIBUTION, FORFEITURES AND EARNINGS

  	
   

  	
  30

  	
   

  
	
  4.4

  	
   

  	
  MAXIMUM ANNUAL
  ADDITIONS

  	
   

  	
  37

  	
   

  
	
  4.5

  	
   

  	
  ADJUSTMENT FOR
  EXCESSIVE ANNUAL ADDITIONS

  	
   

  	
  43

  	
   

  
	
  4.6

  	
   

  	
  ROLLOVERS

  	
   

  	
  45

  	
   

  
	
  4.7

  	
   

  	
  PLAN TO PLAN TRANSFERS
  FROM QUALIFIED PLANS

  	
   

  	
  46

  	
   

  
	
  4.8

  	
   

  	
  VOLUNTARY EMPLOYEE
  CONTRIBUTIONS

  	
   

  	
  47

  	
   

  
	
  4.9

  	
   

  	
  QUALIFIED VOLUNTARY
  EMPLOYEE CONTRIBUTIONS

  	
   

  	
  48

  	
   

  
	
  4.10

  	
   

  	
  DIRECTED INVESTMENT
  ACCOUNT

  	
   

  	
  48

  	
   

  
	
  4.11

  	
   

  	
  INTEGRATION IN MORE
  THAN ONE PLAN

  	
   

  	
  51

  	
   

  
	
  4.12

  	
   

  	
  QUALIFIED MILITARY SERVICE

  	
   

  	
  51

  	
   

  

 

 i
 

 

ARTICLE V

VALUATIONS

	
  5.1

  	
   

  	
  VALUATION OF THE TRUST
  FUND

  	
   

  	
  51

  	
   

  
	
  5.2

  	
   

  	
  METHOD OF VALUATION

  	
   

  	
  52

  	
   

  

 

ARTICLE VI

DETERMINATION AND DISTRIBUTION OF BENEFITS

	
  6.1

  	
   

  	
  DETERMINATION OF
  BENEFITS UPON RETIREMENT

  	
   

  	
  52

  	
   

  
	
  6.2

  	
   

  	
  DETERMINATION OF
  BENEFITS UPON DEATH

  	
   

  	
  52

  	
   

  
	
  6.3

  	
   

  	
  DETERMINATION OF
  BENEFITS IN EVENT OF DISABILITY

  	
   

  	
  54

  	
   

  
	
  6.4

  	
   

  	
  DETERMINATION OF
  BENEFITS UPON TERMINATION

  	
   

  	
  54

  	
   

  
	
  6.5

  	
   

  	
  DISTRIBUTION OF
  BENEFITS

  	
   

  	
  57

  	
   

  
	
  6.6

  	
   

  	
  DISTRIBUTION OF
  BENEFITS UPON DEATH

  	
   

  	
  64

  	
   

  
	
  6.7

  	
   

  	
  TIME OF DISTRIBUTION

  	
   

  	
  69

  	
   

  
	
  6.8

  	
   

  	
  DISTRIBUTION FOR MINOR
  OR INCOMPETENT BENEFICIARY

  	
   

  	
  69

  	
   

  
	
  6.9

  	
   

  	
  LOCATION OF PARTICIPANT
  OR BENEFICIARY UNKNOWN

  	
   

  	
  69

  	
   

  
	
  6.10

  	
   

  	
  IN-SERVICE DISTRIBUTION

  	
   

  	
  70

  	
   

  
	
  6.11

  	
   

  	
  ADVANCE DISTRIBUTION
  FOR HARDSHIP

  	
   

  	
  70

  	
   

  
	
  6.12

  	
   

  	
  SPECIAL RULE FOR
  CERTAIN PROFIT SHARING PLANS

  	
   

  	
  71

  	
   

  
	
  6.13

  	
   

  	
  QUALIFIED DOMESTIC
  RELATIONS ORDER DISTRIBUTION

  	
   

  	
  72

  	
   

  
	
  6.14

  	
   

  	
  DIRECT ROLLOVERS

  	
   

  	
  72

  	
   

  
	
  6.15

  	
   

  	
  TRANSFER OF ASSETS FROM
  A MONEY PURCHASE PLAN

  	
   

  	
  73

  	
   

  
	
  6.16

  	
   

  	
  ELECTIVE TRANSFERS OF BENEFITS TO OTHER PLANS

  	
   

  	
  73

  	
   

  

 

ARTICLE VII

TRUSTEE AND CUSTODIAN

	
  7.1

  	
   

  	
  BASIC RESPONSIBILITIES
  OF THE TRUSTEE

  	
   

  	
  75

  	
   

  
	
  7.2

  	
   

  	
  INVESTMENT POWERS AND
  DUTIES OF DISCRETIONARY TRUSTEE

  	
   

  	
  76

  	
   

  
	
  7.3

  	
   

  	
  INVESTMENT POWERS AND
  DUTIES OF NONDISCRETIONARY TRUSTEE

  	
   

  	
  79

  	
   

  
	
  7.4

  	
   

  	
  POWERS AND DUTIES OF
  CUSTODIAN

  	
   

  	
  82

  	
   

  
	
  7.5

  	
   

  	
  LIFE INSURANCE

  	
   

  	
  82

  	
   

  
	
  7.6

  	
   

  	
  LOANS TO PARTICIPANTS

  	
   

  	
  84

  	
   

  
	
  7.7

  	
   

  	
  MAJORITY ACTIONS

  	
   

  	
  85

  	
   

  
	
  7.8

  	
   

  	
  TRUSTEE’S COMPENSATION
  AND EXPENSES AND TAXES

  	
   

  	
  85

  	
   

  
	
  7.9

  	
   

  	
  ANNUAL REPORT OF THE
  TRUSTEE

  	
   

  	
  86

  	
   

  
	
  7.10

  	
   

  	
  AUDIT

  	
   

  	
  86

  	
   

  
	
  7.11

  	
   

  	
  RESIGNATION, REMOVAL
  AND SUCCESSION OF TRUSTEE

  	
   

  	
  87

  	
   

  
	
  7.12

  	
   

  	
  TRANSFER OF INTEREST

  	
   

  	
  88

  	
   

  
	
  7.13

  	
   

  	
  TRUSTEE INDEMNIFICATION

  	
   

  	
  88

  	
   

  
	
  7.14

  	
   

  	
  EMPLOYER SECURITIES AND REAL PROPERTY

  	
   

  	
  88

  	
   

  

 

 ii
 

 

ARTICLE VIII

AMENDMENT, TERMINATION AND MERGERS

	
  8.1

  	
   

  	
  AMENDMENT

  	
   

  	
  88

  	
   

  
	
  8.2

  	
   

  	
  TERMINATION

  	
   

  	
  90

  	
   

  
	
  8.3

  	
   

  	
  MERGER, CONSOLIDATION OR TRANSFER OF ASSETS

  	
   

  	
  90

  	
   

  

 

ARTICLE IX

TOP HEAVY PROVISIONS

	
  9.1

  	
   

  	
  TOP HEAVY PLAN
  REQUIREMENTS

  	
   

  	
  91

  	
   

  
	
  9.2

  	
   

  	
  DETERMINATION OF TOP HEAVY STATUS

  	
   

  	
  91

  	
   

  

 

ARTICLE X

MISCELLANEOUS

	
  10.1

  	
   

  	
  EMPLOYER ADOPTIONS

  	
   

  	
  93

  	
   

  
	
  10.2

  	
   

  	
  PARTICIPANT’S RIGHTS

  	
   

  	
  93

  	
   

  
	
  10.3

  	
   

  	
  ALIENATION

  	
   

  	
  94

  	
   

  
	
  10.4

  	
   

  	
  CONSTRUCTION OF PLAN

  	
   

  	
  94

  	
   

  
	
  10.5

  	
   

  	
  GENDER AND NUMBER

  	
   

  	
  95

  	
   

  
	
  10.6

  	
   

  	
  LEGAL ACTION

  	
   

  	
  95

  	
   

  
	
  10.7

  	
   

  	
  PROHIBITION AGAINST
  DIVERSION OF FUNDS

  	
   

  	
  95

  	
   

  
	
  10.8

  	
   

  	
  EMPLOYER’S AND
  TRUSTEE’S PROTECTIVE CLAUSE

  	
   

  	
  96

  	
   

  
	
  10.9

  	
   

  	
  INSURER’S PROTECTIVE
  CLAUSE

  	
   

  	
  96

  	
   

  
	
  10.10

  	
   

  	
  RECEIPT AND RELEASE FOR
  PAYMENTS

  	
   

  	
  96

  	
   

  
	
  10.11

  	
   

  	
  ACTION BY THE EMPLOYER

  	
   

  	
  96

  	
   

  
	
  10.12

  	
   

  	
  NAMED FIDUCIARIES AND
  ALLOCATION OF RESPONSIBILITY

  	
   

  	
  96

  	
   

  
	
  10.13

  	
   

  	
  HEADINGS

  	
   

  	
  97

  	
   

  
	
  10.14

  	
   

  	
  APPROVAL BY INTERNAL
  REVENUE SERVICE

  	
   

  	
  97

  	
   

  
	
  10.15

  	
   

  	
  UNIFORMITY

  	
   

  	
  97

  	
   

  
	
  10.16

  	
   

  	
  PAYMENT OF BENEFITS

  	
   

  	
  97

  	
   

  

 

 iii
 

 

ARTICLE XI

PARTICIPATING EMPLOYERS

	
  11.1

  	
   

  	
  ELECTION TO BECOME A
  PARTICIPATING EMPLOYER

  	
   

  	
  98

  	
   

  
	
  11.2

  	
   

  	
  REQUIREMENTS OF
  PARTICIPATING EMPLOYERS

  	
   

  	
  98

  	
   

  
	
  11.3

  	
   

  	
  DESIGNATION OF AGENT

  	
   

  	
  98

  	
   

  
	
  11.4

  	
   

  	
  EMPLOYEE TRANSFERS

  	
   

  	
  98

  	
   

  
	
  11.5

  	
   

  	
  PARTICIPATING
  EMPLOYER’S CONTRIBUTION AND FORFEITURES

  	
   

  	
  99

  	
   

  
	
  11.6

  	
   

  	
  AMENDMENT

  	
   

  	
  99

  	
   

  
	
  11.7

  	
   

  	
  DISCONTINUANCE OF
  PARTICIPATION

  	
   

  	
  99

  	
   

  
	
  11.8

  	
   

  	
  ADMINISTRATOR’S
  AUTHORITY

  	
   

  	
  100

  	
   

  
	
  11.9

  	
   

  	
  PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE

  	
   

  	
  100

  	
   

  

 

ARTICLE XII

CASH OR DEFERRED PROVISIONS

	
  12.1

  	
   

  	
  FORMULA FOR DETERMINING
  EMPLOYER’S CONTRIBUTION

  	
   

  	
  100

  	
   

  
	
  12.2

  	
   

  	
  PARTICIPANT’S  SALARY REDUCTION ELECTION

  	
   

  	
  101

  	
   

  
	
  12.3

  	
   

  	
  ALLOCATION OF
  CONTRIBUTION, FORFEITURES AND EARNINGS

  	
   

  	
  105

  	
   

  
	
  12.4

  	
   

  	
  ACTUAL DEFERRAL
  PERCENTAGE TESTS

  	
   

  	
  107

  	
   

  
	
  12.5

  	
   

  	
  ADJUSTMENT TO ACTUAL
  DEFERRAL PERCENTAGE TESTS

  	
   

  	
  110

  	
   

  
	
  12.6

  	
   

  	
  ACTUAL CONTRIBUTION
  PERCENTAGE TESTS

  	
   

  	
  115

  	
   

  
	
  12.7

  	
   

  	
  ADJUSTMENT TO ACTUAL
  CONTRIBUTION PERCENTAGE TESTS

  	
   

  	
  118

  	
   

  
	
  12.8

  	
   

  	
  SAFE HARBOR PROVISIONS

  	
   

  	
  123

  	
   

  
	
  12.9

  	
   

  	
  ADVANCE DISTRIBUTION FOR HARDSHIP

  	
   

  	
  125

  	
   

  

 

ARTICLE XIII

SIMPLE 40l(K) PROVISIONS

	
  13.1

  	
   

  	
  SIMPLE 401(K)
  PROVISIONS

  	
   

  	
  127

  	
   

  
	
  13.2

  	
   

  	
  DEFINITIONS

  	
   

  	
  127

  	
   

  
	
  13.3

  	
   

  	
  CONTRIBUTIONS

  	
   

  	
  128

  	
   

  
	
  13.4

  	
   

  	
  ELECTION AND NOTICE
  REQUIREMENTS

  	
   

  	
  129

  	
   

  
	
  13.5

  	
   

  	
  VESTING REQUIREMENTS

  	
   

  	
  129

  	
   

  
	
  13.6

  	
   

  	
  TOP-HEAVY RULES

  	
   

  	
  129

  	
   

  
	
  13.7

  	
   

  	
  NONDISCRIMINATION TESTS

  	
   

  	
  129

  	
   

  

 

 iv

 

Defined
Contribution Prototype Plan

ARTICLE
1

DEFINITIONS

As used in this Plan, the following words and phrases shall have the
meanings set forth herein unless a different meaning is clearly required
by the context:

1.1          “ACP”
means the “Actual Contribution Percentage” determined pursuant to Section
12.6(e).

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

1.3          “ADP”
means the “Actual Deferral Percentage” determined pursuant to Section 12.4(e).

1.4          “Administrator”  means the Employer unless another person or
entity has been designated by the Employer pursuant to Section 2.2 to
administer the Plan on behalf of the Employer.

1.5          “Adoption
Agreement” means the separate agreement which is executed by the Employer
and sets forth the elective provisions of this Plan and Trust as specified by
the Employer.

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

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

1.8          “Annuity
Starting Date” means, with respect to any Participant, the first day
of the first period for which an amount is paid as an annuity, or, in the ease of a benefit not payable in the form of an
annuity, the first day on which all events have occurred which entitles the
Participant to such benefit.

1.9       “Beneficiary” means the person (or entity) to whom all
or a portion of a deceased Participant’s interest in the Plan is payable,
subject to the restrictions of Sections 6.2 and 6.6.

1.10        “Code”
means the Internal Revenue Code of 1986, as amended.

1.11        “Compensation” with
respect to any Participant means one
of the following as elected in the Adoption Agreement:

 1
 

 

(a)           Information
required to be reported under Code Sections 6041, 6051 and 6052 (Wages, tips
and other compensation as reported on Form
W-2).  Compensation means
wages, within the meaning of Code Section 3401(a), and all other payments of
compensation to an Employee by the Employer (in the course of the Employer’s
trade or business) for which the Employer is required to furnish the Employee a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052.  Compensation must be determined without
regard to any rules under Code Section 3401(a)
that limit the remuneration included in wages based on the nature or location
of the employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).

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

(c)           415
Safe-Harbor Compensation. Compensation 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 salespersons, 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 Regulation l.62-2(c))), and excluding the
following:

(1)           Employer
contributions to a plan of deferred compensation which are not includible in
the Employee’s gross income for the taxable year in which contributed, or
Employer contributions under a simplified
employee pension plan to the extent such contributions are excludable from the
Employee’s gross income, or any distributions from a plan of deferred
compensation;

(2)           Amounts realized
from the exercise of a nonqualified 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 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 excludable from the gross income
of the Employee).

 2
 

 

However, Compensation
for any Self-Employed Individual shall
be equal to Earned Income. Compensation shall include only that Compensation
which is actually paid to the Participant during the determination period.  Except as otherwise provided in this Plan,
the determination period shall be the period
elected by the Employer in the Adoption Agreement.  If the Employer makes no election, the
determination period shall be the Plan Year.

Notwithstanding the
above, if elected in the Adoption Agreement, Compensation shall include all of
the following types of elective contributions and all of the following types of
deferred compensation:

(a)              Elective contributions that are
made by the Employer on behalf of a Participant that are not includible in gross income under Code Sections
125, 402(e)(3), 402(h)(1)(B), 403(b), and for Plan Years beginning on or after
January 1, 2001 (or as of a date, no earlier than January 1, 1998, as specified
in an addendum to the Adoption Agreement), 132(f)(4);

(b)               Compensation deferred under an
eligible deferred compensation plan within the meaning of Code Section 457(b);
and

(c)               Employee contributions (under
governmental plans) described in Code Section 414(h)(2) that are picked up by
the employing unit and thus are treated as Employer contributions.

For Plan Years
beginning on or after January, 1989, and before January 1, 1994, the annual
Compensation of each Participant taken into account for determining all
benefits provided under the Plan for any Plan Year shall not exceed $200,000.  This limitation shall be adjusted by the
Secretary at the same time and in the same manner as under Code Section 415(d),
except that the dollar increase in effect on January 1 of any calendar year is
effective for Plan Years beginning in such calendar year and the first adjustment
to the $200,000 limitation is effective on January 1, 1990.

For Plan Years beginning
on or after January 1, 1994, Compensation in excess of $150,000 (or such other
amount provided in the Code) shall be disregarded for all purposes other than
for purposes of salary deferral elections. Such amount shall be adjusted by the Commissioner 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 twelve (12) months, the $150,000
annual Compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is twelve (12).

If
Compensation for any prior determination period is taken into account in
determining a Participant’s allocations for the current Plan Year, the
Compensation for such prior determination period is subject to the applicable
annual Compensation limit in effect for that
prior period.  For this purpose, in
determining allocations in Plan Years beginning on or after January 1,
1989, the annual compensation limit in effect for determination periods
beginning

 3
 

 

before that date is
$200,000. In addition, in determining
allocations 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.

Notwithstanding
the foregoing, except as otherwise elected in a non-standardized Adoption
Agreement, the family member aggregation rules of Code Sections
401(a)(17) and 414(q)(6) as in effect prior to the enactment of the Small
Business Job Protection Act of 1996 shall not apply to this Plan effective with
respect to Plan Years beginning after December 31, 1996.

If, in the Adoption
Agreement, the Employer elects to exclude a class of Employees from the Plan,
then Compensation for any Employee who
becomes eligible or ceases to be eligible to participate during a determination
period shall only include Compensation while the Employee is an Eligible
Employee.

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

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

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

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

1.15        “Early
Retirement Date” means the date specified in the Adoption Agreement
on which a Participant or Former Participant
has satisfied the requirements specified in the Adoption Agreement (Early
Retirement Age).  If elected in the
Adoption Agreement, a Participant shall become fully Vested upon satisfying
such requirements if the Participant is still employed at the Early Retirement
Age.

A Former
Participant who separates from service after satisfying any service requirement
but before satisfying the age requirement
for Early Retirement Age and who thereafter reaches the age requirement contained
herein shall he entitled to receive benefits under this Plan (other than
any accelerated vesting and
allocations of Employee Contributions) as though the requirements for Early Retirement Age had been satisfied.

 4
 

 

1.16        “Earned
Income” means the net earnings from self-employment in the trade or
business with respect to which the Plan is established, for which the personal
services of the individual are a material income-producing factor. Net earnings
will be determined without regard to items not included in gross income and the
deductions allocable to such items. Net earnings
are reduced by contributions made by the Employer to a qualified plan to the
extent deductible under Code Section 404. In addition, net earnings
shall be determined with  regard to the deduction allowed to
the taxpayer by Code Section 164(f), for taxable years beginning after December
31, 1989.

1.17        “Elective Deferrals”
means the Employer’s contributions to the Plan that are made pursuant to a
Participant’s deferral election pursuant to Section 12.2, excluding any such
amounts distributed as “excess annual additions” pursuant to Section 4.5.  Elective Deferrals shall be subject to the
requirements of Sections 12.2(b) and 12.2(c) and shall, except as otherwise
provided herein, be required to satisfy the nondiscrimination requirements of Regulation
1.401(k)-1(b)(2), the provisions of which are specifically incorporated herein
by reference.

1.18        “Eligible
Employee” means any Eligible Employee as elected in the Adoption
Agreement and as provided herein. With
respect to a non-standardized Adoption Agreement, an individual shall not be an
“Eligible Employee” if such individual is not reported on the
payroll records of the Employer as a common law employee.  In particular, it is expressly intended that
individuals not treated as common law employees by the Employer on its payroll
records are not “Eligible Employees” and are excluded from Plan participation
even if a court or administrative agency determines that such individuals are
common law employees and not independent contractors.  Furthermore, with respect to a non-standardized
Adoption Agreement, Employees of an Affiliated Employer will not be treated as “Eligible
Employees” prior to the date the Affiliated Employer adopts the Plan as a
Participating Employer.

Except as
otherwise provided in this paragraph, if the Employer does not elect in the
Adoption Agreement to include Employees who
became Employees as the result of a “Code Section 410(b)(6)(C) transaction,”
then such Employees will  only be “Eligible
Employees” after the expiration of the transition period beginning on the date
of the transaction and ending on the last day of the first Plan Year
beginning after the date of the transaction. A “Code Section 410(b)(6)(C)
transaction” is an asset or stock acquisition, merger, or similar transaction
involving a change in the Employer of the Employees of a trade or business that
is subject to the special rules set forth in Code Section 410(b)(6)(C ).
However, regardless of any election made in the Adoption Agreement, if a
separate entity becomes an Affiliate Employer as the result of a “Code Section
410(b)(6)(C) transaction,” then Employees of such separate entity will not be
treated as “Eligible Employees” prior to the date the entity adopts the Plan as
a Participating Employer or, with respect to a standardized Adoption Agreement,
if earlier, the expiration of the transition period set forth above.

If, in the
Adoption Agreement, the Employer elects to exclude union employees, then
Employees whose employment is governed by a collective bargaining agreement
between the Employer and “employee representatives” under which retirement
benefits were the subject of good faith bargaining and if two percent (2%) or
less of the Employees covered pursuant to

 5
 

 

that agreement are
professionals as defined in Regulation 1.410(b)-9, shall not be eligible to
participate in this Plan.  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.

If, in the
Adoption Agreement, the Employer elects to exclude non-resident aliens, then
Employees who are non-resident aliens (within the meaning of Code Section
7701(b)(1)(B)) who received 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)) shall
not be eligible to participate in this Plan.

1.19        “Employee” means any
person who is employed by the Employer. The term “Employee” shall also include any person who is an employee of an Affiliated
Employer and any Leased Employee deemed to be an Employee as provided in Code
Section 414(n) or (o).

1.20     “Employer” means the entity specified in the Adoption
Agreement, any successor which shall maintain this Plan and any predecessor
which has maintained this Plan.  In
addition, unless the context means otherwise, the term “Employer” shall include
any Participating Employer (as defined in Section 11.1) which shall adopt this
Plan.

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

(a)             The
aggregate “Contribution Percentage Amounts” (as defined in Section 12.6)
actually made on behalf of Highly Compensated Participants for such Plan
Year and taken into account in computing the numerator of the ACP, over

(b)             The maximum “Contribution
Percentage Amounts” permitted by the ACP test in Section 12.6 (determined by
reducing contributions made on behalf of Highly Compensated Participants in
order of their “Contribution Percentages” beginning with the highest of such
percentages).

Such determination
shall be made after first taking into account corrections of any Excess
Deferrals pursuant to Section 12.2 and then taking into account adjustments of
any Excess Contributions pursuant to Section 12.5.

1.22        “Excess
Compensation”  means,
with respect to a Plan that is integrated with Social Security (permitted
disparity), a Participant’s Compensation which is in excess of the integration
level elected in the Adoption Agreement.

However, if Compensation
is based on less than a twelve (12) month determination period, Excess
Compensation shall be determined by reducing the integration level by a
fraction, the numerator of which is the number of full months in the short
period and the denominator of which is twelve (12).

 6
 

 

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

(a)           The aggregate amount of Employer
contributions actually  made on behalf of Highly Compensated
Participants for such Plan Year and taken
into account in computing the numerator of the ADP, over

(b)           The maximum amount of such contributions permitted by the
ADP test in Section 12.4 (determined by hypothetically reducing
contributions made on behalf of Highly Compensated Participants in order of the
actual deferral ratios, beginning with the highest of such ratios).

In determining the
amount of Excess Contributions to be distributed and/or recharacterized with
respect to an affected Highly Compensated Participant as determined herein,
such amount shall be reduced by any Excess Deferrals previously  distributed to such affected Highly
Compensated Participant for the Participant’s taxable year ending with or
within such Plan Year.

1.24        “Excess
Deferrals” means, with respect to any taxable year of a Participant,
those elective deferrals (within the meaning of Code Section 402(g)) that are
includible in the Participant’s gross income under Code Section 402(g) to the
extent such Participant’s elective deferrals for the taxable year exceed the
dollar limitation under such Code Section. 
Excess Deferrals shall be treated as an “Annual Addition” pursuant to
Section 4.4 when contributed to the Plan unless distributed to the affected Participant not later than the first April 15th
following the close of the Participant’s taxable year in which the Excess
Deferral was made. Additionally, for purposes of Sections 4.3(f) and
9.2, Excess Deferrals shall continue to be treated as Employer contributions
even if distributed pursuant to Section 12.2(e).  However, Excess Deferrals of Non-Highly
Compensated Participants are not taken into account for purposes of Section
12.4.

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

1.26          “Fiscal
Year” means the Employer’s accounting year.

1.27        “Forfeiture” means,
with respect to a Former Participant who has severed employment, that portion
of the Participant’s Account that is not Vested. Unless otherwise elected in
the Adoption Agreement, Forfeitures occur pursuant to (a) below.

(a)           A
Forfeiture will occur on the earlier of:

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

 7
 

 

(2)           The distribution of
the entire Vested portion of the Participant’s Account of a Former Participant who has severed employment with the Employer.  For purposes of this provision, if the Former
Participant has a Vested benefit of zero, then such Former Participant
shall be deemed to have received a distribution of such Vested benefit as of
the year in which the severance of employment occurs.

(b)              If
elected in the Adoption Agreement, a Forfeiture will occur as of the last day
of the Plan Year in which the Former Participant incurs five (5) 1-Year Breaks
in Service.

Regardless of the preceding provisions, if a Former
Participant is eligible to share in the allocation of Employer contributions or
Forfeitures in the year in which the Forfeiture would otherwise occur, then the
Forfeiture will not occur until the
end of the first Plan Year for which the Former Participant is not eligible to
share in the allocation of Employer contributions
or Forfeitures.  Furthermore, the term
“Forfeiture” shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.

1.28        “Former
Participant” means a person who has been a Participant, but who has ceased to be a Participant
for any reason.

1.29        “414(s) Compensation” means any definition
of compensation that satisfies the nondiscrimination requirements of Code
Section 414(s) and the Regulations thereunder. 
The period for determining 414(s) Compensation must be either the Plan
Year or the calendar  year ending with or within the
Plan Year. An Employer may further limit the period taken into account to that
part of the Plan Year or calendar year in which an Employee was a Participant
in the component of the Plan being tested.
The period used to determine 414(s) Compensation must be applied uniformly to
all Participants for the Plan Year.

1.30        “415
Compensation” means, with respect to any Participant, such
Participant’s (a) Wages, tips and other compensation on Form W-2, (b) Section
3401(a) wages or (c) 415 safe-harbor compensation as elected in the Adoption
Agreement for purposes of Compensation. 
415 Compensation shall be based on the full Limitation Year regardless
of when participation in the Plan commences. 
Furthermore, regardless of any election made in the Adoption Agreement,
with respect to Limitation Years beginning after December 31, 1997, 415
Compensation 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 Participant and
which is not includible in the gross income of the Participant by reason
of Code Section 125, 457, and, for Limitation Years beginning on or after
January 1, 2001 (or as of a date, no earlier than January 1, 1998, as specified
in an addendum to the Adoption Agreement), 132(f)(4).  For Limitation Years beginning prior to
January 1, 1998, 415 Compensation shall exclude such amounts.

Except as
otherwise provided herein, if, in connection with the adoption of any
amendment, the definition of 415 Compensation has been modified, then for Plan
Years prior to the Plan Year which includes the adoption date of such
amendment, 415 Compensation means compensation determined pursuant to the terms
of the Plan then in effect.

 8
 

 

1.31        “Highly
Compensated Employee”  means,
effective for Plan Years beginning after December 31, 1996, an Employee
described in Code Section 414(q)  and
the Regulations thereunder, and generally means an Employee who:

(a)           was a “five percent (5%) owner” as
defined in Section 1.37(c) at any time during the “determination year” or the “look-back
year”; or

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

The “determination
year” means the Plan Year for which testing is being performed and the “look-back
year” means the immediately preceding twelve (12) month period.  However, if the calendar year data election
is made in the Adoption Agreement, for purposes of (b) above, the “look-back
year” shall be the calendar year beginning within the twelve (12) month period
immediately preceding the “determination year.” 
Notwithstanding the preceding sentence, if the calendar year data
election is effective with respect to a Plan Year beginning in 1997, then for
such Plan Year the “look-back year” shall be the calendar year ending with or within the Plan Year for which testing is
being performed, and the “determination year” shall be the period of
time, if any, which extends beyond the “look-back year” and ends on the last
day of the Plan Year for which testing is being performed.

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 Regulation 1.414(q)-IT, A-4 and IRS Notice 97-45 (or any
superseding guidance).

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

For purposes of
this Section, for Plan Years beginning prior to January 1, 1998, the
determination of 415 Compensation shall be made by including amounts that would
otherwise be excluded from a Participant’s gross income by reason of the application of Code Sections 125,
402(e)(3), 402(e)(3), 402(h)(1)(B) and, for Plan Years beginning on or after
January 1, 2001 (or as of a date, no earlier than January 1, 1998, as
specified in an addendum to the Adoption Agreement), 132(f)(4), and, in the
case of Employer contributions made pursuant to a salary reduction agreement,
Code Section 403(b).

In determining who
is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within
the meaning of Code Section. 911(d)) from the Employer constituting United
States source income within the meaning of Code Section 861(a)(3)  shall not be treated as Employees.  Additionally, all Affiliated Employers shall
be taken

 9
 

 

into account as a single
employer and Leased Employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) shall be considered Employees unless such Leased Employees are
covered by a plan described in Code Section 414(n)(5) and are not in any
qualified plan maintained by the Employer. 
The exclusion of Leased Employees for this purpose shall be applied on a
uniform and consistent basis for all
of the Employer’s retirement plans.

1.32        “Highly Compensated Participant” means any
Highly Compensated Employee who is eligible to participate in the component of
the Plan being tested.

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

Notwithstanding
(2) above, (i) no more than 501 Hours of Service are required to be credited to
an Employee on account of any single continuous period during which the
Employee performs no duties (whether or not such period occurs a single
computation period); (ii) an hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account of a period during which no duties are performed
is not required to be credited
to the Employee if such payment is made or due under a plan
maintained solely for the purpose of complying with applicable workers’
compensation, or unemployment compensation or disability insurance laws;  and (iii) Hours of Service are not required
to be credited for a payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.  Furthermore, for purposes of (2) above, a
payment shall be deemed to be made by or due from the Employer regardless of
whether such payment is made by or due from the Employer directly, or
indirectly through, among others, a trust fund, or insurer, to which the
Employer contributes or  pays premiums and regardless of’ whether
contributions made or due to the trust fund, insurer, or other entity are for
the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.

Hours of Service
will be credited for employment with all Affiliated Employers and for any
individual considered to be a Leased Employee pursuant to Code Section 4l4(n)
or 414(o) and the Regulations thereunder. 
Furthermore, the provisions of Department of Labor regulations
2530.200b-2(b) and (c) are incorporated herein by reference.

 10
 

 

Hours of Service
will be determined on the basis of the method elected in the Adoption
Agreement.

1.34.       “Insurer”
means any legal reserve insurance company which has issued or shall issue one
or more Contracts or Policies under the Plan.

1.35                        “Investment
Manager” means a Fiduciary as described in Act Section 3(38).

1.36        “Joint and Survivor Annuity”
means an annuity for the life of a Participant with a survivor annuity for the
life of the Participant’s spouse which is not less than fifty percent (50%),
nor more than one-hundred percent (100%) of the amount of the annuity payable
during the joint lives of the Participant and the Participant’s spouse which
can be purchased with the Participant’s Vested interest in the Plan reduced by
any outstanding loan balances pursuant to Section 7.6.

1.37        “Key Employee” means
an Employee as defined in Code Section 416(i) and the Regulations
thereunder.  Generally, any Employee or
former Employee (as well as each of such Employee’s or former Employee’s
Beneficiaries) is considered a Key Employee if, the individual at any time
during the Plan Year that contains the “Determination Date” (as defined in
Section 9.2(c)) or any of the preceding four (4) Plan Years, has been included
in one of the following categories:

(a)           an
officer of the Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) having annual 415 Compensation greater than
fifty percent (50%) of the amount in effect under Code Section 415(b)(1)(A) for
any such Plan Year;

(b)           one
of the ten Employees having annual 415 Compensation from the Employer for a
Plan Year greater than the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan Year ends and owning (or
considered as owning within the meaning of Code Section 318) both more than
one-half percent (1/2%) interest and the largest interests in the Employer;

(c)           a “five percent (5%) owner” of the
Employer.  “Five percent (5%) owner”
means any person who owns (or is considered as owning within the meaning of
Code Section 318) more than five percent (5%) of the value of the outstanding
stock of the Employer or stock possessing more than five percent (5%) of the
total combined voting power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than five percent (5%) of the
capital or profits interest in the Employer; and

(d)           a “one percent (1%) owner” of the
Employer having annual 415 Compensation from the Employer of more than
$150,000.  “One percent (1%) owner” means
any person who owns (or is considered as owning within the meaning of Code
Section 318) more than one percent (1%) of the value of the outstanding stock
of the Employer or stock possessing more than one percent (1%) of the total
combined voting

 11
 

 

power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more than one percent (1%) of
the capital or profits interest in the Employer.

In
determining percentage ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o) shall be treated as
separate employers.  In determining
whether an individual has 415 Compensation of more than $150,000, 415 Compensation
from each employer required to be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be taken into account. 
Furthermore, for purposes of this Section, for Plan Years beginning
prior to January 1, 1998, the determination of 415 Compensation shall be made
by including amounts that would otherwise be excluded from a Participant’s
gross income by reason of the application of Code Sections 125, 402(e)(3),
402(h)(1)(B) and, for Plan Years beginning on or after January 1, 2001 (or as
of a date, no earlier than January 1, 1998, as specified in an addendum to
the Adoption Agreement), 132(f)(4), and, in the case of Employer contributions
made pursuant to a salary reduction agreement, Code Section 403(b).

1.38        “Late Retirement Date”
means the date of, or the firstt day of the month or the Anniversary Date
coinciding with or next following, whichever corresponds to the election in the
Adoption Agreement for the Normal Retirement Date, a Participant’s actual
retirement after having reached the Normal Retirement Date.

1.39        “Leased Employee” means,
effective with respect to Plan Years beginning on or after January 1, 1997, any
person (other than an Employee of the recipient Employer) who, pursuant to an
agreement between the recipient Employer and any other person or entity (“leasing
organization”), has performed services for the recipient (or for the recipient
and related persons determined in accordance with Code Section 414(n)(6)) on a
substantially full time basis for a period of at least one year, and such
services are performed under primary direction or control by the recipient
Employer.  Contributions or benefits
provided a Leased Employee by the leasing organization, which are attributable
to services performed for the recipient Employer shall be treated as provided
by the recipient Employer.  Furthermore,
Compensation for a Leased Employee shall only include Compensation from the
leasing organization that is attributable to services performed for the
recipient Employer.

A Leased Employee
shall not be considered an employee of the recipient Employer if:  (a) such employee is covered by a money
purchase pension plan providing:  (1) a
nonintegrated employer contribution rate of at least ten percent (10%) of
compensation, as defined in Code Section 415(c)(3), but for Plan Years
beginning prior to January 1, 1998, including amounts contributed pursuant to a
salary reduction agreement which are excludable from the employee’s gross
income under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b), or for Plan
Years beginning on or after January 1, 2001 (or as of a date, no earlier than
January 1, 1998, as specified in an addendum to the Adoption Agreement),
132(f)(4), (2) immediate participation, and (3) full and immediate vesting; and
(b) leased employees do not constitute more than twenty percent (20%) of the
recipient Employer’s nonhighly compensated workforce.

1.40        “Limitation Year” means
the determination period used to determine Compensation.  However, the Employer may elect a different
Limitation Year in the Adoption

 12
 

 

Agreement or by adopting a
written resolution to such effect.  All
qualified plans maintained by the Employer must use the same Limitation
Year.  Furthermore, unless there is a
change to a new Limitation Year, the Limitation Year will be a twelve (12)
consecutive month period.  In the case of
an initial Limitation Year, the Limitation Year will be the twelve (12)
consecutive month period ending on the last day of the period specified in the
Adoption Agreement (or written resolution). 
If the Limitation Year is amended to a different twelve (12) consecutive
month period, the new “Limitation Year” must begin on a date within the “Limitation
Year” in which the amendment is made.

1.41        “Net Profit” means,
with respect to any Fiscal Year, the Employer’s net income or profit for such
Fiscal Year determined upon the basis of the Employer’s books of account in
accordance with generally accepted accounting principles, without any reduction
for taxes based upon income, or for contributions made by the Employer to this
Plan and any other qualified plan.

1.42        “Non-Elective Contribution”
means the Employer’s contributions to the Plan other than Elective Deferrals,
any Qualified Non-Elective Contributions and any Qualified Matching
Contributions.  Employer matching
contributions which are not Qualified Matching Contributions shall be
considered a Non-Elective Contribution for purposes of the Plan.

1.43        “Non-Highly Compensated Participant”
means any Participant who is not a Highly Compensated Employee.  However, if pursuant to Sections 12.4 or 12.6
the prior year testing method is used to calculate the ADP or the ACP, a
Non-Highly Compensated Participant shall be determined using the definition of
Highly Compensated Employee in effect for the preceding Plan Year.

1.44        “Non-Key Employee”
means any Employee or former Employee (and such Employee’s or former Employee’s
Beneficiaries) who is not, and has never been, a Key Employee.

1.45        “Normal Retirement Age”
means the age elected in the Adoption Agreement at which time a Participant’s
Account shall be nonforfeitable (if a Participant is employed by the Employer
on or after that date).

1.46        “Normal Retirement Date” means
the date elected in the Adoption Agreement.

1.47        “1-Year Break in Service”
means, if the Hour of Service Method is elected in the Adoption Agreement, the
applicable computation period during which an Employee or former Employee has
not completed more than 500 Hours of Service. 
Further, solely for the purpose of determining whether an Employee has
incurred a 1-Year Break in Service, Hours of Service shall be recognized for “authorized
leaves of absence” and “maternity and paternity leaves of absence.”  For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work begins, only
if credit therefore is necessary to prevent the Employee from incurring a
1-Year Break in Service, or, in any other case, in the immediately following
computation period.  The Hours of Service
credited for a “maternity or paternity leave of absence” shall be those which
would normally have been credited but for such absence, or, in

 13
 

 

any case in which the
Administrator is unable to determine such hours normally credited, eight (8)
Hours of Service per day.  The total
Hours of Service required to be credited for a “maternity or paternity leave of
absence” shall not exceed the number of Hours of Service needed to prevent the
Employee from incurring a 1-Year Break in Service.

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

A “maternity or
paternity leave of absence” means an absence from work for any period by reason
of the Employee’s pregnancy, birth of the Employee’s child, placement of a
child with the Employee in connection with the adoption of such child, or any
absence for the purpose of caring for such child for a period immediately
following such birth or placement.

If the Elapsed
Time Method is elected in the Adoption Agreement, a “1-Year Break in Service”
means a twelve (12) consecutive month period beginning on the severance from
service date or any anniversary thereof and ending on the next succeeding
anniversary of such date; provided, however, that the Employee or former
Employee does not perform an Hour of Service for the Employer during such
twelve (12) consecutive month period.

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

1.49        “Participant” means
any Eligible Employee who has satisfied the requirements of Section 3.2 and has
not for any reason become ineligible to participate further in the Plan.

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

1.51        “Participant Direction Procedures”
means such instructions, guidelines or policies, the terms of which are
incorporated herein, as shall be established pursuant to Section 4.10 and
observed by the Administrator and applied and provided to Participants who have
Participant Directed Accounts.

1.52        “Participant’s Account”
means the account established and maintained by the Administrator for each
Participant with respect to such Participant’s total interest under the Plan
resulting from (a) the Employer’s contributions in the case of a Profit Sharing
Plan or Money Purchase Plan, and (b) the Employer’s Non-Elective Contributions
in the case of a 401(k) Profit Sharing Plan. 
Separate accountings shall be maintained with respect to that portion of
a Participant’s Account attributable to Employer matching contributions and to
Employer discretionary contributions made pursuant to Section 12.1(a)(3).

 14
 

 

1.53        “Participant’s Combined Account”
means the total aggregate amount of a Participant’s interest under the Plan
resulting from Employer contributions (including Elective Deferrals).

1.54        “Participant’s Elective Deferral Account”
means the account established and maintained by the Administrator for each
Participant with respect to such Participant’s total interest in the Plan
resulting from Elective Deferrals. 
Amounts in the Participant’s Elective Deferral Account are
nonforfeitable when made and are subject to the distribution restrictions of
Section 12.2(c).

1.55        “Participant’s Rollover Account”
means the account established and maintained by the Administrator for each
Participant with respect to such Participant’s interest in the Plan resulting
from amounts transferred from another qualified plan or “conduit” Individual
Retirement Account in accordance with Section 4.6.

1.56        “Participant’s Transfer Account”
means the account established and maintained by the Administrator for each
Participant with respect to the total interest in the Plan resulting from
amounts transferred to this Plan from a direct plan-to-plan transfer in
accordance with Section 4.7.

1.57        “Period of Service”
means the aggregate of all periods commencing with an Employee’s first day of
employment or reemployment with the Employer or an Affiliated Employer and
ending on the first day of a Period of Severance.  The first day of employment or reemployment
is the first day the Employee performs an Hour of Service.  An Employee will also receive partial credit
for any Period of Severance of less than twelve (12) consecutive months.  Fractional periods of a year will be
expressed in terms of days.

Periods of Service
with any Affiliated Employer shall be recognized.  Furthermore, Periods of Service with any
predecessor employer that maintained this Plan shall be recognized.  Periods of Service with any other predecessor
employer shall be recognized as elected in the Adoption Agreement.

In determining
Periods of Service for purposes of vesting under the Plan, Periods of Service
will be excluded as elected in the Adoption Agreement and as specified in
Section 3.5.

In the event the
method of crediting service is amended from the Hour of Service Method to the
Elapsed Time Method, an Employee will receive credit for a Period of Service
consisting of:

(a)           A
number of years equal to the number of Years of Service credited to the
Employee before the computation period during which the amendment occurs; and

(b)           The
greater of (1) the Periods of Service that would be credited to the Employee
under the Elapsed Time Method for service during the entire computation period
in which the transfer occurs or (2) the service taken into account under the
Hour of Service Method as of the date of the amendment.

 15
 

 

In addition, the
Employee will receive credit for service subsequent to the amendment commencing
on the day after the last day of the computation period in which the transfer
occurs.

1.58        “Period of Severance” means
a continuous period of time during which an Employee is not employed by the
Employer.  Such period begins on the date
the Employee retires, quits or is discharged, or if earlier, the twelve (12)
month anniversary of the date on which the Employee was otherwise first absent
from service.

In the case of an
individual who is absent from work for “maternity or paternity” reasons, the
twelve (12) consecutive month period beginning on the first anniversary of the
first day of such absence shall not constitute a one year Period of
Severance.  For purposes of this
paragraph, an absence from work for “maternity or paternity” reasons means an
absence (a) by reason of the pregnancy of the individual, (b) by reason of the
birth of a child of the individual, (c) by reason of the placement of a child
with the individual in connection with the adoption of such child by such
individual, or (d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.

1.59        “Plan” means this
instrument (hereinafter referred to as Morehead Plan Administrators, Ltd.
Defined Contribution Prototype Plan and Trust Basic Plan Document #01) and the
Adoption Agreement as adopted by the Employer, including all amendments thereto
and any addendum which is specifically permitted pursuant to the terms of the
Plan.

1.60        “Plan Year” means the
Plan’s accounting year as specified in the Adoption Agreement.  Unless there is a Short Plan Year, the Plan
Year will be a twelve-consecutive month period.

1.61        “Pre-Retirement Survivor Annuity”
means an immediate annuity for the life of a Participant’s spouse, the payments
under which must be equal to the benefit which can be provided with the
percentage, as specified in the Adoption Agreement, of the Participant’s Vested
interest in the Plan as of the date of death. 
If no election is made in the Adoption Agreement, the percentage shall
be equal to fifty percent (50%). 
Furthermore, if less than one hundred percent (100%) of the Participant’s
Vested interest in the Plan is used to provide the Pre-Retirement Survivor
Annuity, a proportionate share of each of the Participant’s accounts shall be
used to provide the Pre-Retirement Survivor Annuity.

1.62        “Qualified Matching Contribution”
means any Employer matching contributions that are made pursuant to Sections
12.1(a)(2) if elected in the Adoption Agreement, 12.5 and 12.7.

1.63        “Qualified Matching Contribution Account”
means the account established hereunder to which Qualified Matching
Contributions are allocated.  Amounts in
the Qualified Matching Contribution Account are nonforfeitable when made and
are subject to the distribution restrictions of Section 12.2(c).

 16
 

 

1.64        “Qualified Non-Elective Contribution”
means the Employer’s contributions to the Plan that are made pursuant to
Sections 12.1(a)(4) if elected in the Adoption Agreement, 12.5 and 12.7.

1.65        “Qualified Non-Elective Contribution
Account” means the account established hereunder to which
Qualified Non-Elective Contributions are allocated.  Amounts in the Qualified Non-Elective
Contribution Account are nonforfeitable when made and are subject to the
distribution restrictions of Section 12.2(c).

1.66        “Qualified Voluntary Employee
Contribution Account” means the account established hereunder
to which a Participant’s tax deductible qualified voluntary employee
contributions made pursuant to Section 4.9 are allocated.

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

1.68        “Retired Participant” means
a person who has been a Participant, but who has become entitled to retirement
benefits under the Plan.

1.69        “Retirement Date”
means the date as of which a Participant retires for reasons other than Total
and Permanent Disability, regardless of whether such retirement occurs on a
Participant’s Normal Retirement Date, Early Retirement Date or Late Retirement
Date (see Section 6.1).

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

1.71        “Shareholder-Employee”
means a Participant who owns (or is deemed to own pursuant to Code Section
318(a)(1)) more than five percent (5%) of the Employer’s outstanding capital
stock during any year in which the Employer elected to be taxed as a Small
Business Corporation (S Corporation) under the applicable Code sections
relating to Small Business Corporations.

1.72        “Short Plan Year” means,
if specified in the Adoption Agreement, a Plan Year of less than a twelve (12)
month period.  If there is a Short Plan
Year, the following rules shall apply in the administration of this Plan.  In determining whether an Employee has completed
a Year of Service (or Period of Service if the Elapsed Time Method is used) for
benefit accrual purposes in the Short Plan Year, the number of the Hours of
Service (or months of service if the Elapsed Time Method is used) required
shall be proportionately reduced based on the number of days (or months) in the
Short Plan Year.  The determination of
whether an Employee has completed a Year of Service (or Period of Service) for
vesting and eligibility purposes shall be made in accordance with Department of
Labor regulation 2530.203-2(c).  In
addition, if this Plan is integrated with Social Security, then the integration
level shall be proportionately reduced based on the number of months in the
Short Plan Year.

 17
 

 

1.73        “Super Top Heavy Plan”
means a plan which would be a Top Heavy Plan if sixty percent (60%) is replaced
with ninety percent (90%) in Section 9.2(a). 
However, effective as of the first Plan Year beginning after December
31, 1999, no Plan shall be considered a Super Top Heavy Plan.

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

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

1.76        “Top Heavy Plan” means
a plan described in Section 9.2(a).

1.77        “Top Heavy Plan Year” means
a Plan Year commencing after December 31, 1983, during which the Plan is a Top
Heavy Plan.

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

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

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

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

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

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

 18
 

 

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

1.79        “Total and Permanent Disability”
means the inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months.  The disability of a Participant shall be
determined by a licensed physician chosen by the Administrator.  However, if the condition constitutes total
disability under the federal Social Security Acts, the Administrator may rely
upon such determination that the Participant is Totally and Permanently
Disabled for the purposes of this Plan. 
The determination shall be applied uniformly to all Participants.

1.80        “Trustee” means the
person or entity named in the Adoption Agreement, or any successors thereto.

If the sponsor of
this prototype is a bank, savings and loan, trust company, credit union or
similar institution, a person or entity other than the prototype sponsor (or
its affiliates or subsidiaries) may not serve as Trustee without the written
consent of the sponsor.

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

1.82        “Valuation Date” means
the date or dates specified in the Adoption Agreement.  Regardless of any election to the contrary,
the Valuation Date shall include the Anniversary Date and may include any other
date or dates deemed necessary or appropriate by the Administrator for the
valuation of Participants’ Accounts during the Plan Year, which may include any
day that the Trustee, any transfer agent appointed by the Trustee or the
Employer, or any stock exchange used by such agent, are open for business.

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

1.84        “Voluntary Contribution Account”
means the account established and maintained by the Administrator for each
Participant with respect to such Participant’s total interest in the Plan
resulting from the Participant’s after-tax voluntary Employee contributions
made pursuant to Section 4.7.

Amounts
recharacterized as after-tax voluntary Employee contributions pursuant to
Section 12.5 shall remain subject to the limitations of Section 12.2.  Therefore, a separate accounting shall be
maintained with respect to that portion of the Voluntary Contribution Account
attributable to after-tax voluntary Employee contributions made pursuant to
Section 4.8.

 

 19

 

1.85        “Year of Service” means
the computation period of twelve (12) consecutive months, herein set forth, and
during which an Employee has completed at least 1,000 Hours of Service (unless
a lower number of Hours of Service is specified in the Adoption Agreement).

For purposes of
eligibility for participation, the initial computational period shall begin
with the date on which the Employee first performs an Hour of Service
(employment commencement date).  The
initial computation period beginning after a 1-Year Break in Service shall be
measured from the date on which an Employee again performs an Hour of
Service.  Unless otherwise elected in the
Adoption Agreement, the succeeding computation periods shall begin on the anniversary
of the Employee’s employment commencement date. 
However, unless otherwise elected in the Adoption Agreement, if one (1)
Year of Service or less is required as a condition of eligibility, then the
computation period after the initial computational period shall shift to the
current Plan Year which includes the anniversary of the date on which the
Employee first performed an Hour of Service, and subsequent computation periods
shall be the Plan Year.  If there is a
shift to the Plan Year, an Employee who is credited with the number of Hours of
Service to be credited with a Year of Service in both the initial eligibility
computation period and the first Plan Year which commences prior to the first
anniversary of the Employee’s initial eligibility computation period will be
credited with two (2) Years of Service for purposes of eligibility to
participate.

If two (2) Years
of Service are required as a condition of eligibility, a Participant will only
have completed two (2) Years of Service for eligibility purposes upon
completing two (2) consecutive Years of Service without an intervening 1-Year
Break in Service.

For vesting
purposes, and all other purposes not specifically addressed in this Section,
the computation period shall be the period elected in the Adoption
Agreement.  If no election is made in the
Adoption Agreement, the computation period shall be the Plan Year.

In determining
Years of Service for purposes of vesting under the Plan, Years of Service will
be excluded as elected in the Adoption Agreement as specified in Section 3.5.

Years of Service
and 1-Year Breaks in Service for eligibility purposes will be measured on the
same eligibility computation period. 
Years of Service and 1-Year Breaks in Service for vesting purposes will
be measured on the same vesting computation period.

Years of Service
with any Affiliated Employer shall be recognized.  Furthermore, Years of Service with any
predecessor employer that maintained this Plan shall be recognized.  Years of Service with any other predecessor
employer shall be recognized as elected in the Adoption Agreement.

In the event the
method of crediting service is amended from the Elapsed Time Method to the Hour
of Service Method, an Employee will receive credit for Years of Service equal
to:

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

 20
 

 

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

ARTICLE
II

ADMINISTRATION

2.1.         POWERS
AND RESPONSIBILITIES OF THE EMPLOYER

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

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

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

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

 21
 

 

2.2          DESIGNATION
OF ADMINISTRATIVE AUTHORITY

The Employer may
appoint one or more Administrators. If the Employer does not appoint an
Administrator, the Employer will be the Administrator.  Any person, including, but not limited to,
the Employees of the Employer, shall be eligible to serve as an Administrator.
Any person so appointed shall signify acceptance by filing written acceptance
with the Employer.  An Administrator may
resign by delivering a written resignation to the Employer or be removed by the
Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified. Upon the resignation or removal of an Administrator, the Employer
may designate in writing a successor to this position.

2.3          ALLOCATION AND DELEGATION OF
RESPONSIBILITIES

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

2.4          POWERS AND DUTIES OF THE ADMINISTRATOR

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

 22
 

 

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

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

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

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

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

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

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

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

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

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

(j)            to prepare and implement a procedure
for notifying Participants and Beneficiaries
of their rights to elect Joint and Survivor Annuities and Pre-Retirement
Survivor Annuities if required by the Plan, Code and Regulations thereunder:

(k)           to assist Participants regarding
their rights, benefits, or elections available under the Plan;

(l)            to act as the named Fiduciary
responsible for communicating with Participants as needed to maintain Plan
compliance with Act Section 404(c) (if the Employer intends to comply with Act
Section 404(c)) including, but not limited to, the

 23
 

 

receipt and transmission of Participants’ directions
as to the investment of their accounts under the Plan and the formation of
policies, rules, and procedures pursuant to which Participants may give investment
instructions with respect to the investment of their accounts; and

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

2.5          RECORDS AND REPORTS

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

2.6          APPOINTMENT OF ADVISERS

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

2.7          INFORMATION FROM EMPLOYER

The Employer shall
supply full and timely information to the Administrator on all pertinent facts
as the Administrator may require in order to perform its functions hereunder
and the Administrator shall advise the Trustee of such of the foregoing facts
as may be pertinent to the Trustee’s duties under the Plan.  The Administrator may rely upon such
information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.

2.8          PAYMENT OF EXPENSES

All expenses of
administration may be paid out of the Trust Fund unless paid by the
Employer.  Such expenses shall include
any expenses incident to the functioning of the Administrator, or any person or
persons retained or appointed by any Named Fiduciary incident to the exercise
of their duties under the Plan, including, but not limited to, fees of
accountants, counsel, Investment Managers, agents (including nonfiduciary
agents) appointed for the purpose of assisting the Administrator or Trustee in
carrying out the instructions of Participants as to the directed investment of
their accounts (if permitted) and other specialists and their agents, the costs
of any bonds required pursuant to Act Section 412, and other costs of administering the Plan.  Until paid, the expenses shall constitute a
liability of the Trust Fund.

 24
 

 

2.9          MAJORITY ACTIONS

Except where there
has been an allocation and delegation of administrative authority pursuant to
Section 2.3, if there is more than one Administrator, then they shall act by a
majority of their number, but may authorize one or more of them to sign all
papers on their behalf.

2.10        CLAIMS PROCEDURE

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

2.11        CLAIMS REVIEW PROCEDURE

Any Employee,
former Employee, or Beneficiary of either, who has been denied a benefit by a
decision of the Administrator pursuant to Section 2.10 shall be entitled to
request the Administrator to give further
consideration to the claim by filing with the Administrator a written request
for a hearing.  Such request, together
with a written statement of the reasons why the claimant believes such claim
should be allowed, shall be filed with the Administrator no later than sixty
(60) days after receipt of the written notification provided for in Section
2.10.  The Administrator shall then
conduct a hearing within the next sixty (60) days, at which the claimant may be
represented by an attorney or any other representative of such claimant’s
choosing and expense and at which the claimant shall have an opportunity to submit
written and oral evidence and arguments in support of the claim.  At the hearing (or prior thereto upon five
(5) business days written notice to the Administrator) the claimant or the
claimant’s representative shall have an
opportunity to review all documents in the possession of the
Administrator which are pertinent to the
claim at issue and its disallowance. 
Either the claimant or the Administrator may cause a court reporter to
attend  the hearing and record the
proceedings.  In such event, a complete
written transcript of the proceedings shall be furnished to both parties
by the court reporter.  The full expense
of any such court reporter and such transcripts shall be borne by the party
causing the court reporter to attend the hearing.  A finial decision as to the allowance of the
claim shall be made by the Administrator within sixty (60) days of receipt of
the appeal (unless there has been an extension of sixty (60) days due to
special circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the sixty (60) day
period).  Such communication shall be in
a manner calculated to be understood by the claimant and shall include specific
reasons for the specific references to the pertinent Plan provisions on which
the decision is based.  Notwithstanding
the preceding, to the extent any of the time periods specified in this Section
are amended by law or Department of Labor regulation, then the time frames
specified herein shall automatically be changed in accordance with such law or
regulation.

 25
 

 

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

ARTICLE
III

ELIGIBILITY

3.1              CONDITIONS OF ELIGIBILITY

Any Eligible
Employee shall be eligible to participate hereunder on the date such Employee
has satisfied the conditions of eligibility in the Adoption Agreement.

3.2          EFFECTIVE DATE OF PARTICIPATION

An Eligible Employee who has satisfied the conditions of eligibility
pursuant to Section 3.1 shall become a Participant effective as of the
date elected in the Adoption Agreement. 
If said Employee is not employed on such date but is reemployed before a
1-Year Break in Service has occurred, then such Employee shall become a
Participant on the date of reemployment or,
if later, the date the Employee would have otherwise entered the Plan had the
Employee not terminated employment.

Unless specifically
provided otherwise in the Adoption Agreement, an Eligible Employee who
satisfies the Plan’s eligibility requirement conditions by reason of
recognition of service with a predecessor employer will become a Participant as
of the day the Plan credits service with a predecessor employer or, if later,
the date the Employee would have otherwise entered the Plan had the service
with the predecessor employer been service with the Employer.

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

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

 26
 

 

3.3                               DETERMINATION
OF ELIGIBILITY

The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the
Employer.  Such determination shall be
conclusive and binding upon all persons, as long as the same is made pursuant
to the Plan and the Act.  Such determination
shall be subject to review pursuant to Section 2.11.

3.4          TERMINATION OF ELIGIBILITY

In the event a
Participant shall go from a classification of an Eligible Employee to an
ineligible Employee, such  Former Participant shall continue
to  vest in the Plan for each Year of Service
(or Period of Service, if the Elapsed Time Method  is used) completed while an ineligible Employee, until such time
as the Participant’s Account is forfeited or distributed pursuant to the terms
of the Plan. Additionally, the Former Participant’s interest in the Plan shall
continue to share in the earnings of the Trust Fund in the same manner as
Participants.

3.5          REHIRED EMPLOYEES AND BREAKS IN
SERVICE

(a)             If any Participant becomes a Former
Participant due to severance from employment with the Employer and is
reemployed by the Employer before a 1-Year Break in Service occurs, the Former
Participant shall become a Participant as of the reemployment date.

(b)             If any Participant becomes a Former
Participant due to severance from employment with the Employer and is reemployed after a 1-Year Break in Service has occurred,
Years of Service (or Periods of Service if the Elapsed Time Method is
being used) shall include Years of Service (or Periods of Service if the
Elapsed. Time Method is being used) prior to the 1-Year Break in Service
subject to the following rules:

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

(2)             A
Former Participant who has not had Years of Service (or Periods of Service)
before a 1-Year Break in Service disregarded pursuant to (1) above, shall
participate in the Plan as of the date of reemployment, or if later, as of the
date the Former Participant would otherwise enter the Plan pursuant to Sections
3.1 and 3.2 taking into account all service not disregarded.

(c)           After
a Former Participant who has severed employment with the Employer incurs five
(5) consecutive 1-Year Breaks in Service, the Vested portion of

 27
 

 

such Former Participant’s Account attributable to pre-break service
shall not be increased as a result of post-break service. In such case,
separate accounts will be maintained as follows:

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

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

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

3.6           ELECTION NOT TO PARTICIPATE

An Employee may, subject to the approval of the
Employer, elect voluntarily not to participate in the Plan.  The election not to participate must be
irrevocable and communicated to the Employer, in writing, within a reasonable period
of time before the beginning of the first
Plan Year. For standardized Plans, a Participant or an Eligible Employee may
not elect not to participate.

3.7          CONTROL OF ENTITIES BY OWNER-EMPLOYEE

Effective with respect to Plan Years beginning after
December 31, 1996, if this Plan
provides contributions or benefits for one or more Owner-Employees, the
contributions on

 28
 

 

behalf of any Owner-Employee shall be made only
with respect  to the Earned Income for
such Owner-Employee which is derived from the trade or business with respect to
which such Plan is established.

ARTICLE IV

CONTRIBUTION AND ALLOCATION

4.1          FORMULA FOR
DETERMINING EMPLOYER’S CONTRIBUTION

(a)                                  For a Money Purchase Plan:

(1)           The Employer will
make contributions on the following basis. On
behalf of each Participant eligible to
share in allocations, for each year
of such Participant’s participation  in
this Plan, the Employer will contribute the amount elected in the
Adoption Agreement. All contributions by the Employer will be made in cash. In
the event a funding waiver is obtained, this Plan shall be deemed to be an
individually designed plan.

(2)           Notwithstanding the
foregoing, with respect to an Employer which is not a tax-exempt entity, the
Employees contribution for any Fiscal Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code Section
404. However, to the extent necessary to provide the top heavy minimum
allocations, the Employer shall make a contribution even if it exceeds the
amount that is deductible under Code Section 404.

(b)           For a Profit Sharing Plan:

(1)           For each Plan Year,
the Employer may (or will in the case of a Prevailing Wage contribution)
contribute to the Plan such amount as elected by the Employer in the Adoption
Agreement.

(2)           Additionally,
the Employer  will contribute to the Plan the amount necessary, if
any, to provide the top heavy minimum allocations, even if it exceeds current or accumulated Net Profit
or the amount that is deductible under Code Section 404.

4.2          TIME OF PAYMENT OF EMPLOYER’S
CONTRIBUTION

Unless otherwise
provided by contract or law, the Employer may make its contribution to the Plan
for a particular Plan Year at such time as
the Employer, in its sole discretion, determines.  If the Employer makes a contribution for a
particular Plan Year after the close of that Plan Year, the Employer will
designate to the Administrator the Plan Year for which the Employer is making
its contribution.

 29
 

 

4.3            ALLOCATION OF CONTRIBUTION,
FORFEITURES AND EARNINGS

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

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

(1)           For
a Money Purchase Plan (other than a Money Purchase Plan which is integrated by
allocation):

(i)            The Employer’s contribution shall be allocated to each
Participant’s Account in the manner set forth in
Section 4.1 herein and as specified in the Adoption Agreement.

(ii)           However,
regardless of the preceding, a Participant shall only be eligible to share in
the allocations of the Employer’s contribution for the year if the conditions
set forth in the Adoption Agreement are
satisfied, unless a top heavy contribution is required pursuant to Section
4.3(f).  If no election is made in
the Adoption Agreement, then a Participant shall be eligible to share in the
allocation of the Employer’s contribution for the year if the Participant
completes more than five hundred (500) Hours of Service for three (3) Months of
Service if the Elapsed Time method is chosen in the Adoption Agreement) during
the Plan Year or who is employed on the last day of the Plan Year.  Furthermore, with respect to a
non-standardized Adoption Agreement, regardless of any election in the Adoption
Agreement to the contrary, for the Plan Year in which this Plan terminates, a Participant shall only be eligible to share in
the allocation of the Employer’s contributions for the Plan Year if the
Participant is employed at the end of the Plan Year and has completed a Year of
Service (or Period of Service if the Elapsed
Time Method is elected).

(2)           For an integrated Profit Sharing Plan allocution
or a Money Purchase Plan which is integrated by. allocation:

(i)            Except
as provided in Section 4.3(f) for top heavy purposes and subject to the “Overall
Permitted Disparity Limits,” the Employer’s contribution shall be allocated to
each Participant’s Accounts in a dollar amount equal to 5.7% of the sum of each
Participant’s Compensation plus Excess Compensation.  If the Employer does not contribute such
amount of all Participant’s, each Participant’s Compensation plus Excess Compensation
for the Plan Year bears to the total Compensation plus the total

 30
 

 

Excess Compensation of all Participants for that
year.  However,  in the case of any Participant who has exceeded the “Cumulative
Permitted Disparity Limit,” the allocation set forth in this paragraph shall be
based on such Participant’s Compensation rather than Compensation plus Excess
Compensation.

Regardless of the
preceding, 4.3% shall be substituted for 5.7% above if Excess Compensation is
based on more than 20% and less than or equal to 80% of the Taxable Wage
Base.  If Excess Compensation is based on
less than 100% and more than 80% of the Taxable Wage Base, then 5.4% shall be substituted for 5.7% above.

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

(iii)          However,
regardless of the preceding, a Participant shall only be eligible to share in
the allocations of the Employer’s Contribution for the year if the conditions
set forth in the Adoption Agreement
are satisfied, unless as contribution is required pursuant to Section
4.3(f).  If no election is made in the
Adoption Agreement, then a Participant shall be eligible to share in the
allocation of the Employer’s contribution for the year if the Participant
completes more than five hundred (500) Hours of Service (or three (3) Months of
Service if the Elapsed Time method is chosen in the Adoption Agreement) during
the Plan Year or who is employed on the last day of the Plan Year.  Furthermore, with respect to a
non-standardized Adoption Agreement, regardless
of any election in the Adoption Agreement to the contrary, for the Plan
Year in which this Plan terminates, a Participant shall only be eligible to
share in the allocation of the Employer’s contributions for the Plan Year if
the Participant is employed at the end of the Plan Year
and has completed a Year of Service (or Period of Service if the
Elapsed Time Method is elected).

(3)           For a Profit Sharing Plan with a non-integrated allocation
formula or a Prevailing Wage contribution:

(i)            The Employer’s contribution shall be allocated to each
Participant’s Account in accordance with the allocation method elected in the
Adoption Agreement.

(ii)           However, regardless of the preceding, a Participant shall
only be eligible to share in the allocations of the Employer’s contribution for
the year if the conditions set forth in the Adoption Agreement are satisfied,
unless a top heavy contribution is required pursuant to Section 4.3( f).  If no election is made in the Adoption
Agreement, then a Participant shall be

 31
 

 

eligible to share in the
allocation of the Employees contribution for the year if the Participant
completes more than five hundred (500) Hours of Service (or three (3) Months of
Service if the Elapsed Time method is chosen in the Adoption Agreement) during
the Plan Year or who is employed on the last day of the Plan Year.  Furthermore, with respect to a
non-standardized Adoption Agreement, regardless of any election in the Adoption
Agreement to the contrary, for the Plan Year in which this Plan terminates, a
Participant shall only be eligible to share in the allocation of the Employer’s
contributions for the Plan Year if the Participant is employed at the end of
the Plan Year and has completed a Year of Service (or Period of Service if the
Elapsed Time Method is elected).

(4)           “Overall Permitted Disparity Limits”:

“Annual Overall Permitted Disparity Limit”:  Notwithstanding the preceding paragraphs, if
in any Plan “benefits” any Participant who “benefits” under another qualified
plan or simplified employee pension, as defined in Code Section 408(k),
maintained by the Employer that either provides for or imputes permitted
disparity (integrates), then such plans will be considered to be one plan and
will be considered to comply with the permitted disparity rules if the extent
of the permitted disparity of all such plans does not exceed 100%.  For
purposes of the preceding sentence, the extent of the permitted
disparity of a plan is the ratio, expressed as a percentage, which the actual
benefits, benefit rate, offset rate, or employer contribution rate, whatever is
applicable under the Plan, bears to the limitation under Code Section 401(I) applicable to such
Plan.  Notwithstanding the foregoing, if
the Employer maintains two or more standardized paired plans, only one plan may
provide for permitted disparity.

“Cumulative Permitted Disparity Limit”:  With respect to a Participant who “benefits” or “has benefited” under a
defined benefit or target benefit plan of the Employer, effective for Plan
Years beginning on or after January 1, 1994, the cumulative permitted disparity
limit for the Participant is thirty five (35) total
cumulative permitted disparity years. Total cumulative permitted
disparity years means the number of years credited to the Participant for
allocation or accrual purposes under the
Plan,  any other qualified plan or
simplified employee pension plan (whether or not terminated) ever
maintained by the Employer, while such plan either provides for or imputes permitted disparity.  For purposes of determining the Participant’s
cumulative permitted disparity limit, all years ending in the same calendar
year are treated as the same year. If the Participant has not “benefited” under
a defined benefit or target benefit plan which neither provides for nor imputes
permitted disparity for any year beginning on or after January 1, 1994, then
such Participant has no cumulative disparity limit.

 32
 

 

For purposes of this Section “benefiting” means
benefiting under the Plan for any Plan Year during which Participant received
or deemed receive an allocation in accordance  with
Regulation 1.410(b)-3(a).

(c)              Except as otherwise elected in the
Adoption Agreement or as provided in Section 4.10 with respect to
Participant Directed Accounts, as of each Valuation Date, before allocation of
any Employer contributions and Forfeitures, any earnings or losses (net
appreciation or net depreciation) of the Trust Fund (exclusive of assets
segregated for distribution) shall be allocated in the same proportion that
each Participant’s and Former Participant’s nonsegregated
accounts bear to the total of all Participants’ and Former Participants’
nonsegregated accounts as of such date. If any nonsegregated account of
a Participant has been distributed prior to the Valuation Date subsequent to a
Participant’s termination of employment, no earnings or losses shall be
credited to such account.

(d)             Participants’
Accounts shall be debited for any insurance or annuity premiums paid, if any,
and credited with any dividends or interest received on Contracts.

(e)           On or before each Anniversary Date, any amounts
which became Forfeitures since the last Anniversary Date may be made available
to reinstate previously forfeited account balances of Former Participants, if
any, in accordance with Section 3.5(d) or used to satisfy any contribution that
may be required pursuant to Section 6.9. 
The remaining Forfeitures, if any, shall be treated in accordance with
the Adoption Agreement.  If no election
is made in the Adoption Agreement, any remaining Forfeitures wi1l be used to reduce any future Employer
contributions under the Plan. However, if the
Plan provides for an integrated
allocation, then any remaining Forfeitures will be
added to the Employer’s contributions under the Plan. Regardless of the preceding
sentences, in the event the allocation of Forfeitures provided herein shall
cause the “Annual Additions” (as defined in Section 4.4) to any Participant’s
Account to exceed the amount allowable by the Code, an adjustment shall be made
in accordance with Section 4.5.  Except,
however, a Participant shall only be eligible to share in the allocations of
Forfeitures for the year if the conditions set forth in the Adoption Agreement
are satisfied, unless a top heavy contribution is required pursuant to Section
4.3(f).  If no election is made in the
Adoption Agreement, then a Participant shall be eligible to share in the
allocation of the Employees contribution for the year if the Participant
completes more than five hundred (500) Hours of Service for three (3) Months of
Service if the Elapsed Time method is chosen in the Adoption Agreement during
the Plan Year or who is employed on the Last day of the Plan Year.

(f)            Minimum Allocations Required for Top Heavy Plan
Years: Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of
the Employer’s contributions and Forfeitures allocated to the Participant’s
Combined Account of each Non-Key Employee shall be equal to at least three
percent (3%) of such Non-Key

 33
 

 

Employee’s 415 Compensation (reduced by contributions and forfeitures,
if any, allocated to each Non-Key Employee in any defined contribution plan
included with this Plan in a “required aggregation group” (as defined in
Section 9.2(f)).  However, if (i) the sum
of the Employer’s contributions and Forfeitures allocated to the Participant’s
Combined Account of each Key Employee for such Top Heavy Plan Year is less than
three percent (3%) of each Key Employee’s 415 Compensation and (ii) this Plan
is not required to be included in a “required aggregation group” (as defined in
..Section 9.2(f)) to enable a defined benefit plan to meet the requirements of
Code Section 401( a)(4) or 410, the sum of the Employee contributions and
Forfeitures allocated to the Participant’s Combined Account of each Non-Key
Employee shall be equal to the largest percentage allocated to the Participant’s
Combined Account of any Key Employee.

However, for each Non-Key Employee
who is a Participant in a paired Profit Sharing Plan or 401(k) Profit Sharing
Plan and a paired Money Purchase Plan, the minimum three percent (3%)
allocation specified above shall be provided in the Money Purchase Plan.

If this is an integrated Plan,
then for any Top Heavy Plan Year the Employer’s contribution shall be
allocated as follows and shall still
be required to satisfy the other provisions of this subsection:

(1)          An amount equal to
three percent (3%) multiplied by each Participant’s Compensation for the Plan Year shall be allocated to each Participant’s Account.  If the Employer does not contribute such amount for all Participants,
the amount shall be allocated to each Participant’s Account in the same
proportion that such Participant’s total Compensation for the Plan bears to
the total Compensation of all Participants for such year.

(2)          The balance of the
Employer’s contribution over the amount allocated under subparagraph (1) hereof
shall be allocated to each Participant’s Account in a dollar amount equal to
three percent (3%) multiplied by a
Participant’s Excess Compensation. If the Employer does not contribute such
amount for all Participants, each Participant will be allocated a share
of the contribution in the same proportion that such Participant’s Excess Compensation bears to
the total Excess Compensation of all Participants for that year. For purposes
of this paragraph, in the case of any Participant who has exceeded the
cumulative permitted disparity limit described in Section 43(b)(4) such
Participant’s total Compensation will be taken into account.

(3)         The balance of the Employer’s contribution over
the amount allocated under subparagraph (2) hereof
shall be allocated to each Participant’s Account in a dollar amount equal to
2.7% multiplied by the sum  of each
Participant’s total Compensation plus
Excess Compensation.  If the Employer
does not contribute such amount for all Participants, each Participant will
be allocated a share of the contribution in the same proportion that such
Participant’s total Compensation plus Excess Compensation for the Plan Year
bears to the total Compensation

 34
 

 

plus Excess Compensation of all Participants for that
year. For purposes of this paragraph, in the case of any Participant who has
exceeded the cumulative permitted disparity limit described in Section
4.3(b)(4), such Participant’s total Compensation rather than Compensation plus
Excess Compensation will be taken into
account.

Regardless of the preceding, 1.3% shall be substituted
for 2.7% above if Excess Compensation is based on more than 20% and less than
or equal to 80% of the Taxable Wage Base. If Excess Compensation is based on
less than 100% and more than 80% of the Taxable Wage Base, then 2.4% shall he
substituted for 2.7% above.

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

For each Non-Key Employee who is a Participant in this
Plan and another non-paired defined contribution
plan maintained by the Employer, the minimum three percent (3%) allocation
specified above shall be provided as specified in the Adoption
Agreement.

(g)         For purposes of the minimum allocations
set forth above, the percentage allocated to the Participant’s Combined Account
of any Key Employee shall be equal to the ratio of the sum of the Employer’s contributions and Forfeitures allocated on behalf
of such Key Employee divided by the 415 Compensation for such Key
Employee.

(h)         For any Top Heavy Plan Year, the
minimum allocations set forth in this Section shall be allocated to the
Participant’s Combined Account of all Non-Key Employees who are Participants
and who are employed by the Employer on the last day of the Plan Year,
including Non-Key Employees who have (1) failed to complete a Year of Service; or (2) declined to make mandatory
contributions (if required) or, in the case of a cash or deferred arrangement,
Elective Deferrals to the Plan.

(i)           Notwithstanding anything herein to
the contrary, in any Plan Year in which the Employer maintains both this Plan
and a defined benefit pension plan included in a “required aggregation group”
(as defined in Section 9.2(f) which is top heavy, the Employer will not be
required (unless otherwise elected in the Adoption Agreement) to provide a
Non-Key Employee with both the full separate minimum defined benefit plan
benefit and the full separate defined contribution plan allocations. In such
case, the top heavy minimum benefits will be provided as elected in the
Adoption Agreement and, if applicable, as follows:

 35
 

 

(1)                            If the
5% defined contribution minimum is elected in the Adoption Agreement:

(i)            The requirements of Section 9.1 will apply except that
each Non-Key Employee who is a  Participant
in the Profit  Sharing Plan or
money Purchase Plan and who is also a
Participant in the Defined Benefit Plan will receive a minimum
allocation of five percent (5%) of such Participant’s 415 Compensation from the
applicable defined contribution plan(s).

(ii)           For each Non-Key Employee who is a
Participant only in the Defined Benefit Plan the Employer will provide a
minimum non-integrated benefit equal to two percent (2%) of such Participant’s highest five (5) consecutive year
average 415 Compensation for each Year of Service while a participant in
the plan, in which the Plan is top heavy, not to exceed ten (10).

(iii)          For
each Non-Key Employee who is a Participant Only  in this defined contribution plan,
the Employer will provide a minimum
allocation equal to three percent (3%) of such Participant’s 415
Compensation.

(2)          If the 2% defined
benefit minimum is elected in the Adoption Agreement, then for each Non-Key Employee
who is a Participant only in the defined benefit plan, the Employer will
provide a minimum non-integrated benefit equal to two percent (2%) of such Participant’s highest five (5)
consecutive year average of 415 Compensation
for each Year of Service while a participant in the Plan, in which the Plan is
top heavy, not to  exceed ten
(10).

(j)           For
the purposes of this Section, 415
Compensation will be limited to the same dollar limitations set forth in
Section 1.11  adjusted in such
manner as permitted under Code Section 415(d).

(k)          Notwithstanding anything in this
Section to the contrary, all information necessary to properly reflect a given
transaction may not be available until after the date specified herein for
processing such transaction, in which case the transaction will be reflected when such information is
received and processed. Subject to express limits that may be imposed under the
Code, the processing of any  contribution,
distribution or other transaction may be delayed for any legitimate business
reason (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). The
processing date of a transaction will be binding for all purposes of the Plan.

(l)            Notwithstanding
anything in this Section to the contrary, the provisions of this subsection
apply for any Plan Year if, in the non-standardized Adoption Agreement, the
Employer elected to apply the 410(b) ratio percentage failsafe provisions and
the Plan fails to satisfy the “ratio percentage  test” due to a
last day of the Plan Year allocation condition or an Hours of Service (or months of service)
allocation condition. A plan satisfies the “ratio percentage test” if, on the
last of the Plan Year, the “benefiting ratio”

 36
 

 

of the Highly Compensated
Employees who are “includible” is at least 70% of the “benefiting ratio” of the
Highly Compensated Employees who are “includible.” The “benefiting ratio” of
the Non-Highly Compensated Employees is the number of “includible” Non-Highly
Compensated Employees “benefiting” under the Plan divided by the number of “includible” Employees
who are Non-Highly Compensated “benefiting ratio” of the Highly Compensated
Employees is the number of Highly Compensated Employees “benefiting” under the
Plan divided by the number of “includible” Highly Compensated Employees, “Includible”
Employees are all Employees other than: (1) those Employees excluded from
participating in the plan for the entire Plan Year by reason of the collective
bargaining unit exclusion or the nonresident alien exclusion described in the
Code or by reason of the age and service requirements of Article III; and (2)
any Employee who incurs a separation from service during the Plan Year and
fails to complete at least 501 Hours of Service (or three (3) months of service
if the Elapsed Time Method is being used) during such Plan Year.

For purposes of this subsection, an Employee is “benefiting”
under the Plan on a particular date if, under
the Plan, the Employee is entitled to an Employer contribution or an allocation
of Forfeitures for the Plan Year.

If this subsection applies, then
the Administrator will suspend the allocation conditions for the “includible”
on-Highly Compensated Employees who are Participants, beginning first with the “includible”
Employees employed by the Employer on the last day of the Plan Year, then the “includible”
Employees who have the latest separation from service during the Plan Year, and
continuing to suspend the allocation conditions for each “includible” Employee
who incurred an earlier separation from service, from the latest to the
earliest separation from service date, until the Plan satisfies the “ratio
percentage test” for the Plan Year. If two or more “includible” Employees have
a separation from service on the same day, then the Administrator will suspend
the allocation conditions for all “includible”‘ Employees, irrespective of
whether the Plan can satisfy the “ratio percentage test” by accruing
benefits for fewer than all such “includible” Employees. If the Plan for any Plan
Year suspends the allocation conditions for an Includible Employee, then that
Employee will share in the allocation for that Plan Year of the Employer
contribution and Forfeitures, if any, without regard to whether the Employee
has satisfied the other allocation conditions
set forth in this Section.

4.4          MAXIMUM
ANNUAL ADDITIONS

(a)(1)       If a
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(1)(2)) maintained by the
Employer, or a simplified employee pension (as defined in Code Section 408(k))
maintained by the Employer which provides “Annual Additions,” the amount of “Annual
Additions,” which may be credited to the Participant’s accounts for any
Limitation Year shall not exceed the lesser of the “Maximum Permissible Amount”
or any other limitation contained in this Plan. 
If

 37
 

 

the Employer contribution that would otherwise be contributed or
allocated to the Participant’s accounts would cause the “Annual Additions” for the
Limitation Year to exceed the “Maximum Permissible Amount,” the amount
contributed or allocated will be reduced so that the “Annual Additions” for the
Limitation Year swill equal the “Maximum Permissible
Amount,” and any amount in excess of the “Maximum Permissible Amount” which would have been allocated to such
Participant may be allocated to other Participants.

(2)              Prior
to determining the Participant’s actual 415 Compensation for the Limitation
Year, the Employer may determine the “Maximum Permissible Amount” for a
Participant on the basis of a reasonable estimation of the Participant’s 415
Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated.

(3)              As soon as is administratively feasible after
the end of the Limitation Year the “Maximum Permissible
Amount” for such
Limitation Year shall be determined on the basis of the Participant’s actual
415 Compensation for such Limitation Year.

(b)(1)         This subsection applies if, in addition
to this Plan, a Participant is covered under another qualified  defined contribution plan maintained by the
Employer that  is a “Master or
Prototype Plan,” a welfare benefit fund (as defined in Code Section
419(e)) maintained by the Employer, an  individual medical
account (as defined in Code Section
415(1)(2)) maintained by the Employer, or a simplified employee pension (as
defined in Code Section 408( k))  maintained
by the Employer, which provides “Annual Additions,” during any Limitation Year.
The “Annual Additions” which
may be credited to a Participant’s
accounts under this Plan for any such Limitation Year shall not exceed the “Maximum
Permissible Amount” reduced by the “Annual Additions” credited to a Participant’s
accounts under the other plans and 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 other defined contribution plans and welfare benefit funds
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 accounts under this Plan would cause the “Annual Additions” for  the Limitation
Year to exceed this limitation, the amount contributed or allocated will he reduced, so that the “Annual
Additions” under all such plans and
welfare benefit funds for the Limitation Year will equal the “Maximum
Permissible Amount,’ and any amount in excess of the “Maximum Permissible
Amount” which would have been allocated to such Participant may be allocated to
other Participants. If the “Annual Additions” with respect to the Participant
under such other 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.

 

 38

 

(2)           Prior
to determining the Participant’s actual 415 Compensation for the Limitation
Year, the Employer may determine the “Maximum Permissible Amount” for a
Participant on the basis of a reasonable estimation of the Participant’s 415
Compensation for the Limitation Year, uniformly determined for all Participants
similarly situated.

(3)           As
soon as is administratively feasible after the end of the Limitation Year, the “Maximum
Permissible  Amount” for the  Limitation
Year will be determined on the basis of the Participant’s actual 415 Compensation for the
Limitation Year.

(4)           If,
pursuant to Section 4.4(b)(2) or Section 4.5. 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, and then by “Annual Additions” to a
plan subject to Code Section 412, regardless of the actual allocation date.

(5)           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:

(i)            the
total “ Excess Amount” allocated as of such date, times.

(ii)           the
ratio of (1) the “Annual Additions” allocated to the Participant for the Limitation
Year as of such date under this Plan to (2) the total “Annual Additions”
allocated to the Participant for the Limitation Year as of such date under this
and all the other qualified defined contribution plans.

(6)           Any “Excess Amount” attributed to
this Plan will be disposed of in the manner described in Section 4.5.

(c)           If the Participant is covered under
another qualified defined contribution plan maintained by the Employer which is
not a “Master or Prototype Plan.” “Annual Additions” which may be credited to
the Participants Combined Account under this
Plan for any Limitation Year will be limited in accordance with Section 4.4(b),
unless in the Adoption Agreement.

(d)           For
any Limitation Year beginning prior to the date the Code Section 415(e) limits
are repealed with respect to this Plan (as specified in the Adoption Agreement
for the GUST transitional rules), if the Employer maintains or at any tine maintained, a qualified defined benefit  plan covering any Participant  in
this Plan, then the sum of the Participant’s “Defined Benefit Plan
Fraction” and “Defined
Contribution

 39
 

 

Plan Fraction” may not exceed 1.0. In such event, the rate of accrual
in the defined benefit plan will be reduced to the extent necessary so that the
sum of the “Defined_ Contribution Fraction”
and “Defined Benefit Fraction” will
equal 1.0.  However, in the
Adoption Agreement the Employer may specify an alternative method under which
the plans involved will satisfy the limitations of Code Section 415(e), including increased top heavy minimum benefits so that
the combined limitation is 1.25 rather than 1.0.

(e)           For
purposes of applying  the limitations of Code Section 415, the transfer of
funds from one qualified plan to another is not an “Annual Addition.”  In addition, the following are not Employee  contributions for the purposes of Section 4.4(f)(1)(b); (1 )  rollover contributions (as defined in Code Sections 402(c)
403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of loans made to a
Participant front the Plan: (3) repayments of distributions received by an
Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of
distributions received by an Employee pursuant to Code Section 411(a)(3)(D)
(mandatory contributions); and (5) Employee contributions to a simplified
employee pension excludable from gross income under Code Section 408(k)(6).

(f)            For
purposes of this Section, the following terms shall be defined as follows:

(1)           “Annual Additions” means the sum credited to
a Participant’s accounts for any Limitation Year of (a) Employer contributions
(b) Employee contributions (except as provided below), (c) forfeitures, (d)
amounts allocated, after March 31, 1984, to an individual medical account, as
defined in Code Section 415(1)(2), which is part of  a
pension or annuity plan maintained by the Employer (e) 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 Code Section 419A(d)(3)) under a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the Employer and
(f) allocations under a simplified employee pension. Except, however, the Compensation percentage limitation referred to in
paragraph (f)(9)(ii) shall not apply
to:  (1) any contribution for
medical benefits (within the  meaning
of Code section 419(f)(2)) after separation from service which is otherwise
treated as an “Annual Addition,” or (2) any amount otherwise treated as an “Annual
Addition” under Code Section 415(1)(l). Notwithstanding
the foregoing, for Limitation Years beginning prior to January 1, 1987, only that portion of Employee
contributions equal to the lesser of Employee contributions in excess of
six percent (6%) of 415 Compensation or one-half of Employee contributions
shall be considered an “Annual Addition.”

For this purpose, any Excess Amount applied under
Section 4.5 in the Limitation Year to reduce Employer contributions shall be
considered “Annual Additions” for such Limitation Year.

 40
 

 

(2)           “Defined Benefit Fraction” means
a fraction, the numerator of which is the sum of the Participants  “Projected Annual Benefits” under all the defined
benefit plans (whether or not terminated ) maintained by the Employer,
and the denominator of which is the lesser of one hundred twenty-five percent
(125%) of the dollar limitation determined for the Limitation Year under Code
Sections 415(b)(1)(A) as adjusted by Code Section 415(d) or one hundred forty
percent (140%) of the “Highest Average Compensation” including any adjustments
under Code Section 415(b).

Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined benefit plans maintained by the Employer which were in existence on May 6,
1986, the denominator of this fraction will not be less than one hundred
twenty five percent (125%) of the sum of the annual benefits under such plans
which the Participant had accrued as of the end of the close of the last
Limitation Year beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Code Section 415 for all Limitation Years
beginning before January 1, 1987.

Notwithstanding the foregoing, for any Top Heavy Plan
Year, one hundred percent (100%) shall
be substituted for one hundred twenty-five
percent (125%) unless the extra top heavy minimum allocation or benefits is being made pursuant to the
Employer’s specification in the Adoption Agreement. However, for any Plan Year
in which this Plan is Super Top Heavy Plan, one hundred percent (100%) shall
always be substituted for one hundred twenty-five percent (125%).

(3)           Defined
Contribution Dollar Limitation means $30,000 as adjusted under Code Section
415(d).

(4)           Defined
Contribution Fraction means a fraction, the numerator of which is the sum of
the “Annual  Additions” to the
Participant’s accounts under all the defined contribution plans (whether or not
terminated) maintained by the Employer for the current and all prior “Limitation
Years.”  (including the “Annual Additions”
attributable to the Participant’s nondeductible voluntary employee
contributions to any defined benefit plans, whether or not terminated,
maintained by the Employer and the “Annual Additions” attributable to all welfare benefit funds (as defined in Code Section 419(e)),
individual medical account (as defined in Code Section 415(1)(2)), and
simplified employee pensions (as defined in Code Section 408(k)) maintained by
the Employer), and the denominator of which is the sum of the “Maximum
Aggregate Amounts” for the current and all prior Limitation Years in which the Employee had service with the Employer (regardless of whether a
defined contribution plan was maintained by the Employer). The maximum aggregate amount in any Limitation Year
is the lesser of one hundred twenty-five
percent (125%) of the dollar limitation determined under Code Section
415(c)(1)(A) as adjusted by Code Section 415(d) or thirty-five percent (35%) of
the Participant’s 415 Compensation for such Year.

 41
 

 

If the Employee was a Participant as of the end of the
first day of the first Limitation Year beginning after December 31, 1986 in one
or more defined contribution plans maintained by the Employer which were in
existence on May 5, 1986, the numerator of this fraction will be adjusted if the sum of this fraction,
and the “Defined Benefit Fraction” would otherwise exceed 1.0 under the terms
of this Plan.  Under the adjustment, an
amount equal to the product of (1) the excess of the sum of the fractions over
1.0 times (2) the denominator of this
fraction will be permanently subtracted from
the numerator of this fraction.  The
adjustment is calculated using the fractions as they will be computed as of the
end of the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the plan made after May
5, 1986, but using the Code Section 415
limitation applicable to the first Limitation Year
beginning on or after January 1, 1987.

For Limitation Years beginning prior to January 1,
1987, the “Annual Additions” shall not be recomputed to Employee contributions
as “Annual Additions”:

Notwithstanding the foregoing, for any Top Heavy Plan
Year, one hundred percent (100%) shall be substituted for one hundred
twenty-five percent (125%) unless the extra top heavy minimum allocation or
benefit is being made pursuant to the Employer’s specification in the Adoption
Agreement.  However, for any Plan Year in
which this Plan is a Super Top Heavy Plan, one hundred percent (100%) shall
always be substituted for one hundred twenty-five percent (125%).

(5)           “Employer” means the
Employer that adopts this Plan and all Affiliated Employers, except that for
purposes of this Section, the determination of whether an entity is an
Affiliated Employer shall be made by applying Code Section 415(h).

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

(7)           “Highest Average
Compensation” means the average Compensation for the three (3) consecutive
Years of Service with the Employer while a Participant in the Plan that
produces the highest average.  A Year of
Service with the Employer is the twelve (12) consecutive month period ending on
the last day of the Limitation Year.

(8)           “Master or Prototype
Plan” means a plan the form of which is the subject of a favorable opinion
letter from the Internal Revenue Service.

 42
 

 

(9)           “Maximum Permissible
Amount” means the maximum Annual Addition that may be contributed or allocated
to a Participant’s accounts under the Plan for any “Limitation Year,” which
shall not exceed the lesser of:

(i)            the
“Defined Contribution Dollar Limitation,” or

(ii)           twenty-five
percent (25%) of the Participant’s 415 Compensation for the “Limitation Year.”

The Compensation Limitation referred to in (ii) shall
not apply to any contribution for medical benefits within the meaning of Code
Sections 401(h) or 419A(f)(2) which is otherwise treated as an “Annual
Addition.”

If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different twelve (12) consecutive
month period, the “Maximum Permissible Amount” will not exceed the “Defined
Contribution Dollar Limitation” multiplied by a fraction, the numerator of
which is the number of months in the short Limitation Year and the denominator
of which is twelve (12).

(10)         “Projected
Annual Benefit” means the annual retirement benefit (adjusted to an actuarially
equivalent “straight life annuity” if such benefit is expressed in a form other
than a “straight life annuity” or qualified joint and survivor annuity) to
which the Participant would be entitled under the terms of the plan assuming:

(i)            the
Participant will continue employment until Normal Retirement Age (or current
age, if later), and

(ii)           the
Participant’s 415 Compensation for the current Limitation Year and all other
relevant factors used to determine benefits under the Plan will remain constant
for all future Limitation Years.

For purposes of this subsection, “straight life
annuity” means an annuity that is payable in equal installments for the
life of the Participant that terminates upon the Participant’s death.

(g)           Notwithstanding
anything contained in this Section to the contrary, the limitations,
adjustments and other retirements prescribed in this Section shall at all times
comply with the provisions of Code Section 415 and the Regulations thereunder.

4.5             ADJUSTMENT OR EXCESSIVE ANNUAL
ADDITIONS

Allocation of “Annual
Additions” (as defined in Section. 4.4) to a Participant’s Combined Account for
a Limitation Year generally will cease once the limits of Section 4.4 have been
reached for such Limitation Year. 
However, if as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant’s annual 415
Compensation, a reasonable error in

 43
 

 

determining the amount of
elective deferrals (within the meaning of Code Section 402(g(3)) that may be
made with respect to any Participant
under the limits of Section 4.4, or other facts and circumstances to which
Regulation 1.415-6(b)(6) shall be applicable, the “Annual Additions” under this
Plan would cause the maximum provided in Section 4.4 to be exceeded, the “Excess Amount” will be disposed
of in one of the following manners, as uniformly determined by the Plan
Administrator for all Participants similarly situated:

(a)           Any
after-tax voluntary Employee contributions (plus attributable gains) to the
extent they would reduce the Excess Amount that will be distributed to
the Participant;

(b)           If, after the application of
subparagraph (a), an “Excess Amount” still exists, any unmatched Elective Deferrals (and for Limitation Years
beginning after December 31, 1995, any gains attributable to such Elective Deferrals),
to the extent they would reduce the Excess Amount, will be distributed to the
Participant;

(c)           To the extent necessary, matched
Elective Deferrals and Employer matching contributions will be proportionately
reduced from the Participant’s Account. The Elective Deferrals (and for
Limitation Years beginning after December
31,1995, any gains attributable to such Elective Deferrals) will be distributed
to the Participant and the Employer matching contributions (and for Limitation
Years beginning after December 31, 1995, any gains attributable to such
matching contributions) will be used to reduce the Employer’s contributions in
the next Limitation Year;

(d)         If, after the application of
subparagraphs (a), (b), and (c), 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 (including any allocation of Forfeitures) for
such Participant in the next Limitation Year, and each succeeding Limitation
Year if necessary;

(e)           If, after the application of
subparagraphs (a), (b) and (c) an (“Excess Amount” still exists, and the
Participant is not covered by the Plan at the end of a Limitation Year, the “Excess
Amount” will be held unallocated in a suspense account. The suspense
account will be applied to reduce future Employer contributions (including
allocation of any Forfeitures) for all
remaining Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary; and

(f)            If a suspense account is in
existence at any time during a Limitation Year pursuant to this Section,  no investment gains and losses shall be
allocated to such suspense account. 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 Participants’
Accounts before any Employer contributions or any Employee contributions may be
made to the Plan for that Limitation Year.
Except as provided in (a), (b) and (c) above. “Excess Amounts” may not be
distributed to Participants or Former Participants,

 44
 

 

4.6             ROLLOVERS

(a)           If elected in the Adoption Agreement and with the consent
of the Administrator, the Plan may accept a “rollover,” provided the “rollover” will not jeopardize the
tax-exempt status of the Plan or create adverse tax  consequences for the Employer. The amounts rolled over shall be
set up in a Separate account herein termed to as a “Participant’s Rollover.” Such account shall be fully Vested at all times
and shall not be subject to forfeiture for any reason. For purposes of
this Section, the term Participant shall include any Eligible Employee who is
not yet a Participant, if, pursuant to the
Adoption Agreement “rollovers” are permitted to be accepted from Eligible
Employees.  In addition, for purposes of
this Section the term Participant shall also include former Employees if the
Employer and Administrator consent to accept “rollovers” of distributions made
to former Employees from any plan of the Employer.

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

(c)          At
Normal Retirement Date, or such other
date when the Participant or Eligible Employee or such Participant’s or Eligible Employees Beneficiary shall be entitled to
receive benefits, the Participant’s Rollover Account shall be used to
provide additional benefits to the Participant or the Participants Beneficiary.
Any distribution of amounts held in as Participants Rollover Account shall be
made in a manner which is consistent with and satisfies the provisions of
Sections 6.5 and 6.6, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder.  Furthermore, such amounts
shall be considered to be part of a Participant’s benefit in determining
whether an involuntary cash-out of benefits may be made without Participant
consent.

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

(e)          For
purposes of this Section, the term “qualified plan” shall mean any tax
qualified plan under Code Section 401(a), or
any other plans from which distributions are eligible to be rolled over into
this Plan pursuant to the Code. The term “rollover” means: (i) amounts
transferred to this Plan in a direct rollover made pursuant to Code Section
401(a)(31) from another “qualified plan”: (ii) distributions received by an
Employee from other “qualified plans” which are eligible for tax-free rollover
to a “qualified plan” and which are transferred by the Employee to this Plan
within sixty  (60) days following

 45
 

 

receipt thereof; (iii)  amounts transferred to this Plan from a
conduit individual retirement account provided that the conduit individual
retirement account has no assets other than assets which (A) were previously distributed tine Employee by another  “qualified plan” (B) were eligible for tax-free
rollover to a “qualified plan.” and (C) were deposited in such conduit
individual retirement account within sixty (60) days of receipt thereof;
(iv) amounts distributed to the Employee from a conduit retirement account
meeting the requirements of clause (iii)
above and transferred by the Employee to this Plan within sixty (60) days of
receipt thereof from such conduit individual retirement account; and (v)
any other amounts which are eligible to be
rolled over to this Plan pursuant tan the Code.

(f)            Prior to accepting any “rollovers” to
which this Section applies, the Administrator may require the Employee
to establish (by providing opinion of counsel or otherwise) that the amounts to
he rolled over to this Plan meet the requirements of this Section.

4.7             PLAN-TO-PLAN TRANSFERS FROM
QUALIFIED PLANS

(a)           With the consent of the
Administrator, amounts may be transferred (within the meaning of Code Section
414(1)) to this Plan from other tax qualified plans under Code Section 401 task
provided the plan from which such funds are transferred permits the transfer to
be made and the transfer will not jeopardize the tax-exempt status of the Plan
or Trust or create adverse tax consequences for the Employer.  Prior to accepting any transfers to which
this Section applies, the Administrator may require an opinion of counsel that
the amounts to be transferred meet the requirements of this Section. The
amounts transferred shall be set up in a separate account herein referred to as
a “Participant’s Transfer Account.”
Furthermore, for Vesting purposes, the Participant’s Transfer Account shall be
treated as a separate “Participant’s Account.”

(b)           Amounts in a Participant’s Transfer
Account shall be held by the Trustee pursuant to the provisions of this Plan
and may not be withdrawn by or distributed to the Participant, in whole or in
part, except as elected in the Adoption Agreement and subsection (d) below,
provided the restrictions of subsection (c) below and Section 6.15 are
satisfied. The Trustee shall have no duty or responsibility to inquire as to
the propriety of the amount, value or type of assets transferred, nor to
conduct any due diligence with respect to such assets; provided, however, that
such assets are otherwise eligible to be held by the Trustee under the terns of
this Plan.

(c)            Except as permitted by Regulations
(including Regulation 1.411(d)-4), amounts attributable to elective contributions (as defined in Regulation
1.401(k)-1(g)(3)), including amounts treated as elective contributions,  which are transferred from another qualified plan
in as plan-to-plan transfer (other than a direct rollover) shall be subject to
the distribution limitations provided for in Regulation 1.401(k)-1(d).

 46
 

 

(d)           At
Normal Retirement Date, or such other date when the Participant or the
Participant’s Beneficiary shall be entitled
to receive benefits, the Participants Transfer Account  shall be used to provide additional benefits to
the Participant or the Participant’s Beneficiary.  Any distribution of amounts held in a
Participant’s Transfer Account shall be made in as which is consistent with and
satisfies the provisions of Sections 6.5 and 6.6, including, but not limited
to, all notice and consent requirements of 
Code Sections 411(a)(11) and 417 and the Regulations thereunder.  Furthermore, such amounts shall be considered
to be part of a Participant’s benefit in determining whether an involuntary
cash-out benefits may be made without Participant consent.

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

(f)            Notwithstanding anything herein to
the contrary, a transfer directly to this Plan from another qualified plan for
(or a transition having the effect of such a transfer) shall only be permitted
if it will not result in the elimination or reduction of any “Section 411(d)(6)
protected benefit” as described in Section 8.1(e).

4.8             VOLUNTARY
EMPLOYEE CONTRIBUTIONS

(a)              Except
as provided in subsection 4.8(b) below, this Plan will not accept after-tax voluntary Employee
contributions.   If this is an amendment
to a Plan that had previously allowed after-tax voluntary Employee
contributions, then this Plan will not accept after-tax voluntary Employee
contributions for Plan Years beginning after the Plan Year in which this Plan
is adopted by the Employer.

(b)             For 401(k) Plans, if elected in the Adoption
Agreement, each Participant who is eligible to make Elective Deferrals may, in
accordance with nondiscriminatory procedures established by the Administrator,
elect to make after-tax voluntary Employee
contributions to this Plan. Such contributions must generally be paid to the
Trustee within a reasonable period of time after being received by the
Employer.

(c)           The
balance in each Participant’s Voluntary
Contribution Account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.

(d)           A
Participant may elect at any time to withdraw after-tax voluntary Employee
contributions from  such Participant’s
Voluntary Contribution Account  and the
actual earnings thereon in a  manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder.  If the
Administrator maintains subaccounts with respect to after-tax voluntary
Employee contributions (and earnings thereon) which were made on or before a
specified date, a Participant shall be permitted to designate which sub-account
shall be the source for the withdrawal. Forfeitures of Employer contributions
shall not occur solely as a result of an Employee’s withdrawal of after-tax
voluntary Employee contributions.

 47
 

 

In the event a Participant hits received a hardship
distribution pursuant to Regulation 1.401(k)-1(d)(2)(iii)(B) from any plan
maintained by the Employer, then the Participant shall be barred from making
any after-tax voluntary Employee contributions for a period of twelve (12)
months after receipt of the hardship distribution.

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

(f)              To the extent a Participant has
previously made mandatory Employee contributions under prior provisions of this
Plan, such contributions will be treated as after-tax voluntary Employee
contributions.

4.9          QUALIFIED VOLUNTARY EMPLOYEE
CONTRIBUTIONS

(a)              If this is an amendment to a Plan
that previously permitted deductible voluntary Employee contributions, then
each Participant who made “Qualified Voluntary Employee Contributions” within
the meaning of Code Section 219(e)(2) as it existed prior to the enactment of
the Tax Reform Act of 1986, shall have such contributions held in a separate
Qualified Voluntary Employee Contribution Account which shall be fully Vested
at all times. Such contributions, however, shall not be permitted for taxable
years beginning after December 31,1986.

(b)           A Participant may, upon written
request delivered to the Administrator, make withdrawals from such Participant’s
Qualified Voluntary Employee Contribution Account.  Any distribution shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including,
but not limited to, all notice and consent requirements of Code Sections
411(a)(11) and 417 and the Regulations thereunder.

(c)           At
Normal Retirement Date, or such other date when the Participant or the
Participant’s Beneficiary is entitled to receive benefits, the Qualified
Voluntary Employee Contribution Account shall be used to provide additional
benefits to the Participant or the Participant’s Beneficiary.

4.10                  DIRECTED
INVESTMENT ACCOUNT

(a)           If elected in the Adoption Agreement,
all Participants may direct the Trustee as to the investment of all or a
portion of their individual account balances as set forth in the Adoption
Agreement and within limits set by the Employer, Participants may direct the
Trustee, in writing (or in such other form which is acceptable to the Trustee),
to invest their accounts in specific assets, specific funds or other
investments permitted

 48
 

 

under the Plan and the Participant Direction Procedures.
That portion of the account of any Participant that is subject to investment
direction of such Participant will be considered a Participant Directed
Account.

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

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

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

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

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

(e)             Investment directions will be
processed as soon as administratively practicable
after proper investment directions are received from the Participant.  No guarantee is made by the Plan Employer,
Administrator or Trustee that investment
directions will be processed on a daily basis, and no guarantee is made in any
respect regarding the
processing time of an investment direction. 
Notwithstanding any other provision of the Plan, the Employer,
Administrator or Trustee reserves the right to not value an investment option
on any given Valuation Date for any
reason deemed appropriate by the Employer, Administrator or Trustee.  Furthermore, the processing of any investment
transaction may be delayed for any legitimate business reason (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).  The processing date of a
transaction will be binding for all purposes of the Plan and considered the
applicable Valuation Date for an investment transaction.

 49
 

 

(f)              If  the
Employer has elected in the Adoption Agreement that it intends to operate any
portion of this Plan as an Act Section 404(c) plan, the Participant
Direction Procedures should provide an explanation of the circumstances under
which Participants and their Beneficiaries may give investment instructions,
including but not limited to, the following:

(1)             the conveyance of instructions by the
Participants and their Beneficiaries to invest Participant Directed
Accounts in a Directed Investment Option:

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

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

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

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

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

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

(ii)           any
designated Investment Managers; and

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

(g)             With
respect to those assets in  a Participants Directed Account, the Participant or Beneficiary shall direct
the Trustee with regard to any voting, tender and similar rights associated
with the ownership of such assets
(hereinafter referred to as the “Stock Rights”) as follows based on the election made in the Adoption
Agreement:

(1)              each Participant or Beneficiary shall direct the
Trustee to vote or otherwise exercise such Stock Rights in accordance
with the provisions, conditions and terms of any such Stock Rights:

 50
 

 

(2)              such
directions shall be provided to the Trustee by the Participant or Beneficiary
in accordance with the procedure as
established by the Administrator and the Trustee shall vote or otherwise exercise
such Stock Rights with respect to which it has received directions to do
so under this Section; and

(3)              to the extent to
which at Participant or Beneficiary does not instruct the Trustee to vote or
otherwise exercise such Stock Rights, such Participants or Beneficiaries
shall be deemed to have directed the Trustee that such Stock Rights remain
nonvoted and unexercised.

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

4.11        INTEGRATION IN MORE THAN ONE PLAN

If the Employer
maintains qualified retirement plans that provide for permitted disparity
(integration), the provisions of Section 4.3(b)(4) will apply.  Furthermore, if the Employer maintains two or
more standardized paired plans, only one plan may provide for permitted
disparity.

4.12        QUALIFIED MILITARY SERVICE

Notwithstanding
any provisions of this Plan to the contrary, effective as of the later of
December l2, 1994, or the Effective Date of
the Plan, contributions, benefits and service credit with respect to qualified
military service will be provided in accordance With Code Section
414(u).  Furthermore, loan repayments may
be suspended under this Plan .as permitted under Code Section 414(u)(4).

ARTICLE
V

VALUATIONS

5.1              VALUATION OF THE TRUST FUND

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

 

 51

 

5.2              METHOD OF VALUATION

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

ARTICLE
VI

DETERMINATION AND DISTRIBUTION OF BENEFITS

6.1          DETERMINATION OF BENEFITS UPON
RETIREMENT

Every Participant
may terminate employment with the Employer and retire for purposes hereof on
the Participant’s Normal Retirement Date or Early Retirement Date.  However, a Participant may postpone the
termination of employment with the Employer to a later date, in which event the
participation of such Participant in the Plan, including the right to receive
allocations pursuant to Section 4.3, shall continue until such Participant’s
Retirement Date.  Upon a Participants
Retirement Date, or if elected in the Adoption Agreement, the attainment of
Normal Retirement Date without termination of employment with the Employer, or
as soon thereafter as practicable, the Administrators hall direct the
distribution at the election of the Participant of the Participants entire
Vested interest in the Plan in accordance with Section 6.5.

6.2          DETERMINATION OF BENEFITS UPON DEATH

(a)             Upon the death of a Participant
before the Participant’s Retirement date or other termination of employment,
all amounts credited to such Participant’s Combined Account shall, if elected
in the Adoption Agreement, become fully Vested. The Administrator shall direct,
in accordance with the provisions of Sections 6.6 and 6.7, the distribution of
the deceased Participant’s Vested accounts to the Participant’s Beneficiary.

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

 52
 

 

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

(d)           Unless
otherwise elected in the manner prescribed in Section 6.6, the Beneficiary of
the Pre-Retirement Survivor Annuity shall be the Participant’s surviving
spouse  Except, however, the Participant
may designate a Beneficiary other them the spouse for the Pre-Retirement
Survivor Annuity if:

(1)             the
Participant and the Participant’s spouse have validly waived the Pre-Retirement
Survivor Annuity in the manner prescribed in Section 6.6, and the spouse has
waived the right to he the Participant’s Beneficiary.

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

(3)           the Participant has
no spouse; or

(4)           the spouse cannot be
located.

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

(e)             A Participant may, at any time,
designate a Beneficiary for death benefits, if any, payable under the Plan that
are in excess of the Pre-Retirement Survivor Annuity without the Waiver or
consent of the Participant’s spouse.  In
the event no valid designation of Beneficiary exists, or if the Beneficiary is
not alive at the time of the Participant’s death, the death benefit will be
paid in the following order of priority, unless the Employer specifies a different
order of priority in an addendum to the adoption Agreement, to:

(1)           The Participant’s
surviving spouse:

(2)           The
Participants children, including adopted children, per stirpes

(3)           The
Participants surviving parents, in equal shares: or

 53
 

 

(4)                                  The
Participants estate.

If the Beneficiary does not predecease the
Participant, but dies prior to distribution of the death benefit, the death
benefit will be paid to the Beneficiary’s estate.

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

(g)           If the Plan provides an insured death
benefit and a Participant dies before any insurance coverage to which the
Participant is entitled under the Plan is effected, the death benefit from such
insurance coverage shall be limited to the premium which was or otherwise would
.have
been used for such purpose.

(h)           In
the event of any conflict between the terms of this Plan and the terms of any
Contract issued hereunder, the Plan provisions shall control.

6.3          DETERMINATION OF BENEFITS IN EVENT OF
DISABILITY

In the event of a
Participant’s
Total and Permanent Disability prior to the Participant’s Retirement Date or
other termination of employment, all amounts credited to such Participant’s
Combined Account shall, if elected in the Adoption Agreement, become fully
Vested.  In the event of a Participant’s
Total and Permanent Disability, the Administrator, in accordance with the
provisions of Sections 6.5 and 6.7 shall direct the distribution to such
Participant of the entire Vested interest in the Plan.

6.4          DETERMINATION OF ENEFITS UPON
TERMINATION

(a)          If a Participant’s employment with the
Employer is terminated for any reason other than death, Total and Permanent
Disability, or retirement, then such Participant shall be entitled to such
benefits as are provided herein.

Distribution of the funds
due to a Terminated Participant shall be made on the occurrence of an event
which would result in the distribution had the Terminated  Participant remained in the
employ of the Employer (upon the Participant’s death Total and Permanent
Disability, Early or Normal Retirement). 
However, at the election of the Participant the Administrator shall
direct that the entire Vested portion of the Terminated Participant’s Combined
Account be payable Participant provided the conditions, if any, set forth in
the Adoption Agreement have been satisfied. Any distribution under this
paragraph shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder.

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Regardless of whether distributions in kind are
permitted, in the event the amount of the Vested portion of the Terminated
Participant’s Combined Account equals or exceeds the fair market value of any
insurance Contracts, the Trustee, when so directed by the administrator and
agreed to by the Terminated Participant shall assign, transfer, and set over to
such Terminated Participant all Contracts on such Terminated Participant’s life
in such form or with such endorsements, so that the settlement options and
forms of payment ‘are consistent with the provisions of Section 6.5.  In the event that the Terminated Participant’s
Vested portion does not at least equal the fair market value of the Contracts,
if any, the Terminated Participant may pay over to the Trustee the sum needed
to make the distribution equal to the value of the Contracts being assigned
transferred, or the Trustee, pursuant to the Participant’s election, may borrow
the cash value of the Contracts from the Insurer so that the value of the
Contracts is equal to the Vested portion of the Terminated Participant’s
Combined Account and then assign the Contracts to the Terminated Participant.

Notwithstanding the above, unless otherwise elected in
the Adoption Agreement, if the value of a Terminated Participant’s Vested
benefit derived from Employer and Employee contributions does not exceed $5,000
(or $3,500 for distributions made prior to the later of the first day of the
first Plan Year beginning on or after August 5, 1997, or the date specified in
the Adoption Agreement) the Administrator shall direct that the entire Vested
benefit be paid to such Participant in a single lump-sum without regard to the
consent of the Participant or the Participant’s spouse.  A Participant’s Vested benefit shall not
include Qualified Voluntary Employee Contributions within the meaning of Code
Section 72(o)(5)(B) for Plan Years beginning prior to January 1, 1989.  Furthermore, the determination of whether the
$5,000 (or, if applicable, $3,500) threshold has been exceeded is generally
based on the value of the Vested benefit as of the Valuation Date preceding the
date of the distribution. However, if the “lookback rule” applies, the
applicable threshold is deemed to be exceeded if the Vested benefit exceeded
the applicable threshold at the time of any prior distribution. The “lookback rule”
generally applies to all distributions made prior to March 22, 1999. With
respect to distributions made on or after March 22, 1999, the “lookback rule”
applies if either (1) the provisions of Section 6.12 do not apply or (2) a
Participant has begun to receive distributions pursuant to an optional form of
benefit under which at least one scheduled periodic distribution has not yet
been made, and if the value of the Participant’s benefit, determined at the
time of the first distribution under that optional form of benefit exceeded the
applicable threshold.  However, the Plan
does not fail to satisfy the requirements of this paragraph if, prior to the
adoption of this Prototype Plan, the “lookback rule” was applied to all
distributions.  Notwithstanding the
preceding, the “lookback” will not apply to any distributions made on or after
October 17, 2000.

(b)           The Vested portion of any Participant’s
Account shall be a percentage of such Participant’s Account determined on the
basis of the Participants number of Years of Service for Periods of Service if
the Elapsed Time Method is elected) according to the vesting schedule specified
in the Adoption Agreement.  However, a
Participant’s entire interest in the Plan shall be non-forfeitable upon the
Participant’s Normal Retirement Age (if the Participant is employed by the
Employer on or after such date).

 55
 

 

(c)           For
any Top Heavy Plan Year, the minimum top heavy vesting schedule elected by the
Employer in the Adoption Agreement will automatically apply to the Plan. The
minimum top heavy vesting schedule applies to all benefits within the meaning
of Code Section 411(a)(7) except those attributable to Employee contributions,
including benefits accrued before the effective date of Code Section 416 and
benefits accrued before the Plan became top heavy.  Further, no decrease in a Participant’s
Vested percentage shall occur in the event the Plan’s status as top heavy
changes for any Plan Year.  However, this
Section does not apply to the account balances of any Employee who does not
have an Hour of Service after the Plan has initially become top heavy and the
Vested percentage of such Employee’s Participant’s Account shall be determined
without regard to this Section 6.4(c).

If in any subsequent Plan Year the Plan ceases to be a
Top Heavy Plan, then unless a specific Plan  amendment
is made to provide otherwise, the Administrator will continue to use the
vesting schedule in effect while the Plan was a Top Heavy Plan.

(d)         Upon the complete discontinuance of the
Employer’s contributions to the Plan (if this is a profit sharing plan) or upon
any full or partial termination of the Plan, all amounts then credited to the
account of any affected Participant shall become 100% Vested and shall not
thereafter be subject to Forfeiture.

(e)          If
this is an amended or restated Plan, then notwithstanding the vesting schedule
specified in the Adoption Agreement, the Vested percentage of Participant’s
Account shall not be less than the Vested percentage attained as of the later
of the effective date or adoption date of this amendment and restatement. The
computation of a Participant’s nonforfeitable percentage of such Participants
interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Article, or due to changes in the Plan’s status as a
Top Heavy Plan.  Furthermore, if the Plan’s
vesting schedule is amended, then the amended schedule will only apply to those
Participants who complete an Hour of Service after the effective date of the
amendment.

(f)          If the Plan’s vesting schedule is
amended, or if the Plan is amended in any way that directly or indirectly
affects the computation of the Participant’s nonforfeitable percentage or if
the Plan is deemed amended by an automatic change to a top heavy vesting schedule,
then each Participant with at least three (3) Years of Service (or Periods of
Service if the Elapsed Time Method is elected) as of the expiration date of the
election period may elect to have such Participant’s nonforfeitable percentage
computed under the Plan without regard to such amendment or change. If a
Participant fails to make such election, then such Participant shall be subject
to the new vesting schedule.   The Participant’s election period shall
commence on the adoption date of the amendment and shall end sixty (60) days
after the latest of:

(1)                                  the
adoption date of the amendment.

(2)                                  the
effective date of the amendment, or

 56
 

 

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

(g)             In determining Years of Service or
Periods of Service for purposes of vesting under the Plan, Years of Service or
Periods of Service shall be excluded as elected the Adoption Agreement.

6.5          DISTRIBUTION OF BENEFITS

(a)(1)         Unless otherwise elected as provided
below, a Participant who married on the Annuity Starting Date and who does not
die before the Annuity Starting Date shall receive the value of all Plan
benefits in the form of a Joint and Survivor Annuity. The Joint and Survivor
Annuity is an annuity that commences immediately and shall be equal in value to
a single life annuity. Such joint and survivor benefits following the
Participants death shall continue to the spouse during the spouse’s lifetime at a rate equal to
either fifty percent (50%), seventy-five percent (75%) (or, sixty-six and
two-thirds percent (66 2/3%) if the Insurer used to provide the annuity does
not offer a joint and seventy-five percent (75% annuity ), or one hundred
percent (100%) of the rate at which such benefits were payable to the Participant.
Unless otherwise elected in the Adoption Agreement, a joint and fifty percent
(50%) survivor annuity shall be considered the designated qualified joint and
Survivor Annuity and the normal form of payment for the purposes of this plan.  However, the Participant may, without spousal
consent, elect an alternative Joint and Survivor Annuity, which alternative
shall be equal in value to the designated qualified joint and Survivor Annuity.
An unmarried Participant shall receive the value of such Participant’s benefit
in the form of a life annuity.  Such
unmarried Participant, however, may elect to waive the life annuity.  The election must comply with the provisions
of this Section as if it were an election to waive the Joint and Survivor
Annuity by a married Participant, but without fulfilling the spousal consent
requirement.  The Participant may elect
to have any annuity provided for in this Section distributed upon the
attainment of the “earliest retirement age” under the Plan.  The “earliest retirement age” is the earliest
date on which, under the Plan, the Participant could elect to receive
retirement benefits.

(2)               An election to waive the Joint
and Survivor must be made by the Participant in writing (or in such other form
as permitted by the IRS) during the election period and be consented to in
writing (or in such other form as permitted by the IRS) by the Participant’s
spouse.  If the spouse is legally
incompetent to give consent, the spouse’s legal guardian, even if such guardian
is the Participant, may give consent. 
Such election shall designate a Beneficiary (or a form of benefits) that
may not be changed without spousal consent (unless the consent of the spouse
expressly permits designations by the Participant without the requirement of
further consent by the spouse).  Such
spouse’s consent shall be irrevocable and must acknowledge the effect of such
election and be witnessed by a Plan representative or a notary public. Such
consent shall not be required if it is established to the satisfaction of the
Administrator that the required 

 57
 

 

consent cannot be
obtained because there is no spouse, the spouse cannot be located, or other
circumstances that may be prescribed by Regulations.  The election made by the Participant and
consented to by such Participant’s spouse may be revoked by the Participant in
writing (or in such other form as permitted by the IRS) without the consent of
the spouse at any time during the election period.  A revocation of a prior election shall cause
the Participant’s benefits to be distributed as a Joint and Survivor
Annuity.  The number of revocations shall
not be limited. Any new election must comply with  the requirements of this paragraph. A former spouse’s
waiver shall not be binding on a new spouse.

(3)           The election period
to waive the Joint and Survivor Annuity shall be the ninety (90) day period
ending on the Annuity Starting  Date.

(4)           For purposes of this
Section, spouse or surviving spouse means the spouse or surviving spouse of the  Participant, provided that a
former spouse will be treated as the spouse or surviving spouse and a current
spouse will not be treated as the spouse or surviving spouse to the extent
provided under a qualified domestic relations order as described in Code
Section 414(p).

(5)           With regard to the
election, except as otherwise provided herein, the Administrator shall provide
to the Participant no less than thirty (30) days and no more than ninety (90)
days before the Annuity Starting Date a written (or such other form as
permitted by the IRS) explanation of:

(i)             the
terms and conditions of the Joint and Survivor Annuity.

(ii)            the
Participant’s right  to make and
the effect of an election to waive the Joint and Survivor Annuity.

(iii)           the
right of the Participant’s spouse to consent to any election to  waive the Joint and Survivor
Annuity, and

(iv)           the
right of the Participant to revoke such election, and the effect of such
revocation.

(6)           Any distribution
provided for in this Section made on or after December 31, 1996, may commence
less than thirty (30) days after the notice required by Code Section 417(a)(3)
is given provided the following requirements are satisfied:

(i)             the
Administrator clearly informs the Participant that the Participant has a right
to a period of thirty (30) days after receiving the notice to consider whether
to waive the Joint and Survivor Annuity and to elect (with spousal consent) a
form of distribution other than a Joint and Survivor Annuity;

 58
 

 

(ii)            the
Participant is permitted to revoke any affirmative distribution election at
least until the Annuity Starting Date or, if later, at any time prior to the
expiration of the seven (7) day period that begins the day after the
explanation of the Joint and Survivor Annuity is provided to the Participant;

(iii)           the
Annuity Starting Date is after the time that the explanation of the Joint and
Survivor Annuity is provided to the Participant.  However, the Annuity Starting Date may be
before the date that any affirmative distribution election is made by the
Participant and before the date that the distribution is permitted to commence
under (iv) below; and

(iv)           distribution
in accordance with the affirmative election does not commence before the
expiration of the seven (7) day period that begins the day after the
explanation of the Joint and Survivor Annuity is provided to the Participant.

(b)           In the event a married Participant
duly elects pursuant to paragraph (a)(2) above not to receive the benefit in
the form of a Joint and Survivor Annuity, or if such Participant is not
married, in the form of a life annuity, the Administrator, pursuant to the
election of the Participant, shall direct the distribution to a Participant or
Beneficiary any amount to which the Participant or Beneficiary is entitled
under the Plan in one or more of the following methods which are permitted
pursuant to the Adoption Agreement:

(1)           One lump-sum payment
in cash or in property that is allocated to the accounts of the Participant at
the time of the distribution;

(2)           Partial withdrawals;

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

(4)             Purchase
of or providing an annuity.   However, such annuity may not be in any form
that will provide for payments over a period extending beyond either the life
of the Participant for the lives of the Participant and the Participant’s
designated Beneficiary) or the life expectancy of the Participant (or the life
expectancy of the Participant and the Participant’s designated Beneficiary).

 59
 

 

(c)             Benefits may not be paid without
the Participant’s
and the Participant’s spouse’s consent if the present value of the Participant’s
Joint and Survivor Annuity derived from Employer and Employee contributions
exceeds, or has ever exceeded, $5,000 (or $3,500, for distributions made prior
to the later of the first day of the first Plan Year beginning after August 5,
1997, or the date specified in the Adoption Agreement ) and the benefit is “immediately
distributable.”  However, spousal consent
is not required if the distribution will made in the form of a Qualified Joint
and Survivor Annuity and the benefit is “immediately distributable.”  A benefit is “immediately distributable” if
any part of the benefit could be distributed to the Participant (or surviving
spouse) before the Participant attains (or would have attained if not deceased)
the later of the Participant’s Normal Retirement Age or age 62.

If the value of the
Participant’s benefit derived from Employer and Employee contributions does not
exceed, and has never exceeded at the time any prior distribution, $5,000 (or,
if applicable, $3,300), then the Administrator will distribute such benefit in
a lump-sum without such Participant’s consent. 
No distribution may  be
made under the preceding sentence after the Annuity Starting Date unless the
Participant and the Participant’s spouse consent in writing (or in such other
form as permitted by the IRS) to such distribution.  Any consent required under this paragraph
must be obtained not more than ninety (90) days before commencement of the
distribution and shall be made in a manner consistent with Section
6.5(a)(2).  Notwithstanding the
preceding, the “lookback rule” (which provides that if the present value at the
time of a prior distribution exceeded the applicable dollar threshold, then the
present value at any subsequent time is deemed to exceed the threshold)  will not apply to any distributions made
on or after October 17, 2000.

(d)            The
following rules will apply with respect to the consent requirements set forth
in subsection (c):

(1)            No
consent shall be valid unless the Participant has received a general
description of the material features and an explanation of the relative values
of the optional forms of benefit available under the Plan that would satisfy
the notice requirements of Code Section 417;

(2)            The
Participant must be informed of the right to defer receipt of the distribution.
If a Participant fails to consent, it shall be deemed an election to defer the
commencement of payment of any benefit. 
However, any election to defer the receipt of benefits shall not apply
with respect to distributions that are required under Section 6.5(e);

(3)            Notice
of the rights specified under this paragraph shall be provided no less than
thirty (30) days and no more than ninety (90) days before the Annuity Starting
Date;

(4)            Written
(or such other form as permitted by the IRS) consent of the Participant to the
distribution must not be made before the Participant receives the notice and
must not be made more than ninety (90) days before the Annuity Starting Date;
and

 60
 

 

(5)            No
consent shall be valid if a significant detriment is imposed under the Plan on
any Participant who does not consent to the distribution.

(e)             Notwithstanding any provision in
the Plan to the contrary, for Plan Years beginning after December 31, 1990, the
distribution of a Participant’s benefits, whether under the Plan or through the
purchase of an annuity Contract, shall be made in accordance with the following
requirements and shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder (including Regulation 1.401(a)(9)-2):

(1)            A
Participant’s benefits will be distributed or must begin to be distributed not
later than the Participant’s “required beginning date.” Alternatively,
distributions to the Participant must begin no later than the Participant’s “required
beginning date” and must be made over the life of the Participant (or the lives
of the Participant and the Participant’s designated Beneficiary) or the life
expectancy of the Participant (or the life expectancies of the Participant and
the Participant’s designated Beneficiary) in accordance with Regulations.  However, if the distribution is to be in the
form of a joint and survivor annuity or single life annuity, then distributions
must begin no later than the “required beginning date” and must be made over
the life of the Participant (or the lives of the Participant and the
Participant’s designated Beneficiary) in accordance with Regulations.

(2)            The
“required beginning date” (or a Participant who is a “five percent (5%) owner”
with respect to the Plan Year ending in the calendar year in which such
Participant attains age 70 1/2 means April 1st of the calendar year following the
calendar year in which the Participant attains age 70 1/2. Once distributions
have begun to a “five percent (5%) owner” under this subsection, they must
continue to be distributed, even if the Participant ceases to be a “five
percent (5%) owner” in a subsequent year.

(3)            The
“required beginning date” for a Participant other than a “five percent (5%)
owner” means, unless the Employer has elected to continue the pre-SBJA rules in
the Adoption Agreement, April 1st of the calendar year following the later of
the calendar year in which the Participant attains age 70 1/2 or the
calendar year in which the Participant retires.

(4)            If
the election is made to continue the pre-SBJA rules, then except as provided
below, the “required beginning date” is April 1st of the calendar year
following the calendar year in which a Participant attains age 70 1/2.

 61
 

 

(i)            However,
the “required beginning date” for a Participant who had attained age 70 1⁄2
before January 1, 1988, and was not a five percent (5%) owner (within the meaning
of Code Section 416) at any time during the Plan Year ending with or within the
calendar year in which the Participant attained age 66 1/2 or any subsequent
Plan Year, is April 1st of the calendar year following the calendar in which
the Participant retires.

(ii)             Notwithstanding
(i) above, the “required beginning date” for a Participant who was a five
percent (5%) owner (within the meaning of Code Section 416) at any time during
the five (5) Plan Year period ending in the  calendar
year in which the Participant attained age 70 1/2 is April 1st of the calendar
year in which the Participant attained age 70 1/2.  In the case of a Participant who became a
five percent (5%) owner  during
any Plan Year after the calendar year in which the Participant attained Age 70
1/, the “required beginning date” is April 1st of the calendar year following
the calendar year in which such subsequent Plan Year ends.

(5)           If this is an
amendment or restatement of a plan that contained the pre-SBJPA rules and an
election is made to use the post-SBJPA rules, then the transition rules elected
in the Adoption Agreement will apply.

(6)           Except as otherwise
provided herein, “five percent (5%) owner” means, for purposes of this Section,
a Participant who is a five percent (5%) owner as defined in Code Section 416
at any time during the Plan Year ending with or within the calendar year in
which such owner attains age 70 1/2.

(7)           Distributions to a
Participant and such Participant’s Beneficiaries will only be made in
accordance with the incidental death benefit requirements of Code Section
401(a)(9)(G) and the Regulations thereunder.

(8)           For
purposes of this Section, the life expectancy of a Participant and/or a
Participant’s spouse (other than in the case of a life annuity) shall or shall
not be redetermined annually as elected in the Adoption Agreement and in
accordance with Regulations.  If the
Participant or the Participant’s spouse may elect,  pursuant to the Adoption Agreement, to have
life expectancies recalculated, then the election, once made shall be
irrevocable.  If no election is made by
the time distributions must commence, then the life expectancy of the
Participant and the Participant’s spouse shall not be subject to recalculation.
Life expectancy and joint and last survivor life expectancy shall be computed
using the return multiples in Tables V and VI of Regulation Section 1.72-9.

(9)           With respect to
distributions under the Plan made for calendar years beginning on or after
January 1, 2001, or if later, the date specified in the Adoption Agreement, the
Plan will apply the minimum distribution requirements of Code Section 401(a)(9)
in accordance with the Regulations under Section 

 62
 

 

401(a)(9) that were proposed on January 17, 2001, notwithstanding any
provision of the Plan to the contrary. 
This amendment shall continue in effect until the end of the last
calendar year beginning before the effective date of final Regulations under
Section 401(a)(9) or such other date as may be specified in guidance published
by the Internal Revenue Service.

However, if the date specified in the Adoption
Agreement is a date in 2001 other than January 1, 2001, then with respect to
distributions under the Plan made on or after such date 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 Section 401(a)(9) that were proposed on January 17, 2001,
notwithstanding any provision of the Plan to the contrary.  If the total amount of required minimum
distributions made to a participant for 2001 
prior to the specified date are equal to or greater than the amount of
required minimum distributions determined under the 2001 Proposed Regulations,
then no additional distributions are required for such participant for 2001 on
or after such date.  If the total amount
of required minimum distributions made to a participant for 2001 prior to the
specified date are less than the amount determined under the 2001 Proposed
Regulations, then the amount of required minimum distributions for 2001 on or
after such date will be determined so that the total amount of required minimum
distributions for 2001 is the amount determined under the 2001 Proposed
Regulations.  This amendment shall
continue in effect until the end of the last calendar year beginning before the
effective date of final Regulations under Section 401(a)(9) or such other date
as may be specified in guidance published by the Internal Revenue Service.

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

(g)           Subject
to the spouse’s right of consent afforded under the Plan, the restrictions
imposed by this Section shall not apply if a Participant has, prior to January
1, 1984, made a written designation to have retirement benefits paid an
alternative method acceptable under Code Section 401(a) as in effect prior to
the enactment of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA).

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

X equals P (AB
plus D) - D

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

 63
 

 

However, the
Employer may attach an addendum to the Adoption Agreement to provide that as
separate account shall be established for the Participants, interest in the
Plan as of the time of the distribution, and at any relevant time the
Participants Vested portion of the separate account will be equal to an amount
determined as follows:  P(AB plus (R x
D)) — (R x D) where R is the  ratio
of the account balance at the relevant time to the account balance after
distribution and the other terms have the same meaning as in the preceding paragraph.
Any amendment to change the formula in accordance with the preceding sentence
shall not be considered an amendment which causes this Plan to become an
individually designed Plans.

(i)            If this is a Plan
amendment that eliminates or restricts the ability of a Participant to receive
payment of the Participant’s interest in the Plan under as particular optional
form of benefit, then 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 Act 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.

6.6           DISTRIBUTION OF BENEFITS UPON DEATH

(a)           Unless otherwise
elected as provided below, a Vested Participant who dies before the Annuity
Starting Date and who has surviving spouse shall have the Pre-Retirement
Survivor Annuity paid to the surviving spouse. The Participant’s spouse may
direct that payment of the Pre-Retirement Survivor Annuity commence within a
reasonable period after the Participant’s death. If the spouse does not so
direct, payment of such benefit will commence at the time the Participant would
have attained the later of Normal Retirement Age or age 62. However, the spouse
may elect a later commencement date. Any distribution to the Participant’s
spouse shall be subject to the rules specified in Section 6.6(h).

(b)           Any election to
waive the Pre-Retirement Survivor Annuity before the Participant’s death must
be made by the Participant in writing (or in such other form as permitted by
the IRS) during the election period and shall require the spouse’s irrevocable
consent in the same manner provided for in Section 6.5(a)(2). Further, the
spouse’s consent must acknowledge the specific nonspouse Beneficiary.  Notwithstanding the foregoing, the nonspouse
Beneficiary need not be acknowledged, provided the consent of the spouse
acknowledges that the spouse has the right to limit consent only to a specific
Beneficiary and that the spouse voluntarily elects to relinquish such right.

(c)           The election period
to waive the Pre-Retirement Survivor Annuity shall begin on the first day of
the Plan Year in which the Participant attains age 35 and end on the date of
the Participants death. An earlier waiver (with spousal consent)

 64
 

 

may be made provided a written (or such other form as permitted by the
IRS) explanation of the Pre-Retirement Survivor Annuity is given to the
Participant and such waiver becomes invalid at the beginning of the Plan Year
in which the Participant turns age 35. 
In the event a Participant separates from service prior to the beginning
of the election period, the election period shall begin on the date of such
separation from service.

(d)           With regard to the
election, the Administrator shall provide each Participant within the
applicable election period, with respect to stash Participant (and consistent
with Regulations), a written for such other form as permitted by the IRS)
explanation of the Pre-Retirement Survivor Annuity containing comparable
information to that required pursuant to Section 6.5(a)(5). For the purposes of
this paragraph, the term “applicable period” means, with respect to a
Participant, whichever of the following periods ends last:

(1)           The period beginning
with the first day of the Plan Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the Plan Year in which the
Participant attains age 35:

(2)           A reasonable period
after the individual becomes a Participant

(3)           A reasonable period
ending after the Plan no longer fully subsidizes the cost of the Pre-Retirement
Survivor Annuity with respect to the Participant;  or

(4)           A reasonable period
ending after Code Section 401(a)(11) applies to the Participant.

For purposes of applying this subsection, a reasonable
period ending after the enumerated events described in (2), (3) and (4) is the
end of the two (2) year period beginning one (1) year prior to the date the
applicable event occurs, and ending one (1) year after that date.  In the case of a Participant who separates from
service before the Plan Year in which age 35 is attained, notice shall be
provided within the two (2) year period beginning one (1) year prior to
separation and ending one (1) year after separation.  If such a Participant thereafter returns to
employment with the Employer, the applicable period for such Participant shall
be redetermined.

(e)           The
Pre-Retirement Survivor Annuity provided for in this Section shall apply only
to Participants who are credited with an Hour of Service on or after August 23,
1984. Former Participants who are not credited with an Hour of Service on or
after August 23, 1984, shall be provided with rights to the Pre-Retirement
Survivor Annuity in accordance with Section 303(e)(2) of the Retirement Equity
Act of 1984.

(f)            If
the value of the Pre-Retirement Survivor Annuity derived from Employer and
Employee contributions does not exceed, and has never exceeded at the time of
any prior distribution, $5,000 (or, $3,500 for distributions made prior to the
later of the first day of the first Plan Year beginning after August 5, 1997,
or the date

 65
 

 

specified in the Adoption Agreement) the Administrator shall direct the
distribution of such amount to the Participant’s spouse as soon as
practicable.  No distribution may be made
under the preceding sentence after the Annuity Starting Date unless the spouse
consents in writing (or in such other form as permitted by the IRS).  If the value exceeds, or has ever exceeded at
the time of any prior distribution, $5,000 (or, if applicable, $3,500), an immediate
distribution of the entire amount may be made to the surviving spouse, provided
such surviving spouse consents in writing (or in such other form as permitted
by the IRS) to such distribution.  Any
consent required under this paragraph must be obtained not more than ninety
(90) days before commencement of the distribution and shall be made in a manner
consistent with Section 6.5(a)(2). Notwithstanding the preceding, the “lookback
rule” (which provides that if the present value at the time of a prior
distribution exceeded the applicable dollar threshold, then the present value
at any subsequent time is deemed to exceed the threshold) will not apply to any
distributions made on or after October 17, 2000.

(g)            Death benefits may be paid to a
Participant’s Beneficiary in one of the following optional forms of benefits
subject to the rules specified in Section 6.6(h) and the elections made in the
Adoption Agreement.  Such optional forms
of distributions may be elected by the Participant in the event there is an
election to waive the Pre-Retirement Survivor Annuity, and for any death
benefits in excess of the Pre-Retirement Survivor Annuity.  However, if no optional form of distribution
was elected by the Participant prior to death, then the Participant’s
Beneficiary may elect the form of distribution:

(1)           One
lump-sum payment in cash or in property that is allocated to the accounts of
the Participant at the time of the distribution.

(2)           Partial withdrawals.

(3)           Payment
in monthly, quarterly, semi-annual, or annual cash installments over a period to
be determined by the Participant or the Participant’s Beneficiary. In order to
provide such installment payments, the Administrator may (A) segregate the
aggregate amount thereof in a separate, federally insured savings account,
certificate of deposit in a bank or savings and loan association, money market
certificate or other liquid short-term security or (B) purchase a
nontransferable annuity contract for a term certain (with no life
contingencies) providing for such payment. 
After periodic installments commence, the Beneficiary shall have the
right to reduce the period over which such periodic installments shall be made,
and the cash amount of such periodic installments shall be adjusted
accordingly.

(4)           In the form of an annuity over the
life expectancy of the Beneficiary.

(5)           If death benefits in
excess of the Pre-Retirement Survivor Annuity are to be paid to the surviving
spouse, such benefits may be paid pursuant to (1), (2) or (3) above, or used to
purchase an annuity so as to increase the payments made pursuant to the
Pre-Retirement Survivor Annuity.

 

 66

 

(h)           Notwithstanding
any provision in the Plan to the contrary, distributions upon the death of a
Participant shall be made in accordance with the following requirements and
shall otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder.

(1)           If
it is determined, pursuant to Regulations, that the distribution of a
Participant’s interest has begun and the Participant dies before the entire
interest has been distributed, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of distribution elected
pursuant to Section 6.5 as of the date of death.

(2)           If
a Participant dies before receiving any distributions of the interest in the
Plan or before distributions are deemed to have begun pursuant to Regulations,
then the death benefit shall be distributed to the Participant’s Beneficiaries
in accordance with the following rules subject to the elections made in the
Adoption Agreement and subsections 6.6(b)(3) and 6.6(i) below:

(i)            The
entire death benefit shall be distributed to the Participant’s Beneficiaries by
December 31st of the calendar year in which the fifth anniversary of the
Participant’s death occurs:

(ii)             The
5-year distribution requirement of (i) above shall not apply to any portion of
the deceased Participant’s interest which is payable to or for the benefit of a
designated Beneficiary.  In such event,
such portion shall be distributed over the life of such designated Beneficiary
(or over a period not extending beyond the life expectancy of such designated
Beneficiary) provided such distribution begins not later than December 31st of
the calendar year immediately following the calendar year in which the
Participant died or such later date as may be prescribed by Regulations):

(iii)            However,
in the event the Participant’s spouse (determined as of the date of the
Participants death is the designated Beneficiary, the provisions of (ii) above
shall apply except that the requirement that distributions commence within one
year of the Participant’s death shall not apply.  In lieu thereof, distributions must commence
on or before the later of:  (1) December
31st of the calendar year immediately following the calendar year in which the
Participant died; or (2) December 31st of the calendar year in which the
Participant would have attained age 70 1/2. 
If the surviving spouse dies before distributions to such spouse begin,
then the 5-year distribution requirement of this Section shall apply as if the
spouse was the Participant.

(3)           Notwithstanding
subparagraph (2) above, or any elections made in the Adoption Agreement, if a
Participant’s death benefits are to be paid in the form of a Pre-Retirement
Survivor Annuity, then distributions to the Participant’s surviving spouse must
commence on or before the later of:  (1)
December 31st of 

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

(i)            For purposes of Section 6.6(h)(2), the
election by a designated Beneficiary to be excepted from the 5-year
distribution requirement (if permitted in the Adoption Agreement) must be made
no later than December 31st of the calendar year following the calendar year of
the Participant’s death. Except, however, with respect to a designated
Beneficiary who is the Participant’s surviving spouse, the election must be
made by the earlier of: (1) December 31st of the calendar year immediately
following the calendar year in which the Participant died or, if later,
December 31st of the calendar year in which the Participant would have attained
age 70 1/2; or (2) December 31st of the calendar year which contains the fifth
anniversary of the date of the Participant’s death.  An election by as designated Beneficiary must
be in writing (or in such other form as permitted by the IRS) and shall be
irrevocable as of the last day of the election period stated herein.  In the absence of an election by the
Participant or a designated Beneficiary, the 5-year distribution requirement
shall apply.

(j)              For
purposes of this Section, the life expectancy of a Participant and a
Participants spouse (other than in the case of a life annuity) shall or shall
not be redetermined annually as elected in the adoption Agreement and in
accordance with Regulations.  If the
Participant may elect, pursuant to the Adoption Agreement, to have life
expectancies recalculated, then the election, once made shall be irrevocable.
If no election is made by the time distributions must commence, then the life
expectancy of the Participant and the Participant’s spouse shall not be subject
to recalculation.  Life expectancy and
joint and last survivor life expectancy shall be computed using the return
multiples in Tables V and VI of Regulation Section 1.72-9.

(k)             For purposes of this Section, any
amount paid to a child of the Participant will be treated as if it had been
paid to the surviving spouse if the amount becomes payable to the surviving
spouse when the child reaches the age of majority.

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

(m)            Subject to the spouse’s right of
consent afforded under the Plan, the restrictions imposed by this Section shall
not apply if a Participant has, prior to January 1, 1984, made a written
designation to have death benefits paid in an alternative method acceptable
under Code Section 401(a) as in effect prior to the enactment of the Tax Equity
and Fiscal Responsibility Act of 1982 (TEFRA).

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6.7          TIME OF DISTRIBUTION

Except as limited
by Sections 6.5 and 6.6, whenever a distribution is to be made, or a series of
payments are to commence, the distribution or series of payments may be made or
begun on such date or as soon thereafter as is practicable.  However, unless a Former Participant elects
in writing to defer the receipt of benefits such election may not result in a
death benefit that is more than incidental), the payment of benefits shall
begin not later than the sixtieth (60th) day after the close of the Plan Year
in which the latest of the following events occurs: (a) the date on which the
Participant attains the earlier of age 65 or the Normal Retirement Age
specified herein: (b) the tenth (10th) anniversary of the year in which the
Participant commenced participation in the Plan; or (c) the date the
Participant terminates service with the Employer.

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

6.8          DISTRIBUTION FOR MINOR OR INCOMPETENT
BENEFICIARY

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

6.9          LOCATION OF PARTICIPANT OR BENEFICIARY
UNKNOWN

In the event that
all, or any portion, of the distribution payable to a Participant or
Beneficiary hereunder shall, at the later of the Participant’s attainment of
age 62 or Normal Retirement Age, remain unpaid solely by reason of the
inability of the Administrator, after sending a registered letter, return
receipt requested, to the last known address, and after further diligent
effort, to ascertain the whereabouts of such Participant or Beneficiary, the
amount so distributable shall be treated as a Forfeiture pursuant to the
Plan.  Notwithstanding the foregoing, if
the value of a Participant’s Vested benefit derived from Employer and Employee
contributions does not exceed $5,000, then the amount distributable may be
treated as a Forfeiture at the time it is determined that the whereabouts of
the Participant or the Participant’s Beneficiary can not be ascertained.  In the event a Participant or Beneficiary is
located subsequent to the Forfeiture, such benefit shall be restored, first
from Forfeitures, if any, and then from an additional Employer contribution, if
necessary.  Upon Plan termination, the
portion of the distributable amount that is an “eligible rollover distribution”
as defined in Plan Section 6.14(b)(1) may be paid directly to an individual
retirement account described in Code Section 408(a) or an individual retirement
annuity described in Code Section 408(b). 
However, regardless of the preceding, a benefit that is lost by reason
of escheat under applicable state law is not treated as a Forfeiture for
purposes of this Section nor as an impermissible forfeiture under the Code.

 69
 

 

6.10        IN-SERVICE DISTRIBUTION

For Profit Sharing
Plans and 401(k) Profit Sharing Plans, if elected, in the Adoption Agreement,
at such time as the conditions set forth in the Adoption Agreement have been
satisfied, then the Administrator, at the election of a Participant who has not
severed employment with the Employer, shall direct the distribution of up to
the entire Vested amount then credited to the accounts as elected in the
Adoption Agreement maintained on behalf of such Participant.  In the event that the Administrator makes
such a distribution, the Participant shall continue to be eligible to
participate in the Plan on the same basis as any other Employee.  Any distribution made pursuant to this
Section shall be made in a manner consistent with Section 6.5,  including, but not limited to, all notice and
consent requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder.  Furthermore, if an
in-service distribution is permitted from more than one account type, the
Administrator may determine any ordering of a Participant’s in-service
distribution from such accounts.

6.11        ADVANCE DISTRIBUTION FOR HARDSHIP

(a)             For Profit Sharing Plans and 401(k)
Plans (except to the extent Section 12.9 applies), if elected in the Adoption
Agreement, the Administrator, at the election of the Participant, shall direct
the distribution to any Participant in any one Plan Year up to the lesser of
100% of the Vested interest of the Participant’s Combined Account valued as of
the last Valuation Date or the amount necessary to satisfy the immediate and
heavy financial need of the Participant. 
Any distribution made pursuant to this Section shall be deemed to be
made as of the first day of the Plan Year or, if later, the Valuation Date
immediately preceding the date of distribution, and the account from which the
distribution is made shall be reduced accordingly.  Withdrawal under this Section shall be
authorized only if the distribution is for an immediate and heavy financial
need. The Administrator will determine whether there are immediate and heavy
financial need based can the facts and circumstances. An immediate and heavy
financial need includes, but is not limited to, a distribution for one of the
following:

(1)           Medical
expenses described in Code Section 213(d) incurred by the Participant, the
Participant’s
spouse, or any of the Participant’s dependents (as defined in Code Section 152)
or necessary for these persons to obtain medical  care as described in Code Section 213(d);

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

(3)           Funeral expenses for
a member of the Participants family;

(4)           Payment of tuition,
related educational fees, and room and board expenses, for the next twelve (12)
months of post-secondary education for the Participant, the Participant’s
spouse, children, or dependents as defined in Code Section 152); or

 70
 

 

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

(b) If elected in the Adoption Agreement, no
distribution shall be made pursuant to this Section from the Participant’s
Account until such Account has become fully Vested.  Furthermore, if a hardship distribution is
permitted from more than one account type, the Administrator may determine any
ordering of a Participant’s hardship distribution from such accounts.

(c)            Any distribution made pursuant this
Section shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice and
consent requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder.

6.12        SPECIAL
RULE FOR CERTAIN PROFIT SHARING PLANS

(a)             The provisions of this Section
apply to a Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan
to the extent elected in the Adoption Agreement.

(b)             If an election is made to not offer
life annuities as a form of distribution, then a Participant shall be
prohibited from electing benefits in the form of a life annuity and the Joint
and Survivor Annuity provisions of Section 6.5 shall not apply.

(c)           Notwithstanding
anything in Sections 6.2 and 6.6 to the contrary, upon the death of a
Participant, the automatic form of distribution will be a lump-sum rather than
a Qualified Pre-Retirement Survivor Annuity. 
Furthermore, the Participant’s spouse will be the Beneficiary of the
Participant’s entire Vested interest in the Plan unless an election is made to
waive the spouse as Beneficiary. The other provisions in Section 6.2 shall be
applied by treating the death benefit in this subsection as though it is a
Qualified Pre-Retirement Survivor Annuity.

(d)           Except
to the extent otherwise provided in this Section, the provisions of Sections
6.2. 6.5 and 6.6 regarding spousal consent shall be inoperative with respect to
this Plan.

(e)           If
a distribution is one to which Code Sections 401(a)(11) and 417 do  not apply, such distribution may commence
less than thirty (30) days after the notice required under Regulation
1.41(a)-11(c) is given, provided that:

(1)           the Plan
Administrator clearly informs the Participant that the Participant has a right
to a period of at least thirty (30) days after the notice to consider the
decision of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and

 71
 

 

(2)           the Participant,
after receiving the notice, affirmatively elects a distribution.

6.13        QUALIFIED DOMESTIC RELATIONS ORDER
DISTRIBUTION

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

6.14        DIRECT ROLLOVERS

(a)           Notwithstanding
any provision of the Plan to the contrary that would otherwise limit a “distributee’s”
election under this Section, a ““distributer” may elect, at the time and in
the manner prescribed by the Administrator, to have any portion of an “eligible
rollover distribution” that is equal to at least $500 paid directly to an “eligible retirement plain”
specified by the ‘‘distributee” in a “direct rollover.”

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

(1)           An “eligible
rollover distribution” means any distribution described in Code
Section 402(c)(4) and generally includes any distribution of all or any portion
of the balance to the credit of the distribute, except that an “eligible
rollover distribution” does not include: any distribution that is one
of a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the “distributee” or the joint lives (or joint life
expectancies) of the “distributee” and the “distributees” designated beneficiary,
or for a specified period of ten (10) years or more: any distribution to the
extent such distribution is required under Code Section 401(a)(9); the portion
of any other distribution(s) that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities) for distributions made after December 31, 1998, any hardship
distribution described in Code Section 40l(k)(2)(B)(i)(IV) and any other
distribution reasonably expected to total less than $200 during a year.

(2)           An “eligible
retirement plan” is an individual retirement account described in Code Section
408(a), an annuity retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a), or a qualified plan described
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.

 72
 

 

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

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

6.15        TRANSFER OF ASSETS FROM A MONEY PURCHASE
PLAN

(a)           This
Section shall be effective as of the following date:

(1)           for Plans not
entitled to extended reliance as described in Revenue Ruling 94-76, the first
day of the first Plan Year beginning on or after December 12, 1994, or if
later, 90 days after December 12, 1994; or

(2)           for Plans entitled
to extended reliance as described in Revenue Ruling 94-76, as of the first day
of the first Plan Year following the Plan Year in which the extended reliance
period applicable to the Plan ends. However, in the event of a transfer of
assets to the Plan from a money purchase plan that occurs after the date of the
most recent determination letter, the effective date of the amendment shall be
the date immediately preceding the date of such transfer of assets.

(b)             Notwithstanding any provision of
this Plan to the contrary, to the extent that any optional form of benefit
under this Plan permits a distribution prior to the Employee’s 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(1), to
this Plan from a money purchase pension plan qualified under Code Section
401(a) (other than any portion of those assets and liabilities attributable to
after-tax voluntary Employee contributions or to a direct or indirect rollover
contribution).

6.16        ELECTIVE TRANSFERS OF BENEFITS TO OTHER
PLANS

(a)             If a voluntary, fully-informed
election is made by a Participant, then if the conditions set forth herein are
satisfied, a Participant’s entire benefit may be transferred between qualified
plans (other than any direct rollover described in Q&A-3 of Regulation
1.40(a)(31)-1).  As an alternative to the
transfer, the Participant may elect to retain the Participant’s “Section 411(d)(6) protected
benefits” under the Plan (or, if the plan is terminating, to receive any
optional form of benefit for which the Participant is eligible under the plan
as required by Code Section 411(d)(6)). A transfer between qualified plans may
only be made pursuant to this subsection if the following additional
requirements are met:

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(i)            The
transfer occurs at time at which the participant’s benefits are distributable.
A Participant’s benefits are distributable on a particular date if, on that
date, the Participant is eligible, under the terms of the Plan, to receive an
immediate distribution of these benefits (e.g., in the form of an immediately
commencing annuity) from that plan under provisions of the plan not
inconsistent with Code Section 401(a):

(ii)           For transfers that occur on or after
January 1, 2002, the transfer occurs at a time at which the Participant is not
eligible to receive an immediate distribution of the participant’s entire nonforteitable accrued
benefit in a single-sum distribution that would consist entirely of an eligible
rollover distribution within the meaning of Code Section 401(a)(31)(C):

(iii)         The
participant is fully Vested in the transferred benefit in the transferee plan;

(iv)         In
the case of a transfer from a defined contribution plan to a defined benefit
plan, the defined benefit plan provides a minimum benefit, for each Participant
whose benefits are transferred, equal to the benefit, expressed as an annuity
payable at normal retirement age, that is derived solely on the basis of the
amount transferred with respect to such Participant: and

(v)            The
amount of the benefit transferred, together with the amount of any
contemporaneous Code Section 401(a)(31) direct rollover to the transferee plan,
equals the Participant’s entire nonforfeitable accrued benefit under the Plan.

(b)           If
a voluntary, fully-informed election is made by as Participant, then if the
conditions set forth herein are satisfied, a Participant’s entire benefit may
be transferred between qualified defined contribution plans lather than any
direct rollover described in Q&A-3 of Regulation 1.40(a)(31)-1).  As an alternative to the transfer, the
Participant may elect to retain the Participant’s “Section 411(d)(6) protected
benefits” under the Plan (or, if the plan is terminating, to receive any
optional form of benefit for which the Participant is eligible under the plan
as required by Code Section 411(d)(6)). 
A transfer between qualified plans may only be made pursuant to this
subsection if the following additional requirements are met:

(i)             To
the extent the benefits are transferred from a money purchase pension plan, the
transferee plan must be a money purchase pension plan. To the extent the benefits
being transferred from a part of a qualified cash or deferred arrangement under
Code Section 40l(k), the benefits must be transferred to a qualified cash or
deferred arrangement under Code Section 401(k), 
the benefits must transferred from a profit-sharing plan other than from
a qualified cash or deferred arrangement, or from a stock bonus plan other than
an employee stock ownership plan, may be transferred to any hype of defined
contribution plan: and

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(ii)           The
transfer must be made either in connection with an asset or stock acquisition,
merger, or other similar transaction involving a change in employer of the
employees of a trade or business (i.e., an acquisition or disposition within
the meaning of Regulation 1.410(b)-2(f)or in connection with the Participant’s
change in employment status to an employment status with respect to which the
Participant is not entitled to additional allocations under the Plan.

ARTICLE
VII

TRUSTEE ANA CUSTODIAN

7.1           BASIC RESPONSIBILITIES OF THE TRUSTEE

(a)           The
provisions of this Article, other than Section 7.6, shall not apply to this
Plan if a separate trust agreement is being used as specified in the Adoption
Agreement.

(b)           The
Trustee is accountable to the Employer for  the
funds contributed to the Plan by the Employer, but the Trustee does not have
any duty to see that the contributions received comply with the provisions of
the Plan. The Trustee is not obligated to collect any contributions from the
Employer, nor is it under a duty to see that funds deposited with it are
deposited in accordance with the provisions of the Plan.

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

(d)           In
the event that the Trustee shall be directed by a Participant (pursuant to the
Participant Direction Procedures if the Plan permits Participant directed
investments), the Employer, or an Investment Manager or other agent appointed
by the Employer with respect to the investment of such assets, the Trustee
shall have no liability with respect to the investment of such assets, but
shall be responsible only to execute such investment instructions as so directed.

(1)          The Trustee shall be
entitled to rely fully on the written or other form acceptable to the
Administrator and the Trustee, including but not limited to, voice recorded)
instructions of a Participant (pursuant to the Participant Direction Procedures),
the Employer, or any Fiduciary or nonfiduciary agent of the Employer, in the
discharge of such duties, and shall not be liable for any loss or other
liability resulting from such direction (or lack of direction) of the
investment of any part of the Plan assets.

 75
 

 

(2)         The Trustee may
delegate the duty of executing such instructions to any nonfiduciary agent,
which may be an affiliate of the Trustee or any Plan representative.

(3)         The Trustee may refuse
to comply with any direction from the Participant in the event the Trustee, in
its sole and absolute discretion, deems such direction improper by virtue of
applicable law.  The Trustee shall not be
responsible or liable for any loss or expense that may result from the Trustee’s
refusal or failure to comply with any direction from the Participant.

(4)         Any costs and expenses
related to compliance with the Participant’s directions shall be borne by the
Participant’s Directed
Account, unless paid by the Employer.

(5)         Notwithstanding
anything herein above to the contrary, the Trustee shall not invest any portion
of a Participant’s Directed Account in “collectibles” within the meaning of
Code Section 408(m).

(e)           The Trustee will maintain records of
receipts and disbursements and furnish to the Employer and/or Administrator for
each Plan Year a Written annual report pursuant to Section 7.9.

(f)            The
Trustee may employ a bank or trust company pursuant to the terms of its usual
and customary bank agency agreement, under which the duties of such bank or
trust company shall be of a custodial, clerical and record-keeping nature.

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

7.2          INVESTMENT POWERS AND DUTIES OF
DISCRETIONARY TRUSTEE

(a)             This Section applies if the
Employer, in the Adoption Agreement or as otherwise agreed upon by the Employer
and the Trustee, designates the Trustee to administer all or a portion of the
trust as a discretionary Trustee.  If so
designated, then the Trustee has the discretion and authority to invest,
manage, and control those Plan assets except, however, with respect to those
assets which are subject to the investment direction of a Participant (if
Participant directed investments are permitted), or an Investment Manager, the
Administrator, or other agent appointed by the Employer.  The exercise of any investment discretion
hereunder shall be consistent with the “funding policy and method” determined
by the Employer.

(b)             The Trustee shall, except as
otherwise provided in this Plan, invest and reinvest the Trust Fund to keep the
Trust Fund invested without distinction between principal and income and in
such securities or property, real or personal, wherever situated, as the
Trustee shall deem advisable, including, but not limited to, common or 

 76
 

 

preferred stocks, open-end or closed-end mutual funds, bonds and other
evidences of indebtedness or ownership, and real estate or any interest
therein.  The Trustee shall at all times
in making investments of the Trust Fund consider, among other factors the short
and long-term financial needs of the Plan on the basis of information furnished
by the Employer.  In making such
investments, the Trustee shall not be restricted to securities or other
property of the character expressly authorized by the applicable law for trust
investments; however, the Trustee shall give due regard to any limitations
imposed by the Code or the Act so that at all times this Plan may qualify as a
qualified Plan and Trust.

(c)             The Trustee, in addition to all
powers and authorities under common law, statutory authority, including the
Act, and other provisions of this Plan, shall have the following powers and,
authorities to be exercised in the Trustee’s sole discretion:

(1)             To
purchase, or subscribe for, any securities or other property and to retain the
same.  In conjunction with the purchase
of securities, margin accounts may be opened and maintained;

(2)             To
sell, exchange, convey, transfer, grant options to purchase, or otherwise
dispose of any securities or other property held by the Trustee, by private
contract or at public auction.  No person
dealing with the Trustee shall be bound to see to the application of the purchase
money or to inquire into the validity, expediency, or propriety of any such
sale other disposition, with or without advertisement;

(3)             To
vote upon any stocks, bonds, or other securities:  to give general or special proxies or powers
of attorney with or without power of substitution: to exercise any conversion
privileges, subscription rights or other options, and to make any payments
incidental thereto: to oppose, or to consent to or otherwise participate in,
corporate reorganizations or other changes affecting corporate securities, and
to delegate discretionary powers, and to pay any assessments or charges in
connection therewith; and generally to exercise any of the powers of an owner
with respect to stocks, bonds, securities, or other property.  However, the Trustee shall not vote proxies
relating to securities for which it has not been assigned full investment
management responsibilities. In those cases where another party has such
investment authority or discretion, the Trustee will deliver all proxies to
said party who will then have full responsibility for voting those proxies;

(4)           To cause any
securities or other property to be registered in the Trustee’s own name, in the
name of one or more of the Trustee’s nominees, in as clearing corporation, in a
depository, or in book entry form or in bearer form, but the books and records
of the Trustee shall at all times show that all such investments are part of
the Trust Fund;

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(5)           To invest in a
common, collective, or pooled trust fund (the provisions of which are
incorporated herein by reference) maintained by any Trustee (or any affiliate
of such Trustee) hereunder pursuant to Revenue Ruling 8.1- 100, all or such
part of the Trust Fund as the Trustee may deem advisable, and the part of the
Trust Fund so transferred shall be subject to all the terms and provisions of
the common, collective, or pooled trust fund which contemplate the commingling
for investment purposes of such trust assets of other trusts. The name of the
trust fund may be specified in an addendum to the Adoption Agreement.  The Trustee may withdraw from such common,
collective, or pooled trust fund all or such part of the Trust Fund as the
Trustee may deem advisable;

(6)           To borrow or raise
money for the purposes of the Plan in such amount, and upon such terms and
conditions, as the Trustee Shall deem advisable; and for any sum so borrowed,
to issue a promissory note as Trustee, and to secure the repayment thereof by
pledging all, or any part, of the Trust Fund; and no person lending money to
the Trustee shall be bound to see the to the application of the money lent or
to inquire into the validity, expediency, or propriety of any borrowing;

(7)           To
accept and retain for such time as it may deem advisable any securities or
other property received or acquired by it as Trustee hereunder, whether or not
such securities or other property would normally he purchased as investments
hereunder;

(8)             To
make, execute, acknowledge, and deliver any and all documents of transfer and
conveyance and any and all other instruments that may be necessary or
appropriate to carry out the powers herein granted;

(9)             To
settle, compromise, or submit to arbitration any claims, debts, or damages due
or owing to or from the Plan, to commence or defend suits or legal or
administrative proceedings, and to represent the Plan in all suits and legal
and administrative proceedings;

(10)           To
employ suitable agents and counsel and to pay their reasonable expenses and
compensation, and such agents or counsel may or may not be an agent or counsel
for the Employer;

(11)           To
apply for and procure from the Insurer as an investment of the Trust Fund any
annuity or other Contracts (on the life of any Participant, or in the case of a
Profit Sharing Plan (including a 401(k) plan), on the life of any person in
whom a Participant has an insurable interest, or on the joint lives of a
Participant and any person in whom the Participant has an insurable interest)
as the Administrator shall deem proper; to exercise, at any time or from time
to time, whatever rights and privileges may be granted under such annuity or
other Contracts; to collect, receive, and settle for the proceeds of all such
annuity, or other Contracts as and when entitled to do so under the provisions
thereof;

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(12)           To
invest funds of the Trust in time deposits or savings accounts bearing as
reasonable rate of interest or in cash or cash balances without liability for
interest thereon, including the specific authority to invest in any type of
deposit of the Trustee (or of a financial institution related to the Trustee);

(13)           To
invest in Treasury Bills and other forms of United States government
obligations:

(14)           To
sell, purchase and acquire put or call options it the options are traded on and
purchased through a national securities exchange registered under the Securities
Exchange Act of 1934, as amended, or, if the options are not traded on a
national securities exchange, are guaranteed by a member firm of the New York
Stock Exchange regardless of whether such options are covered;

(15)           To
deposit monies in federally insured savings accounts or certificates of deposit
in banks or savings and loan associations including the specific authority to
make deposit into any savings accounts or certificates of deposit of the
Trustee (or a financial institution related to the Trustee);

(16)           To
pool all or any of the Trust Fund, from time to time, with assets belonging to
any other qualified employee pension benefit trust treated by the Employer or
any Affiliated Employer, and to commingle such assets and make Joint or common
investments and carry joint accounts on behalf of this Plan and Trust and such
other trust or trusts, allocating undivided shares or interests such
investments or accounts or any pooled assets of the two or more trusts in
accordance with their respective interests; and

(17)           To
do all such acts and exercise all such rights and privileges, although not
specifically mentioned herein, as the Trustee may deem necessary to carry out
the purposes of the Plan

7.3          INVESTMENT POWERS AND DUTIES OF
NONDISCRETIONARY TRUSTEE

(a)           This Section applies
if the Employer, in the adoption Agreement or as otherwise agreed upon by the
Employer and the Trustee, designates the Trustee to administer all or a portion
of the trust as a nondiscretionary Trustee. If so designated then the Trustee
shall have no discretionary authority to invest, manage, or control those Plan
assets, but must act solely as a directed Trustee of those Plan assets
nondiscretionary Trustee, as directed Trustee of the Plan funds it holds, is
authorized and empowered, by way of limitation, with the powers, rights and
duties set forth herein and in Section 7.14, each of which the nondiscretionary
Trustee exercises solely as directed Trustee in accordance with the direction
of the party which has the authority to manage and control the investment of
the Plan assets. If no directions are provided to the Trustee, the Employer
will provide necessary direction. 
Furthermore, the Employer and the nondiscretionary Trustee may, in
writing, limit the powers of the nondiscretionary Trustee to any combination of
powers listed within this Section.

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(b)             The
Trustee, in addition to all powers and authorities under common law, statutory
authority, including the Act and other provisions of this Plan, shall have the
following powers and authorities:

(1)             To
invest the assets, without distinction between principal and income, in
securities or property, real or personal, wherever situated, including, but not
limited to, common or preferred stocks, open-end or closed-end mutual funds,
bonds and other evidences of indebtedness or ownership, and real estate or any
interest therein.  In making such
investments, the Trustee shall not be restricted to securities or other
property of the character expressly authorized by the applicable law for trust
investments; however, the Trustee shall give due regard to any limitations
imposed by the Code or the Act so that at all times this Plan may qualify as a
qualified Plan and Trust.

(2)             To
purchase, or subscribe for, any securities or other property and to retain the
same.  In conjunction with the purchase
of securities, margin accounts may be opened and maintained:

(3)             To
sell, exchange, convey, transfer, grant options to purchase or otherwise
dispose of any securities or other property held by the Trustee, by private
contract or at public auction.  No person
dealing with the Trustee shall be bound to see to the application of the
purchase money or to inquire into the validity, expediency, or propriety of any
such sale or other disposition, with or without advertisement;

(4)             At
the direction or the party which has the authority or discretion, to vote upon
any stocks, bonds, or other securities; to give general or special proxies or
powers of attorney with or without power of substitution; to exercise any
conversion privileges, subscription rights or other options, and to make any
payments incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting corporate
securities and to delegate powers, and pay any assessments or charges in
connection therewith; and generally to exercise any of the powers of an owner
with respect to stocks, bonds, securities, or other property;

(5)             To
cause any securities or other property to be registered in the Trustee’s own
name, in the name of one or more of the Trustee’s nominees, in a clearing
corporation, in to depository, or in book entry form or in bearer forms but the
books and records of the Trustee shall at all times show that all such
investments are part of the Trust Fund;

(6)             To
invest in a common, collective, or pooled trust fund (the provisions of which
are incorporated herein by reference) maintained by an Trustee (or any
affiliate of such Trustee) hereunder pursuant to Revenue Ruling 81-100, all or 

 80
 

 

such part of the Trust Fund as the party which has the authority to
manage and control the investment of` the assets shall deem advisable, and the
part of the Trust Fund so transferred shall be subject to all the terms and
provisions of the common, collective, or pooled trust fund which contemplate
the commingling for investment purposes of such trust assets with trust assets
of other trusts.  The name of the trust
fund may be specified in an addendum to the Adoption Agreement;

(7)             To
borrow or raise money for the purposes of the Plan in such amount, and upon
such terms and conditions, as the Trustee shall deem advisable; and for any sum
so borrowed, to issue a promissory note as Trustee, and to secure the repayment
thereof by pledging all, any part, of the Trust Fund; and no person lending
money to the Trustee shall be bound to see to the application of the money lent
or to inquire into the validity, expediency, or propriety of any borrowing;

(8)             To
make, execute, acknowledge, and deliver any and all documents of transfer and
conveyance and any and all other instruments that may be necessary or
appropriate to early out the powers herein granted;

(9)             To
settle, compromise, or submit to arbitration any claims, debts, or damages due
or owing to or from the Plan, to commence or defend suits or legal
administrative proceedings, and to represent the Plan in all writs and legal
and administrative proceedings;

(10)           To
employ suitable agents and counsel and to pay their reasonable expenses and
compensation, and such agent or counsel may or may not be an agent or counsel
for the Employer;

(11)           To
apply for and procure from the Insurer as an investment of the Trust Fund any
annuity or other Contracts (on the life of any Participant, on in the case of a
Profit Sharing Plan (including a 401(k) plan), on the life of any person in
whom a Participant has an insurable interest, or on the joint lives of a
Participant and any person in whom the Participant has an insurable interest)
as the Administrator shall deem proper; to exercise, at the direction of the
person with the authority to do so, whatever rights and privileges may be
granted under such annuity or other Contracts; to collect, receive, and settle
for the proceeds of all such annuity or other Contracts as and when entitled to
do so under the provisions thereof;

(12)           To
invest funds of the Trust in time deposits or savings accounts bearing a
reasonable rate of interest or in cash or cash balances without liability for
interest thereon, including the specific authority to invest in any type of
deposit of the Trustee (or of a financial institution related to the Trustee);

(13)           To
invest in Treasury Bills and other forms of United States government
obligations;

 

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(14)         To sell purchase and
acquire put or call options if the options are traded on and purchased through
a national securities exchange registered under the Securities Exchange Act of
1934, as amended, or, if the options are not traded on a national securities
exchange, are guaranteed by a member firm of the New York Stock Exchange
regardless of whether such options are covered;

(15)         To deposit monies in
federally insured savings accounts or certificates of deposit in banks or
savings and loan associations including the specific authority to make deposit
into any savings accounts or certificates of deposit of the Trustee (or a
financial institution related to the Trustee); and

(16)         To pool all or any of
the Trust Fund, from time to time, with assets belonging to any other qualified
employee pension benefit trust created by the Employer or any Affiliated
Employer, and to commingle such assets and make joint or common investments and
carry joint accounts on behalf of this Plan and such other trust or trusts, allocating
undivided shares interests in such investments or accounts or any pooled assets
of the two or more trusts in accordance with their respective interests.

7.4          POWERS AND DUTIES OF CUSTODIAN

If there is a discretionary Trustee, the Employer may
appoint a custodian.  A custodian has the
same powers, rights and duties as a nondiscretionary Trustee. Any reference in
the  Plan to a Trustee also is a
reference to a custodian unless the context of the Plan indicates otherwise. A
limitation of the Trustee’s liability by Plan provision also acts as a
limitation of the custodian’s liability. Any action taken by the custodian at
the discretionary Trustee’s direction satisfies any provision in the Plan
referring to the Trustee taking that action. The resignation or removal of the
custodian shall be made in accordance with Section 7.11 as though the custodian
were a Trustee.

7.5          LIFE INSURANCE

(a)           The Trustee, at the
direction of the Administrator and pursuant to instructions from the individual
designated in the Adoption Agreement for such purpose and subject to the
conditions set forth in the Adoption Agreement, shall ratably apply for, own,
and pay all premiums on Contracts on the lives of the Participants or, in the
case of Profit Sharing Plan (including a 401(k) plan), on the life of any
person in whom the Participant has an insurable interest or on the joint lives
of a Participant and any person in whom the Participant has an insurable
interest. Any initial or additional Contract purchased on behalf of a Participant
shall have as face amount of not less than $1,000, the amount set forth the
Adoption Agreement, or the limitation of the Insurer, whichever is
greater.  If a life insurance Contract is
to be purchased for a Participant or Former Participant, then the aggregate
premium for ordinary life insurance for each Participant or Former Participant
must be less than 50% of the aggregate contributions and Forfeitures allocated
to the Participant’s or Former Participant’s Combined Account.  For purposes 

 82
 

 

of this limitation, ordinary life insurance Contracts are Contracts
with both non-decreasing death benefits and non-increasing premiums.  If term insurance or universal life insurance
is purchased, then the aggregate premium must be 25% or less of the aggregate contributions
and Forfeitures allocated to the Participant’s or Former Participant’s Combined
Account.  If both term insurance and
ordinary life insurance are purchased, then the premium for term insurance plus
one-half of the premium for ordinary life insurance may not in the aggregate
exceed 25% of the aggregate Employer contributions and Forfeiture allocated to
the Participant’s or Former Participant’s Combined Account.  Notwithstanding the preceding, the
limitations imposed herein with respect to the purchase of life insurance shall
not apply, in the case of a Profit Sharing Plan (including a 401(k) plan), to
the portion of the Participant’s Account that has accumulated for at least two
(2) Plan Years or to the entire Participant’s Account if the Participant has
been a Participant in the Plan for at least five (5) years.  Amounts transferred to this Plan in
accordance with Section 4.6(e)(ii) or (v) and a Participant’s or Former
Participant’s Voluntary Contribution Account may be used to purchase Contracts without
limitation.

(b)           The Trustee must
distribute the Contracts to the Participant or Former Participant or convert
the entire value of the Contracts at or before retirement into cash or provide
for a periodic income so that no portion of such value may be used to continue
life insurance protection beyond commencement of benefits.  Furthermore, if a Contract is purchased on
the joint lives of the Participant and another person and such other person
predeceases the Participant, then the Contract may not be maintained under this
Plan.

(c)           Notwithstanding
anything herein above to the contrary, amounts credited to a Participant’s
Qualified Voluntary Employee Contribution Account pursuant to Section 4.9,
shall not be applied to the purchase of life insurance Contracts.  Furthermore, no life insurance Contracts
shall be required to be obtained on an individual’s life if, for any reason
(other than the nonpayment of premiums) the Insurer will not issue a Contract
on such individual’s life.

(d)           The Trustee will be the
owner of any life insurance Contract purchased under the terms of this
Plan.  The Contract must provide that the
proceeds will be payable to the Trustee; however, the Trustee shall be required
to pay over all proceeds of the Contract to the Participant’s designated
Beneficiary in accordance with the distribution provisions of Article VI.  A Participant’s spouse will be the designated
Beneficiary pursuant to Section 6.2, unless a qualified election has been made
in accordance with Sections 6.5 and 6.6 of the Plan, if applicable. Under no
circumstances shall the Trust retain any part of the proceeds that are in
excess of the cash surrender value immediately prior to death. However, the
Trustee shall not pay the proceeds in a method that would violate requirements
of the Retirement Equity pct of 1984, as stated in Article VI of the Plan, or
Code Section 401(a)(9) and the Regulations thereunder.  In the event of any conflict between she
terms of this Plan and the terms of any insurance Contract purchased hereunder,
the Plain provisions shall control.

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7.6          LOANS
TO PARTICIPANTS

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

(b)           Loans shall not be
made to any Shareholder-Employee or Owner-Employee (including an Owner-Employee’s
family members as defined in Code Section 267(c)(4) unless an exemption for
such loan is obtained pursuant to Act Section 408 or such loan would otherwise
not be a prohibited transaction pursuant to Code Section 4975 and Act Section
408.

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

(d)           If the Vested
interest of a Participant is used to secure any loan made pursuant to this
Section, then the written (or such other form as permitted by the IRS) consent
of the Participant’s spouse shall be required in a manner consistent with
Section 6.5(a), provided the spousal consent requirements of such Section apply
to the Plan.  Such consent must be
obtained within the 90-day period prior to the date the loan is made.  Any security interest held by the Plan by
reason of an outstanding loan to the Participant or Former Participant shall be
taken into account in determining the amount of the death benefit or
Pre-Retirement Survivor Annuity. 
However, unless the loan program established pursuant to this Section provides
otherwise, no spousal consent shall be required under this paragraph if the
total interest subject to the security is not in excess of $5,000 (or, $3,500
effective for loans made prior to the later of the first day of the first Plan
Year beginning after August 5, 1997, or the date specified in the Adoption
Agreement).

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

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

(2)           a procedure for applying for loans;

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

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

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

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

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

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

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

7.7          MAJORITY ACTIONS

Except where there
has been an allocation and delegation of powers, if there shall be more than
one Trustee, they shall act by a majority of their number, but may authorize
one or more of them to sign papers on their behalf.

7.8           TRUSTEE’S COMPENSATION AND EXPENSES
AND TAXES

The Trustee shall
be paid such reasonable compensation as set forth in the Trustee’s fee schedule
(if the Trustee has such a schedule) or as agreed upon in writing by the
Employer and the Trustee. However, an individual serving as Trustee who already
receives full-time compensation from the Employer shall not receive
compensation from this Plan.  In
addition, the Trustee shall be reimbursed for any reasonable expenses,
including reasonable counsel fees incurred by it as Trustee.  Such compensation and expenses shall be paid
from the Trust Fund unless paid or advanced by the Employer.  All taxes of any kind whatsoever that may be
levied or assessed under existing or future laws upon, or in respect of, the
Trust Fund or the income thereof, shall be paid from the Trust Fund.

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7.9           ANNUAL
REPORT OF THE TRUSTEE

(a)             Within a reasonable period of time
after the later of the Anniversary Date or receipt of the Employer’s
contribution for each Plan Year, the Trustee, or its agent, shall furnish to
the Employer and Administrator a written statement of account with respect to
the Plan Year for which such contribution was made setting forth:

(1)             the net income, or loss, of the
Trust fund;

(2)             the gains, or losses, realized by
the Trust Fund upon sales or other disposition of the assets;

(3)             the increase, or decrease, in the
value of the Trust Fund;

(4)             all payments and distributions made
from the Trust fund; and

(5)             such further information as the
Trustee and/or Administrator deems appropriate.

(b)             The Employers, promptly upon its
receipt of each such statement of account, shall acknowledge receipt thereof in
writing and advise the Trustee and/or Administrator of its approval or
disapproval thereof.  Failure by the
Employer to disapprove any such statement of account within thirty (30) days
after its receipt thereof shall be deemed an approval thereof. The approval by
the Employer of any statement of account shall be binding on the Employer and
the Trustee as to all matters contained in the statement to the same extent as
if the account of the Trustee had been settled by judgment or decree in an
action for a judicial settlement of its account in a court of competent
jurisdiction which the Trustee, the Employer and all persons having or claiming
an interest in the Plan were parties. 
However, nothing contained in this Section shall deprive the Trustee of
its right to have its accounts judicially settled if the Trustee so desires.

7.10        AUDIT

(a)           If an audit of the Plan’s records
shall be required by the Act and the regulations thereunder for any Plan Year,
the Administrator shall engage on behalf of all Participants an independent
qualified public accountant or that purpose. Such accountant shall, after an
audit of the books and records of the Plan in accordance with generally
accepted auditing standards, within a reasonable period after the close of the
Plan Year, furnish to the Administrator and the Trustee a report of the audit
setting forth the accountant’s opinion as to whether any statements, schedules
or lists, that are required by Act Section 103 or the Secretary of Labor to be
filed with the Plan’s annual report, are presented fairy in conformity with
generally accepted accounting principles applied consistently.

(b)           All auditing and accounting fees
shall be an expense of and may, at the election of the Employer, be paid from
the Trust Fund.

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(c)           If
some or all of the information necessary to enable the Administrator to comply
with Act Section 103 is maintained by a bank, insurance company, or similar
institution, regulated, supervised, and subject to periodic examination by a
state or federal agency then it shall transmit and certify the accuracy of that
information to the Administrator as provided in Act Section 103(b) within one
hundred twenty (120) days after the end of the Plan Year or such other date as
may be prescribed under regulations at the Secretary of Labor.

7.11        RESIGNATION. REMOVAL AND SUCCESSION’ OF
TRUSTEE

(a)           Unless
otherwise agreed to by both the Trustee and the Employer, a Trustee may resign
at any time by delivering to the Employer, at least thirty (30) days before its
effective date, a written notice of resignation.

(b)           Unless
otherwise agreed to by both the Trustee and the Employer, the Employer may
remove a Trustee at any time by delivering to the Trustee, at least thirty (30)
days before its effective date, a written notice of such Trustee’s removal.

(c)             Upon the death, resignation,
incapacity, or removal of any Trustee, a successor may be appointed by the
Employer; and such successor, upon accepting such appointment in writing and
delivering same to the Employer, shall, without further act, become vested with
all the powers and responsibilities of the predecessor as if such successor had
been originally named as a Trustee herein. Until such a successor is appointed,
any remaining Trustee or Trustees shall have full authority to act under the
terms of the Plan.

(d)             The Employer may designate one or
more successors prior to the death, resignation, incapacity, or removal of a
Trustee.  In the event a successor is so
designated by the Employer and accepts such designation, the successor shall,
without further act, become vested with all the powers and responsibilities of
the predecessor as if such successor had been originally named as Trustee
herein immediately upon the death, resignation, incapacity, or removal of the
predecessor.

(e)           Whenever
any Trustee hereunder ceases to serve  as
such, the Trustee shall furnish to the Employer and Administrator a written
statement of account with respect to the portion of the Plan Year during which
the individual or entity served as Trustee. This statement shall be either (i)
included as part of the annual statement of account for the Plan Year required
under Section 7.9 or (ii) set forth in a special statement. Any such special
statement of account should be rendered to the Employer no later than the due
date of the annual statement of account for the Plan Year. The procedures set
forth in Section 7.9 for the approval by the Employer of annual statements of
account shall apply to any special statement of account rendered hereunder and
approval by the Employer of an such special statement in the manner provided in
Section 7.9 shall have the same effect upon the statement as the Employer’s
approval of an annual statement of account. No successor to the Trustee shall
have any duty or responsibility to investigate the acts or transactions of any
predecessor who has rendered all statements of account required by Section 7.9
and this subparagraph.

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7.12        TRANSFER OF INTEREST

Notwithstanding
any other provision contained in this Plan, the Trustee at the direction of the
Administrator shall transfer the interest, if any, of a Participant to another
trust forming part of a pension, profit sharing, or stock bonus plan that meets
the requirements of Code Section 401(a), provided that the trust to which such
transfers are made permits the transfer to be made.

7.13        TRUSTEE INDEMNIFICATION

The Employer
agrees to indemnify and hold harmless the Trustee against any and all claims,
losses, damages, expenses and liabilities the Trustee may incur in the exercise
and performance of the Trustee’s powers and duties hereunder, unless the same
are determined to be due to gross negligence or willful misconduct.

7.14        EMPLOYER SECURITIES AND REAL PROPERTY

The Trustee shall
be empowered to acquire and hold “qualifying Employer securities” and “qualifying
Employer real property,” as
those terms are defined in the Act. However, no more than one hundred percent
(100%), in the case of a Profit Sharing Plan or 401(k) Plan, or ten percent
(10%), in case of a Money Purchase Plan, of the fair market value of all the
assets in the Trust Fund may be invested in “qualifying Employer securities”
and “qualifying
Employer real property.”

Notwithstanding
the preceding, for Plan Years beginning after December 31, 1998, if the Plan
does not permit Participants to direct the investment of their Participants’
Elective Deferral Accounts, then the Trustee shall only be permitted to acquire
or hold “qualifying Employer securities” and
“qualifying Employer real property” to the extent permitted under Act Section
407.

ARTICLE
VIII

AMENDMENT, TERMINATION AND MERGERS

8.1           AMENDMENT

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

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(b)           The Employer may (1) change the
choice of options in the Adoption Agreement, (2) add any addendum to the
Adoption Agreement that is specifically permitted pursuant to the terms of the
Plan, (3) add overriding language to the Adoption Agreement when such language
is necessary to satisfy Code Sections 415 or 416 because of the required
aggregation of multiple plans, and (4) add certain model amendments published
by the Internal Revenue Service which specifically provide that their adoption
will not cause the Plan to be treated as an individually designed plan.  An Employer that amends the Plan for any
other reason, including a waiver of the minimum funding requirement under Code
Section 412(d), will no longer participate in this Prototype Plan and this Plan
will be considered to be an individually designed plan.  Notwithstanding the preceding, the attachment
to the Adoption Agreement of any addendum specifically authorized by the Plan
or a list of any “Section 411(d)(6) protected benefits” which must be preserved
shall not be considered an amendment to the Plan.

(c)           The Employer expressly delegates
authority to the sponsor of this Prototype Plan, the right to amend each
Employer’s Plan by submitting a copy of the amendment to each Employer who has
adopted this Prototype Plan, after first having received a ruling or favorable
determination from the Internal Revenue Service that the Prototype Plan as
amended qualifies under Code Section 401(a) and the Act (unless a ruling or
determination is not required by the IRS). 
For purposes of this Section, the mass submitter shall be recognized as
the agent of the sponsor.  If the sponsor
does not adopt any amendment made by the mass submitter, it will no longer be
identical to, or a minor modifier of, the mass submitter plan.

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

(e)           Except as permitted by Regulations
(including Regulation 1.411(d )-4) or other IRS guidance, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger, plan
transfer or similar transaction) shall be effective if it eliminates or reduces
any “Section 411(d)(6) protected benefit” or adds or modifies conditions
relating to “Section
411(d)(6) protected benefits’’ which results in a further restriction on such
benefits unless such “Section 411(d)(6) protected benefits” are preserved with
respect to benefits accrued as of the later of the adoption date or effective
date of the amendment, “Section 4(d)(6) protected benefits” are benefits
described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.  A Plan amendment that eliminates or restricts
the ability of a Participant to receive payment of the Participant’s interest
in the Plan under a particular optional form of benefit will be permissible if
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 

 89
 

 

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 is not effective unless the amendment provides that the amendment
shall not apply to any distribution with an Annuity Starting Date earlier than
the earlier of:  (i) the ninetieth (90th) day after the date the
Participant receiving the distribution has been furnished a summary that
reflects the amendment and that satisfies the Act 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.

8.2          TERMINATION

(a)           The Employer shall have the right at
any time to terminate the Plan by delivering to the Trustee and Administrator
written notice of such termination.  Upon
any full or partial termination, all amounts credited to the affected Participants’
Combined Accounts shall become 100% Vested and shall not thereafter be subject
to forfeiture, and all unallocated amounts, including Forfeitures, shall be
allocated to the accounts of all Participants in accordance with the provisions
hereof.

(b)           Upon the full termination of the
Plan, the Employer shall direct the distribution of the assets to Participants
in a manner that is consistent with and satisfies the provisions of Section
6.5.  Distributions to a Participant
shall be made in cash (or in property if permitted in the Adoption Agreement)
or through the purchase of irrevocable nontransferable deferred commitments
from the Insurer.  Except as permitted by
Regulations the termination of the Plan shall not result in the reduction of “Section
411(d)(6) protected benefits” as described in Section 8.1(e).

8.3          MERGER, CONSOLIDATION OR TRANSFER OF
ASSETS

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

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ARTICLE
IX

TOP HEAVY PROVISIONS

9.1          TOP HEAVY PLAN REQUIREMENTS

Notwithstanding
anything in this Plan to the contrary, for any Top Heavy Plan Year, the Plan
shall provide the special vesting requirements of Code Section 416(b) pursuant
to Section 6.4 of the Plan and the special minimum allocation requirements of
Code Section 416(c) pursuant to Section 4.3(f) of the Plan.  Except as otherwise provided in the Plan, the
minimum allocation shall be an Employer Non-Elective Contribution and, if no
vesting schedule has been selected in the Adoption Agreement, shall be subject
to the 6 year Graded vesting schedule described in the adoption Agreement.

9.2          DETERMINATION OF TOP HEAVY STATUS

(a)           This Plan shall be a Top Heavy Plan
for any plan year beginning after December 31, 1983, if any. of the following conditions exists:

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

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

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

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

(1)           If
the Employer maintains one or more defined contribution plans (including any
simplified employee pension plan (as defined in Code Section 408(k)), and the
Employer has not maintained any defined benefit plan which during the 5-year
period ending on the “determination date” has or has had accrued benefits, the
top heavy ratio for this plan alone or for the “required aggregation group” or “permissive
aggregation group” as appropriate is a fraction, the numerator of which is the
sum of the account balances of all Key Employees as of the “determination date”
(including any part of any account balance distributed in the 5-year period
ending on the “determination date”), and the denominator of which is the sum of
all account balances (including any part of any account balance distributed in
the 5-year period ending on the “determination date”), 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.

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

(3)           For
purposes of (1) and (2) above, the value of account balances and the present
value of accrued benefits will be determined as of the most recent “valuation
date” that falls within or ends with the l2-month period ending on the “determination
date,” except as provided in Code Section 416 and the Regulations thereunder
for the first and second plan years of a defined benefit plan.  The account balances and accrued benefits of a
participant (i) who is not a Key Employee but who was a Key. Employee in a prior year, or (ii) who has not
been credited with at least one Hour of Service with any Employer maintaining
the plan at any time during the 5-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).

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

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

(e)           “Present value” means the present
value based only on the interest and mortality rates specified in the Adoption
Agreement.

(f)            “Required aggregation group” means
(1) each qualified plan of the Employer in which at least one Key Employee
participates or participated at any time during the determination period (regardless
of whether the plan has terminated), and (2) any other qualified plan of the
Employer which enables a plan described in (1) to meet the requirements of Code
Sections 401(a)(4 ) or 410.

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

ARTICLE
X

MISCELLANEOUS

10.1        EMPLOYER ADOPTIONS

(a)           Any
organization may become the Employer hereunder by executing the Adoption
Agreement in a form satisfactory to the Trustee, and it shall provide such
additional information as the Trustee may require.  The consent of the Trustee to act as such
shall be signified by its execution of the Adoption Agreement or a separate agreement
(including, if elected in the Adoption Agreement, a separate trust agreement).

(b)           Except
as otherwise provided in this Plan, the affiliation of the Employer and the
participation of its Participants shall be separate and apart from that of any
other employer and its participants hereunder.

10.2        PARTICIPANT’S RIGHTS

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

 93
 

 

10.3          ALIENATION

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

(b)             Subsection (a) shall not apply to
the extent a Participant or Beneficiary is indebted to the Plan by reason of a
loan made pursuant to Section 7.6.  At the
time distribution is to be made to or for a Participant’s or Beneficiary’s
benefit, such portion of the amount to be distributed as shall equal such
indebtedness shall be paid to the Plan, to apply against or discharge such
indebtedness.  Prior to making a payment,
however, the Participant or Beneficiary must be given notice by the
Administrator that such indebtedness is to be so paid in whole or part from the
Participant’s interest in the Plan.  If
the Participant or Beneficiary does not agree that the indebtedness is a valid
claim

against the Participant’s interest in the Plan, the Participant or
Beneficiary shall be entitled to a review of the validity of the claim in
accordance with procedures provided in Sections 2.10 and 2.11.

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

(d)           Notwithstanding
any provision of this Section to the contrary, an offset to a Participant’s
accrued benefit against an amount that the Participant is ordered or required
to pay the Plan with respect to a judgment, order, or decree issued, or a
settlement entered into, on or after August 5, 1997, shall be permitted in
accordance with Code Sections 401(a)(13)(C) and (D).

10.4          CONSTRUCTION OF PLAN

This Plan and
Trust shall be construed and enforced according to the Code, the Act and the
laws of the state or commonwealth in which the Employees (or if there is a
corporate Trustee, the Trustee’s) principal office is located (unless otherwise
designated in the Adoption Agreement), other than its laws respecting choice of
law, to the extent not pre-empted by the Act.

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10.5        GENDER AND NUMBER

Wherever any words
are used herein in the masculine, feminine or neuter gender, they shall be
construed as though they were also used in another gender in all cases where
they would so apply, and whenever any words are used herein in the singular or
plural form, they shall be construed as though they were also used in the other
form in all cases where they would so apply.

10.6        LEGAL ACTION

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

10.7        PROHIBITION AGAINST DIVERSION OF FUNDS

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

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

(c)           Except
as specifically stated in the Plan, any contribution made by the Employer to
the Plan (if the Employer is not tax-exempt) is conditioned upon the
deductibility of the contribution by the Employer under the Code and, to the
extent any such deduction is disallowed, the Employer may, within one (1) year
following a final determination of the disallowance, whether by agreement with
the internal Revenue Service or by final decision of a court of competent
jurisdiction, demand repayment of such disallowed contribution and the Trustee
shall return such contribution within one (1) year following the
disallowance.  Earnings of the Plan
attributable to the contribution may not be returned to the Employer, but any
losses attributable thereto must reduce the amount so returned.

 

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10.8        EMPLOYER’S AND TRUSTEE’S PROTECTIVE
CLAUSE

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

10.9        INSURER’S PROTECTIVE CLAUSE

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

10.10      RECEIPT AND RELEASE FOR PAYMENTS

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

10.11      ACTION BY THE EMPLOYER

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

10.12      NAMED FIDUCIARIES AND ALLOCATION OF
RESPONSIBILITY

The “Named
Fiduciaries” of this Plan are (1) the Employer, (2) the Administrator, (3) the
Trustee (if the Trustee has discretionary authority as elected in the Adoption
Agreement or as otherwise agreed upon by the Employer and the Trustee), and (4)
any Investment Manager appointed hereunder. 
The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan
including, but not limited to, any agreement allocating or delegating their
responsibilities, the terms of which are incorporated herein by reference.  In general, the Employer shall have the sole
responsibility for making the contributions provided for under the Plan; and
shall have the sole authority to appoint and remove the Trustee and the
Administrator; to formulate the Plan’s “funding policy and method”; and to amend the elective provisions of
the Adoption Agreement or terminate, in whole or in part, the Plan.  The Administrator shall have the sole
responsibility for the administration of the Plan, which responsibility is
specifically described in the Plan.  If
the Trustee has

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discretionary authority,
it shall have the sole responsibility of management of the assets held under
the Trust, except those assets, the management of which has been assigned to an
Investment Manager or Administrator, who shall be solely responsible for the
management of the assets assigned to it, all as specifically provided in the
Plan.  Each named Fiduciary warrants that
any directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may rely
upon any such direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information or action.  It is intended under the Plan that each named
Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under the Plan.  No named Fiduciary shall guarantee the Trust
Fund in any manner against investment loss or depreciation in asset value.  Any person or group may serve in more than
one Fiduciary capacity.

10.13       HEADINGS

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

10.14      APPROVAL BY INTERNAL REVENUE SERVICE

Notwithstanding
anything herein to the contrary, if, pursuant to a timely application filed by
or on behalf of the Plan, the Commissioner of the Internal Revenue Service or
the Commissioner’s delegate should determine that the Plan does not initially
qualify as a tax-exempt plan under Code Sections 401 and 501, and such
determination is not contested, or if contested, is finally upheld, then if the
Plan is a new plan, it shall be void ab initio and all amounts contributed to
the Plan, by the Employer, less expenses paid, shall be returned within one (1)
year and the Plain shall terminate, and the Trustee shall be discharged from
all further obligations.  If the
disqualification relates to a Plan amendment, then the Plan shall operate as if
it had not been amended.  If the Employer’s
Plan fails to attain or retain qualification, such Plan will no longer
participate in this prototype plan and will be considered an individually designed
plan.

10.15      UNIFORMITY

All provisions of
this Plan shall be interpreted and applied in a uniform, nondiscriminatory
manner.

10.16      PAYMENT OF BENEFITS

Except as
otherwise provided in the Plan, benefits under this Plan shall be paid, subject
to Sections 6.10, 6.11 and 12.9, only upon death, Total and Permanent
Disability, normal or early retirement, termination of employment, or
termination of the Plan.

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ARTICLE
XI

PARTICIPATING EMPLOYERS

11.1        ELECTION TO BECOME PARTICIPATING
EMPLOYER

Notwithstanding anything
herein to the contrary, with the consent of the Employer and Trustee, any
Affiliated Employer may adopt the Employer’s Plan and all of the provisions hereof,
and participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.  Regardless of the preceding,
an entity that ceases to be an Affiliated Employer may continue to be a
Participating Employer through the end of the transition period for certain
dispositions set forth in Code Section 410(b)(6)(C ).  In the event a Participating Employer is not
in Affiliated Employer and the transition period in the preceding sentence, if
applicable, has expired, then this Plan will be considered an individually
designed plan.

11.2        REQUIREMENTS OF PARTICIPATING EMPLOYERS

(a)           Each Participating Employer shall be
required to select the same Adoption Agreement provisions as those selected by
the Employer other than the Plan Year, the Fiscal Year, and such other items
that must, by necessity, vary among employers.

(b)           The Trustee may, but shall not be
required to, commingle, hold and invest as one Trust Fund all contributions
made by Participating Employers, as well as all increments thereof.  However, the assets of the Plan shall, on an
ongoing basis, be available to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the Employer or Participating
Employer who contributed such assets.

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

11.3        DESIGNATION OF AGENT

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

11.4        EMPLOYEE TRANSFERS

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

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11.5        PARTICIPATING EMPLOYER’S CONTRIBUTION
AND FORFEITURES

Any contribution
or Forfeiture subject to allocation during each Plan Year shall be allocated
among all Participants of all Participating Employers in accordance with the
provisions of this Plan.  However, if a
Participating Employer is not an Affiliated Employer (due to the transition
title for certain dispositions set forth in Code Section 410(b)(6)(C)) then any
contributions made by such Participating Employer will only be allocated among
the Participants eligible to share of the Participating Employer.  On the basis of the information furnished by
the Administrator, the Trustee may keep separate books and records concerning
the affairs of each Participating Employer hereunder and as to the accounts and
credits of the Employees of each Participating Employer.  The Trustee may, but need not, register
Contracts so as to evidence that a particular Participating Employer is the
interested Employer hereunder, but in the event of an Employee transfer from
one Participating Employer to another, the employing Participating Employer
shall immediately notify the Trustee thereof.

11.6        AMENDMENT

Amendment of this
Plan by the Employer at any time when there shall be a Participating Employer
that is an Affiliated Employer hereunder shall only be by the written action of
each and every Participating Employer and with the consent of the Trustee where
such consent is necessary in accordance with the terms of this Plan.

11.7        DISCONTINUANCE OF PARTICIPATION

Except in the case
of a standardized Plan, any Participating Employer that is an Affiliated
Employer shall be permitted to discontinue or revoke its participation in the
Plan at any time.  At the time of any
such discontinuance or revocation, satisfactory evidence thereof and of any
applicable conditions imposed shall be delivered to the Trustee.  The Trustee shall thereafter transfer,
deliver and assign Contracts and other Trust Fund assets allocable to the
Participants of such Participating Employer to such new. trustee or custodian as shall have been
designated by such Participating Employer, in the event that it has established
a separate qualified retirement plan for its employees provided, however, that
no such transfer shall be made if the result is the elimination or reduction of
any “Section 411(d)(6) protected benefits” as described in Section 8.1(e).  If no successor is designated, the Trustee
shall retain such assets for the Employees of said Participating Employer
pursuant to the provisions of Article VII hereof.  In no such event shall any part of the corpus
or income of the Trust Fund as it relates to such Participating Employer be
used for or diverted to purposes other than for the exclusive benefit of the
employees of such Participating Employer.

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11.8        ADMINISTRATOR’S AUTHORITY

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

11.9        PARTICIPATING EMPLOYER CONTRIBUTION FOR
AFFILIATE

If any Participating
Employer is prevented in whole or in part from making a contribution which it
would otherwise have made under the Plan by reason of having no current or
accumulated earnings or profits, or because such earnings or profits are less
than the contribution which it would otherwise have made, then, pursuant to
Code Section 404(a)(3)(B), so much of the contribution which such Participating
Employer was so prevented from making may be made, for the benefit of the
participating employees of such Participating Employer, by other Participating
Employers who are members of the same affiliated group within the meaning of
Code Section 1504 to the extent of their current or accumulated earnings or
profits, except that such contribution by each such other Participating
Employer shall be limited to the proportion of its total current and
accumulated earnings or profits remaining after adjustment for its contribution
to the Plan made without regard to this paragraph which the total prevented
contribution bears to the total current and accumulated earnings or profits of
all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph.

A Participating
Employer on behalf of whose employees a contribution is made under this
paragraph shall not be required to reimburse the contributing Participating
Employers.

ARTICLE
XII

CASH OR DEFERRED PROVISIONS

Except as
specifically provided elsewhere in this Plan, the provisions of this Article
shall apply with respect to any .401(k) Profit Sharing Plan regardless of
any provisions in the Plan to the contrary.

12.1        FORMULA FOR DETERMINING EMPLOYER’S
CONTRIBUTION

(a)           For each Plan Year, the Employer will
(or may with respect to any discretionary contributions) contribute to the
Plan:

(1)           The
amount of the total salary reduction elections of all Participants made
pursuant to Section 12.2(a), which amount shall be deemed Elective Deferrals,
plus

(2)           If
elected in the Adoption Agreement, a matching contribution equal to the
percentage, if any, specified in the Adoption Agreement of the Elective
Deferrals of each Participant eligible to share in the allocations of the
matching contribution, which amount shall be deemed an Employer’s matching
contribution or Qualified Matching Contribution as elected in the Adoption
Agreement, plus

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(3)           If
elected in the Adoption Agreement, a Prevailing Wage Contribution or a
discretionary amount determined each year by the Employer, which amount it any,
shall be deemed an Employer’s Non-Elective Contribution, plus

(4)             If
elected in the Adoption Agreement, at Qualified Non-Elective Contribution.

(b)           Notwithstanding the foregoing, if the
Employer is not a tax-exempt entity, then the Employer’s contributions for any
Fiscal Year may generally not exceed the maximum amount allowable as a
deduction to the Employer under the provisions of Code Section 404.  However, to the extent necessary to provide
the top heavy minimum allocations, the Employer shall make a contribution even
if it exceeds current or accumulated Net Profit or the amount that is
deductible under Code Section 404.  All
contributions by the Employer shall be made in cash or in such property as is
acceptable to the Trustee.

12.2        PARTICIPANT’S SALARY REDUCTION LECTION

(a)           Each Participant may elect to defer a
portion of Compensation which would have been received in the Plan Year, but
for the salary reduction election, subject to the limitations of this Section
and the Adoption Agreement.  A salary reduction
election (or modification of an earlier election) may not be made with respect
to Compensation which is currently available on or before the date the
Participant executed such election, or if later, the later of the date the
Employer adopts this cash or deferred arrangement or the date such arrangement
first became effective.  Any elections
made pursuant to this Section shall become effective as soon as is
administratively feasible.  If the
automatic election option is elected in the Adoption Agreement, then in the
event a Participant fails to make a deferral election and does not
affirmatively elect to receive cash, such Participant Shall be deemed to have
made a deferral election equal to the percentage of Compensation set forth in
the Adoption Agreement.  The automatic
election may, in accordance with procedures established by the Administrator,
be applied to all Participants or to Eligible Employees who become Participants
after a certain date.  For purposes of
this Section, the annual dollar limitation of Code Section 401(a)(7) ($150,000
as adjusted) shall not apply.

Additionally, if elected in the Adoption Agreement,
each Participant may elect to defer a different percentage or amount of any
cash bonus to be paid by the Employer during the Plan Year deferral election
may not be made with respect to cash bonuses which are currently available on
or before the date the Participant executes such election.

The amount by which Compensation and/or cash bonuses
are reduced shall be that Participant’s Elective Deferrals and shall be treated
as an Employer contribution and allocated to that Participants Elective
Deferral Account.

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Once made, a Participants election to reduce
Compensation shall remain in effect until modified or terminated.  Modifications may be made as specified in the
Adoption Agreement, and terminations may be made at any time.  Any modification or termination of an
election will become effective as soon as is administratively feasible.

(b)           The balance in each Participant’s
Elective Deferral Account, Qualified Matching Contribution Account and
Qualified Non-Elective Contribution Account shall be fully Vested at all times
and, except as otherwise provided herein, shall not be subject to Forfeiture
for any reason.

(c)           Amounts held in a Participant’s
Elective Deferral Account, Qualified Matching Contribution Account and
Qualified Non-Elective Account may only be distributable as provided in (4), (5
) or (6) below or as provided under the other provisions of this Plan, but in
no event prior to the earlier of the following events or any other events
permitted by the Code or Regulations:

(1)           the
Participant’s separation from service, Total and Permanent Disability, or
death;

(2)           the
Participant’s attainment of age 591⁄2;

(3)           the
proven financial hardship of the Participant, subject to the limitations of
Section 12.9;

(4)           the
termination of the Plan without the existence at the time of Plan termination
of another defined contribution plan or the establishment of a successor
defined contribution plan by the Employer or an Affiliated Employer within the
period ending twelve months after distribution of all assets from the Plan
maintained by the Employer.  For this
purpose, a defined contribution does not include an employee stock ownership
plan (as defined in Code Section 4975(e)(7) or 409), a simplified employee
pension plan (as defined Code Section 403(k)), or a SIMPLE individual
retirement account plan (as defined in Code Section 408(p));

(5)           the
date of the sale by the Employer to an entity that is not an Affiliated
Employer of substantially all of the assets (within the meaning of Code Section
409(d)(2)) with respect to a Participant who continues employment with the
corporation acquiring such asset; or

(6)           the
date of the sale by the Employer or an Affiliated Employer of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) to an entity that not
an Affiliated Employer with respect to a Participant who continues employment
with such subsidiary.

Distributions that are made because of (4), (5) or (6)
above must be made in as lump-sum.

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(d)           A Participant’s “elective deferrals”
made under this Plan and all other plans, contracts or arrangements of the
Employer maintaining the Plan during any calendar year shall not exceed the
dollar limitation imposed by Code Section 402(g), as in effect at the beginning
of such calendar year.  This dollar
limitation shall be adjusted annually pursuant to the method provided in Code
Section 415(d) in accordance with Regulations. 
For this purpose, “elective deferrals” means, with respect to a calendar
year, the sum of all employer contributions made on behalf of such Participant
pursuant to an election to defer under any qualified cash or deferred
arrangement as described in Code Section 401(k), any salary reduction
simplified employee pension (as defined in Code Section 408(k)(6)), any SIMPLE
IRA plan described in Code Section 408(p), any eligible deferred compensation
plan under Code Section 457, any plans described under Code Section 501(c)(18),
and any Employer contributions made on the behalf of a Participant for the
purchase of an annuity contract under Code Section 403(b) pursuant to a salary
reduction agreement.  “Elective deferrals”
shall not include any deferrals properly distributed as excess “Annual
Additions” pursuant to Section 4.5.

(e)           If a Participant has Excess Deferrals
for a taxable year, the Participant may, not later than March 1st following the
close of such taxable year, notify the Administrator in writing of such excess
and request that the Participant’s Elective Deferrals under this Plan be
reduced by an amount specified by the Participant.  In such event, the Administrator shall direct
the distribution of such excess amount (and any “Income” allocable to such
excess amount) to the Participant not later than the first April 15th following the close of the Participant’s
taxable year.  Any distribution of less
than the entire amount of Excess Deferrals and “Income” shall be treated as a
pro rata distribution of Excess Deferrals and “Income.”  The amount distributed shall not exceed the
Participant’s Elective Deferrals under the Plan for the taxable year.  Any distribution on or before the last day of
the Participant’s taxable year must satisfy each of the following conditions:

(1)           the
Participant shall designate the distribution as Excess Deferrals;

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

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

Regardless of the
preceding, if a Participant has Excess Deferrals solely from elective deferrals
made under this Plan or any other plan maintained by the Employer, a
Participant will be deemed to have notified the Administrator of such excess
amount and the Administrator shall direct the distribution of such Excess
Deferrals in a manner consistent with the provisions of this subsection.

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Any distribution
made pursuant to this subsection shall be made first from unmatched Elective
Deferrals and, thereafter, from Elective Deferrals which are matched.  Matching contributions which relate to Excess
Deferrals that are distributed pursuant to this Section 12.2(e) shall be
treated as a Forfeiture to the extent required pursuant to Code Section
401(a)(4) and the Regulations thereunder.

For the purpose of
this subsection, “Income” means the amount of income or loss allocable to a
Participant’s Excess Deferrals, which amount shall be allocated in the same
manner as income or losses are allocated pursuant to Section 4.3(c).  However, “Income” for the period between the
end of the taxable year of the Participant and the date of the distribution
(the “gap period”) is not required to be distributed.

(f)            Notwithstanding the preceding, a
Participant’s Excess Deferrals shall be reduced, but not below zero, by any
distribution and/or recharacterization of Excess Deferrals pursuant to Section
12.5(a) for the Plan Year beginning with or within the taxable yea of the
Participant.

(g)           In the event a Participant has
received a hardship distribution pursuant to Regulation 1.401(k)-1(d)(2)(iii)(B)
from any other plan maintained by the Employer or from the Participant’s
Elective Deferral Account pursuant to Section 12.9, then such Participant shall
not be permitted to elect to have Elective Deferrals contributed to the Plan
for a period of twelve (12) months following the receipt of the
distribution.  Furthermore, the dollar
limitation under Code Section 402(g) shall be reduced, with respect to the
Participants taxable year following the taxable year in which the hardship
distribution was made, by the amount of such Participant’s Elective Deferrals,
if any, made pursuant to this Plan (and any other plan maintained by the
Employer) for the taxable year of the hardship distribution.

(h)           At Normal Retirement Date, or such
other date when the Participant shall be entitled to receive benefits, the fair
market value of the Participant’s Elective Deferral Account shall be used to
provide benefits to the Participant or the Participant’s Beneficiary.

(i)            If during a Plan Year, it is projected
that the aggregate amount of Elective Deferrals to be allocated to all Highly
Compensated Participants under this Plan would cause the Plan to fail the tests
set forth in Section 12.4, then the Administrator may automatically reduce the
deferral amount of affected Highly Compensated Participants, beginning with the
Highly Compensated Participant who has the highest actual deferral ratio until
it is anticipated the Plan will pass the tests or until the actual deferral
ratio equals the actual deferral ratio of the Highly Compensated Participant
having the next highest actual deferral ratio. 
This process may continue until it is anticipated that the Plan will
satisfy one of the tests set forth Section 12.4.  Alternatively, the Employer may specify a
maximum percentage of Compensation that may be deferred by Highly Compensated
Participants:

(j)            The Employer and the Administrator
shall establish procedures necessary to implement the salary reduction
elections provided for herein.  Such
procedures may 

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contain limits on salary deferral elections such as
limiting elections to whole percentages of Compensation or to equal dollar
amounts per pay period that an election is in effect.

12.3        ALLOCATION OF CONTRIBUTION. FORFEITURES
AND EARNINGS

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

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

(1)           With
respect to Elective Deferrals made pursuant to Section 12.1(a)(1), to each
Participant’s Elective Deferral Account in an amount equal to each such
Participant’s Elective Deferrals for the year.

(2)           With
respect to the Employees matching contribution made pursuant to Section
12.1(a)(2), to each Participant’s Account, or Participant’s Qualified Matching
Contribution Account, as elected in the Adoption Agreement, in accordance with
Section 12.1(a)(2).

Except, however, in order to be entitled to receive any Employer
matching contribution, a Participant must satisfy the conditions for sharing in
the Employer matching contribution as set forth in the Adoption Agreement.  Furthermore, regardless of any election in
the Adoption Agreement to the contrary, for the Plan Year in which this Plan
terminates, a Participant shall only be eligible to share in the allocation of
the Employer’s contributions for the Plan Year if the Participant is employed
at the end of the Plan Year and has completed to Year of Service (or Period of
Service if the Elapsed Time Method is elected).

(3)           With
respect to the Employees Non-Elective Contribution made pursuant to Section
12.1(a)(3), to each Participant’s Account in accordance with the provisions of
Section 4.3(b)(2)or (3) whichever is applicable.

(4)           With
respect to the Employees Qualified Non-Elective Contribution made pursuant to
Section 12,1(11)(4). to each Participant’s (excluding Highly Compensated
Employees. if elected in the Adoption Agreement) Qualified Non-Elective
Contribution Account in accordance with the Adoption Agreement.

(c)           Notwithstanding anything in the Plan
to the contrary, in determining whether a Non-Key Employee has received the
required minimum allocation pursuant to Section 4.3(f) such Non-Key Employee’s
Elective Deferrals and matching contributions used to satisfy the ADP tests in
Section 12.4 or the ACP tests in Section 12.6 shall not be taken into account.

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(d)           Notwithstanding
anything herein to the contrary, Participants who terminated employment during
the Plan Year shall share in the salary deferral contributions made by the
Employer for the year of termination without regard to the Hours of Service
credited.

(e)                 Notwithstanding
anything herein to the contrary (other than Sections  4.3(f) and 12.3(f)), Participants shall
only share in the allocations of the Employer’s matching  contribution made pursuant to Section
12.1(a)(2), the Employer’s Non-Elective Contributions made pursuant to Section  12.1(a)(3), the Employer’s
Qualified Non-Elective Contribution made pursuant to Section 12.1(a)(4), and
Forfeitures as provided in the Adoption Agreement.  If no election is made in the Adoption
Agreement, then a Participant shall be eligible to share in the allocation of
the Employer’s contribution for  the
year if the Participant completes more than 500 Hours of Service (for three (3)
Months of Service if the Elapsed Time method is chosen in the Adoption
Agreement) during the Plan Year or who is employed on the last day of the Plan
Year.  Furthermore,  regardless of any election in the
Adoption Agreement to the contrary, for the Plan Year in which this Plan
terminates, a Participant shall only be eligible to share in the allocation of
the Employer’s contributions for the Plan Year if the Participant is employed
at the end of the Plan Year and has completed a Year of Service (or Period of
Service if the Elapsed Time Method is elected).

(f)            Notwithstanding, anything in this
Section to the contrary, the provisions of this subsection apply for any Plan
Year if, in the non-standardized Adoption Agreement the Employer elected to
apply the 410(b) ratio percentage failsafe provisions and the plan fails to
satisfy the “ratio percentage test” due to a last day of the Plan Year
allocation condition or an “Hours of Service” (or months of service) allocation
condition.  A plan satisfies the “ratio
percentage test” if on the last day of the Plan Year, the “benefiting ratio” of
the Non-Highly Compensated Employees who are “includible” is at least 70% of
the “benefiting ratio” of the Highly Compensated Employees who are “includible.”  The “benefiting ratio” of the Non-Highly
Compensated Employees is the number of “includible” Non-Highly “benefiting”
under the Plan divided by the number of “includible” Employees who are
Non-Highly Compensated Employees.  The “benefiting
ratio” of the Highly Compensated Employees is the number of Highly Compensated
Employees “benefiting” under the Plan divided by the number of “includible”
Highly Compensated Employees.  “Includible”
Employees are all Employees other than: 
(1) those Employees excluded from participating in the plan for the
entire Plan Year by reason of the collective bargaining unit exclusion or the
nonresident alien exclusion described in the Code or by reason of the age and
service requirements of Article III: and (2) any Employee who incurs a
separation from service during the Plan Year and fails to complete at least 501
Hours of Service (or three (3) months of service if the Elapsed Time Method is
being used) during such Plan Year.

For purposes of this subsection, an Employee is “benefiting”
under the Plan on a particular date if, under the Plan, the Employee is
entitled to an Employer contribution or an allocation of Forfeitures for the
Plan Year.

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If this subsection applies, then the Administrator
will suspend the allocation conditions for the “includible” Non-Highly
Compensated Employees who are Participants, beginning first with the “includible”
Employees employed by the Employer on the last day of the Plan Year, then the “includible”
Employees who have the latest separation from service during the Plan Year, and
continuing to suspend the allocation conditions for each “includible” Employee
who incurred an earlier separation from service, from the latest to the
earliest separation from service date, until the Plan satisfies the “ratio
percentage test” for the Plan Year.  If
two or more “includible” Employees have a separation from service on the same
day, then the Administrator will suspend the allocation conditions for all such
“includible” Employees, irrespective of whether the Plan can satisfy the “ratio
percentage test” by accruing benefits for fewer than all such “includible”
Employees.  If the Plan for any Plan Year
suspends the allocation conditions for an “includible” Employee, then that
Employee will share in the allocation for that Plan Year of the Employer
contribution and Forfeitures, if any, without regard to whether the Employee
has satisfied the other allocation conditions set forth in this Section.

If the Plan includes Employer snatching contributions subject to ACP
testing this subsection applies separately to the Code Section 401(m) portion
of the Plan.

12.4        ACTUAL DEFERRAL PERCENTAGE TESTS

(a)           Except as otherwise provided herein,
this subsection applies if the Prior Year Testing method is elected in the
Adoption Agreement.  The “Actual Deferral
Percentage” (hereinafter “ADP”) for a Plan Year for Participants who are Highly
Compensated Employees thereinafter “HCEs”) for each Plan Year and the prior
year’s ADP for Participants who were Non-Highly Compensated Employees
(hereinafter “NHCEs”) for the prior Plan Year must satisfy one of the following
tests:

(1)           The
ADP for to Plan Year for Participants who are HCEs for the Plan Year shall snot
exceed the prior year’s ADP for Participants who were NHCEs for the prior Plan
Year multiplied by 1.25; or

(2)           The
ADP for a Plan Year for Participants who are HCEs for the Plan Year shall not
exceed the prior year’s ADP for Participants who were NHCEs for the prior Plan
Year multiplied by 2.0 provided, that the ADP for Participants who are HCEs
does not exceed the prior year’s ADP for Participants who were NHCEs in the
prior Plan Year by more than two (2) percentage points.

Notwithstanding the above, for purposes of applying the foregoing tests
with respect to the first Plan Year in which the Plan permits any Participant
to make Elective Deferrals, the ADP for the prior year’s NHCEs shall be deemed
to be three percent (3%) unless the Employer has elected in the Adoption
Agreement to use the current Plan Year’s ADP for these Participants.  However, the provisions of this paragraph may
not be used if the Plan is a successor plan or is otherwise prohibited from
using such provisions pursuant to IRS Notice 98-1 (or superseding guidance).

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(b)           Notwithstanding the foregoing, if the
Current Year Testing method is elected in the Adoption Agreement, the ADP tests
in (a)(1), above shall be applied by comparing the current Plan Year’s ADP for
Participants who are HCEs with the current Plan Year’s ADP (rather than the
prior Plan Year’s ADP) for Participants who are NHCEs for the current Plan
Year.  Once made, this election can only
be changed if the Plan meets the requirements for changing to the Prior Year
Testing method set forth in IRS Notice 98-1 (or superseding guidance).  Furthermore, this Plan must use the same
testing method for both the ADP and ACP tests for Plan Years beginning on or
after the date the Employer adopts its GUST restated plan.

(c)           This subsection applies to prevent
the multiple use of the test set forth in subsection (a)(2) above.  Any HCE eligible to make Elective Deferrals
pursuant to Section 12.2 and to make after-tax voluntary Employee contributions
or to receive matching contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer, shall have either the
actual deferral ratio adjusted in the manner described in Section 12.5 or the
actual contribution ratio adjusted in the manner described in Section 12.7 so
that the “Aggregate Limit” is not exceeded pursuant to Regulation
1.401(m)-2.  The amounts in excess of the
“Aggregate Limit” shall be treated as either an Excess
Contribution or in Excess Aggregate Contribution.  The ADP and ACP of the HCEs are determined
after any corrections required to meet the ADP and ACP tests 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 HCEs does not exceed 1.25 multiplied by the ADP and ACP of the
NHCEs.

“Aggregate Limit”
means the sum of (i) 125 percent of the greater of the ADP of the NHCEs for the
prior Plan Year or the ACP of such NHCEs 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% or two (2) plus the
lesser of such ADP or ACP.  “Lesser” is
substituted for “greater”
in (i) above, and “greater” is substituted for “lesser” after “two (2) plus the” in (ii) above if it would result in a larger
Aggregate Limit.  If the Employer has
elected in the Adoption Agreement to use the Current Year Testing method, then
in calculating the “Aggregate Limit” for a particular Plan Year, the NHCEs ADP
and ACP for that Plan Year, instead of the prior Plan Year, is used.

(d)           A Participant is an HCE for a
particular Plan Year if the Participant meets the definition of an HCE in
effect for that Plan Year.  Similarly, a
Participant is an NHCE for a particular Plan Year the Participant does not meet
the definition of an HCE in effect for that Plan Year.

(e)           For the purposes of this Section and
Section 12.5 ADP means, for a specific group of Participants for a Plan Year,
the average of the ratios (calculated separately for each Participant in such
group) of (1) the amount of Employer contributions actually paid over to the
Plan on behalf of such Participant for the Plan Year to (2) the 

 108
 

 

Participant’s 414(s) Compensation for such Plan
Year.  Employer contributions on behalf
of any participant shall include:  (1)
any Elective Deferrals made pursuant to the Participant’s deferral election
(including Excess Deferrals of HCEs), but excluding (i) Excess Deferrals of
NHCEs that arise solely from Elective Deferrals made under the plan or plans of
this Employer and (ii) Elective Deferrals that are taken into account in the
ACP tests set forth in Section 12.6 (provided the ADP test is satisfied both
with and without exclusion of these Elective Deferrals): and (2) at the election
of the Employer, Qualified Non-Elective Contributions and Qualified Matching
Contributions to the extent such contributions are not used to satisfy the ACP
test.

The actual deferral ratio for each Participant and the
ADP for each group shall be calculated to the nearest one-hundredth of one
percent.  Elective Deferrals allocated to
each Highly Compensated Participant’s Elective Deferral Account shall not be
reduced by Excess Deferrals to the extent such excess amounts are made under
this Plan or any other plan maintained by the Employer.

(f)            For purposes of this Section and
Section 12.5, a Highly Compensated Participant and a Non-Highly Compensated
Participant shall include any Employee eligible to make salary deferrals
pursuant to Section 12.2 for the Plan Year. 
Such Participants who fail to make Elective Deferrals shall be treated
for ADP purposes as Participants on whose behalf no Elective Deferrals are
made.

(g)           In the event this Plan satisfies the
requirements of Code Sections 401(a)(4), 401(k), or 410(b) only if aggregated
with one or more other plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if aggregated with this Plan,
then this Section shall be applied by determining the ADP of Employees as if
all such plans were a single plan.  Any
adjustments to the NHCE ADP for the prior year will be made in accordance with
IRS Notice 98-1 and any superseding guidance, unless the Employer has elected
in the Adoption Agreement to use the Current Year Testing method.  Plans may be aggregated in order to satisfy
Code Section 401(k) only if they have the same Plan Year and use the same ADP
testing method.

(h)           The ADP for any Participant who is an
HCE for the Plan Year and who is eligible to have Elective Deferrals (and
Qualified Non-Elective Contributions or Qualified Matching Contributions, or
both, if treated as Elective Deferrals for purposes of the ADP test) allocated
to such Participant’s accounts under two ( 2) or more arrangements described in
Code Section 40.1(k), that are maintained by the Employer, shall be determined
as if such Elective Deferrals (and, if applicable, such Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both) were made under a
single arrangement for purposes of determining such HCE’s actual deferral
ratio.  However, if the cash or deferred
arrangements have different Plan Years, this paragraph shall be applied by
treating all cash or deferred arrangements ending with or within the same
calendar year arrangement.  Notwithstanding
the foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under Regulations under Code Section 401.

 109
 

 

(i)            For purposes of determining the ADP
and the amount of Excess Contributions pursuant to Section 12.5, only Elective
Deferrals, Qualified Non-Elective Contributions and Qualified Matching
Contributions contributed to the Plan prior to the end of the twelve (12) month
period immediately following the Plan Year to which the contributions relate
shall be considered.

(j)            Notwithstanding anything in this
Section to the contrary, the provisions of this Section and Section 12.5 may be
applied separately (or will be applied separately to the extent required by
Regulations) to each “plan” within the meaning of Regulation 1.407(k)-1(g)(11).  Furthermore, for Plan Years beginning after
December 31, 1998, the provisions of Code Section 401(k)(3)(F) may be used to
exclude from consideration all Non-Highly Compensated Employee s who have not
satisfied the minimum age and service requirements of Code Section 410(a)(1)(A)

12.5        ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE
TESTS

(a)           In the event (or, with respect to
subsection (c) when the Prior Year Testing method is being used, if it is
anticipated) that for Plan Years beginning after December 31, 1996, the Plan
does not satisfy one of the tests set fort-h Section 12.4, the Administrator
shall adjust Excess Contributions or the Employer shall make contributions
pursuant to the options set forth below of any combination thereof.  However, if the Prior Year testing method is
being used and it is anticipated that the Plan might not satisfy one of such
tests, then the Employer may make contributions pursuant to the options set
forth in subsection (c) below.

(b)           On or before the fifteenth day of the
third month following the end of each Plan Year, but in no event later than the
close of the following Plan Year, the Highly Compensated Participant allocated
the largest amount of Elective Deferrals shall have a portion of such Elective
Deferrals (and “Income” allocable to such amounts) distributed and/or, at the
Participant’s election, recharacterized as a after-tax voluntary Employee
contribution pursuant to Section 4.8) until the total amount of Excess
Contributions has been distributed, or until the amount of the Participant’s
Elective Deferrals equals the Elective Deferrals of the Highly Compensated
Participant having the next largest amount of Elective Deferrals
allocated.  This process shall continue
until the total amount of Excess Contributions has been distributed.  Any distribution and/or recharacterization of
Excess Contributions shall be made in the following order:

(1)           With
respect to the distribution of Excess Contributions such distribution:

(i)            may
be postponed but not later than the close of the Plan Year following the Plan
Year to which they are allocable;

(ii)           shall
be made first from unmatched Elective Deferrals and, thereafter, simultaneously
from Elective Deferrals which are matched and matching contributions which
relate to such Elective Deferrals. 
Matching contributions which relate to Excess Contributions shall be
forfeited unless the related matching contribution is distributed as an Excess
Aggregate Contribution pursuant to Section 12.7;

 110
 

 

(iii)          shall
be adjusted “Income”; and

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

(2)           With
respect to the recharacterization of Excess Contributions pursuant to (a)
above, such recharacterized amounts;

(i)            shall
be deemed to have occurred on the date on which the last of those Highly
Compensated Participants with Excess Contributions to be recharacterized is
notified of the recharacterization and the tax consequences of such
recharacterization;

(ii)           shall
not exceed the amount of Elective Deferrals on behalf of any Highly Compensated
Participant for any Plan Year;

(iii)          shall
be treated as after-tax voluntary Employee contributions for purposes of Code
Section 401(a)(4) and Regulation 1.401(k)-1(b). 
However, for purposes of Sections 4.3(f) and 9.2 (top heavy rules),
recharacterized Excess Contributions continue to be treated as Employer
contributions that are Elective Deferrals. 
Excess Contributions (and “Income” attributable to such accounts)
recharacterized as after-tax voluntary Employee contributions shall continue to
be nonforfeitable and subject to the same distribution rules provided for in
Section 12.2(c); and

(iv)          are
not permitted if the amount recharacterized plus after-tax voluntary Employee
contributions actually made by such Highly Compensated Participant, exceed the
maximum amount of after-tax voluntary Employee contributions (determined prior
to application of Section 12.6) that such Highly Compensated Participant is
permitted to make under the Plan in the absence of recharacterization.

(3)           Any
distribution and/or recharacterization of less than the entire amount of Excess
Contributions shall be treated as a pro rata distribution and/or
recharacterization of Excess Contributions and “Income.”

(4)           For
the purpose of this Section, “Income” means the income or losses allocable to
Excess Contributions, which amount shall be allocated at the same time and in
the same manner as income or losses are allocated pursuant to Section
4.3(c).  However, “Income” for the period
between the end of the Plan Year and the date of the distribution (the “gap
period”) is not required to be distributed.

(5)           Excess
Contributions shall be treated as Employer contributions for purposes of Code
Sections 404 and 415 even if distributed from the Plan.

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(c)           Notwithstanding the above, within
twelve (12) after the end of the Plan Year (or, if the Prior Year Testing
methods used, within twelve (12) months after the end of the prior Plan Year),
the Employer may make an special Quantified Non-Elective Contribution or
Qualified Matching Contribution in accordance with one of the following
provisions which contribution shall be allocated to the Qualified Non-Elective
Contribution Account or Qualified Matching Contribution Account of each
Non-Highly Compensated Participant eligible to share in the allocation in
accordance with such provision.  The
Employer shall provide the Administrator with written notification of the
amount of the contribution being made and to which provision it relates.

(1)           A
Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4.  Such contribution shall be allocated in the
same proportion that each Non-Highly Compensated Participant’s 414(s)
Compensation for the year (or prior year if the Prior Year Testing method is
being used) bears to the total 414(s) Compensation of all Non-Highly
Compensated Participants for such year.

(2)           A
Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4.  Such contribution shall be allocated in the
same proportion that each Non-Highly Compensated Participant’s 414(s)
Compensation for the year (or prior year if the Prior Year Testing method is
being used) bears to the total 414(s) Compensation of all Non-Highly
Compensated Participants for such year. 
However, for purposes of this contribution, Non-Highly Compensated
Participants who are not employed at the end of the Plan Year (or at the end of
the prior Plan Year if the Prior Year Testing method is being used) and, if
this is a standardized Plan, who have not completed more than 500 Hours of
Service for three (3) consecutive calendar months if the Elapsed Time Method is
selected in the Adoption Agreement) during such Plan Year, shall not be
eligible to share in the allocation and shall be disregarded.

(3)           A
Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4.  Such contribution shall be allocated in equal
amounts per capita).

(4)           A
Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4.  Such contribution shall be allocated in equal
amounts (per capita).  However, for
purposes of this contribution, Non-Highly Compensated Participants who are not
employed at the end of the Plan Year (or at the end of the prior Plan Year if
the 

 112
 

 

Prior Year Testing method is being used) and, if this
is a standardized Plan who have not completed more than 500 Hours of Service
(or three (3) consecutive calendar months if the Elapsed Time Method is
selected in the Adoption Agreement) during such Plan Year, shall not be
eligible to share in the allocation and shall be disregarded.

(5)           A
Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4.  Such contribution shall be allocated to the
Qualified Non-Elective Contribution Account of the Non-Highly Compensated
Participant having the lowest 414(s) Compensation, until one of the tests set
forth tan Section 12.4 is Satisfied (or is anticipated to be satisfied), or
until such Non-Highly Compensated Participant has received the maximum “Annual
Addition” pursuant to Section 4.4.  This
process shall continue until one the tests set forth in Section 12.4 is satisfied
(or is anticipated to be satisfied).

(6)           A
Qualified Non-Elective Contribution may he made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4.  Such contribution shall be allocated to the
Qualified Non-Elective Contribution Account of the Non-Highly Compensated
Participant having the lowest 414(s) Compensation, until one of the tests set
forth in Section 12.4 is satisfied (or is anticipated to be satisfied), or
until such Non-Highly Compensated Participant has received the maximum “Annual
Addition” pursuant to Section 4.4.  This
process shall continue until one of the tests set forth in Section 12.4 is
satisfied (or is anticipated to be satisfied). 
However, for purposes of this contribution, Non-Highly Compensated
Participants who are not employed at the end of the Plan Year (or at the end of
the prior Plan Year if the Prior Year Testing method is being used) and, if
this is a standardized Plan, who have not completed more than 500 Hours of
Service for three (3) consecutive calendar months if the Elapsed Time Method is
selected in the Adoption Agreement) during such Plan Year, shall not be
eligible to share in the allocation and shall be disregarded.

(7)           A
Qualified Matching Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.4.  Such contribution shall be allocated to the
Qualified Matching Contribution Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated Participant’s
Elective Deferrals for the year bears to the total Elective Deferrals of all
Non-Highly Compensated Participants.

(8)           A
Qualified Matching Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.4.  Such contribution shall be allocated to the
Qualified Matching Contribution Account of 

 113
 

 

each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participants Elective Deferrals for
the year bears to the total Elective Deferrals of all Non-Highly Compensated
Participants.  However, for purposes of
this contribution, Non-Highly Compensated Participants who are not employed at
the end of the Plan Year (or at the end of the prior Plan Year if the Prior
Year Testing method is being used) and, if this is a standardized Plan, who
have not completed more than 500 Hours of Service (or three (3) consecutive
calendar months if the Elapsed Time Method is selected in the Adoption
Agreement) during such Plan Year, shall not be eligible to share in the
allocation and shall be disregarded.

(9)           A
Qualified Matching Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.4.  Such contribution shall be allocated to the
Qualified Matching Contribution Account of the Non-Highly Compensated
Participant having having the lowest Elective Deferrals until one of the tests
set forth in Section 12.4 is satisfied (or is anticipated to be satisfied), or
until such Non-Highly Compensated Participant has received the maximum “Annual
Addition” pursuant to Section 4.4.  This
process shall continue until one of the tests set forth in Section 12.4 is
satisfied (or is anticipated to be satisfied).

(10)         A
Qualified Matching Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth Section 12.4.  Such contribution shall be allocated to the
Qualified Matching Contribution Account of the Non-Highly Compensated
Participant having the lowest Elective Deferrals until one of the tests set
forth in Section 12.4 is satisfied (or is anticipated to be satisfied), or until
such Non-Highly Compensated Participant has received the maximum “Annual
Addition” pursuant to Section 4.4.  This
process shall continue until one of the tests set -forth Section 12.4 is
satisfied (or is anticipated to be satisfied). 
However, for purposes of this contribution, Non-Highly Compensated
Participants who are not employed at the end of the Plan Year (or at the end of
the Prior Plan Year it the Prior Year Testing method is being used) and if this
a standardized Plan, who have not completed more than 500 Hours of Service for
three (3) consecutive calendar months if the Elapsed Time Method is selected in
the Adoption Agreement) during such Plan Year, shall not be eligible to share
the allocation and shall be disregarded.

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

 

 114

 

12.6        ACTUAL CONTRIBUTION PERCENTAGE TESTS

(a)           Except as otherwise provided herein,
this subsection applies if the Prior Year Testing method is elected in the
Adoption Agreement.  The “Actual
Contribution Percentage” (hereinafter “ACP”) for Participants who are Highly
Compensated Employees (hereinafter “HCEs”) for each Plan Year and the prior
year’s ACP for Participants who were Non-Highly Compensated Employees
(hereinafter “NHCEs”) for the prior Plan Year must satisfy one of the following
tests:

(1)           The
ACP for a Plan Year for Participants who are HCEs for the Plan Year shall not
exceed the prior year’s ACP for Participants who were NHCEs for the prior Plan
Year multiplied by 1.25; or

(2)           The
ACP for a Plan Year for Participants who are HCEs for the Plan Year shall not
exceed the prior year’s ACP for Participants who were NHCEs for the prior Plan
Year multiplied by 2.0, provided that the ACP for Participants who are HCEs
does not exceed the prior year’s ACP for Participants who were NHCEs in the
prior Plan Year by more than two (2) percentage points.

Notwithstanding the above, for purposes of applying
the foregoing tests with respect to the first Plan Year in which the Plan
permits any Participant to make Employee contributions, provides for matching
contributions, or both, the ACP for the prior years NHCEs shall be deemed to be
three percent (3%) unless the Employer has elected in the Adoption Agreement to
use the current Plan Year’s ACP for these Participants.  However, the provisions of this paragraph may
not be used if the Plan is as successor plan or is otherwise prohibited from
using such provisions pursuant to IRS Notice 98-1 (or superseding guidance).

(b)           Notwithstanding the preceding, if the
Current Year Testing method is elected in the Adoption Agreement, the ACP tests
in (a)(1) and (a)(2), above shall be applied by comparing the current Plan Year’s
ACP for Participants who are HCEs with the current Plan Year’s ACP (rather than
the prior Plan Year’s ACP for Participants who are NHCEs for the current Plan
Year.  Once made, this election can only
be changed if the Plan meets the requirements for changing to the Prior Year
Testing method set forth in IRS Notice 98-1 (or superseding guidance).  Furthermore, this Plan must use the same
testing method for both the ADP and ACP tests for Plan Years beginning on or
after the date the Employer adopts its GUST restated plan.

(c)           This subsection applies to prevent
multiple use of the test set forth in subsection (a)(2) above.  Any HCE eligible to make Elective Deferrals
pursuant to Section 12.2 and to make after-tax voluntary Employee contributions
or to receive matching contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer, shall have either the
actual deferral ratio adjusted in the manner described in Section 12.5 or the
actual contribution ratio reduced in the manner described in Section 12.7 so
that the “Aggregate Limit” is not exceeded pursuant to Regulation
l.401(m)-2.  The amounts in excess of the
“Aggregate Limit” shall be 

 115
 

 

treated as either an Excess Contribution or an Excess
Aggregate Contribution.  The ADP and ACP
of the HCEs are determined after any corrections required to meet the ADP and
ACP tests and are deemed to be the maximum permitted under such test for the
Plan Year.  Multiple use does not occur
if either the ADP or ACP of the HCEs does not exceed 1.25 multiplied by the ADP
and ACP of the NHCEs.

“Aggregate Limit” means the sum of (i) 125 percent of the greater of
the ADP of the NHCE for the Plan Year or the ACP of such NHCEs 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%
or two plus the lesser of such ADP or ACP. 
“Lesser” is substituted for “greater” in (i) above, and “greater” is
substituted for “lesser”
after “two plus the” in (ii) above if it would result in a larger Aggregate
Limit.  If the Employer has elected in
the Adoption Agreement to use the Current Year Testing method, then in
calculating the “Aggregate Limit” for a particular Plan Year, the NHCEs ADP and
ACP for that Plan Year, instead of the prior Plan Year, is used.

(d)           A Participant is a Highly Compensated
Employee for a particular Plan Year if the Participant meets the definition of
a Highly Compensated Employee in effect for that Plan Year.  Similarly, a Participant is a Non-highly
Compensated Employee for a particular Plan Year if the Participant does not
meet the definition of a Highly Compensated Employee in effect for that Plan
Year.

(e)           For the purposes of this Section and
Section 12.7, ACP for a specific group of Participants for a Plan Year means
the average of the “Contribution Percentages” (calculated separately for each
Participant in such group).  For this
purpose, “Contribution Percentage” means the ratio (expressed as a percentage)
of the Participant’s “Contribution Percentage Amounts” to the Participants 414(s) Compensation.  The actual contribution ratio for each
Participant and the ACP for each group, shall be calculated to the nearest
one-hundredth of one percent of the Participant’s 414(s) Compensation.

(f)            “Contribution
Percentage Amounts” means the sum of (i) after-tax voluntary Employee
contributions, (ii) Employer “Matching Contributions” made pursuant to Section
12.1(a)(2) (including Qualified Matching Contributions to the extent such
Qualified Matching Contributions are not used to satisfy the tests set forth in
Section 12.4), (iii) Excess Contributions recharacterized as nondeductible voluntary
Employee contributions pursuant to Section 12.5, and (iv) Qualified
Non-Elective Contributions (to the extent not used to satisfy the tests set
forth in Section 12.4).  However, “Contribution
Percentage Amounts” shall not include “Matching Contributions” that are
forfeited either to correct Excess Aggregate Contributions or due to Code
Section 401(a)(4) and the Regulations thereunder because the contributions to
which they relate are Excess Deferrals, Excess Contributions, or Excess
Aggregate Contributions.  In addition, “Contribution
Percentage Amounts” may include Elective Deferrals provided the ADP test in
Section 12.4 is met before the Elective Deferrals are used in the ACP test and
continues to be met following the exclusion of those Elective Deferrals that
are used to meet the ACP test.

 116
 

 

(g)           For
purposes of determining the ACP and the amount of Excess Aggregate
Contributions pursuant to Section 12.7, only Employer “Matching Contributions”
(excluding “Matching Contributions” forfeited or distributed pursuant to
Section 12.2(e), 12.5(b), or 12.7(b)) contributed to the Plan prior to the end
of the succeeding Plan Year shall be considered.  In addition, the Administrator may elect to
take into account, with respect to Employees eligible to have Employer “Matching
Contributions” made pursuant to Section 12.1(a)(2) or after-tax voluntary
Employee contributions made pursuant to Section 4.7 allocated to their
accounts, elective deferrals (as defined in Regulation 1.402(g)-1(b)) and
qualified non-elective contributions (as defined in Code Section 401(m)(4)(C))
contributed to any plan maintained by the Employer.  Such elective deferrals and qualified
non-elective contributions shall be treated as Employer matching contributions
subject to Regulation 1.401(m)-1(b)(2) which is incorporated herein by
reference.  The Plan Year must be the
same as the plan year of the plan to which the elective deferrals and the
qualified non-elective contributions are made.

(h)           In
the event that this Plan satisfies the requirements of Code Sections 401(a)(4),
401(m), or 410(b) only if aggregated with one or more other plans, or if one or
more other plans satisfy the requirements of such sections of the Code only if
aggregated with this Plan, then this Section shall be applied by determining
the ACP of Employees as if all such plans were a single plan.  Plans may be aggregated in order to satisfy
Code section 401(m) only if they have the same Plan Year.

Any adjustments to the NHCE ACP for the prior year
will be made in accordance with IRS Notice 98-1 and any superseding guidance,
unless the Employer has elected in the Adoption Agreement 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 ACP testing method.

(i)            For
purposes of this Section, if an HCE is a Participant under two (2) or more
plans (other than an employee stock ownership plan as defined in Code Section
4975(e)(7)) which are maintained by the Employer or an Affiliated Employer to
which “Matching Contributions,” nondeductible voluntary Employee contributions,
or both, are made, all such contributions on behalf of such HCE shall be
aggregated for purposes of determining such HCP’s actual contribution
ratio.  However, if the plans have
different plan years, this paragraph shall be applied by treating all plans
ending with or within the same calendar year as a single plan.

(j)            For purposes of this Section and
Section 12.7, a Highly Compensated Participant and a Non-Highly Compensated
Participant shall include any Employee eligible to have “Matching Contributions”
made pursuant to Section 12.1(a)(2) (whether or not a deferral election was
made or suspended pursuant to Section 12.2(g)) allocated to such Participant’s
account for the Plan Year or to make salary deferrals pursuant to Section 12.2
(if the Employer uses salary deferrals to satisfy the provisions of this 

 117
 

 

Section) or after-tax voluntary Employee contributions
pursuant to Section 4.7 (whether or not nondeductible voluntary Employee
contributions are made) allocated to the Participant’s account for the Plan
Year.

(k)           For purposes of this Section and
Section 12.7, “Matching Contribution” means an Employer contribution made to
the Plan, or to a contract described in Code Section 403(b), on behalf of a
Participant on account of a nondeductible voluntary Employee contribution made
by such Participant, or on account of a Participant’s elective deferrals under
a plan maintained by the Employer.

(l)            For purposes of determining the ACP
and the amount of Excess Aggregate Contributions pursuant to Section 12.7, only
Elective Deferrals, Qualified Non-Elective Contributions, “Matching
Contributions” and Qualified Matching Contributions contributed to the Plan
prior to the end of the twelve (12) month period immediately following the Plan
Year to which the contributions relate shall be considered.

(m)          Notwithstanding
anything in this Section to the contrary, the provisions of this Section and
Section 12.7 may be applied separately (or will be applied separately to the
extent required by Regulations) to each “plan” within the meaning of Regulation
1.401(k)-1(g)(11).  Furthermore, for Plan
Years beginning after December 31, 1998, the provisions of Code Section
401(k)(3)(F) may be used to exclude from consideration all Non-Highly
Compensated Employees who have not satisfied the minimum age and service
requirements of Code Section 410(a)(1)(A).

12.7                        ADJUSTMENT
TO ACTUAL CONTRIBUTION PERCENTAGE TESTS

(a)           In
the event (or, with respect to subsection (g) below when the Prior Year Testing
method is being used, if it is anticipated) that for Plan Years beginning after
December 31, 1996, the Plan does not satisfy one of the tests set forth in
Section 12.6, the Administrator shall adjust Excess Aggregate Contributions or
the Employer shall make contributions pursuant to the options set forth below
or any combination thereof.  However, if
the Prior Year testing method is being used and it is anticipated that the Plan
might not satisfy one of such tests, then the Employer may make contributions
pursuant to the options set forth in subsection (c) below.

(b)           On
or before the fifteenth day of the third month following the end of the Plan
Year, but in no event later than the close of the following Plan Year the
Highly Compensated Participant having the largest allocation of “Contribution
Percentage Amounts” shall have a portion of such “Contribution Percentage
Amounts” (and “Income” allocable to such amounts) distributed or, if
non-Vested, Forfeited (including “Income” allocable to such Forfeitures) until
the total amount of Excess Aggregate Contributions has been distributed, or
until the amount of the Participant’s “Contribution Percentage Amounts” equals
the “Contribution Percentage Amounts” of the Highly Compensated Participant
having the next largest amount of “Contribution Percentage Amounts.”  This process shall continue until the total
amount of Excess Aggregate 

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Contributions has been distributed or forfeited.  Any distribution and/or Forfeiture of “Contribution
Percentage Amounts” shall be made in the following order:

(1)           Employer matching
contributions distributed and/or forfeited pursuant to Section 12.5(b)(1);

(2)           After-tax voluntary
Employee contributions including Excess Contributions recharacterized as
after-tax voluntary Employee contributions pursuant to Section 12.5(b)(2);

(3)           Remaining Employer
matching contributions.

(c)           Any
distribution or Forfeiture of less than the entire amount of Excess Aggregate
Contributions (and “Income”) shall be treated as a pro rata distribution of
Excess Aggregate Contributions and “Income.” 
Distribution of Excess Aggregate Contributions shall be designated by
the Employer as a distribution of Excess Aggregate Contributions (and “Income”).  Forfeitures of Excess Aggregate Contributions
shall be treated in accordance with Section 4.3.  However, no such Forfeiture may be allocated
to a Highly Compensated Participant whose contributions are reduced pursuant to
this Section.

(d)           For
the purpose of this Section, “Income” means the income or losses allocable to
Excess Aggregate Contributions, which amount shall be allocated at the same
time and in the same manner as income or losses are allocated pursuant to
Section 4.3(c).  However, “Income” for
the period between the end of the Plan Year and the date of the distribution
(the “gap period”) is not required to be distributed.

(e)           Excess
Aggregate Contributions attributable to amounts other than nondeductible
voluntary Employee contributions, including forfeited matching contributions,
shall be treated as Employer contributions for purposes of Code Section 404 and
415 even if distributed from the Plan.

(f)            The
determination of the amount of Excess Aggregate Contributions with respect to
any Plan Year shall be made after first determining the Excess Contributions,
if any, to be treated as nondeductible voluntary Employee contributions due to
recharacterization for the plan year of any other qualified cash or deferred
arrangement (as defined in Code Section 401(k)) maintained by the Employer that
ends with or within the Plan Year or which are treated as after-tax voluntary
Employee contributions due to recharacterization pursuant to Section 12.5.

(g)           Notwithstanding
the above, within twelve (12) months after the end of the Plan Year (or, if the
Prior Year Testing method is used, within twelve (12) months after the end of
the prior Plan Year), the Employer may make a special Qualified Non-Elective
Contribution or Qualified Matching Contribution in accordance with one of the following
provisions which contribution shall be allocated to the Qualified Non-Elective
Contribution Account or Qualified Matching Contribution Account of each
Non-Highly 

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Compensated eligible to share in the allocation in accordance with such
provision.  The Employer shall provide
the Administrator with written notification of the amount of the contribution
being made and for which provision it is being made pursuant to.

(1)           A Qualified
Non-Elective Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.6.  Such contribution shall be allocated in the
same proportion that each Non-Highly Compensated Participant’s 414(s) Compensation
for the year (or prior year if the Prior Year Testing method is being used)
bears to the total 414(s) Compensation of all Non-Highly Compensated
Participants for such year.

(2)           A Qualified
Non-Elective Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.6.  Such contribution shall be allocated in the
same proportion that each Non-Highly Compensated Participant’s 414(s)
Compensation for the year (or prior year if the Prior Year Testing method is
being used) bears to the total 414(s) Compensation of all Non-Highly
Compensated Participants for such year. 
However, for purposes of this contribution, Non-Highly Compensated
Participants who are not employed at the end of the Plan Year (or at the end of
the prior Plan Year if the Prior Year Testing method is being used) and, if
this is the standardized Plan, who have not completed more than 500 Hours of
Service (or three (3) consecutive calendar months if the Elapsed Time Method is
selected in the Adoption Agreement) during such Plan Year, shall not be
eligible to share in the allocation and shall be disregarded.

(3)           A qualified
Non-Elective Contribution may be made on behalf of the Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.6.  Such contribution shall be allocated in equal
amounts (per capita).

(4)           A Qualified
Non-Elective Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.6.  Such contribution shall be allocated in equal
amounts (per capita).  However, for
purposes of this Contribution, Non-Highly Compensated Participants who are not
employed at the end of the Plan Year (or at the end of the prior Plan Year if
the Prior Year Testing method is being used) and, if this is a standardized
Plan, who have not completed more than 500 Hours of Service (or three (3)
consecutive calendar months if the Elapsed Time Method is selected in the
Adoption Agreement) during such Plan Year, shall not be eligible to share in
the allocation and shall be disregarded.

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(5)           A Qualified
Non-Elective Contribution may be made on behalf of  Non-Highly Compensated Participants in an
amount sufficient to satisfy (or to prevent an anticipated failure of) one of
the tests set forth in Section 12.6.  Such
contribution shall be allocated to the Qualified Non-Elective Contribution
Account of the Non-Highly Compensated Participant having the lowest 414(s)
Compensation, until one of the tests set forth in Section 12.6 is satisfied (or
is anticipated to be satisfied), or until such Non-Highly Compensated
Participant has received the maximum “Annual Addition” pursuant to Section
414.  This process shall continue until
one of the tests set forth in Section 12.6 is satisfied (or is anticipated to
be satisfied).

(6)           A Qualified
Non-Elective Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.6.  Such contribution shall be allocated to the
Qualified Non-Elective Contribution Account of the Non-Highly Compensated
Participant having the lowest 414(s) Compensation, until one of the tests set
forth in Section 12.6 is satisfied (or is anticipated to be satisfied), or
until such Non-Highly Compensated Participant has received the maximum “Annual
Addition” pursuant to Section 414.  This
process shall continue until one of the tests set forth in Section 12.6 is
satisfied (or is anticipated to be satisfied). 
However, for purposes of this contribution, Non-Highly Compensated
Employees who are not employed at the end of the Plan Year (or at the end of
the prior Plan Year if the Prior Year Testing method is being used) and, if
this is a standardized Plan, who have not completed more than 500 Hours of
Service (or three (3) consecutive calendar months if the Elapsed Time Method is
selected in the Adoption Agreement) during such Plan Year, shall not be
eligible to share in the allocation and shall be disregarded.

(7)           A “Matching
Contribution” may be made on behalf of Non-Highly Compensated Participants in
an amount sufficient to satisfy (or to prevent an anticipated failure of) one
of the tests set forth in Section 12.6. 
Such contribution shall be allocated on behalf of each Non-Highly
Compensated Participant in the same proportion that each Non-Highly Compensated
Participant’s Elective Deferrals for the year bears to the total Elective
Deferrals of all Non-Highly Compensated Participants.  The Employer shall designate, at the time the
contribution is made, whether the contribution made pursuant to this provision
shall be a Qualified Matching Contribution allocated to a Participant’s
Qualified Matching Contribution Account or an Employer Non-Elective
Contribution allocated to a Participant’s Non-Elective Account.

(8)           A “Matching
Contribution” may be made on behalf of Non-Highly Compensated Participants in
an amount sufficient to satisfy (or to prevent an anticipated failure of) one
of the tests set forth in Section 12.6. 
Such contribution shall be allocated on behalf of such Non-Highly
Compensated Participant in the same proportion that each Non-Highly Compensated
Participant’s Elective Deferrals for the year bears to the total Elective
Deferrals of all Non-Highly Compensated Participants.  The Employer shall designate, at the time the
contribution is made, whether a contribution made pursuant to this provision
shall 

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be a Qualified Matching Contribution allocated to a Participant’s
Qualified Matching Contribution Account or an Employer Non-Elective
Contribution allocated to a Participant’s Non-Elective Account.  However, for purposes of this contribution,
Non-Highly Compensated Participants who are not employed at the end of the Plan
Year (or at the end of the prior Plan Year if the Prior Year Testing method is
being used) and, if this is a standardized Plan, who have not completed more
than 500 Hours of Service (or three (3) consecutive calendar months if the
Elapsed Time Method is selected in the Adoption Agreement) during such Plan
Year, shall not be eligible to share in the allocation and shall be
disregarded.

(9)           A “Matching
Contribution” may be made on behalf of Non-Highly Compensated Participants in
an amount sufficient to satisfy (or to prevent an anticipated failure of) one
of the tests set forth in Section 12.4. 
Such contribution shall be allocated on behalf of the Non-Highly
Compensated Participant having the lowest Elective Deferrals until one of the
tests set forth in Section 12.4 is satisfied (or is anticipated to be
satisfied), or until such Non-Highly Compensated Participant has received the
maximum “Annual Addition” pursuant to Section 4.4.  This process shall continue until one of the
tests set forth in Section 12.4 is satisfied (or is anticipated to be
satisfied).  The Employer shall
designate, at the time the contribution is made, whether the contribution made
pursuant to this provision shall be a Qualified Matching Contribution allocated
to a Participant’s Qualified Matching Contribution Account or an Employer
Non-Elective Contribution allocated to a Participant’s Non-Elective Account.

(10)         A “Matching
Contribution” may be made on behalf of Non-Highly Compensated Participants in
an amount sufficient to satisfy (or to prevent an anticipated failure of) one
of the tests set forth in Section 12.4. 
Such contribution shall be allocated on behalf of the Non-Highly
Compensated Participant having the lowest Elective Deferrals until one of the
tests set forth in Section 12.4 is satisfied (or is anticipated to be
satisfied), or until such Non-Highly Compensated Participant has received the
maximum “Annual Addition” pursuant to Section 4.4.  This process shall continue until one of the
tests set forth in Section 12.4 is satisfied (or is anticipated to be
satisfied).  The Employer shall designate,
at the time the contribution is made, whether the contribution made pursuant to
this provision shall be a Qualified Matching Contribution allocated to a
Participant’s Qualified Matching Contribution Account or an Employer
Non-Elective Contribution allocated to a Participant’s Non-Elective
Account.  However, for purposes of this
contribution, Non-Highly Compensated Participants who are not employed at the
end of the Plan Year (or at the end of the prior Plan Year if the Prior Year
Testing method is being used) and, if this is a standardized Plan, who have not
completed more than 500 Hours of Service (or three (3) consecutive calendar
months if the Elapsed Time Method is selected in the Adoption Agreement) during
such Plan Year, shall not be eligible to share in the allocation and shall be
disregarded.

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

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12.8        SAFE HARBOR PROVISIONS

(a)           The
provisions of this Section will apply if the Employer has elected, in the
Adoption Agreement, to use the “ADP Test SafeHarbor” or “ACP Test Safe Harbor.”
If the Employer has elected to use the “ADP Test Safe Hatbor” for a Plan Year,
then the provisions relating to the ADP test described in Section 12.4 and in
Code Section 401(k)(3) do not apply for such 
Plan Year.  In addition, if the
Employer has also elected to use the “ACP Test Safe Harbor” for a Plan Year,
then the provisions relating to the ACP test described in Section 12.6 and in
Code Section 401(m)(2) do not apply for such Plan Year.  Furthermore, to the extent any other
provision of the Plan is inconsistent with the provisions of this Section, the
provisions of this Section will govern.

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

(1)           “ACP Test Safe
Harbor” means the method described in subsection (c) below for satisfying the
ACP test of Code Section 401(m)(2).

(2)           “ACP Test Safe
Harbor Matching Contributions” means “Matching Contributions” described in
subsection (d)(1).

(3)           “ADP Test Safe
Harbor” means the method described in subsection (c) for satisfying the ADP
test of Code Section 401(k)(3).

(4)           “ADP Test Safe
Harbor Contributions” means “Matching Contributions” and nonelective
contributions described in subsection (c)(1) below.

(5)           “Compensation” means
Compensation as defined in Section 1.11, except, for purposes of this Section,
no dollar limit, other than the limit imposed by Code Section 401(a)(17),
applies to the Compensation of a Non-Highly Compensated Employee.  However, solely for purposes of determining
the Compensation subject to a Participant’s deferral election, the Employer may
use an alternative definition to the one described in the preceding sentence,
provided such alternative definition is a reasonable definition within the
meaning of Regulation 1.414(s)-1(d)(2) and permits each Participant to elect
sufficient Elective Deferrals to receive the maximum amount of “Matching
Contributions” (determined using the definition of Compensation described in
the preceding sentence) available to the Participant under the Plan.

(6)           “Eligible
Participant” means a Participant who is eligible to  make Elective Deferrals under the Plan for
any part of the Plan Year (or who would be eligible to make Elective Deferrals
but for a suspension due to a hardship distribution described in Section 12.9
or to statutory limitations, such as Code Section 402(g) and 415) and who is
not excluded as an “Eligible Participant” under the 401(k) Safe Harbor
elections in the Adoption Agreement.

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(7)           “Matching
Contributions” means contributions made by the Employer on account of an “Eligible
Participant’s” Elective Deferrals.

(c)           The provisions of this
subsection apply for purposes of satisfying the “ADP Test Safe Harbor.”

(1)           The “ADP Test Safe
Harbor Contribution” is the contribution elected by the Employer in the
Adoption Agreement to be used to satisfy the “ADP Test Safe Harbor.”  However, if no contribution is elected in the
Adoption Agreement, the Employer will contribute to the Plan for the Plan Year
a “Basic Matching Contribution” on behalf of each “Eligible Employee.”  The “Basic Matching Contribution” is equal to
(i) one-hundred percent (100%) of the amount of an “Eligible Participant’s”
Elective Deferrals that do not exceed three percent (3%) of the Participant’s “Compensation”
for the Plan Year, plus (ii) fifty percent (50%) of the amount of the
Participant’s Elective Deferrals that exceed three percent (3%) of the
Participant’s “Compensation” but do not exceed five percent (5%) of the
Participant’s “Compensation.”

(2)           Except as provided
in subsection (e) below, for purposes of the Plan, a Basic Matching
Contribution or an Enhanced Matching Contribution will be treated as Qualified
Matching Contribution and a Nonelective Safe Harbor Contribution will be
treated as Qualified Non-Elective Contribution. Accordingly, the ‘‘ADP Test
Safe Harbor Contribution” will be fully Vested and subject to the distribution
restrictions set forth in Section 12:2(c) (i.e., may generally not be
distributed earlier than separation from service, death, disability, an event
described in Section 401(k)(1), or, in case of a profit sharing plan, the
attainment of age 59 1/2.  In addition,
such contributions must satisfy the “ADP Test Safe Harbor” without regard to
permitted disparity under Code Section 401(1).

(3)           At least thirty (30)
days, but not more than ninety (90) days, before the beginning of the Plan
Year, the Employer will provide each “Eligible Participant” a comprehensive
notice of the Participant’s
rights and obligations under the Plan, written in a manner calculated to be
understood by the average Participant. However, if an Employee becomes eligible
after the 90th day before the beginning of the Plan Year and does not receive
the notice for that reason, the notice must be provided no more than ninety
(90) days before the Employee becomes eligible but not later than the date the
Employee becomes eligible.

(4)           In addition to any
other election periods provided under the Plan, each “Eligible Participant” may
make or modify a deferral election during the thirty (30) day period
immediately following receipt of the notice described in subsection (3)
above.  Furthermore, if the “ADP Test
Safe Harbor” is a “Matching Contribution” each “Eligible Employee” must be
permitted to elect sufficient Elective Deferrals to receive the maximum amount
of “Matching Contributions” available to the
Participant under the Plan.

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(d)           The provisions of
this subsection apply if the Employer has elected to satisfy the “ACP Test Safe
Harbor.”

(1)           In addition to the “ADP
Test Safe Harbor Contributions.” the Employer will make any “Matching. Contribution”  in accordance with elections made in the
Adoption Agreement. Such additional “Matching Contributions” will be considered
“ACP Test Safe Harbor Matching Contributions.”

(2)           Notwithstanding any
election in the Adoption Agreement to the contrary, an “Eligible Participant’s”
Elective Deferrals in excess of six percent (6%)             of Compensation” may not be taken into account in
applying “ACP Test Safe Harbor Matching Contributions” In addition, effective
with respect to Plan Years beginning after December 31, 1999, any portion of an
“ACP Test Safe Harbor Matching Contribution” attributable to discretionary
Matching Contribution” may not exceed four percent (4%) of an “Eligible
Participant’s” “Compensation.”

(e)           The Plan is required
to satisfy the ACP test of Code Section 401(m)(2), using the current year
testing method, if the Plan permits after-tax voluntary Employee contributions
or if matching contributions that do not satisfy the “ACP Test Safe Harbor” may
be made to the Plan.  In such event, only
“ADP Test Safe Harbor Contributions” or “ACP Test Safe Harbor Contributions”
that exceed the amount needed to satisfy the “ADP Test Harbor” or “ACP Test
Safe Harbor” (if the Employer has elected to use the ACP Test Safe Harbor”) may
be treated as Qualified Nonelective Contributions or Qualified Matching Contributions
in applying the ACP test.  In addition,
in applying the ACP test, elective contributions may not treated as matching
contributions under Code Section 401(m)(3). 
Furthermore, in applying the ACP test, the Employer may elect to
disregard with respect to all “Eligible Participant’s” all “Matching
Contributions” if the only “‘Matching Contributions” made to the Plan satisfy
the “ADP Test Safe Harbor Contribution” (the “Basic Matching Contribution” or
the “Enhanced Matching Contribution”) and (2) if the “ACP Test Safe Harbor” is
satisfied, “Matching Contributions” that do not exceed four percent (4%) of
each Participant’s
“Compensation.”

12.9        ADVANCE DISTRIBUTION FOR HARDSHIP

(a)           The
Administrator, at the election of a Participant, shall direct the Trustee to
distribute to the Participant in any one Plan Year up to the lesser of (1) 100%
of the accounts as elected in the Adoption Agreement valued as of the last
Valuation Date or (2) the amount necessary to satisfy the immediate and heavy
financial need of the Participant. Any distribution made pursuant to this
Section shall be deemed to he made as of the first day of the Plan Year or, if
later, the Valuation Date immediately preceding the date of distribution, and
the account from which the distribution is made shall he reduced
accordingly.  Withdrawal under this
Section shall be authorized only if the distribution is for one of the
following or any other item permitted under Regulation 1.40(k)-1(2)(iv):

 125
 

 

(1)           Medical expenses
described in Code Section 2(3)(d) incurred by the Participant, the Participants
spouse, or any of the Participant’s dependents (as defined in Code Section 152)
or necessary for these persons to obtain medical care as described in Code
Section 213(d).

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

(3)           Payment of tuition
and related educational fees, and room and board expenses, for the next twelve
(12) months of post-secondary education for the Participant the Participants
spouse, children, or dependents (as defined in Code Section 152); or

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

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

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

(2)           The Participant has
obtained all distributions, other than hardship distributions, and all
nontaxable loans currently available under all plans maintained by the Employer
(to the extent the loan would not increase the hardship);

(3)           The Plan, and all
other plans maintained by the Employer, provide that the Participant’s elective
deferrals and nondeductible voluntary Employee contributions will be suspended
for at least twelve (12) months after receipt of the hardship distribution; and

(4)           The Plan, and all
other plans maintained by the Employer, provide that the Participant may not
make elective deferrals for the Participant’s taxable year immediately
following the taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such next taxable year less the
amount of such Participant’s elective deferrals for the taxable year of the
hardship distribution.

(c)           Notwithstanding the above,
distributions from the Participant’s Elective Deferral Account, Qualified
Matching Contribution Account and Qualified Non-Elective Account pursuant to
this Section shall be limited solely to the Participant’s Elective Deferrals
and any income attributable thereto credited to the Participant’s Elective
Deferral Account as of December 31, 1988. 
Furthermore, if a hardship distribution is permitted from more than one
account type, the Administrator may determine any ordering of a Participant’s
hardship distribution from such accounts.

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(d)           Any distribution made pursuant to
this Section shall be made in a manner which is consistent with and satisfies
the provisions of Section 6.5, including, but not limited to, all notice and
consent requirements of Code Sections 411(a) and 417 and the Regulations
thereunder.

ARTICLE
XIII

SIMPLE 401(k) PROVISIONS

13.1        SIMPLE 401(k) PROVISIONS

(a)           If elected in the Adoption Agreement,
this Plan is intended to be 401(k) plan which satisfies the requirements if
Code Sections 401(k)(11) and 401(m)(10).

(b)           The provisions of this Article apply
for a “year” only if the following conditions are met:

(1)           The Employer adopting this Plan is an
“eligible employer.” An “eligible employer means, with respect to any “year,”
an Employer that had no more than 100 Employees who received at least $5,000 of
“compensation” from the Employer for the preceding “year.”  In applying the preceding sentence, all
employees of an Affiliated Employer are taken into account.

An “eligible employer” that has elected to use the SIMPLE 401(k)
provisions but fails to be an “eligible employer for any Subsequent “year,” is
treated as an “eligible employer” for the two (2) “years” following the last “year”
the Employer was an “eligible employer, if the failure is due to any
acquisition, disposition, or similar transaction involving an “eligible
employer,” the preceding sentence applies only if the provisions of Code
Section 410(b)(6)(C)(i) are satisfied.

(2)           No contributions are made or benefits
accrued for services during the “year,” on behalf of any “eligible employee”
under any other plan, contract, pension, or trust described in Code Section
2l9(g)(5)(A) or (B), maintained by the Employer.

(c)           To the extent that any other
provision of the Plan is inconsistent with the provisions of this Article, the
provisions of this Article govern.

13.2        DEFINITIONS

(a)           “Compensation”
means, for purposes of this Article, the sum of the wages, tips, and other
compensation from the Employer subject to federal income tax withholding (as
described in Code Section 6051(a)(3)) and the Employee’s salary reductions
contributions made under this or any other 401 (k) plan, and, if applicable,
elective deferrals under a Code Section 408(p) SIMPLE plan, a SARSEP, or a Code
Section 403(b) annuity contract and compensation deferred under a Code Section
457 plan, required to be reported by the Employer on Form W-2 (as described in
Code Section 6051(a)(8)).  For
self-employed

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individuals, “compensation”  means net earnings from self-employment
determined under Code Section 1402(a) prior to subtracting any contributions
made under this Plan on behalf of the individual.  The provisions of the plan implementing the
limit on Compensation under Code Section 401(a)(17) apply to the “compensation”
under this Article.

(b)           “Eligible employee”
means, for purposes of this Article, any Participant who is entitled to make
elective deferrals described in Code Section 402(g) under the terms of the
Plan.

(c)           “Year” means the calendar year.

13.3        CONTRIBUTIONS

(a)           Salary Reduction Contributions

(1)           Each “eligible
employee” may make a salary reduction election to have “compensation” reduced
for the “year” in any amount selected by the Employee subject to the limitation
in subsection (c) below.  The Employer
will make a salary reduction contribution to the Plan, as an Elective Deferral,
in the amount by which the Employee’s “compensation” has been reduced.

(2)           The total salary
reduction contribution for the “year” cannot exceed $6,000 for any
Employee.  To the extent permitted by
law, this amount will be adjusted to reflect any annual cost-of-living
increases announced by the IRS.

(b)           Other Contributions

(1)           Matching
Contributions. Unless (2) below is elected, each “year” the Employer will make
a matching contribution to the Plan on behalf of each Employee who makes a
salary reduction election under Section 13.3(a).  The amount of the matching contribution will
be equal to the Employee’s salary reduction contribution up to a limit of three
percent (3%) of the Employees “compensation” for the full “year.”

(2)           Nonelective
Contributions. For any “year,” instead of a matching contribution, the Employer
may elect to contribute a nonelective contribution of two percent (2%) of “compensation” for the “year” for each “eligible employee”
who received at least $5,000 of “compensation from the Employer for the “year.”

(c)           Limitation on Other Contributions

No Employer or Employee contributions may be made to this Plan for the “year”
other than salary reduction contributions described in Section 13.3(a),
matching or nonelective contributions described in Section 13.3(b) and rollover
contributions described in Regulation Section 1402(c)-2, Q&A-1(a).  Furthermore, the provisions of` Section 4.4 which implement the limitations of
Code Section 415 apply to contributions made pursuant to this Section.

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13.4        ELECTION AND NOTICE REQUIREMENTS

(a)           Election Period

(1)           In addition to any
other election periods provided under the Plan, each “eligible employee” may
make or modify a salary reduction election during the 60-day period immediately
preceding each January 1st.

(2)           For the “year” an
Employee becomes eligible to make salary reduction contributions under this
Article, the 60-day election period requirement of subsection (a)(1) is deemed
satisfied if the Employee may make or modify a salary reduction election during
a 60-day period that includes either the date the Employee becomes eligible or
the day before.

(3)           Each “eligible
employee” may terminate a salary reduction election at any time during the “year.”

(b)           Notice Requirements.

(1)           The Employer will
notify each “eligible employee” prior to the 60-day election period described
in Section 13.4(a) that a salary reduction election or a modification to a
prior election may be made during that period.

(2)           The notification
described in (1) above will indicate whether the Employer will provide a
matching contribution described in Section 13.3(b)(l) or a two percent (2%)
nonelective contribution described in section 13.3(b)(2).

13.5        VESTING REQUIREMENTS

All benefits
attributable to contributions made pursuant to this Article are nonforfeitable
at all times, and all previous contributions made under the Plan are
nonforfeitable as of the beginning of the Plan Year that the 401(k) SIMPLE
provisions apply.

13.6        TOP-HEAVY RULES

The Plan is not
treated as a top heavy plan under Code Section 416 for any year for which the
provisions of this Article are effective and satisfied.

13.7        NONDISCRIMINATION TESTS

The Plan is
treated as meeting the requirements of Code Sections 401(k)(3)(A)(ii) and
401(m)(2) for any “year” for which the provisions of this Article are effective
and satisfied.  Accordingly, Sections
12.4, 12.5, 12.6 and 12.7 shall not apply to the Plan.

 

 129Exhibit 10.1

 

UNIT PURCHASE AGREEMENT

 

THIS UNIT PURCHASE AGREEMENT (“Agreement”) is
entered into this 21st day of September, 2007, by and between Dakota
Growers Pasta Company, Inc., a North Dakota corporation (“Buyer”), and
TechCom Group, LLC (“TechCom”), Buhler, Inc. (“Buhler”) and B-New, LLC (“B-New”)
(each a “Seller” and collectively the “Sellers”).

 

W  I 
T  N  E 
S  S  E 
T  H:

 

WHEREAS, Sellers are holders of Units (the “Units”)
of DNA Dreamfields Company, LLC, an Ohio limited liability company (the “Company”);
and

 

WHEREAS, Sellers desire to sell to Buyer, and Buyer
desires to purchase from Sellers, the Units held by Sellers, upon the terms and
subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of and in reliance
upon the representations, warranties and obligations in this Agreement, the
parties agree as follows:

 

1.                                      Definitions.
When used in this Agreement, the following terms in all of their tenses and
cases will have the meanings assigned to them below or elsewhere in this
Agreement as indicated below:

 

“Affiliate” of any Person means any person
directly or indirectly controlling, controlled by, or under common control
with, any such Person and any officer, director, governor, or controlling
person of such Person.

 

“Contract” means any commitment, understanding,
instrument, lease, pledge, mortgage, indenture, note, license, agreement,
purchase or sale order, contract, promise, or similar arrangement evidencing or
creating any obligation, whether written or oral.

 

“Governmental Authority” means any federal,
provincial, municipal, state, regional or local authority, agency, body, court
or instrumentality, regulatory or otherwise, domestic or foreign, which, in
whole or in part, was formed by or operates under the auspices of any federal,
provincial, municipal, state, regional or local government, domestic or
foreign.

 

“Law” means any common law and any federal,
provincial, municipal, state, regional, local or foreign law, bylaw, rule,
statute, ordinance, rule, order or regulation.

 

“Lien” means any lien, charge, covenant,
condition, easement, adverse claim, demand, encumbrance, limitation, security
interest, option, pledge, or any other title defect or restriction of any kind.

 

“Losses” means any liability, damage,
deficiency, cost or expense, including reasonable attorney, technical,
engineering, laboratory, accounting and report fees.

 

 

“Operating Agreement” means the Operating
Agreement of the Company dated October 31, 2003, as amended on February 9,
2004, October 25, 2004 and November 1, 2004 and as amended and restated on May
1, 2005, as in effect on the date hereof.

 

“Person” means any individual, corporation,
partnership, association, trust or any other entity or organization.

 

2.                                      Purchase
and Sale of Units. Subject to the terms and conditions of this
Agreement, Sellers hereby agree to sell, transfer and assign to Buyer, and
Buyer hereby agrees to purchase from Sellers, the Units held by Seller as
described in Exhibit A hereto (the Units so sold, transferred and
assigned to Buyer being the “Purchased Units”). Each Seller does hereby
acknowledge and agree that, notwithstanding any provisions in the Operating
Agreement to the contrary, the Company shall continue in existence as an entity
following the completion of the purchase and sale of Units contemplated by this
Agreement. Each Seller does further acknowledge and agree that the Company
shall continue to hold all rights with respect to the “Brand” and the licensed
use of the “Technology” (as defined in the Operating Agreement) that are
granted to the Company by the terms and conditions of the Operating Agreement
and that the transactions contemplated by this Agreement shall not in any way
reduce, impair or terminate the Company’s rights to the Brand or the Technology
as established under the Operating Agreement.

 

3.                                      Purchase
Price. In consideration of Buyer’s purchase of the Purchased Units,
Buyer shall pay each Seller an amount equal to $37,393 per Unit (the “Purchase
Price”) in respect of the Purchased Units of such Seller, payable by means
of wire transfer at the closing.

 

4.                                      Representations and Warranties of Seller. Each Seller, severally and not jointly, hereby represents and warrants
to Buyer, as follows:

 

4.1                                 Purchased
Units. Each Seller owns, beneficially and of record, all right, title and
interest in and to the Purchased Units, free and clear of all Liens. At the
Closing, Buyer will acquire from Seller good and valid title to the Purchased
Units, free of all Liens. Other than the Purchased Units, Seller has no other interest
in any Units, other equity securities of the Company, securities of the Company
containing any equity features, any right, subscription, warrant, option,
conversion right or agreement of any kind to purchase or otherwise acquire from
the Company any membership interest, interest in its Units or other equity or
any other securities of the Company of any kind.

 

4.2                                 Authority;
Enforceability. Seller is duly formed or organized and validly existing,
and has the requisite power and authority to execute and deliver this Agreement
and to perform its obligations hereunder (including, without limitation, the
power to sell, transfer and convey the Purchased Units as provided by this
Agreement). The execution, delivery and performance of this Agreement by Seller
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all requisite action on the part of Seller, and no other  

 

2

 

proceedings on its
part are necessary to authorize the execution, delivery and performance of this
Agreement. This Agreement has been duly executed and delivered by Seller and
constitutes the valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, except to the extent that such
enforceability (i) may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors’ rights generally, and
(ii) is subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

 

4.3                                 Consents.
Except as provided in the Operating Agreement and except for such approvals,
consents or waivers of, or filings with, Persons or Governmental Authorities
that have already been obtained by Seller, no approval, consent or waiver of,
or filing with, any Person or Governmental Authority is required in connection
with the transactions contemplated by this Agreement or the execution, delivery
or performance by Seller of this Agreement.

 

4.4                                 No
Conflicts. The execution, delivery and performance of this Agreement by
Seller and the consummation by Seller of the transactions contemplated hereby
will not conflict with or result in any breach of, or give rise to rights of
termination, amendment, acceleration or cancellation under the provisions of
any Contract by which Seller or any of its properties is bound or affected, or
any Law to which Seller or any of its properties is subject.

 

4.5                                 Exculpation
Among Sellers; Reliance on Advisors. Each
Seller acknowledges that in making its decision to sell the Purchased Units, it
is not relying upon any advice or information from any other Seller or from any
Person, including the Company or Buyer or their respective Affiliates. Each
Seller has reviewed with such Seller’s own tax advisors the tax consequences of
the sale of the Purchased Units and the transactions contemplated by this
Agreement, and has and will rely solely on such advisors and not on any
statements or representations of the Company, Buyer or either of their
respective Affiliates. Each Seller understands that such Seller (and not the
Company or Buyer) shall be responsible for each such Seller’s own tax liability
that may arise as a result of such Seller’s sale of the Purchased Units or the
transactions contemplated by this Agreement. Each Seller acknowledges that
Stoel Rives LLP is legal counsel to Buyer, whose interests are in conflict with
those of the Sellers, and that Stoel Rives LLP, as counsel for Buyer, does not
represent any Seller or any Seller’s interests in connection with the sale of
the Purchased Units, and that each Seller has had the opportunity to obtain
advice from Seller’s own legal counsel regarding the sale of the Purchased
Units.

 

4.6                                 Disclosure. No representation or warranty of any Seller in this Agreement
or in any certificate, schedule, statement or other document furnished or to be
furnished to Buyer pursuant to this Agreement or in connection with the
transactions contemplated by this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
required to be stated

 

3

 

herein or therein
or necessary to make the statements herein or therein not misleading.

 

5.                                      Representations
and Warranties of Buyer. Buyer hereby represents and warrants to
Sellers, as follows:

 

5.1                                 Authority;
Enforceability. Buyer is a corporation duly organized and validly existing
under the laws of the state of North Dakota. Buyer has the requisite power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder, including without limitations, the power to purchase the Purchased
Units and deliver the Purchase Price to the Sellers as provided in this Agreement.
The execution, delivery and performance of this Agreement by Buyer and the
consummation of the transactions contemplated thereby have been duly and
validly authorized by all requisite action on the part of Buyer, and no other
proceedings on Buyer’s part are necessary to authorize the execution, delivery
and performance of this Agreement. This Agreement has been duly executed and
delivered by Buyer and constitutes the valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except to the extent
that such enforceability (i) may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors’ rights
generally, and (ii) is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

5.2                                 Consents.
Except as provided in the Operating Agreement and except for such approvals,
consents or waivers of, or filings with, Persons or Governmental Authorities
that have already been obtained by Buyer, no approval, consent or waiver of, or
filing with, any Person or Governmental Authority is required in connection
with the transactions contemplated hereby or the execution, delivery or
performance by Buyer of this Agreement.

 

5.3                                 No
Conflicts. The execution, delivery and performance of this Agreement by
Buyer and the consummation by Buyer of the transactions contemplated hereby
will not conflict with or result in any breach of, or give rise to rights of
termination, amendment, acceleration or cancellation under the provisions of
any Contract by which Buyer or any of Buyer’s properties is bound or affected,
or any Law to which Buyer or any of Buyer’s properties is subject.

 

5.4                                 Investment
Intent. Buyer is aware that the sale of the Purchased Units to Buyer
hereunder has not been registered under applicable federal and state securities
laws. Buyer is acquiring the Purchased Units for investment only, for Buyer’s
own account and not with a view to, or in connection with, the further sale or
transfer of all or any portion thereof.

 

5.5                                 Information.
Buyer has had an opportunity to ask questions of, and receive answers from the
executive officers of the Company, concerning the business, management and
financial affairs of the Company. Buyer has had an opportunity to obtain, and
has received, any and all additional information deemed necessary

 

4

 

by Buyer to verify
such information in order to form a decision concerning a purchase of the Purchased Units. Buyer acknowledges that in making the
decision to purchase the Purchased Units, Buyer is not relying upon any advice
from any Seller or from any Person, including the Company or Seller or their
respective Affiliates.

 

5.6                                 Disclosure. No representation or warranty of Buyer in this Agreement or in
any certificate, schedule, statement or other document furnished or to be
furnished to any Seller pursuant this Agreement or in connection with the
transactions contemplated by this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
required to be stated herein or therein or necessary to make the statements
herein or therein not misleading.

 

6.                                      Closing
and Closing Deliveries.

 

6.1                                 Closing.
The consummation of the transactions contemplated hereby (the “Closing”)
will take place at such place and such time as is mutually agreeable to Buyer
and Sellers but shall occur no later than September 30, 2007 (the “Closing Date”).

 

6.2                                 Closing Procedures. At the Closing,
each Seller will deliver to Buyer against payment by Buyer of the Purchase
Price for the Purchased Units an
Assignment, in substantially the form attached hereto as Exhibit B, conveying
to Buyer all of each Seller’s right, title and interest in and to the Purchased
Units owned by such Seller. Each Seller and related party other than Buhler
shall deliver to Buyer a Non-Compete Agreement in substantiality the
form attached hereto as Exhibit C-1; and Buhler shall deliver to Buyer a
Non-Compete Agreement in substantially the form attached hereto as Exhibit C-2.

 

7.                                      Release;
Survival; Indemnification.

 

7.1                                 Release.

 

(a)                                  As
a condition to this Agreement and in consideration of the payment to be
received by each Seller, each Seller, for and on behalf of such Seller and such
Seller’s heirs, administrators, executors, successors, assigns, and Affiliates
agrees to, and hereby does, release acquit and forever discharge the Company,
its officers, governors, members, employees, agents, successors, assigns, and
Affiliates and Buyer and Buyer’s Affiliates and each and all thereof, of and
from any and all manner of action or actions, suits, claims, damages,
judgments, levies, executions, liquidated or unliquidated, fixed or contingent,
direct or indirect, which such Seller, such Seller’s heirs, administrators,
executors, successors and assigns ever had, have or ever can, shall or may have
against the Company, its officers, governors, members, employees, agents,
successors and assigns or Buyer or any of Buyer’s Affiliates related in any
manner to any state of facts or 

 

5

 

circumstances on
or prior to the date hereof, save and except only those rights, obligations and
duties imposed and created by this Agreement and except for liabilities that
arise due to fraud committed by the Company or Buyer.

 

(b)                                 As
a condition to this Agreement and in consideration of the Purchased Units,
Buyer, for and on behalf of itself and its administrators, executors,
successors, assigns, and Affiliates agrees to, and hereby does, release acquit
and forever discharge the Company, its officers, governors, members, employees,
agents, successors, assigns, and Affiliates and Sellers and Sellers’ respective
Affiliates and each and all thereof, of and from any and all manner of action
or actions, suits, claims, damages, judgments, levies, executions, liquidated
or unliquidated, fixed or contingent, direct or indirect, which Buyer, Buyer’s
heirs, administrators, executors, successors and assigns ever had, have or ever
can, shall or may have against the Company, its officers, governors, members,
employees, agents, successors and assigns or Sellers or any of Sellers’
respective Affiliates related in any manner to any state of facts or
circumstances on or prior to the date hereof, save and except only those
rights, obligations and duties imposed and created by this Agreement and except
for liabilities that arise due to fraud committed by the Sellers.

 

7.2                                 Survival
of Representations and Warranties. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the sale and purchase of the Purchased Units and
payment therefore for a period of three (3) years. All statements contained in
any certificate, instrument or other writing delivered by or on behalf of any
party pursuant to this Agreement or in connection with or in contemplation of
the transactions herein contemplated shall constitute representations and
warranties by such party hereunder.

 

7.3                                 Indemnification
by Seller. From and after the Closing, each Seller will indemnify Buyer and
Affiliates of Buyer against and hold them harmless from:

 

(a)                                  Representations.
All Losses resulting from or arising out of any inaccuracy in or breach of any
representation and warranty by Seller herein;

 

(b)                                 Covenants.
All Losses resulting from or arising out of any breach or nonperformance of any
covenant or obligation of Seller herein; and

 

(c)                                  Costs. Any and all costs and expenses (including, without limitation, legal
and accounting fees) related to any of the foregoing.

 

Notwithstanding
the foregoing provisions, each Seller’s indemnification obligation pursuant to
this Section 7.3 shall not exceed the Purchase Price received by such Seller with
respect to the sale of Purchased Units to Buyer pursuant to this Agreement.

 

6

 

7.4                                 Indemnification
by Buyer. From and after the Closing, Buyer will indemnify Seller and
Affiliates of Seller against and hold them harmless from:

 

(a)                                  Representations.
All Losses resulting from or arising out of any inaccuracy in or breach of any
representation or warranty by Buyer herein;

 

(b)                                 Covenants.
All Losses resulting from or arising out of any breach or nonperformance of any
covenant or obligation of Buyer herein; and

 

(c)                                  Costs.
Any and all related costs and expenses (including, without limitation, legal
and accounting fees) related to any of the foregoing.

 

Notwithstanding
the foregoing provisions, the Buyer’s aggregate indemnification obligation
pursuant to this Section 7.4 shall not exceed the aggregate Purchase Price paid
by the Buyer with respect to the purchase of Purchased Units from the Sellers
pursuant to this Agreement, and the Buyer’s indemnification obligation pursuant
to this Section 7.4 to each of the Sellers shall not exceed the portion of the
aggregate Purchase Price paid to such Seller by the Buyer.

 

8.                                      Miscellaneous.

 

8.1                                 Notices.
All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if signed by the respective Person giving such
notice or other communication (in the case of any corporation the signature
shall be by an authorized officer thereof) (i) when delivered personally, (ii)
one (1) business day following deposit
with a nationally recognized overnight delivery service, (iii) transmitted by
confirmed facsimile if sent during normal business hours of the recipient, if
not, then on the next business day, (iv) two (2) business days after being deposited
in the United States mail in a sealed envelope, postage prepaid, return receipt
requested, addressed as follows:

 

	
  If to Buyer:

  	
   

  	
  Dakota
  Growers Pasta Company, Inc.

  One
  Pasta Avenue

  Carrington,
  ND 58421

  Facsimile:
  (701) 652-3713

  Attention: Timothy J.
  Dodd

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Ronald McFall

  Stoel Rives LLP

  100 South Fifth Street,
  Suite 1900

  Minneapolis, MN 55402

  Facsimile:
  (612) 373-8881

  

 

7

 

	
  If to a Seller:

  	
   

  	
  to
  the addresses of such Seller set forth on Exhibit D or to such other
  address as may have been designated in a prior notice.

  

 

8.2                                 Binding
Effect. Except as may be otherwise provided herein, this Agreement will be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, nothing in this Agreement is intended or will be construed to confer
on any Person other than the parties hereto any rights or benefits hereunder.

 

8.3                                 Headings.
The headings in this Agreement are intended solely for convenience of reference
and will be given no effect in the construction or interpretation of this
Agreement.

 

8.4                                 Counterparts.
This Agreement may be executed in multiple counterparts, each of which will be
deemed an original, and all of which together will constitute one and the same
document.

 

8.5                                 Governing
Law; Prevailing Party. This Agreement, including the validity hereof and
the rights and obligations of the parties hereunder, and all amendments and
supplements hereto and all waivers and consents hereunder, shall be construed
in accordance with and governed by the domestic substantive laws of the state
of Ohio without giving effect to any choice of law or conflicts of law
provision or rule that would cause the application of the domestic substantive
laws of any other jurisdiction. The parties agree that any action, suit or
proceeding in respect of or arising out of this Agreement, in validity or
performance, shall be initiated and prosecuted as to all parties and their
respective successors and assigns in the state of Ohio. Each party hereby
consents to and submits to the exercise of jurisdiction over such party’s
person by any state or federal court situated in the state of Ohio having
jurisdiction over the subject matter. Each party waives any objection based on forum non conveniens, and any objection to venue of any
action instituted hereunder. In an action to enforce a party’s rights
hereunder, the prevailing party shall be entitled to recover its cost and
expenses (including attorneys’ fees, whether or not suit is brought) from the
other party.

 

8.6                                 Further
Assurances. The parties hereto agree that each will execute and deliver to
the other any and all documents in addition to those expressly provided for
herein that may be necessary or appropriate to carry out the provisions of this
Agreement, whether prior to or at the Closing. Each Seller further agrees that,
at any time and from time to time after the Closing, each Seller will execute
and deliver to Buyer at Buyer’s expense such further assignments, certificates
or other written assurances as Buyer may reasonably request to perfect and
protect Buyer’s title to the Purchased Units or as may otherwise be required to
carry out the provisions of this Agreement.

 

8.7                                 No
Strict Construction. The language used in this Agreement will be deemed to
be the language chosen by the parties hereto to express their mutual intent,
and no

 

8

 

rule of strict
construction will be applied against either party. The language used in this
Agreement was negotiated by all parties and no party shall be deemed to be the
drafter.

 

8.8                                 Modification.
No supplement, modification or amendment of this Agreement will be binding unless
made in a written instrument which is signed by all of the parties and which
specifically refers to this Agreement.

 

8.9                                 Entire
Agreement. This Agreement and the agreements and documents referred to in
this Agreement or delivered hereunder, including, without limitation, the
Exhibits referred to herein, are the exclusive statement of the agreement among
the parties concerning the subject matter hereof. All negotiations among the
parties are merged into this Agreement, and there are no representations,
warranties, covenants, understandings, or agreements, oral or otherwise, in
relation thereto among the parties other than those incorporated herein and to
be delivered hereunder.

 

8.10                           Individual
Obligations of Each Seller. Notwithstanding anything contained herein, each
representation, warranty, covenant and agreement of a Seller or the Sellers
herein is made by each Seller solely as to or on behalf of itself and not as to
all Sellers or any other Seller, and no Seller shall be liable or responsible
for any breach of any representation, warranty, covenant or agreement herein by
any other Seller.

 

INTENDING TO BE LEGALLY BOUND, the parties have signed
this Unit Purchase Agreement as of the date first above written.

 

	
  

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  Dakota
  Growers Pasta Company, Inc.

  
	
   

  	
   

  
	
   

  	
  /s/ Tim Dodd

  
	
   

  	
  By: Tim Dodd

  
	
   

  	
  Its:  Pres/CEO

  

 

	
  SELLERS:

  
	
   

  
	
   

  
	
  B-New, LLC

  
	
   

  
	
  /s/
  Mike Crowley

  	
   

  
	
  By: Mike Crowley

  
	
  Its:  Principal

  
	
   

  
	
   

  
	
  TechCom Group, LLC

  
	
   

  
	
  /s/
  Jon R. Anfinsen

  	
   

  
	
  By: Jon R. Anfinsen

  
	
  Its:  CEO

  
	
   

  
	
   

  
	
  Buhler, Inc.

  
	
   

  
	
  /s/
  Rene W. Steiner

  	
   

  
	
  By: Rene W. Steiner

  
	
  Its:  President

  
	
   

  
	
  /s/
  Nikles Malkus

  	
   

  
	
  By: Nikles Malkus

  
	
  Its:  CFO, VP Finance

  

 

9

 

EXHIBIT
A

 

Number
of Units to be Sold

 

	
  Seller

  	
   

  	
  Number of Units

  
	
   

  	
   

  	
   

  
	
  B-New, LLC

  	
   

  	
  15.12

  
	
   

  	
   

  	
   

  
	
  TechCom Group, LLC

  	
   

  	
  17.56

  
	
   

  	
   

  	
   

  
	
  Buhler, Inc.

  	
   

  	
  27.00

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