Document:

Exhibit 10.1

 

PRICELINE.COM
INCORPORATED 1999 OMNIBUS PLAN

 

PERFORMANCE SHARE UNIT
AGREEMENT

 

THIS PERFORMANCE SHARE UNIT AGREEMENT (“Agreement”) is made as of the
1st day of December, 2007 by and between priceline.com Incorporated, a Delaware
corporation, with its principal United States office at 800 Connecticut Avenue,
Norwalk, Connecticut 06854, and [name of
participant] (the “Participant”).

 

WITNESSETH:

 

Pursuant to terms of the priceline.com Incorporated 1999 Omnibus Plan
(the “Plan”), the Board of Directors of the Company (the “Board”) has
authorized this Agreement.  The
Participant has been granted as of December 1, 2007 (the “Grant Date”), subject
to execution of this Agreement and simultaneously herewith, a Non-Competition
and Non-Solicitation Agreement, attached hereto as Appendix A, the
number of performance share units (the “Performance Share Units”) set forth
below.  Unless otherwise indicated, any
capitalized term used herein, but not defined herein, shall have the meaning
ascribed to such term in the Plan.  The
Performance Share Units comprising this award may be recorded in an unfunded
Performance Share Unit account in the Participant’s name maintained by the
Company.  The Participant will have no
rights as a stockholder of the Company by virtue of any Performance Share Unit
awarded to him until shares of Stock (as defined below), if any, are issued to
the Participant as described in this Agreement.

 

1.             Definitions

 

(a)           “Adjusted EBITDA” shall
mean priceline.com International Limited’s operating income before interest,
taxes, depreciation and amortization (including amortization of acquisition
related intangibles), adjusted to exclude the impact of stock-based
compensation expense.  The Committee
shall have the authority to make equitable adjustments to the Adjusted EBITDA
in recognition of unusual or non-recurring events affecting the financial
results of priceline.com International Limited, or  in response to changes in laws or regulations, or to account
for items of gain, loss or expenses determined to be extraordinary or unusual
in nature or infrequent in occurrence, or related to the acquisition of a
business or the disposition of a business or a segment of a business, or
related to a change in accounting principles.

 

(b)           “Change in Control” shall
have the meaning given such term under Section 3(i).

 

(c)           “Change in Control
Period” shall mean the period commencing on the effective date of the Change in
Control and ending on the date immediately prior to the date which is six (6)
months after the effective date of the Change in Control.

 

(d)           “Company” shall mean
priceline.com Incorporated, any of its subsidiaries or affiliates.

 

(e)           “Continuous Service”
shall mean the Participant’s service with the Company or any Subsidiary or
Affiliate whether as an employee, director or consultant, which is not
interrupted or terminated.

 

Confidential
Treatment requested by priceline.com incorporated — confidential portions of
this document have been redacted and have been separately filed with the commission.

 

 

(f)            “Cumulative Adjusted
EBITDA” shall mean the adjusted EBITDA during the Performance Period,
calculated on a cumulative basis, net of any losses.

 

(g)           “Determination Date”
shall mean March 1, 2011.

 

(h)           “Disability” shall mean
(i) any physical or mental condition that would qualify a Participant for a
disability benefit under any long-term disability plan maintained by the
Company and applicable to him or her, (ii) if there is no such plan, such
condition provided in any applicable governmental statute or regulation that
constitutes a Disability, or (iii) if there is no such applicable statute or
regulation, such other condition as may be determined by the Committee in its
sole discretion to constitute a Disability.

 

(i)            “Performance Period”
shall mean the period commencing on January 1, 2008 and ending on December 31,
2010.

 

(j)            “Plan Year” shall mean
the calendar year.

 

(k)           “Stock” shall mean
shares of common stock, par value $0.008, of the Company.

 

(l)            “Target Amount” shall
have the meaning given such term under Section 2.

 

(m)          “Vesting Factor” means
the factor by which to multiply the Target Amount determined in accordance with
the following table:

 

	
  If the
  Cumulative Adjusted EBITDA Range

  for the Performance Period is:

  	
   

  	
  Then
  the Vesting Factor or Vesting Factor

  Range is:

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  

 

Notwithstanding any other provision of this Agreement
to the contrary, the Committee, in its sole discretion, may adjust the terms of
the table set forth above in connection with the acquisition of a business or
the disposition of a business or a segment of a business.

 

2.             The
Grant

 

Subject to the terms and conditions set forth herein, the Participant
is granted [number of units] Performance Share Units as of the Grant Date (the “Target
Amount”).

 

3.             Vesting;
Effect of Termination of Continuous Service; Change in Control

 

(a)           Vesting at End of
Performance Period.  If the
Participant remains in Continuous Service through and including the Determination
Date, then the Participant shall be entitled to

 

[***] = CONFIDENTIAL material
redacted and filed separately with the commission.

 

2

 

receive a number of
shares of Stock determined by multiplying the Target Amount by the Applicable
Vesting Factor.  The “Applicable Vesting
Factor” shall be equal to either (i) the sole Vesting Factor that corresponds
to the applicable Cumulative Adjusted EBITDA Range set forth in the table in
Section 1(m) above in the event there is no Vesting Factor Range, or (ii) the
sum of (A) the lowest Vesting Factor in the applicable Vesting Factor Range
that corresponds to the applicable Cumulative Adjusted EBITDA Range set forth
in the table in Section 1(m) above, plus (B) the ProRata Vesting Factor
Increase.  The “ProRata Vesting Factor
Increase” is the quotient of (1) the excess of the actual Cumulative Adjusted
EBITDA over the lowest Cumulative Adjusted EBITDA in the applicable Cumulative
Adjusted EBITDA Range set forth in the table in Section 1(m) above, divided by
(2) the result of a fraction, the numerator of which is the difference between
the lowest and highest Cumulative Adjusted EBITDA within such applicable
Cumulative Adjusted EBITDA Range, and the denominator of which is the
difference between the lowest and highest applicable Vesting Factor in the
applicable Vesting Factor Range set forth in the table in Section 1(m)
above.  All shares of Stock to be issued
to the Participant under this Section 3(a), if any, shall be issued to the
Participant as soon as practicable after the Determination Date but in no event
later than March 15, 2011.  If the
Participant becomes entitled to any shares of Stock under this Section 3(a), he
shall not be entitled to receive any shares of Stock under any other subsection
of this Section 3.

 

(b)           Termination for
Cause.  If, prior to the
Determination Date, the Participant’s Continuous Service is (i) terminated by
the Company  for Cause or (ii)
voluntarily terminated by the Participant other than on account of death or Disability prior to March 1,
2011, then the Participant shall receive no shares of Stock under this
Agreement.

 

(c)           Pre-2009 Termination
Without a Change in Control.  Subject
to Section 3(e), if, on or prior to December 31, 2008, the Participant’s
Continuous Service is terminated by the Company other than for Cause or by the
Participant on account of death or Disability, then the Participant (or the
Participant’s designated beneficiary in the event of the Participant’s death)
shall receive a number of shares of Stock equal to the Target Amount,
multiplied by a fraction, the numerator of which is the number of full months
completed since January 1, 2008 as of the date of such termination, and the
denominator of which is 36.

 

(d)           Post-2008
Termination Without a Change in Control. 
Subject to Section 3(f), if, after December 31, 2008, but prior to the
Determination Date and prior to a Change in Control, the Participant’s
Continuous Service is terminated by the Company other than for Cause or by the
Participant on account of death or Disability, then the Participant’s
Performance Share Unit number shall be determined (or that of the Participant’s
designated beneficiary in the event of the Participant’s death) in accordance
with Exhibit 1, and the Participant shall at the time of such
termination be vested in a number of shares of Stock determined by the product
of (i) such Performance Share Unit number, multiplied by (ii) a fraction, the
numerator of which is the number of full months completed since January 1, 2008
as of the date of such termination, and the denominator of which is 36.  All shares of Stock to be issued to the
Participant under this Section 3(d), if any, shall be issued to the Participant
as soon as practicable after the Participant’s Continuous Service terminates
but in no event later than March 15 of the calendar year following the calendar
year in which the Participant’s Continuous Service terminates.  If the Participant becomes entitled to any
shares of Stock under this Section 3(d), he shall not be entitled to receive
any shares of Stock under any other subsection of this Section 3.

 

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(e)           Pre-2009 Change in
Control Without Termination.  If
there is a Change in Control on or prior to December 31, 2008, and the
Participant remains in Continuous Service through the date which is six (6)
months after the effective date of the Change in Control (“Six-Month Date”),
then the Participant shall be vested in a number of shares of Stock equal to
the Target Amount, multiplied by a fraction, the numerator of which is the
number of full months completed since January 1, 2008 as of the Six-Month Date,
and the denominator of which is 36.

 

(f)            Post-2008 Change in
Control Without Termination.  If
there is a Change in Control after December 31, 2008, but prior to the
Determination Date, and the Participant remains in Continuous Service through
the Six-Month Date, then the Participant’s Performance Share Unit number shall
be determined in accordance with Exhibit 1, and the Participant shall on
such Six-Month Date be vested in a number of shares of Stock determined by the
product of (i) such Performance Share Unit number, multiplied by (ii) a
fraction, the numerator of which is the number of full months completed since
January 1, 2008 as of the date of the Six-Month Date, and the denominator of
which is 36.  Thereafter, the Participant
shall become vested as of the Determination Date in a number of shares of Stock
equal to the product of the Target Amount, multiplied by the fraction resulting
from one (1) minus the fraction set forth in Section 3(f)(ii) of this
paragraph, provided that, in the event that the Participant’s Continuous
Service is terminated prior to the Determination Date by the Company other than
for Cause or by the Participant on account of death or Disability, the
Participant shall be vested in a number of shares of Stock equal to the number
of remaining Performance Share Units, multiplied by a fraction, the numerator
of which is the number of full months that have been completed during the
period commencing on the Six-Month Date and ending on the date of such
termination, and the denominator of which is the number of full months during
the period commencing on the Six-Month Date and ending on the Determination
Date.  Notwithstanding any provision
hereof, to the extent that cash is substituted for all or part of any
Performance Share Unit incident to the Change in Control, then each such Performance
Share Unit shall to that extent be immediately vested upon the Change in
Control.  All shares of Stock (or any
cash substituted therefore) to be issued to the Participant under this Section
3(f), if any, shall be issued to the Participant as soon as practicable after
such Six-Month Date occurs but in no event later than March 15 of the calendar
year following the calendar year in which the Six-Month Date occurs. If the
Participant becomes entitled to any shares of Stock or cash under this Section
3(f), he shall not be entitled to receive any shares of Stock under any other
subsection of this Section 3.

 

(g)           Termination During a
Pre-2009 Change in Control Period. 
If there is a Change in Control on or prior to December 31, 2008, and
the Participant’s Continuous Service is terminated by the Company other than
for Cause or by the Participant on account of death or Disability during the
Change in Control Period, then the Participant (or the Participant’s designated
beneficiary in the event of the Participant’s death) shall receive a number of
shares of Stock equal to the Target Amount, multiplied by a fraction, the
numerator of which is the number of full months completed since January 1, 2008
as of the date of such termination, and the denominator of which is 36.

 

(h)           Termination During a
Post-2008 Change in Control Period. 
If there is a Change in Control after December 31, 2008, but prior to
the Determination Date, and the Participant’s Continuous Service is terminated
during the Change in Control Period  by
the Company other than for Cause or by the Participant on account of death or
Disability, then the Participant’s Performance Share Unit number (or that of
the Participant’s designated beneficiary in the event

 

4

 

of the Participant’s
death) shall be determined in accordance with Exhibit 1, and the
Participant shall be vested at the time of such termination in the sum of (i) a
number of shares of Stock determined by multiplying such Performance Share Unit
number by a fraction, the numerator of which is the number of full months
completed since January 1, 2008 as of the date of such Change in Control, and
the denominator of which is 36, and (ii) a number of shares of Stock equal to
the product of the Target Amount, multiplied by the fraction resulting from one
(1) minus the fraction set forth in Section 3(h)(i) of this paragraph.  All shares of Stock to be issued to the
Participant under this Section 3(h) as a result of the Participant’s
termination of Continuous Service on or prior to the Change in Control, if any,
shall be issued to the Participant no later than March 15 of the calendar year
following the calendar year in which the effective date of the Change in
Control occurs.  All shares of Stock to
be issued to the Participant under this Section 3(h) as a result of the
Participant’s termination of Continuous Service after the effective date of the
Change in Control, if any, shall be issued to the Participant as soon as
practicable after the Participant’s Continuous Service terminates but in no event
later than March 15 of the calendar year following the calendar year in which
the Participant’s Continuous Service terminates.  If the Participant becomes entitled to any
shares of Stock under this Section 3(h), he shall not be entitled to receive
any shares of Stock under any other subsection of this Section 3.

 

(i)            For purposes of this
Agreement, the term “Change in Control” shall mean the occurrence of any one of
the following events:

 

(i)            any Person is or
becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing thirty-five percent (35%) or more of the combined voting
power of the Company’s then outstanding securities eligible to vote for the
election of the Board (the “Company Voting Securities”); provided, however,
that the event described in this paragraph (i) shall not be deemed to be a
Change in Control if such event results from the acquisition of Company Voting
Securities pursuant to a Non-Qualifying Transaction (as defined in paragraph
(iii) below);

 

(ii)           individuals who, on the
Grant Date, constitute the Board (the “Incumbent Directors”) cease for any
reason to constitute at least a majority of the Board; provided, however,
that any person becoming a director subsequent to the Grant Date, whose
election or nomination for election was approved (either by a specific vote or
by approval of the proxy statement of the Company in which such person is named
as a nominee for director, without written objection to such nomination) by a
vote of at least two-thirds of the directors who were, as of the date of such
approval, Incumbent Directors, shall be an Incumbent Director; provided,
further, that no individual initially appointed, elected or nominated as
a director of the Company as a result of an actual or threatened election
contest with respect to the election or removal of directors or as a result of
any other actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be deemed to be an Incumbent
Director;

 

(iii)          the consummation of a
merger, consolidation, statutory share exchange or similar form of corporate
transaction involving (A) the Company or (B) any of its wholly owned
subsidiaries pursuant to which, in the case of this clause (B), Company Voting
Securities are issued or issuable (any event described in the immediately
preceding clause (A) or (B), a “Reorganization”) or the sale or other
disposition of all or substantially all of the assets of the Company to an
entity that is not an Affiliate of the Company (a

 

5

 

“Sale”), unless immediately following such
Reorganization or Sale:  (1) more than
50% of the total voting power (in respect of the election of directors, or
similar officials in the case of an entity other than a corporation) of (x) the
Company (or, if the Company ceases to exist, the entity resulting from such
Reorganization), or, in the case of a Sale, the entity which has acquired all
or substantially all of the assets of the Company (in either case, the “Surviving
Entity”), or (y) if applicable, the ultimate parent entity that directly or
indirectly has Beneficial Ownership of more than 50% of the total voting power
(in respect of the election of directors, or similar officials in the case of an
entity other than a corporation) of the Surviving Entity (the “Parent Entity”),
is represented by Company Voting Securities that were outstanding immediately
prior to such Reorganization or Sale (or, if applicable, is represented by
shares into which such Company Voting Securities were converted pursuant to
such Reorganization or Sale), (2) no Person is or becomes the Beneficial Owner,
directly or indirectly, of 35% or more of the total voting power (in respect of
the election of directors, or similar officials in the case of an entity other
than a corporation) of the outstanding voting securities of the Parent Entity
(or, if there is no Parent Entity, the Surviving Entity) and (3) at least a
majority of the members of the board of directors (or similar officials in the
case of an entity other than a corporation) of the Parent Entity (or, if there
is no Parent Entity, the Surviving Entity) following the consummation of the
Reorganization or Sale were, at the time of the approval by the Board of the
execution of the initial agreement providing for such Reorganization or Sale,
Incumbent Directors (any Reorganization or Sale which satisfies all of the
criteria specified in (1), (2) and (3) above being deemed to be a “Non-Qualifying
Transaction”); or

 

(iv)          the stockholders of the
Company approve a plan of complete liquidation or dissolution of the Company.

 

Notwithstanding the foregoing, if any Person becomes the Beneficial
Owner, directly or indirectly, of 35% or more of the combined voting power of
Company Voting Securities solely as a result of the acquisition of Company
Voting Securities by the Company which reduces the number of Company Voting
Securities outstanding, such increased amount shall be deemed not to result in
a Change in Control; provided, however, that if such Person
subsequently becomes the Beneficial Owner, directly or indirectly, of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities Beneficially Owned by such Person, a
Change in Control of the Company shall then be deemed to occur.

 

(j)            For the purposes of
Section 3(i) (and with respect to Section 3(i)(i), for purposes of Section
1(b)), the following terms shall have the following meanings:

 

(i)            “Affiliate” shall mean
an affiliate of the Company, as defined in Rule 12b-2 promulgated under
Section 12 of the U.S. Securities Exchange Act of 1934, as amended from time to
time (the “Exchange Act”);

 

(ii)           “Beneficial Owner”
shall have the meaning set forth in Rule 13d3 under the Exchange Act;

 

(iii)          “Person” shall have the
meaning set forth in Section 3(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof, except that such term shall not include
(1) the Company or any of its subsidiaries, (2) a trustee or other

 

6

 

fiduciary holding securities under an employee benefit
plan (or related trust) sponsored or maintained by the Company or any of its
subsidiaries, (3) an underwriter temporarily holding securities pursuant to an
offering of such securities, (4) a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of shares of Stock or (5) the Participant or any group of
persons including the Participant, or any entity controlled by the Participant
or any group of persons including the Participant; provided the Participant is
an executive officer, director or more than 10% owner of Stock.

 

4.             Nontransferability
of Grant

 

Except as otherwise provided herein or in the Plan, no Performance
Share Units shall be assigned, negotiated, pledged, or hypothecated in any way
or be subject to execution, attachment or similar process.  No transfer of the Participant’s rights with
respect to such Performance Share Units, whether voluntary or involuntary, by
operation of law or otherwise, shall be permitted.  Immediately upon any attempt to transfer such
rights, such Performance Share Units, and all of the rights related thereto,
shall be forfeited by the Participant.

 

5.             Distribution
and Voting Rights

 

Performance Share Units shall have no distribution, dividend or voting
rights.

 

6.             Stock;
Adjustment Upon Certain Events

 

(a)           Stock to be issued
under this Agreement, if any, shall be made available, at the discretion of the
Board, either from authorized but unissued Stock, from issued Stock reacquired
by the Company or from Stock purchased by the Company on the open market
specifically for this purpose.

 

(b)           The existence of this
Agreement and the Performance Share Units granted hereunder shall not affect in
any way the right or power of the Board or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or other
change in the Company’s capital structure or its business, any merger or
consolidation of the Company or any affiliate, any issue of bonds, debentures,
preferred or prior preference stocks ahead of or affecting the Stock, the
authorization or issuance of additional shares of Stock, the dissolution or
liquidation of the Company or any affiliate or sale or transfer of all or part
of the assets or business of the Company or any affiliate, or any other
corporate act or proceeding.

 

(c)           If an acquiring entity
does not agree to the continuation and future vesting of the Performance Share
Units hereunder and other conditions that apply in the event of a Change in
Control, then the number of Performance Share Units granted hereunder shall be
fully vested upon a Change in Control.

 

(d)           In the event of any
dividend or other distribution (whether in the form of cash, Stock, or other
property), recapitalization, Stock split, reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase, or share exchange, or
other similar corporate transaction or event that affects the Stock such that
an adjustment is required in order to prevent dilution or enlargement of the
rights of holders of Performance Share Units under the Plan, then the Committee
shall make such equitable changes or adjustments to any or all of (i) the
number

 

7

 

and kind of shares of
Stock or other property (including cash) that may thereafter be issued in
connection with the Performance Share Units granted under the Plan, (ii) the
number and kind of shares of Stock or other property (including cash) issued or
issuable in respect of outstanding Performance Share Units, (iii) performance
targets, and (iv) any individual limitations applicable to the Performance
Share Units granted under the Plan.

 

7.             Determinations

 

The Committee shall determine the extent to which an award has been
earned, if at all, in accordance with Section 3 of this Agreement on or prior
to the Determination Date.  Such
determination and all other determinations, interpretations or other actions
made or taken pursuant to the provisions of this Agreement by the Committee or
the Board in good faith shall be final, conclusive and binding for all purposes
and upon all persons, including, without limitation, the Participant and the Company,
and their respective heirs, executors, administrators, personal representatives
and other successors in interest.  In
addition, the Chairperson of the Committee is hereby authorized to make any
determination with respect to an award’s vesting and payment in the event of
the termination of the Participant’s Continuous Service pursuant to Sections
3(b), 3(c), or 3(d) of this Agreement, and such determination shall be likewise
conclusive and binding.

 

8.             Other
Conditions

 

The transfer of any Stock under this Agreement, if any, shall be
effective only at such time as counsel to the Company shall have determined
that the issuance and delivery of such Stock is in compliance with all
applicable laws, regulations of governmental authority and the requirements of
any securities exchange on which Stock is traded.

 

9.             Withholding
Taxes

 

The Participant shall be liable for any and all taxes and contributions
of any kind required by law to be withheld with respect to the delivery of any
shares of Stock under this Agreement. 
The Participant agrees that the Participant’s employer may, in its
discretion, (a) require the Participant to remit to the Company on the date on
which the Participant becomes the owner of shares of Stock under this Agreement
cash in an amount sufficient to satisfy all applicable required withholding
taxes and social security contributions related to such vesting, (b) deduct
from his regular salary payroll cash, on a payroll date coincident with or
following the date on which the Participant becomes the owner of shares of
Stock under this Agreement, in an amount sufficient to satisfy such
obligations, or (c) withhold from the total number of shares of Stock the
Participant is to receive on a determination date a number of shares that has a
total value equal to the amount necessary to satisfy any and all such
withholding tax obligations.

 

10.           Distribution
of Stock

 

Subject to Section
8, as soon as administratively practicable after the time the Participant
becomes entitled to receive shares of Stock, if any, under this Agreement, (but
in no event later than the time periods described in Sections 3(a) through
3(h), as the case may be) the Company shall cause the Participant to be the
record owner of such shares of Stock.

 

8

 

11.           Incorporation
of the Plan

 

The Plan, as it exists on the date of this Agreement and as amended
from time to time, is hereby incorporated by reference and made a part hereof,
and the Performance Share Units and this Agreement shall be subject to all
terms and conditions of the Plan.  In the
event of any conflict between the provisions of this Agreement and the
provisions of the Plan, the terms of the Plan shall control, except as
expressly stated otherwise.

 

12.           Electronic
Delivery

 

The Company may, in its sole discretion, deliver any documents related
to the Performance Share Units and the Participant’s participation in the Plan,
or future awards that may be granted under the Plan, by electronic means or to
request the Participant’s consent to participate in the Plan by electronic
means.  The Participant hereby consents
to receive such documents by electronic delivery and, if requested, agrees to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the Company.

 

13.           Nature
of Grant

 

The Participant acknowledges and agrees that: (a) the Plan is
established voluntarily by the Company, it is discretionary in nature and it
may be modified, amended, suspended or terminated by the Company at any time;
(b) the grant of Performance Share Units is voluntary and occasional and does
not create any contractual or other right to receive future grants of
Performance Shares Units, or benefits in lieu of Performance Shares Units, even
if Performance Shares Units have been granted repeatedly in the past; (c) all
decisions with respect to future Performance Shares Unit grants, if any, will
be at the sole discretion of the Company; (d) participation in the Plan is voluntary;
(e) the Performance Shares Units are not a part of normal or expected
compensation or salary for any purposes, including, but not limited to,
calculating any severance, resignation, termination, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or
similar payments; (f) the future value of the underlying shares of Stock is
unknown and cannot be predicted with certainty; and (g) in consideration of the
grant of Performance Shares Units, no claim or entitlement to compensation or
damages shall arise from termination of the Performance Shares Units or
diminution in value of the Performance Shares Units or shares received upon
vesting including (without limitation) any claim or entitlement resulting from termination
of the Participant’s Continuous Service by the Company or a Subsidiary or
Affiliate (for any reason whatsoever and whether or not in breach of local
labor laws) and the Participant hereby releases the Company and its
Subsidiaries and Affiliates from any such claim that may arise; if,
notwithstanding the foregoing, any such claim is found by a court of competent
jurisdiction to have arisen, then, by signing this Agreement, the Participant
shall be deemed irrevocably to have waived the Participant’s entitlement to
pursue such claim.

 

14.           Data
Privacy

 

The Participant explicitly and unambiguously consents to the
collection, use and transfer, in electronic or other form, of the Participant’s
personal data by and among, as applicable, the Company and its Subsidiaries and
Affiliates, namely priceline.com Incorporated (located in the United States of
America), priceline.com International Limited (located in the United Kingdom), 

 

9

 

Booking.com Ltd. (located in the United Kingdom), and
Booking.com B.V. (located in The Netherlands), for the exclusive purpose of
implementing, administering and managing the Participant’s participation in the
Plan.  The Participant hereby understands
that the Company and its Subsidiaries and Affiliates hold (but only process or
transfer to the extent required or permitted by local law) the following
personal information about the Participant: the Participant’s name, home
address and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of Stock or
directorships held in the Company, details of all Performance Share Units or
any other entitlement to shares of Stock awarded, canceled, exercised, vested,
unvested or outstanding in the Participant’s favor, for the purpose of
implementing, administering and managing the Plan (“Data”).  The Participant hereby understands that Data
may be transferred to any third parties assisting in the implementation,
administration and management of the Plan, including Computershare Limited (located in the United States of
America), Mellon Investor Services (located in the United States of America),
and Morgan Stanley (located in the United States of America), that these
recipients may be located in the Participant’s country or elsewhere (including
countries outside of the European Union such as the United States of America),
and that the recipient’s country may have different data privacy laws and
protections than the Participant’s country. 
The Participant hereby understands that the Participant may request a
list with the names and addresses of any potential recipients of the Data by
contacting the Participant’s local human resources representative.  The Participant authorizes the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other
form, for the purposes of implementing, administering and managing the
Participant’s participation in the Plan, including any requisite transfer of
such Data as may be required to a broker or other third party with whom the
Participant may elect to deposit any shares acquired upon vesting of the
Performance Share Unit.  The Participant
hereby understands that Data will be held only as long as is necessary to
implement, administer and manage the Participant’s participation in the Plan
and in accordance with local law.  The
Participant hereby understands that the Participant may, at any time, view
Data, request additional information about the storage and processing of Data,
require any necessary amendments to Data or refuse or withdraw the consents
herein, in any case without cost, by contacting in writing the Participant’s
local human resources representative. 
The Participant hereby understands, however, that refusing or
withdrawing the Participant’s consent may affect the Participant’s ability to
participate in the Plan.  For more
information on the consequences of the Participant’s refusal to consent or
withdrawal of consent, the Participant hereby understands that the Participant
may contact the Participant’s local human resources representative.

 

15.           Miscellaneous

 

(a)           This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, personal legal representatives, successors, trustees,
administrators, distributees, devisees and legatees.  The Company shall assign to, and require, any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree in writing to perform this
Agreement.  Notwithstanding the
foregoing, this Agreement may not be assigned by the Participant.

 

(b)           The Participant
acknowledges that the Company intends for the information contained in Section
1(m) and Exhibit 1 hereof to remain confidential.  Notwithstanding any other provision hereof,
the Participant’s entitlement to any award or payment hereunder is

 

10

 

contingent upon the
Participant maintaining the confidentiality of the information contained in
Section 1(m) and Exhibit 1.  The
Participant agrees that he or she shall not disclose or cause the disclosure of
such information and shall hold such information confidential.

 

(c)           No modification or
waiver of any of the provisions of this Agreement shall be effective unless in
writing and signed by the party against whom it is sought to be enforced; provided,
however, that, notwithstanding any other provision of this Agreement or the
Plan to the contrary, the parties shall in good faith amend this Agreement to
the limited extent necessary to comply with the requirements under Section 409A
of the U.S. Internal Revenue Code of 1986, as amended, in order to ensure that
any amounts paid or payable hereunder are not subject to the additional 20%
income tax thereunder while maintaining to the maximum extent practicable the
original intent of this Agreement.

 

(d)           This Agreement may be
executed in one or more counterparts, all of which taken together shall
constitute one agreement.

 

(e)           The failure of any
party hereto at any time to require performance by another party of any
provision of this Agreement shall not affect the right of such party to require
performance of that provision, and any waiver by any party of any breach of any
provision of this Agreement shall not be construed as a waiver of any
continuing or succeeding breach of such provision, a waiver of the provision
itself, or a waiver of any right under this Agreement.

 

(f)            The headings of the
sections of this Agreement have been inserted for convenience of reference only
and shall in no way restrict or modify any of the terms or provisions hereof.

 

(g)           The Company shall pay
all fees and expenses necessarily incurred by the Company in connection with
this Agreement and will from time to time use its reasonable efforts to comply
with all laws and regulations which, in the opinion of counsel to the Company,
are applicable thereto.

 

(h)           All notices, consents,
requests, approvals, instructions and other communications provided for herein
shall be in writing and validly given or made when delivered, or on the second
succeeding business day after being mailed by registered or certified mail,
whichever is earlier, to the persons entitled or required to receive the same,
at the addresses set forth at the heading of this Agreement or to such other
address as either party may designate by like notice.  Notices to the Company shall be addressed to
its principal office, attention of the Company’s General Counsel.

 

(i)            The Plan and this
Agreement constitute the entire Agreement and understanding between the parties
with respect to the matters described herein and supersede all prior and
contemporaneous agreements and understandings, oral and written, between the
parties with respect to such subject matter.

 

(j)            This Agreement shall
be governed and construed and the legal relationships of the parties determined
in accordance with the laws of the state of Delaware without reference to
principles of conflict of laws.

 

11

 

(k)           The Company represents
and warrants that it is duly authorized by its Board and/or the Committee (and
by any other person or body whose authorization is required) to enter into this
Agreement, that there is no agreement or other legal restriction which would
prevent it from entering into, and carrying out its obligations under, this
Agreement, and that the officer signing this Agreement is duly authorized and
empowered to sign this Agreement on behalf of the Company.

 

 

[Signature
on the following page]

 

12

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

 

PRICELINE.COM INCORPORATED

 

Jeffery Boyd

Chief Executive Officer

 

ACCEPTANCE
OF AGREEMENT

 

The undersigned hereby (a) acknowledges
receiving a copy of the Plan, which has either been previously delivered or is
provided with this Agreement, and represents that he or she is familiar with
and understands all provisions of the Plan and this Agreement, (b) accepts the
Performance Share Units granted hereunder, (c) acknowledges the execution of a
Non-Competition and Non-Solicitation Agreement, attached hereto as Appendix
A, simultaneously herewith, and (d) explicitly consents to the transfer of
Data outside of the European Economic Area in accordance with the terms set
forth in Section 14 hereof.

 

 

	
  Date:

  	
   

  	
   

  	
  Participant:

  	
   

  	
   

  

 

13

 

Exhibit 1

 

The Performance Share Unit number shall be determined in accordance
with the following chart.  Upon any date
of determination as set forth in the Agreement, the Participant’s Performance
Share Unit number shall be determined as of the most recently completed fiscal
quarter for the period commencing January 1, 2008.  Such Performance Share Unit number shall be
equal to the product of (1) the Target Amount, multiplied by either (2)(a) the
sole Mid-Period Vesting Factor under the column with the heading “Mid-Period
Vesting Factor Ranges” in the chart below corresponding to the applicable
Cumulative EBITDA Range per applicable quarter for which the determination is
made or (b) the sum of (i) the lowest Mid-Period Vesting Factor in the
applicable Mid-Period Vesting Factor Range corresponding to the applicable
Cumulative EBITDA Range per applicable quarter for which the determination is
made, plus (ii) the ProRata Mid-Period Vesting Factor Increase.

 

All amounts are in millions of Euros.

 

	
  Cumulative

  Adjusted

  EBITDA

  Ranges

  per

  specified

  quarter

  	
   

  	
  4th fiscal

  quarter

  completed

  since

  l/l/08

  	
   

  	
  5th fiscal

  quarter

  completed 

  since

  1/l/08

  	
   

  	
  6th fiscal

  quarter

  completed

  since

  1/1/08

  	
   

  	
  7th fiscal

  quarter

  completed

  since

  1/1/08

  	
   

  	
  8th fiscal

  quarter

  completed

  since

  l/l/08

  	
   

  	
  9th fiscal

  quarter

  completed

  since

  1/1/08

  	
   

  	
  10th fiscal

  quarter

  completed

  since

  1/1/08

  	
   

  	
  11th fiscal

  quarter

  completed

  since

  1/1/08

  	
   

  	
  Mid-

  Period

  Vesting

  Factor

  Ranges

  (Earned

  shares as a

  factor of the

  Target

  Amount)

  	
   

  
	
  Less than

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  More than

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  But less than

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  More than

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  But less than

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  More than

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  But less than

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  More than

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  But less than

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Greater than

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

The “ProRata Mid-Period Vesting  Factor
Increase” means the quotient of (1) the increase in the Cumulative Adjusted
EBITDA within the specified range per the applicable quarter for which the
determination is made, divided by (2) the result of a fraction, the numerator
of which is the difference between the lowest and highest Cumulative Adjusted
EBITDA within such specified range per the applicable quarter for which the
determination is made, and the denominator of which is the difference between
the lowest and highest specified Mid-Period Vesting Factor for such quarter.

 

[***] = Confidential material
redacted and filed separately with the commission.

 

14Exhibit 10.5

THE CORPORATEPLAN

FOR
RETIREMENTSM

(PROFIT SHARING/401(K) PLAN)

A FIDELITY PROTOTYPE PLAN

Non-Standardized Adoption
Agreement No. 001

For use With

Fidelity Basic Plan Document No. 02

FIDELITY
INVESTMENTS

FWP-CONVENTION

2005 DEC 28  AM 9:30

	
  Plan Number: 48634

  	
   

  
	
  The CORPORATEplan for RetirementSM

  	
   

  
	
   

  	
  Non-Std PS Plan

  
	
   

  	
  10/09/2003

  
	
  © 2003 FMR Corp.

  
	
  All rights
  reserved.

  

 

ADOPTION AGREEMENT

ARTICLE 1

NON-STANDARDIZED
PROFIT SHARING/401(K) PLAN

1.01                        PLAN
INFORMATION

(a)                                  Name of Plan:

This is The Children’s Place 401(k) Savings Plan
(the “Plan”)

(b)                                  Type of Plan:

(1)                                  x                                  401(k)
Only

(2)                                  o                                    401(k)
and Profit Sharing

(3)                                  o                                    Profit
Sharing Only

(c)                                  Administrator Name (if not the Employer):

Address:

Telephone Number:

The Administrator is the agent for service of legal
process for the Plan.

(d)                                  Plan Year End (month/day):                                        12/31

(e)                                  Three
Digit Plan Number:  001

(f)                                    Limitation Year (check one):

(1)                                 o                                    Calendar Year

(2)                                 x                                  Plan
Year

(3)                                 o                                    Other:

(g)                                 Plan Status (check
appropriate box(es)):

(1)                                 o                                    New Plan Effective
Date:

(2)                                 x                                  Amendment
Effective Date:                                              01/01/2006

 1
 

This is (check one):

(A)         x                                   an amendment and
restatement of a Basic Plan Document No. 02 Adoption Agreement previously
executed by the Employer; or

(B)         o                                     a conversion to a
Basic Plan Document No. 02 Adoption Agreement.

The original effective
date of the Plan: 9/1/1990

(3)          o                                    This is an
amendment and restatement of the Plan and the Plan was not amended prior to the
effective date specified in Subsection 1.01(g)(2) above to comply with the
requirements of the Acts specified in the Snap Off Addendum to the Adoption
Agreement. The provisions specified in the Snap Off Addendum are effective as
of the dates specified in the Snap Off Addendum, which dates may be prior to
the Amendment Effective Date. Please read and complete, if necessary, the Snap
Off Addendum to the Adoption Agreement.

(4)          o                                    Special Effective Dates - Certain
provisions of the Plan shall be effective as of a date other than the date
specified above. Please complete the Special Effective Dates Addendum to the
Adoption Agreement indicating the affected provisions and their effective
dates.

(5)          o                                    Plan Merger Effective Dates. Certain
plan(s) were merged into the Plan and certain provisions of the Plan are
effective with respect to the merged plan(s) as of a date other than the date
specified above. Please complete the Special Effective Dates Addendum to the
Adoption Agreement indicating the plan(s) that have merged into the Plan and
the effective date(s) of such merger(s).

1.02                        EMPLOYER

	
  (a)

  	
  Employer Name:

  	
  The Children’s Place Retail Stores, Inc.

  	
   

  
	
   

  	
    Address:

  	
  915 Secaucus Rd

  	
   

  
	
   

  	
   

  	
  Secaucus, NJ 07094

  	
   

  
	
   

  	
    Contact’s Name:

  	
  Ms. Susan Pergament

  	
   

  
	
   

  	
    Telephone Number:

  	
  (201) 601-8255

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (1)

  	
  Employer’s Tax Identification Number:

  	
  31-1241495

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (2)

  	
  Employer’s fiscal year end:

  	
  1/31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (3)

  	
  Date business commenced:

  	
  1/1/1968

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  The term
  “Employer” includes the following Related Employer(s) (as defined in
  Subsection 2.01(rr)) (list each participating Related
  Employer and its Employer Tax Identification Number):

  
							

 

1.03                        TRUSTEE

	
  (a)

  	
  Trustee Name:

  	
  Fidelity Management Trust Company

  
	
   

  	
  Address:

  	
  82 Devonshire Street

  
	
   

  	
   

  	
  Boston, MA 02109

  

 

 2
 

1.04                        COVERAGE

All Employees who
meet the conditions specified below shall be eligible to participate in the
Plan:

(a)                                  Age Requirement  (check one):

(1)                                 x                                  no
age requirement.

(2)                                 o                                    must have attained
age:            (not to
exceed 21).

(b)                                  Eligibility Service Requirement

(1)                                 Eligibility
to Participate in Plan (check one):

	
  (A)

  	
  o

  	
  no Eligibility Service requirement.

  
	
   

  	
   

  	
   

  
	
  (B)

  	
  x

  	
  3  (not to exceed 11) months of
  Eligibility Service requirement (no minimum number Hours of Service can be
  required).

  
	
   

  	
   

  	
   

  
	
  (C)

  	
  o

  	
  one year of Eligibility Service requirement (at
  least 1,000 Hours of Service are required during the Eligibility Computation
  Period).

  
	
   

  	
   

  	
   

  
	
  (D)

  	
  o

  	
  two years of Eligibility Service requirement (at
  least 1,000 Hours of Service are required during each Eligibility Computation
  Period). (Do not
  select if Option 1.01(b)(1), 401(k) Only, is checked, unless a different
  Eligibility Service requirement applies to Deferral Contributions under
  Option 1.04(b)(2).)

  
	
   

  	
   

  	
   

  
	
  Note: If the
  Employer selects the two year Eligibility Service requirement, then
  contributions subject to such Eligibility Service requirement must be 100%
  vested when made.

  

 

(2)          x                                  Special Eligibility Service requirement for Deferral Contributions
and/or Matching Employer Contributions:

(A)                               The
special Eligibility Service requirement applies to (check the appropriate
box(es)):

(i)                                    o                                    Deferral
Contributions.

(ii)                                x                                  Matching
Employer Contributions.

(B)                               The
special Eligibility Service requirement is: (B) - 11 month(s) of Eligibility
Service (Fill in (A), (B), or (C) from Subsection 1.04(b)(l) above).

(c)                                  Eligible Class of Employees  (check
one):

Note: The Plan may
not cover employees who are residents of Puerto Rico. These employees are
automatically excluded from the eligible class, regardless of the Employer’s
selection under this Subsection 1.04(c).

 3
 

(1)                                 o                                    includes all
Employees of the Employer.

(2)                                 x                                  includes
all Employees of the Employer except for (check the appropriate box(es)):

(A)                               x                              employees
covered by a collective bargaining agreement.

(B)                               o                                Highly Compensated
Employees as defined in Code Section 414(q).

(C)                               x                              Leased
Employees as defined in Subsection 2.01(cc).

(D)         x                                  nonresident
aliens who do not receive any earned income from the Employer which constitutes
United States source income.

(E)                                 x                              other:
Individuals who are considered Freelance Personnel.

Note: The Employer
should exercise caution when excluding employees from participation in the
Plan. Exclusion of employees may adversely affect the Plan’s satisfaction of
the minimum coverage requirements, as provided in Code Section 410(b).

(d)                                  The Entry Dates shall be  (check one):

(1)          o                                    immediate upon
meeting the eligibility requirements specified in Subsections 1.04(a), (b), and
(c).

(2)          o                                    the first day of
each Plan Year and the first day of the seventh month of each Plan Year.

(3)          o                                    the first day of
each Plan Year and the first day of the fourth, seventh, and tenth months of
each Plan Year.

(4)          x                                  the
first day of each month.

(5)          o                                    the first day of
each Plan Year. (Do not
select if there is an Eligibility Service requirement of more than six months
in Subsection 1.04(b) or if there is an age requirement of more than 20 1/2 in
Subsection 1.04(a).)

(e)         o                                        Special Entry Date(s)  - In addition to the Entry Dates
specified in Subsection 1.04(d) above, the following special Entry Date(s)
apply for Deferral and/or Matching Employer Contributions. (Special Entry Dates may only be
selected if Option 1.04(b)(2), special Eligibility Service requirement, is
checked. The same Entry Dates must be selected for contributions that are
subject to the same Eligibility Service requirements.)

 4
 

(1)                                 The
special Entry Date(s) shall apply to (check the appropriate box(es)):

(A)                               o                                    Deferral
Contributions.

(B)                               o                                    Matching Employer
Contributions.

(2)                                 The
special Entry Date(s) shall be:            
(Fill in (1), (2), (3), (4), or (5) from Subsection 1.04(d) above).

(f)                                    Date of Initial Participation  - An Employee shall become a Participant
unless excluded by Subsection 1.04(c) above on the Entry Date immediately
following the date the Employee completes the service and age requirement(s) in
Subsections 1.04(a) and (b), if any, except (check one):

(1)          x                                  no
exceptions.

(2)          o                                    Employees employed
on the Effective Date in Subsection 1.01(g)(l) or (2) shall become Participants
on that date.

(3)          o                                    Employees who meet
the age and service requirement(s) of Subsections 1.04(a) and (b) on the
Effective Date in Subsection 1.01(g)(1) or (2) shall become Participants on
that date.

1.05                        COMPENSATION

Compensation for
purposes of determining contributions shall be as defined in Section 5.02,
modified as provided below.

(a)                                  Compensation Exclusions: Compensation shall exclude the item(s)
listed below for purposes of determining Deferral Contributions, Employee
Contributions, if any, and Qualified Nonelective Employer Contributions, or, if
Subsection 1.01(b)(3), Profit Sharing Only, is selected, Nonelective Employer
Contributions. Unless otherwise indicated in Subsection 1.05(b), these
exclusions shall also apply in determining all other Employer-provided
contributions. (Check the appropriate box(es); Options (2), (3), (4), (5), and
(6) may not be elected with respect to Deferral Contributions if Option
1.10(a)(3), Safe Harbor Matching Employer Contributions, is checked):

(1)          o                                    No exclusions.

(2)          o                                    Overtime Pay.

(3)          o                                    Bonuses.

(4)          o                                    Commissions.

(5)          x                                  The
value of a qualified or a non-qualified stock option granted to an Employee by
the Employer to the extent such value is includable in the Employee’s taxable
income.

(6)          x                                  Severance
Pay.

 5
 

(b)                                  Special Compensation Exclusions for
Determining Employer-Provided Contributions in Article 5 (either
(1) or (2) may be selected, but not both):

(1)          o                                   Compensation for
purposes of determining Matching, Qualified Matching, and Nonelective Employer
Contributions shall exclude:                                   
(Fill in number(s) for item(s) from Subsection 1.05(a) above that apply.)

(2)          o                                   Compensation for
purposes of determining Nonelective Employer Contributions only shall exclude:                           
(Fill in number(s) for item(s) from Subsection 1.05(a) above that apply.)

Note: If the
Employer selects Option (2), (3), (4), (5), or (6) with respect to Nonelective
Employer Contributions, Compensation must be tested to show that it meets the
requirements of Code Section 414(s) or 401(a)(4). These exclusions shall not
apply for purposes of the “Top Heavy” requirements in Section 15.03, for
allocating safe harbor Matching Employer Contributions if Subsection 1.10(a)(3)
is selected, for allocating safe harbor Nonelective Employer Contributions if
Subsection 1.11(a)(3) is selected, or for allocating non-safe harbor
Nonelective Employer Contributions if the Integrated Formula is elected in Subsection
1.11(b)(2).

(c)                                  Compensation for the First Year of
Participation - Contributions for the Plan Year in which an
Employee first becomes a Participant shall be determined based on the Employee’s
Compensation (check one):

(1)          o                                       for the entire
Plan Year.

(2)          x                                     for
the portion of the Plan Year in which the Employee is eligible to participate
in the Plan.

Note: If the
initial Plan Year of a new Plan consists of fewer than 12 months from the
Effective Date in Subsection 1.01(g)(l) through the end of the initial Plan
Year, Compensation for purposes of determining the amount of contributions,
other than non-safe harbor Nonelective Employer Contributions, under the Plan
shall be the period from such Effective Date through the end of the initial
year. However, for purposes of determining the amount of non-safe harbor
Nonelective Employer Contributions and for other Plan purposes, where
appropriate, the full 12-consecutive-month period ending on the last day of the
initial Plan Year shall be used.

1.06                        TESTING
RULES

(a)                                  ADP/ACP Present Testing Method - The
testing method for purposes of applying the “ADP” and “ACP” tests described in
Sections 6.03 and 6.06 of the Plan shall be the (check one):

(1)          x                                  Current Year Testing Method - The “ADP” or “ACP”
of Highly Compensated Employees for the Plan Year shall be compared to the “ADP”
or “ACP” of Non-Highly Compensated Employees for the same Plan Year. (Must choose if Option 1.10(a)(3),
Safe Harbor Matching Employer Contributions, or Option 1.11(a)(3), Safe Harbor
Formula, with respect to Nonelective Employer Contributions is checked.)

(2)          o                                    Prior Year Testing Method - The “ADP” or “ACP”
of Highly Compensated Employees for the Plan Year shall be compared to the “ADP”
or “ACP” of Non-Highly Compensated Employees for the immediately preceding Plan
Year. (Do not
choose if Option 1.10(a)(3), Safe Harbor Matching Employer Contributions, or
Option 1.11(a)(3), Safe Harbor Formula, with respect to Nonelective Employer
Contributions is checked.)

 6
 

(3)          o                                      Not applicable. (Only if Option 1.01(b)(3), Profit
Sharing Only, is checked or Option 1.04(c)(2)(B), excluding all Highly
Compensated Employees from the eligible class of Employees, is checked.)

Note: Restrictions
apply on elections to change testing methods that are made after the end of the
GUST remedial amendment period.

(b)                                  First Year Testing Method - If the first Plan Year that the Plan,
other than a successor plan, permits Deferral Contributions or provides for
either Employee or Matching Employer Contributions, occurs on or after the
Effective Date specified in Subsection 1.01(g), the “ADP” and/or “ACP” test for
such first Plan Year shall be applied using the actual “ADP” and/or “ACP” of
Non-Highly Compensated Employees for such first Plan Year, unless otherwise
provided below.

(1)          o                                   The
“ADP” and/or “ACP” test for the first Plan Year that the Plan permits Deferral
Contributions or provides for either Employee or Matching Employer
Contributions shall be applied assuming a 3% “ADP” and/or “ACP” for Non-Highly
Compensated Employees. (Do
not choose unless Plan uses prior year testing method described in Subsection
1.06(a)(2).)

(c)                                  HCE Determinations: Look Back Year - The look back year for purposes of
determining which Employees are Highly Compensated Employees shall be the
12-consecutive-month period preceding the Plan Year, unless otherwise provided
below.

(1)          o                                   Calendar Year Determination - The look back
year shall be the calendar year beginning within the preceding Plan Year. (Do not choose if the Plan Year is
the calendar year.)

(d)                                  HCE Determinations: Top Paid Group Election - All Employees with Compensation
exceeding $80,000 (as indexed) shall be considered Highly Compensated
Employees, unless Top Paid Group Election below is checked.

(1)          o                                   Top Paid Group Election - Employees with
Compensation exceeding $80,000 (as indexed) shall be considered Highly
Compensated Employees only if they are in the top paid group (the top 20% of
Employees ranked by Compensation).

Note: Effective for
determination years beginning on or after January 1, 1998, if the Employer
elects Option 1.06(c)(1) and/or 1.06(d)(1), such election(s) must apply
consistently to all retirement plans of the Employer for determination years
that begin with or within the same calendar year (except that Option 1.06(c)(1),
Calendar Year Determination, shall not apply to calendar year plans).

1.07                        DEFERRAL
CONTRIBUTIONS

(a)          x                                   Deferral Contributions -
Participants may elect to have a portion of their Compensation contributed to
the Plan on a before-tax basis pursuant to Code Section 401(k).

(1)                                 Regular
Contributions - The Employer shall make a Deferral Contribution in
accordance with Section 5.03 on behalf of each Participant who has an executed
salary reduction agreement in effect with the Employer for the payroll period
in question, not to exceed 60% of Compensation for that period.

Note: For
Limitation Years beginning prior to 2002, the percentage elected above must be
less than 25% in order to satisfy the limitation on annual additions under Code
Section 415 if other types of contributions are provided under the Plan.

 7
 

(A)          o                                 Instead
of specifying a percentage of Compensation, a Participant’s salary reduction
agreement may specify a dollar amount to be contributed each payroll period,
provided such dollar amount does not exceed the maximum percentage of
Compensation specified in Subsection 1.07(a)(l) above.

(B)                               A Participant may
increase or decrease, on a prospective basis, his salary reduction agreement
percentage (check one):

(i)          o                                       as of the
beginning of each payroll period.

(ii)         o                                      as of the first
day of each month.

(iii)        þ                                     as
of the next Entry Date. (Do
not select if immediate entry is elected with respect to Deferral Contributions
in Subsection 1.04(d) or 1.04(e).)

(iv)        o                                        other.
(Specify, but must be at least once per Plan Year)

Note: Notwithstanding
the Employer’s election hereunder, if Option 1.10(a)(3), Safe Harbor Matching
Employer Contributions, or 1.11(a)(3), Safe Harbor Formula, with respect to
Nonelective Employer Contributions is checked, the Plan provides that an Active
Participant may change his salary reduction agreement percentage for the Plan
Year within a reasonable period (not fewer than 30 days) of receiving the
notice described in Section 6.10.

(C)                               A
Participant may revoke, on a prospective basis, a salary reduction agreement at
any time upon proper notice to the Administrator but in such case may not file
a new salary reduction agreement until (check one):

(i)          o                                          the first day
of the next Plan Year.

(ii)         þ                                         any
subsequent Entry Date. (Do
not select if immediate entry is elected with respect to Deferral Contributions
in Subsection 1.04(d) or 1.04(e).)

(iii)        o                                        other. (Specify,
but must be at least once per Plan Year)

(2)          x                                  Additional Deferral Contributions - The
Employer may allow Participants upon proper notice and approval to enter into a
special salary reduction agreement to make additional Deferral Contributions in
an amount up to 100% of their Compensation for the payroll period(s) designated
by the Employer.

 8
 

(3)          x                                  Bonus Contributions - The Employer may
allow Participants upon proper notice and approval to enter into a special
salary reduction agreement to make Deferral Contributions in an amount up to
100% of any Employer paid cash bonuses designated by the Employer on a uniform
and non-discriminatory basis that are made for such Participants during the
Plan Year. The Compensation definition elected by the Employer in Subsection
1.05(a) must include bonuses if bonus contributions are permitted.

Note: A Participant’s
contributions under Subsection 1.07(a)(2) and/or (3) may not cause the
Participant to exceed the percentage limit specified by the Employer in
Subsection 1.07(a)(l) for the full Plan Year. If the Administrator anticipates
that the Plan will not satisfy the “ADP” and/or “ACP” test for the year, the
Administrator may reduce the rate of Deferral Contributions of Participants who
are Highly Compensated Employees to an amount objectively determined by the
Administrator to be necessary to satisfy the “ADP” and/or “ACP” test.

1.08                        EMPLOYEE
CONTRIBUTIONS (AFTER-TAX CONTRIBUTIONS)

(a)          o                                     Employee Contributions - Either (1) Participants will be permitted
to contribute amounts to the Plan on an after-tax basis or (2) the Employer
maintains frozen Employee Contributions Accounts (check one):

(1)          o                                    Future Employee Contributions -
Participants may make voluntary, non-deductible, after-tax Employee
Contributions pursuant to Section 5.04 of the Plan. (Only if Option 1.07(a), Deferral
Contributions, is checked.)

(2)          o                                    Frozen Employee Contributions -
Participants may not currently make after-tax Employee Contributions to the
Plan, but the Employer does maintain frozen Employee Contributions Accounts.

1.09                        QUALIFIED
NONELECTIVE CONTRIBUTIONS

(a)                                  Qualified Nonelective Employer Contributions -
If Option 1.07(a), Deferral Contributions, is checked, the Employer may
contribute an amount which it designates as a Qualified Nonelective Employer
Contribution to be included in the “ADP” or “ACP” test. Unless otherwise
provided below, Qualified Nonelective Employer Contributions shall be allocated
to Participants who were eligible to participate in the Plan at any time during
the Plan Year and are Non-Highly Compensated Employees either (A) in the ratio
which each Participant’s “testing compensation”, as defined in Subsection
6.01(t), for the Plan Year bears to the total of all Participants’ “testing compensation”
for the Plan Year or (B) as a flat dollar amount.

(1)          x                                  Qualified
Nonelective Employer Contributions shall be allocated to Participants as a
percentage of the lowest paid Participant’s “testing compensation”, as defined
in Subsection 6.01(t), for the Plan Year up to the lower of (A) the maximum
amount contributable under the Plan or (B) the amount necessary to satisfy the “ADP”
or “ACP” test. If any Qualified Nonelective Employer Contribution remains,
allocation shall continue in the same manner to the next lowest paid
Participants until the Qualified Nonelective Employer Contribution is
exhausted.

 9
 

1.10                        MATCHING
EMPLOYER CONTRIBUTIONS  (Only if Option
1.07(a), Deferral Contributions, is checked)

(a)                                  x                                 Basic Matching Employer Contributions
(check one):

(1)          o                                    Non-Discretionary Matching Employer Contributions -
The Employer shall make a basic Matching Employer Contribution on behalf of
each Participant in an amount equal to the following percentage of a
Participant’s Deferral Contributions during the Contribution Period (check (A)
or (B) and, if applicable, (C)):

Note: Effective for
Plan Years beginning on or after January 1, 1999, if the Employer elected
Option l.11(a)(3), Safe Harbor Formula, with respect to Nonelective Employer Contributions
and meets the requirements for deemed satisfaction of the “ADP” test in Section
6.10 for a Plan Year, the Plan will also be deemed to satisfy the “ACP” test
for such Plan Year with respect to Matching Employer Contributions if Matching
Employer Contributions hereunder meet the requirements in Section 6.11.

(A)                               o                                    Single Percentage
Match:              %

(B)                               o                                    Tiered Match:

         %
of the first          % of the
Active Participant’s Compensation contributed to the Plan,

         %
of the next          % of the
Active Participant’s Compensation contributed to the Plan,

         %
of the next          % of the
Active Participant’s Compensation contributed to the Plan.

Note: The
percentages specified above for basic Matching Employer Contributions may not
increase as the percentage of Compensation contributed increases.

(C)         o                                     Limit on
Non-Discretionary Matching Employer Contributions (check the appropriate
box(es)):

(i)         o                                          Deferral
Contributions in excess of          %
of the Participant’s Compensation for the period in question shall not be
considered for non-discretionary Matching Employer Contributions.

Note: If the
Employer elected a percentage limit in (i) above and requested the Trustee to
account separately for matched and unmatched Deferral Contributions made to the
Plan, the non-discretionary Matching Employer Contributions allocated to each
Participant must be computed, and the percentage limit applied, based upon each
payroll period.

(ii)         o                                      Matching Employer
Contributions for each Participant for each Plan Year shall be limited to $                        .

 10
 

(2)         o                                       Discretionary Matching Employer Contributions -
The Employer may make a basic Matching Employer Contribution on behalf of each
Participant in an amount equal to the percentage declared for the Contribution
Period, if any, by a Board of Directors’ Resolution (or by a Letter of Intent
for a sole proprietor or partnership) of the Deferral Contributions made by
each Participant during the Contribution Period. The Board of Directors’
Resolution (or Letter of Intent, if applicable) may limit the Deferral
Contributions matched to a specified percentage of Compensation or limit the
amount of the match to a specified dollar amount.

(A)         o                                     4% Limitation on
Discretionary Matching Employer Contributions for Deemed Satisfaction of “ACP”
Test - In no event may the dollar amount of the discretionary Matching Employer
Contribution made on a Participant’s behalf for the Plan Year exceed 4% of the
Participant’s Compensation for the Plan Year. (Only if Option 1.11(a)(3), Safe Harbor Formula, with
respect to Nonelective Employer Contributions is checked.)

(3)         x                                     Safe Harbor Matching Employer Contributions -
Effective only for Plan Years beginning on or after January 1, 1999, if the
Employer elects one of the safe harbor formula Options provided in the Safe
Harbor Matching Employer Contribution Addendum to the Adoption Agreement and
provides written notice each Plan Year to all Active Participants of their rights
and obligations under the Plan, the Plan shall be deemed to satisfy the “ADP”
test and, under certain circumstances, the “ACP” test.

(b)         o                                        Additional Matching Employer
Contributions - The Employer may at Plan Year end make an
additional Matching Employer Contribution equal to a percentage declared by the
Employer, through a Board of Directors’ Resolution (or by a Letter of Intent
for a sole proprietor or partnership), of the Deferral Contributions made by
each Participant during the Plan Year. (Only if Option 1.10(a)(1) or (3) is checked.) The
Board of Directors’ Resolution (or Letter of Intent, if applicable) may limit
the Deferral Contributions matched to a specified percentage of Compensation or
limit the amount of the match to a specified dollar amount.

(1)         o                                         4% Limitation on Additional Matching Employer
Contributions for Deemed Satisfaction of “ACP” Test - In no event
may the dollar amount of the additional Matching Employer Contribution made on
a Participant’s behalf for the Plan Year exceed 4% of the Participant’s
Compensation for the Plan Year. (Only if Option 110(a)(3), Safe Harbor Matching Employer Contributions,
or Option 1.11(a)(3), Safe Harbor Formula, with respect to Nonelective Employer
Contributions is checked.)

Note: If the Employer
elected Option 1.10(a)(3), Safe Harbor Matching Employer Contributions, above
and wants to be deemed to have satisfied the “ADP” test for Plan Years
beginning on or after January 1, 1999, the additional Matching Employer
Contribution must meet the requirements of Section 6.10. In addition to the
foregoing requirements, if the Employer elected either Option 1.10(a)(3), Safe
Harbor Matching Employer Contributions, or Option 1.11(a)(3), Safe Harbor
Formula, with respect to Nonelective Employer Contributions, and wants to be
deemed to have satisfied the “ACP” test with respect to Matching Employer
Contributions for the Plan Year, the Deferral Contributions matched may not
exceed the limitations in Section 6.11.

 11
 

(c)                                  Contribution Period for Matching Employer
Contributions - The Contribution Period for purposes of
calculating the amount of basic Matching Employer Contributions described in
Subsection 1.10(a) is:

(1)                                 o                                    each calendar
month.

(2)                                 o                                    each Plan Year
quarter.

(3)                                 þ                                    each
Plan Year.

(4)                                 o                                    each payroll
period.

The Contribution Period for additional Matching
Employer Contributions described in Subsection 1.10(b) is the Plan Year.

(d)                                 Continuing Eligibility Requirement(s) - A Participant who makes Deferral
Contributions during a Contribution Period shall only be entitled to receive
Matching Employer Contributions under Section 1.10 for that Contribution Period
if the Participant satisfies the following requirement(s) (Check the
appropriate box(es). Options (3) and (4) may not be elected together; Option (5)
may not be elected with Option (2), (3), or (4); Options (2), (3), (4), (5),
and (7) may not be elected with respect to basic Matching Employer
Contributions if Option 1.10(a)(3), Safe Harbor Matching Employer
Contributions, is checked):

(1)         x                                     No
requirements.

(2)         o                                       Is employed by
the Employer or a Related Employer on the last day of the Contribution Period.

(3)         o                                       Earns at least
501 Hours of Service during the Plan Year. (Only if the Contribution Period is the Plan Year.)

(4)         o                                       Earns at least
1,000 Hours of Service during the Plan Year. (Only if the Contribution Period is the Plan Year.)

(5)         o                                       Either earns at
least 501 Hours of Service during the Plan Year or is employed by the Employer
or a Related Employer on the last day of the Plan Year. (Only if the Contribution Period is
the Plan Year.)

(6)         o                                       Is not a Highly
Compensated Employee for the Plan Year.

(7)         o                                       Is not a partner
or a member of the Employer, if the Employer is a partnership or an entity taxed
as a partnership.

(8)         o                                       Special
continuing eligibility requirement(s) for additional Matching Employer
Contributions. (Only if
Option 1.10(b), Additional Matching Employer Contributions, is checked.)

(A)                            The
continuing eligibility requirement(s) for additional Matching Employer
Contributions is/are:          
(Fill in number of applicable eligibility requirement(s) from above.)

 12
 

Note: If Option (2), (3), (4), or (5) above is
selected, then Matching Employer Contributions can only be funded by the Employer after the Contribution Period or Plan Year
ends. Matching Employer Contributions funded during the Contribution Period or
Plan Year shall not be subject to the eligibility requirements of Option (2),
(3), (4), or (5). If Option (2), (3), (4), or (5) is adopted during a
Contribution Period or Plan Year, as applicable, such Option shall not become
effective until the first day of the next Contribution Period or Plan Year.

(e)         o                                          Qualified Matching Employer
Contributions - Prior to making any Matching Employer
Contribution hereunder (other than a safe harbor Matching Employer
Contribution), the Employer may designate all or a portion of such Matching
Employer Contribution as a Qualified Matching Employer Contribution that may be
used to satisfy the “ADP” test on Deferral Contributions and excluded in
applying the “ACP” test on Employee and Matching Employer Contributions. Unless
the additional eligibility requirement is selected below, Qualified Matching
Employer Contributions shall be allocated to all Participants who meet the
continuing eligibility requirement(s) described in Subsection 1.10(d) above for
the type of Matching Employer Contribution being characterized as a Qualified
Matching Employer Contribution.

(1)         o                                       To receive an allocation of Qualified Matching
Employer Contributions a Participant must also be a Non-Highly Compensated
Employee for the Plan Year.

Note: Qualified Matching Employer Contributions may not
be excluded in applying the “ACP” test for a Plan Year if the Employer elected
Option 1.10(a)(3), Safe Harbor Matching Employer Contributions, or Option
1.1l(a)(3), Safe Harbor Formula, with respect to Nonelective Employer
Contributions, and the “ADP” test is deemed satisfied under Section 6.10 for
such Plan Year.

1.11                        NONELECTIVE
EMPLOYER CONTRIBUTIONS

Note: An Employer may elect both a fixed formula and
a discretionary formula. If both are selected, the discretionary formula shall
be treated as an additional Nonelective Employer Contribution and allocated
separately in accordance with the allocation formula selected by the Employer.

(a)         o                                        Fixed Formula (An
Employer may elect both the Safe Harbor Formula and one of the other fixed
formulas. Otherwise, the Employer may only select one of the following.)

(1)         o                                       Fixed Percentage Employer
Contribution - For each Plan
Year, the Employer shall contribute for each eligible Active Participant an
amount equal to                   %
(not to exceed 15% for Plan Years beginning
prior to 2002 and 25% for Plan Years beginning on or after January 1, 2002) of
such Active Participant’s Compensation.

(2)         o                                       Fixed Flat Dollar Employer
Contribution - The Employer
shall contribute for each eligible Active Participant an amount equal to $                    .

The contribution amount is based on an Active
Participant’s service for the following period:

(A)                               o                                    Each paid hour.

(B)                               o                                    Each payroll
period.

(C)                               o                                    Each Plan Year.

(D)                               o                                    Other:

 13
 

(3)         o                                         Safe Harbor Formula - Effective only with
respect to Plan Years that begin on or after January 1, 1999, the Nonelective
Employer Contribution specified in the Safe Harbor Nonelective Employer
Contribution Addendum is intended to satisfy the safe harbor contribution
requirements under the Code such that the “ADP” test (and, under certain
circumstances, the “ACP” test) is deemed satisfied. Please complete the Safe
Harbor Nonelective Employer Contribution Addendum to the Adoption Agreement. (Choose  only if Option
1.07(a), Deferral Contributions, is checked.)

(b)         o                                        Discretionary Formula -
The Employer may decide each Plan Year whether to make a discretionary
Nonelective Employer Contribution on behalf of eligible Active Participants in
accordance with Section 5.10. Such contributions shall be allocated to eligible
Active Participants based upon the following (check (1) or (2)):

(1)         o                                        Non-Integrated Allocation Formula - In the
ratio that each eligible Active Participant’s Compensation bears to the total
Compensation paid to all eligible Active Participants for the Plan Year.

(2)         o                                        Integrated Allocation Formula - As (A) a
percentage of each eligible Active Participant’s Compensation plus (B) a
percentage of each eligible Active Participant’s Compensation in excess of the “integration
level” as defined below. The percentage of Compensation in excess of the “integration
level” shall be equal to the lesser of the percentage of the Active Participant’s
Compensation allocated under (A) above or the “permitted disparity limit” as
defined below.

Note: An Employer
that has elected the Safe Harbor formula in Subsection 1.11(a)(3) above may not
take Nonelective Employer Contributions made to satisfy the safe harbor into
account in applying the integrated allocation formula described above.

“Integration level” means the Social Security taxable
wage base for the Plan Year, unless the Employer elects a lesser amount in (A)
or (B) below.

(A)                                        % (not to exceed 100%) of the Social
Security taxable wage base for the Plan Year, or

(B)                               $           (not to exceed the Social Security taxable wage base).

“Permitted disparity
limit” means the percentage provided by the following table:

	
  The “Integration Level” is

  	
   

  	
  The
  “Permitted

  
	
  % of the Taxable Wage

  	
   

  	
  Disparity

  
	
  Base

  	
   

  	
  Limit” is

  
	
  20% or less

  	
   

  	
  5.7%

  
	
  More than 20%, but not more than 80%

  	
   

  	
  4.3%

  
	
  More than 80%, but less than 100%

  	
   

  	
  5.4%

  
	
  100%

  	
   

  	
  5.7%

  

Note: An Employer
who maintains any other plan that provides for Social Security Integration
(permitted disparity) may not elect Option 1.1l(b)(2).

 14
 

(c)                                  Continuing Eligibility Requirement(s) -
A Participant shall only be entitled to receive Nonelective Employer
Contributions for a Plan Year under this Section 1.11 if the Participant
satisfies the following requirement(s) (Check the appropriate box(es) - Options
(3) and (4) may not be elected together; Option (5) may not be elected with
Option (2), (3), or (4); Options (2), (3), (4), (5), and (7) may not be elected
with respect to Nonelective Employer Contributions under the fixed formula if
Option 1.11 (a)(3), Safe Harbor Formula, is checked):

(1)         o                                       No requirements.

(2)         o                                       Is employed by
the Employer or a Related Employer on the last day of the Plan Year.

(3)         o                                       Earns at least
501 Hours of Service during the Plan Year.

(4)         o                                       Earns at least
1,000 Hours of Service during the Plan Year.

(5)         o                                       Either earns at
least 501 Hours of Service during the Plan Year or is employed by the Employer
or a Related Employer on the last day of the Plan Year.

(6)         o                                       Is not a Highly
Compensated Employee for the Plan Year.

(7)         o                                       Is not a partner
or a member of the Employer, if the Employer is a partnership or an entity
taxed as a partnership.

(8)         o                                       Special
continuing eligibility requirement(s) for discretionary Nonelective Employer
Contributions. (Only if
both Options 1.11  (a) and (b) are checked.)

(A)                             The
continuing eligibility requirement(s) for discretionary Nonelective Employer
Contributions is/are:             
(Fill in number of applicable eligibility requirement(s) from above.)

Note: If Option
(2), (3), (4), or (5) above is selected then Nonelective Employer Contributions
can only be funded by the Employer
after the Plan Year ends.
Nonelective Employer Contributions funded during the Plan Year shall not be
subject to the eligibility requirements of Option (2), (3), (4), or (5). If
Option (2), (3), (4), or (5) is adopted during a Plan Year, such Option shall
not become effective until the first day of the next Plan Year.

1.12                        EXCEPTIONS
TO CONTINUING ELIGIBILITY REQUIREMENTS

o                                    Death, Disability, and Retirement
Exception to Eligibility Requirements - Active Participants who
do not meet any last day or Hours of Service requirement under Subsection
1.10(d) or 1.11  (c) because they
become disabled, as defined in Section 1.14, retire, as provided in Subsection
1.13(a), (b), or (c), or die shall nevertheless receive an allocation of
Nonelective Employer and/or Matching Employer Contributions. No Compensation
shall be imputed to Active Participants who become disabled for the period
following their disability.

1.13                        RETIREMENT

(a)                                  The Normal Retirement Age  under the Plan is
(check one):

(1)         x                                        age
65.

 15
 

(2)         o                                          age             
(specify between 55 and 64).

(3)         o                                        later of age            
(not to exceed 65) or the fifth
anniversary of the Participant’s Employment Commencement Date.

(b)         x                                      The Early Retirement Age is the first day of the
month after the Participant attains age 55.0 (specify 55 or greater) and
completes               
years of Vesting Service.

Note: If this Option is elected, Participants who
are employed by the Employer or a Related Employer on the date they reach Early
Retirement Age shall be 100% vested in their Accounts under the Plan.

(c)         x                                      A Participant who becomes disabled,
as defined in Section 1.14, is eligible for disability retirement.

Note: If this Option is elected, Participants who
are employed by the Employer or a Related Employer on the date they become
disabled shall be 100% vested in their Accounts under the Plan.

1.14                        DEFINITION
OF DISABLED

A Participant is disabled if he/she (check the appropriate box(es)):

(a)         o                                           satisfies
the requirements for benefits under the Employer’s long-term disability plan.

(b)         x                                         satisfies
the requirements for Social Security disability benefits.

(c)          o                                        is determined
to be disabled by a physician approved by the Employer.

1.15                        VESTING

A Participant’s vested interest in Matching Employer Contributions
and/or Nonelective Employer Contributions, other than Safe Harbor Matching
Employer and/or Nonelective Employer Contributions elected in Subsection
1.10(a)(3) or 1.11(a)(3), shall be based upon his years of Vesting Service and
the schedule(s) selected below, except as provided in Subsection 1.2l(d) or in
the Vesting Schedule Addendum to the Adoption Agreement.

(a)                                  o                                    Years
of Vesting Service shall exclude:

(1)         o                                        for new plans,
service prior to the Effective Date as defined in Subsection 1.01(g)(l).

(2)         o                                        for existing
plans converting from another plan document, service prior to the original
Effective Date as defined in Subsection
1.01(g)(2).

(b)                                  Vesting
Schedule(s)

Note: The vesting schedule selected below applies
only to Nonelective Employer Contributions and Matching Employer Contributions
other than safe harbor contributions under Option 1.11(a)(3) or Option 1.10(a)(3).
Safe harbor contributions under Options 1.11(a)(3) and 1.10(a)(3) are always
100% vested immediately.

 16

	
  (1)
  Nonelective Employer Contributions

  (check one):

  	
   

  	
  (2)
  Matching Employer Contributions 

  (check one):

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (A)

  	
  x

  	
  N/A - No
  Nonelective Employer Contributions

  	
   

  	
  (A)

  	
  o

  	
  N/A - No Matching Employer Contributions

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (B)

  	
  o

  	
  100% Vesting
  immediately

  	
   

  	
  (B)

  	
  o

  	
  100% Vesting
  immediately

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (C)

  	
  o

  	
  3 year cliff
  (see C below)

  	
   

  	
  (C)

  	
  o

  	
  3 year cliff
  (see C below)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (D)

  	
  o

  	
  5 year cliff
  (see D below)

  	
   

  	
  (D)

  	
  o

  	
  5 year cliff
  (see D below)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (E)

  	
  o

  	
  6 year graduated
  (see E below)

  	
   

  	
  (E)

  	
  o

  	
  6 year graduated
  (see E below)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (F)

  	
  o

  	
  7 year graduated
  (see F below)

  	
   

  	
  (F)

  	
  o

  	
  7 year graduated
  (see F below)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (G)

  	
  o

  	
  Other vesting

  (complete G1 below)

  	
   

  	
  (G)

  	
  x

  	
  Other vesting

  (complete G2 below)

  

 

	
  Years of 

  Vesting Service

  	
   

  	
  Applicable Vesting Schedule(s)

  	
   

  
	
   

  	
   

  	
  C

  	
   

  	
  D

  	
   

  	
  E

  	
   

  	
  F

  	
   

  	
  Gl

  	
   

  	
  G2

  	
   

  
	
  0

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  —

  	
  %

  	
  0.00

  	
  %

  
	
  1

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  —

  	
  %

  	
  0.00

  	
  %

  
	
  2

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  20

  	
  %

  	
  0

  	
  %

  	
  —

  	
  %

  	
  25.00

  	
  %

  
	
  3

  	
   

  	
  100

  	
  %

  	
  0

  	
  %

  	
  40

  	
  %

  	
  20

  	
  %

  	
  —

  	
  %

  	
  50.00

  	
  %

  
	
  4

  	
   

  	
  100

  	
  %

  	
  0

  	
  %

  	
  60

  	
  %

  	
  40

  	
  %

  	
  —

  	
  %

  	
  75.00

  	
  %

  
	
  5

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  80

  	
  %

  	
  60

  	
  %

  	
  —

  	
  %

  	
  100.00

  	
  %

  
	
  6

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  	
  80

  	
  %

  	
  —

  	
  %

  	
  100.00

  	
  %

  
	
  7 or more

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  

 

Note: A schedule
elected under Gl or G2 above must be at least as favorable as one of the
schedules in C, D, E or F above.

Note: If the Plan
is being amended to provide a more restrictive vesting schedule, the more
favorable vesting schedule shall continue to apply to Participants who are
Active Participants immediately prior to the later of (1) the effective date of
the amendment or (2) the date the amendment is adopted.

(c)                    o                       A vesting
schedule more favorable than the vesting schedule(s) selected above applies to
certain Participants. Please complete the Vesting Schedule Addendum to
the Adoption Agreement.

 17
 

(d)                    Application of Forfeitures - If a
Participant forfeits any portion of his non-vested Account balance as provided
in Section 6.02, 6.04, 6.07, or 11.08, such forfeitures shall be (check one):

(1)                    o                      N/A - Either
(A) no Matching Employer Contributions are made with respect to Deferral
Contributions under the Plan and all other Employer Contributions are 100%
vested when made or (B) there are no Employer Contributions under the Plan.

(2)                    x                    applied to
reduce Employer contributions.

(3)                    o                      allocated
among the Accounts of eligible Participants in the manner provided in Section
1.11. (Only if Option
1.11(a) or (b) is checked.)

1.16           PREDECESSOR EMPLOYER
SERVICE

o                      Service for purposes of eligibility
in Subsection 1.04(b) and vesting in Subsection 1.15(b) of this Plan shall
include service with the following predecessor employer(s):

1.17           PARTICIPANT LOANS

Participant loans (check
one):

(a)                    x                     are allowed in accordance with
Article 9 and loan procedures outlined in the Service Agreement.

(b)                    o                        are not  allowed.

1.18           IN-SERVICE
WITHDRAWALS

Participants may
make withdrawals prior to termination of employment under the following
circumstances (check the appropriate box(es)):

(a)                    x                     Hardship Withdrawals - Hardship withdrawals from a Participant’s
Deferral Contributions Account shall be allowed in accordance with Section
10.05, subject to a $500 minimum amount.

(b)                    x                     Age 59 1/2  - Participants shall be entitled to
receive a distribution of all or any portion of the following Accounts upon
attainment of age 59 1/2 (check one):

(1)                    £                      Deferral
Contributions Account.

(2)                    x                    All
vested account balances.

(c)                                                       Withdrawal of Employee Contributions and Rollover
Contributions -

(1)                    Unless otherwise provided below,
Employee Contributions may be withdrawn in accordance with Section 10.02
at any time.

 18
 

(A)                £                        Employees may not make
withdrawals of Employee Contributions more frequently than:                                                                              .

(2)                    Rollover Contributions may be
withdrawn in accordance with Section 10.03 at any time.

(d)                    x                     Protected
In-Service Withdrawal Provisions - Check
if the Plan was converted by plan amendment or received transfer contributions from another defined contribution plan, and benefits under the other defined
contribution plan were payable as (check the appropriate box(es)):

(1)                    £                      an in-service withdrawal of vested employer contributions maintained in a Participant’s
Account (check (A) and/or (B)):

(A)                £                        for at least                (24
or more) months.

(i)                       £                      Special restrictions applied to
such in-service withdrawals under the prior plan that the Employer wishes to
continue under the Plan as restated hereunder. Please complete the Protected
In-Service Withdrawals Addendum to the Adoption Agreement identifying the
restrictions.

(B)                £                        after the Participant has at least
60 months of participation.

(i)                       £                      Special restrictions applied to such in-service withdrawals under the
prior plan that the Employer wishes to continue under the Plan as restated
hereunder. Please complete the Protected In-Service Withdrawals Addendum to the
Adoption Agreement identifying the restrictions.

(2)                    x                    another
in-service withdrawal option that is a “protected benefit” under Code Section 411(d)(6)
or an in-service hardship withdrawal option not otherwise described in Section 1.18(a).
Please complete the Protected In-Service Withdrawals Addendum to the Adoption
Agreement identifying the in-service withdrawal option(s).

1.19           FORM OF DISTRIBUTIONS

Subject to Section 13.01, 13.02 and Article 14, distributions under the
Plan shall be paid as provided below. (Check the appropriate box(es) and, if any
forms of payment selected in (b), (c) and/or (d) apply only to a specific class
of Participants, complete Subsection (b) of the Forms of Payment Addendum.)

(a)                     Lump Sum
Payments - Lump sum payments
are always available under the Plan.

(b)                    x                     Installment
Payments - Participants may
elect distribution under a systematic withdrawal plan (installments).

(c)                     £                       Annuities  (Check if the Plan is retaining any annuity
form(s) of payment.)

(1)                    An annuity form of payment is
available under the Plan for the following reason(s) (check (A) and/or (B), as
applicable):

 19
 

(A)                £                        As a
result of the Plan’s receipt of a
transfer of assets from another defined contribution plan or pursuant to the
Plan terms prior to the Amendment Effective Date specified in Section 1.01(g)(2),
benefits were previously payable in the form of an annuity that the Employer
elects to continue to be offered as a form of payment under the Plan.

(B)                £                        The Plan received a transfer of
assets from a defined benefit plan or another defined contribution plan that
was subject to the minimum funding requirements of Code Section 412 and
therefore an annuity form of payment is a protected benefit under the Plan in
accordance with Code Section 411(d)(6).

(2)                    The normal
form of payment under the Plan is (check (A) or (B)):

(A)                £                        A lump sum payment.

(i)                       Optional annuity forms of
payment (check (I) and/or (II), as applicable). (Must check and complete (I) if a life annuity is one
of the optional annuity forms of payment under the Plan.)

(I)                           £                  A married Participant who elects an
annuity form of payment shall receive a qualified joint and          %
(at least 50%) survivor annuity.
An unmarried Participant shall receive a single life annuity, unless a
different form of payment is specified below:

                                                              

(II)                       £                  Other
annuity form(s) of payment. Please complete Subsection (a) of the Forms of
Payment Addendum describing the other annuity form(s) of payment available
under the Plan.

(B)                £                        A life annuity (complete (i)
and (ii) and check (iii) if applicable).

(i)                       The normal form for married
Participants is a qualified joint and         %
(at least 50%) survivor annuity.
The normal form for unmarried Participants is a single life annuity, unless a
different annuity form is specified below:

                                                                   

(ii)                   The qualified preretirement survivor
annuity provided to a Participant’s spouse is purchased with           %
(at least 50%) of the Participant’s
Account.

(iii)               o                    Other
annuity form(s) of payment. Please complete Subsection (a) of the Forms of
Payment Addendum describing the other annuity form(s) of payment available
under the Plan.

 20
 

(d)                    o                       Other Non-Annuity Form(s) of Payment - As a result of the Plan’s receipt of a
transfer of assets from another plan or pursuant to the Plan terms prior to the
Amendment Effective Date specified in 1.01(g)(2), benefits were previously
payable in the following form(s) of payment not described in (a), (b) or (c)
above and the Plan will continue to offer these form(s) of payment:

                                                                   

(e)                    o                       Eliminated Forms of Payment Not
Protected Under Code Section 411(d)(6).  Check if either (1) under the Plan terms
prior to the Amendment Effective Date or (2) under the terms of another plan
from which assets were transferred, benefits were payable in a form of payment
that will cease to be offered after a specified date. Please complete
Subsection (c) of the Forms of Payment Addendum describing the forms of payment
previously available and the effective date of the elimination of the form(s)
of payment.

1.20           TIMING OF
DISTRIBUTIONS

Except as provided
in Subsection 1.20(a) or (b) and the Postponed Distribution Addendum to the
Adoption Agreement, distribution shall be made to an eligible Participant from
his vested interest in his Account as soon as reasonably practicable following
the date the Participant’s application for distribution is received by the
Administrator.

(a)                    Required Commencement of
Distribution - If a Participant does not elect to receive
benefits as of an earlier date, as permitted under the Plan, distribution of a
Participant’s Account shall begin as of the Participant’s Required Beginning
Date.

(b)                    o                       Postponed Distributions -
Check if the Plan was converted by plan amendment from another defined
contribution plan that provided for the postponement of certain distributions
from the Plan to eligible Participants and the Employer wants to continue to
administer the Plan using the postponed distribution provisions. Please
complete the Postponed Distribution Addendum to the Adoption Agreement
indicating the types of distributions that are subject to postponement and the
period of postponement.

Note: An Employer
may not provide for postponement of distribution to a Participant beyond the
60th day following the close of the Plan Year in which (1) the Participant
attains Normal Retirement Age under the Plan, (2) the Participant’s 10th
anniversary of participation in the Plan occurs, or (3) the Participant’s
employment terminates, whichever is latest.

1.21           TOP HEAVY STATUS

(a)                   The
Plan shall be subject to the Top-Heavy Plan requirements of Article 15 (check
one):

(1)                    o                      for
each Plan Year, whether or not the Plan is a “top-heavy plan” as defined in
Subsection 15.01(f).

(2)                    x                    for each Plan
Year, if any, for which the Plan is a “top-heavy plan” as defined in Subsection
15.01(f).

(3)                    o                      Not
applicable.  (Choose
only if Plan covers only employees subject to a collective bargaining
agreement.)

 21
 

(b)                    In
determining whether the Plan is a “top-heavy plan” for an Employer with at
least one defined benefit plan, the following assumptions shall apply:

(1)                    o                      Interest
rate:              %
per annum.

(2)                    o                      Mortality
table:                    .

(3)                    x                    Not applicable. (Choose
only if either (A) Plan covers only employees subject to a collective
bargaining agreement or (B) Employer does not maintain and has not maintained
any defined benefit plan during the five-year period ending on the applicable “determination
date”, as defined in Subsection 15.01(a).)

(c)                    If
the Plan is or is treated as a “top-heavy plan” for a Plan Year, each non-key
Employee shall receive an Employer Contribution of at least 3.0 (3, 4,
5, or 7 1/2)% of Compensation for the Plan Year in accordance with Section
15.03. The minimum Employer Contribution provided in this Subsection 1.21(c)
shall be made under this Plan only if the Participant is not entitled to such
contribution under another qualified plan of the Employer, unless the Employer
elects otherwise below.

(1)                    o                      The
minimum Employer Contribution shall be paid under this Plan in any event.

(2)                    o                      Another
method of satisfying the requirements of Code Section 416. Please complete the
416 Contribution Addendum to the Adoption Agreement describing the way in which
the minimum contribution requirements will be satisfied in the event the Plan
is or is treated as a “top-heavy plan”.

(3)                    o                      Not
applicable. (Choose only
if Plan covers only employees subject to a collective bargaining agreement.)

Note: The minimum
Employer contribution may be less than the percentage indicated in Subsection
1.21(c) above to the extent provided in Section 15.03.

(d)                    If the Plan is or is treated as a “top-heavy plan”
for a Plan Year, the following vesting schedule shall apply instead of the
schedule(s) elected in Subsection 1.15(b) for such Plan Year and each Plan Year
thereafter (check  one):

(1)                    o                      Not
applicable. (Choose only
if either (A) Plan provides for Nonelective Employer Contributions and the
schedule elected in Subsection 1.15(b)(1) is at least as favorable in all cases
as the schedules available below or (B) Plan covers only employees subject to a
collective bargaining agreement.)

(2)                    o                      100%
vested after             
(not in excess of 3) years of
Vesting Service.

(3)                    x                    Graded
vesting:

 22
 

 

	
  Years of Vesting Service

  	
   

  	
  Vesting

  Percentage

  	
   

  	
  Must be

  at Least

  	
   

  
	
  0

  	
   

  	
  0.00

  	
  %

  	
  0

  	
  %

  
	
  1

  	
   

  	
  0.00

  	
  %

  	
  0

  	
  %

  
	
  2

  	
   

  	
  25.00

  	
  %

  	
  20

  	
  %

  
	
  3

  	
   

  	
  50.00

  	
  %

  	
  40

  	
  %

  
	
  4

  	
   

  	
  75.00

  	
  %

  	
  60

  	
  %

  
	
  5

  	
   

  	
  100.00

  	
  %

  	
  80

  	
  %

  
	
  6 or more

  	
   

  	
  100.00

  	
  %

  	
  100

  	
  %

  

 

Note: If the Plan
provides for Nonelective Employer Contributions and the schedule elected in
Subsection 1.15(b)(1) is more favorable in all cases than the schedule elected
in Subsection 1.21(d) above, then the schedule in Subsection 1.15(b)(l) shall
continue to apply even in Plan Years in which the Plan is a “top-heavy plan”.

1.22           CORRECTION TO MEET
415 REQUIREMENTS UNDER MULTIPLE DEFINED CONTRIBUTION PLANS

If the Employer maintains other defined contribution
plans, annual additions to a Participant’s Account shall be limited as provided
in Section 6.12 of the Plan to meet the requirements of Code Section 415,
unless the Employer elects otherwise below and completes the 415 Correction
Addendum describing the order in which annual additions shall be limited among
the plans.

(a)                    o                       Other
Order for Limiting Annual Additions

1.23           INVESTMENT DIRECTION

Investment
Directions - Participant Accounts shall be invested
(check one):

(a)                    o                       in
accordance with the investment directions provided to the Trustee by the Employer
for allocating all Participant Accounts among the Options listed in the Service
Agreement.

(b)                    x                     in
accordance with the investment directions provided to the Trustee by each Participant
for allocating his entire Account among the Options listed in the Service
Agreement.

(c)                    o                       in
accordance with the investment directions provided to the Trustee by each
Participant for all contribution sources in his Account, except that the
following sources shall be invested in accordance with the investment
directions provided by the Employer (check (1) and/or (2)):

(1)                    o                      Nonelective
Employer Contributions

(2)                    o                      Matching
Employer Contributions

 23
 

The Employer must direct the applicable sources among
the same investment options made available for Participant directed sources
listed in the Service Agreement.

1.24           RELIANCE ON OPINION
LETTER

An adopting Employer may rely on the opinion letter
issued by the Internal Revenue Service as evidence that this Plan is qualified
under Code Section 401 only to the extent provided in Announcement 2001-77,
2001-30 I.R.B. The Employer may not rely on the opinion letter in certain other
circumstances or with respect to certain qualification requirements, which are
specified in the opinion letter issued with respect to this Plan and in
Announcement 2001-77. In order to have reliance in such circumstances or with
respect to such qualification requirements, application for a determination
letter must be made to Employee Plans Determinations of the Internal Revenue
Service. Failure to fill out the Adoption Agreement properly may result in
disqualification of the Plan.

This Adoption Agreement may be used only in
conjunction with Fidelity Basic Plan Document No. 02. The Prototype Sponsor
shall inform the adopting Employer of any amendments made to the Plan or of the
discontinuance or abandonment of the prototype plan document.

1.25           PROTOTYPE
INFORMATION:

	
  Name of Prototype Sponsor:

  	
   

  	
  Fidelity Management & Research Company

  
	
  Address of Prototype Sponsor:

  	
  82 Devonshire Street

  
	
   

  	
   

  	
  Boston, MA 02109

  
				

 

Questions regarding this prototype document may be
directed to the following telephone number: 1-800-343-9184.

 24

EXECUTION PAGE

(Employer’s Copy)

IN WITNESS WHEREOF, the Employer has caused this
Adoption Agreement to be executed this 27th day of December, 2005.

	
  Employer:

  	
   

  	
  The Children’s Place Retail Stores Inc.

  	
   

  
	
  By:

  	
   

  	
  /s/ Michael Corrigan

  	
   

  
	
  Title:

  	
   

  	
  Sr. Director - Compensation & Benefits

  	
   

  

 

	
  Employer:

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  

 

Accepted by:

Fidelity Management Trust Company, as Trustee

	
  By:

  	
   

  	
  /s/ James F. Harrigan

  	
   

  	
   

  	
  Date:

  	
  12/28/2005

  	
   

  
	
  Title:

  	
   

  	
  James F. Harrigan

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  	
   

  

 

 26
 

ADDENDUM

Re: SPECIAL EFFECTIVE
DATES

for

Plan Name:           The Children’s Place 401(k) Savings
Plan

(a)      o                        Special Effective Dates for Other
Provisions - The following provisions (e.g., new eligibility
requirements, new contribution formula, etc.) shall be effective as of the
dates specified herein:

 

 

 

(b)      o                        Plan Merger Effective Dates - The following plan(s) were merged into
the Plan after the Effective Date indicated in Subsection 1.01(g)(l) or (2), as
applicable. The provisions of the Plan are effective with respect to the merged
plan(s) as of the date(s) indicated below:

(1)                   Name of merged
plan

 

Effective date:

 27
 

(2)                    Name
of merged plan:

Effective date:

(3)                   Name
of merged plan:

Effective date:

(4)                   Name
of merged plan:

Effective date:

(5)                   Name
of merged plan:

Effective date:

 28
 

ADDENDUM

Re: SAFE HARBOR MATCHING
EMPLOYER CONTRIBUTION

for

Plan Name:           The Children’s Place 40l(k) Savings
Plan

(a)                     Safe Harbor Matching Employer Contribution Formula

Note: Matching
Employer Contributions made under this Option must be 100% vested when made and
may only be distributed because of death, disability, separation from service,
age 59 1/2, or termination of the Plan without the establishment of a successor
plan. In addition, each Plan Year, the Employer must provide written notice to
all Active Participants of their rights and obligations under the Plan.

(1)                   x                     100%
of the first 3% of the Active Participant’s Compensation contributed to the
Plan and 50% of the next 2% of the Active Participant’s Compensation
contributed to the Plan.

(A)                  x                    Safe
harbor Matching Employer Contributions shall not be made on behalf of
Highly Compensated Employees.

Note: If the
Employer selects this formula and does not elect Option 1.10(b),
Additional Matching Employer Contributions, Matching Employer Contributions
will automatically meet the safe harbor contribution requirements for deemed
satisfaction of the “ACP” test. (Employee Contributions must still be tested.)

(2)                   o                       Other
Enhanced Match:

          %
of the first          % of
the Active Participant’s Compensation contributed

to the plan,

          %
of the next          % of the
Active Participant’s Compensation contributed

to the plan,

          %
of the next          % of the
Active Participant’s Compensation contributed

to the plan.

Note: To satisfy
the safe harbor contribution requirement for the “ADP” test, the percentages
specified above for Matching Employer Contributions may not increase as the
percentage of Compensation contributed increases, and the aggregate amount of
Matching Employer Contributions at such rates must at least equal the aggregate
amount of Matching Employer Contributions which would be made under the
percentages described in (a)(l) of this Addendum.

(A)                  o                      Safe
harbor Matching Employer Contributions shall not be made on behalf of
Highly Compensated Employees.

(B)                  o                      The
formula specified above is also intended to satisfy the safe harbor
contribution requirement for deemed satisfaction of the “ACP” test with respect
to Matching Employer Contributions. (Employee Contributions must still be
tested.)

Note: To satisfy
the safe harbor contribution requirement for the “ACP” test, the Deferral
Contributions and/or Employee Contributions matched cannot exceed 6% of a
Participant’s Compensation.

 29
 

ADDENDUM

Re: SAFE HARBOR
NONELECTIVE EMPLOYER CONTRIBUTION

for

Plan Name:           The Children’s Place 401(k) Savings
Plan

(a)                     Safe Harbor Nonelective Employer Contribution
Election

(1)                   o                       For
each Plan Year, the Employer shall contribute for each eligible Active
Participant an amount equal to                 %
(not less than 3% nor more than 15%)
of such Active Participant’s Compensation.

(2)                   o                       The
Employer may decide each Plan Year whether to amend the Plan by electing and
completing (A) below to provide for a contribution on behalf of each eligible
Active Participant in an amount equal to at least 3% of such Active Participant’s
Compensation.

Note: An Employer that has selected Subsection
(a)(2) above must amend the Plan by electing (A) below and completing the
Amendment Execution Page no later than 30 days prior to the end of each Plan
Year for which safe harbor Nonelective Employer Contributions are being made.

(A)                  o                      For
the Plan Year beginning                          ,
the Employer shall contribute for each eligible Active Participant an amount
equal to          % (not less
than 3% nor more than 15%) of such Active Participant’s Compensation.

Note: Safe harbor Nonelective Employer Contributions
must be 100% vested when made and may only be distributed because of death,
disability, separation from service, age 59 1/2, or termination of the Plan
without the establishment of a successor plan. In addition, each Plan Year, the
Employer must provide written notice to all Active Participants of their rights
and obligations under the Plan.

(b)                     o                      Safe
harbor Nonelective Employer Contributions shall not be made on behalf of
Highly Compensated Employees.

(c)                     o                      In
conjunction with its election of the safe harbor described above, the Employer
has elected to make Matching Employer Contributions under Subsection 1.10 that
are intended to meet the requirements for deemed satisfaction of the “ACP” test
with respect to Matching Employer Contributions.

 30

ADDENDUM

Re: PROTECTED IN-SERVICE
WITHDRAWALS

for

Plan Name:                                 The
Children’s Place 401(k) Savings Plan

	
  (a)

  	
  Restrictions on In-Service Withdrawals of Amounts Held for
  Specified Period - The following restrictions apply to
  in-service withdrawals made in accordance with Subsection 1.18(d)(l)(A) (cannot include any mandatory
  suspension of contributions restriction):

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (b)

  	
  Restrictions on In-Service Withdrawals Because of
  Participation in Plan for 60 or More Months - The
  following restrictions apply to in-service withdrawals made in accordance
  with Subsection 1.18(d)(l)(B) (cannot include any mandatory suspension of contributions
  restriction):

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (c)

  	
  x

  	
  Other In-Service Hardship Withdrawal Provisions
  - In-service hardship withdrawals are permitted from a Participant’s Deferral
  Contributions Account and the other sub-accounts specified below, subject to
  the conditions otherwise applicable to hardship withdrawals from a
  Participant’s Deferral Contributions Account:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Matching
  Employer Contributions

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 31
 

 

	
  (d)

  	
  o

  	
  Other In-Service Withdrawal
  Provisions - In-service
  withdrawals from a Participant’s Accounts specified below shall be available
  to Participants who satisfy the requirements also specified below:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (1)

  	
  o

  	
  The following restrictions apply to a Participant’s Account following
  an in-service withdrawal made pursuant to (d) above (cannot include any mandatory
  suspension of contributions restriction):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 32
 

ADDENDUM

Re: FORMS OF PAYMENT

for

Plan
Name:                                 The
Children’s Place 401(k) Savings Plan

(a)                     The following optional forms of annuity will
continue to be offered under the Plan:

                                                                                         

(b)                    The forms of payment described in
Section 1.19(b), (c) and/or (d) apply to the following class(es) of
Participants:

Note: Please indicate if different classes of
Participants are subject to different forms of payment.

(c)                    The following forms of payment were
previously available under the Plan but will be eliminated as of the date
specified in subsection (4) below (check the applicable (box(es) and complete
(4)):

(1)                    o                      Installment Payments.

(2)                    o                      Annuities.

(A)                o                        The normal form of payment under the Plan was
a lump sum and all optional annuity forms of payment not listed under Section
1.19(c)(2)(A)(i) are eliminated. The eliminated forms of payment include the
following:

                                                                                         

(B)                o                        The normal form of payment under the Plan was a life annuity and
all annuity forms of payment not listed under Section 1.19(c)(2)(B) are
eliminated. (Complete
(i)  and (ii)  and,
if applicable, (iii).)

(i)                      The normal form for married
Participants was a qualified joint and ____% (at
least 50%) survivor annuity. The normal form for unmarried
Participants was a single life annuity, unless a different form is specified
below:

                                                                                         

(ii)                  The qualified preretirement survivor
annuity provided to a Participant’s spouse was purchased with            %
(at least 50%) of the Participant’s
Account.

(iii)              The other
annuity form(s) of payment previously available under the Plan included the
following:

                                                                                         

(3)                    o                      Other Non-Annuity Forms of Payment. All
other non-annuity forms of payment that are not listed in Section 1.19(d) but
that were previously available under the Plan are eliminated. The eliminated
non-annuity forms of payment include the following:

                                                                                         

 33
 

(4)                   The form(s) of payment described in
this Subsection (c) will not be offered to Participants who have an Annuity
Starting Date which occurs on or after                          (cannot be earlier than September 6, 2000). Notwithstanding
the date entered above, the forms of payment described in this Subsection (c)
will continue to be offered to Participants who have an Annuity Starting Date
that occurs (1) within 90 days following the date the Employer provides
affected Participants with a summary that satisfies the requirements of 29 CFR
2520.104b-3 and that notifies them of the elimination of the applicable form(s)
of payment, but (2) no later than the first day of the second Plan Year
following the Plan Year in which the amendment eliminating the applicable
form(s) of payment is adopted.

 34
 

ADDENDUM

Re: VESTING SCHEDULE

for

Plan
Name:                                 The
Children’s Place 401(k) Savings Plan

(a)                    More Favorable Vesting Schedule

(1)                     The following
vesting schedule applies to the class of Participants described in (a)(2)
below:

 

 

 

(2)                     The vesting
schedule specified in (a)(l) above applies to the following class of
Participants:

 

(b)                   o        Additional Vesting Schedule

(1)                     The following
vesting schedule applies to the class of Participants described in (b)(2)
below:

 

 

 

(2)                     The
vesting schedule specified in (b)(l) above applies to the following class of
Participants:

 

 35
 

ADDENDUM

Re: POSTPONED
DISTRIBUTIONS

for

Plan Name:                                 The Children’s
Place 401(k) Savings Plan

Postponement of Certain Distributions to Eligible
Participants - The types of distributions specified below
to eligible Participants of their vested interests in their Accounts shall be
postponed for the period also specified below:

 

 

 

Notwithstanding the foregoing, if the Employer
selected an Early Retirement Age in Subsection 1.14(b) that is the later of an
attained age or completion of a specified number of years of Vesting Service,
any Participant who terminates employment on or after completing the required
number of years of Vesting Service, but before attaining the required age shall
be eligible to commence distribution of his vested interest in his Account upon
attaining the required age.

 36
 

ADDENDUM

Re: 415 CORRECTION

for

Plan Name:                                 The Children’s
Place 401(k) Savings Plan

(a)                   Other Formula for Limiting Annual Additions to Meet
415 - If the
Employer, or any employer required to be aggregated with the Employer under
Code Section 415, maintains any other qualified defined contribution plans or
any “welfare benefit fund”, “individual medical account”, or “simplified
medical account”, annual additions to such plans shall be limited as follows to
meet the requirements of Code Section 415:

 

 

 

 37
 

ADDENDUM

Re: 416 CONTRIBUTION

for

Plan Name:                                 The Children’s Place 401(k) Savings Plan

(a)                  Other
Method of Satisfying the Requirements of 416 - If the Employer, or any employer required to be aggregated
with the Employer under Code Section 416, maintains any other qualified defined
contribution or defined benefit plans, the minimum benefit requirements of Code
Section 416 shall be satisfied as follows:

 

 

 

 38

The CORPORATEplan for
RetirementSM

ADDENDUM

RE: Code Sections
401(k) and 401(m) 2004 Final Regulations, Roth 401(k)

Amendments for
Fidelity Basic Plan Document No. 02

PREAMBLE

Adoption
and Effective Date of Amendment. This
amendment of the Plan is adopted to reflect the final regulations under
Internal Revenue Code (Code) sections 401(k) and 401(m) and to reflect Code
section 402A as added by section 617 of the Economic Growth and Tax Relief
Reconciliation Act of 2001. This amendment is intended as good faith compliance
with the requirements of Code sections 401(k), 401(m) and 402A and is to be
construed in accordance with guidance issued thereunder. Except as otherwise
provided in the numbered paragraphs below, this amendment shall be effective as
determined pursuant to the rules in paragraphs A and B immediately below:

A.                     Except
as otherwise provided in paragraph B below, this amendment shall be effective
for plan years that begin on or after January 1, 2006.

B.                       If
the Plan is maintained pursuant to one or more collective bargaining agreements
between employee representatives and one or more employers in effect on the
date described in paragraph A above, this amendment shall be effective
beginning with the later of the first plan year beginning after the termination
of the last such agreement or the first plan year described in paragraph A
above.

Supersession
of Inconsistent Provisions. This
amendment shall supersede the provisions of the Plan to the extent those
provisions are inconsistent with the provisions of this amendment.

1.                         Section
5.03, “Deferral Contributions,” is hereby amended, effective January 1, 2006,
by adding a new subsection (c) to the end thereof to provide as follows:

(c)       Roth Deferral Contributions.

(1)                     General
Application.

(A)      This
subsection (c) will apply to contributions beginning with the effective date
specified in the Roth Deferral Contributions Addendum to the Adoption Agreement
but in no event before the first day of the first taxable year beginning on or
after January 1, 2006.

 1
 

(B)       As of the effective date under subparagraph (A) hereof, the
Plan will accept Roth Deferral Contributions made on behalf of Participants. A Participant’s Roth
Deferral Contributions will be allocated to a separate account maintained for
such contributions as described in paragraph (2) of this Section 5.03(c).

(C)       Unless specifically stated otherwise, Roth Deferral Contributions will be treated as
Deferral Contributions for all purposes under the Plan.

(2)                     Separate
Accounting.

(A)      Contributions and withdrawals of Roth Deferral
Contributions will be credited and debited to the Roth Deferral Contributions
sub-account maintained for each Participant within the Participant’s Account.

(B)       The
Plan will maintain a record of the amount of Roth Deferral Contributions in
each such sub-account.

(C)       Gains,
losses, and other credits or charges must be separately allocated on a
reasonable and consistent basis to each Participant’s Roth Deferral
Contributions sub-account and the Participant’s other sub-accounts within the Participant’s
Account under the Plan.

(D)       No
contributions other than
Roth Deferral Contributions and properly attributable earnings will be credited
to each Participant’s Roth Deferral Contributions sub-account.

(3)                     Direct
Rollovers.

(A)      Notwithstanding anything to the contrary in Section 13.04, a
direct rollover of a distribution from a Roth Deferral Contributions
sub-account under the Plan will only be made to another Roth Deferral
Contributions account under an applicable retirement plan described in
Code section 402A(e)(l) or to a Roth IRA described in Code section 408A
and only to the extent the rollover is permitted under the rules of Code
section 402(c).

(B)       Notwithstanding anything to the contrary in Section 5.06,
and provided the Employer so elects in the Roth Deferral Contributions Addendum
to the Adoption Agreement, the Plan

 2
 

will accept a rollover
contribution to a Roth Deferral Contributions sub-account, but only if it is a
direct rollover from another Roth Deferral Contributions account under an applicable retirement plan
described in Code section 402A(e)(l) and only to the extent the rollover is
permitted under the rules of Code section 402(c).

(C)       The Plan will not provide for a direct rollover (including an
automatic rollover) for distributions from a Participant’s Roth Deferral
Contributions sub-account if the amounts of the distributions that are eligible
rollover distributions are reasonably expected to total less than $200 during a
year. In addition, any distribution from a Participant’s Roth Deferral
Contributions sub-account is not taken into account in determining whether
distributions from a Participant’s other sub-accounts are reasonably expected
to total less than $200 during a year. However, eligible rollover distributions
from a Participant’s Roth Deferral Contributions sub-account are taken into
account in determining whether the total amount of the Participant’s account
balances under the Plan exceeds $1,000 for purposes of mandatory distributions
from the Plan.

(D)       The provisions of the Plan that allow a Participant to elect a
direct rollover of only a portion of an eligible rollover distribution but only
if the amount rolled over
is at least $500 is applied by treating any amount distributed from the
Participant’s Roth Deferral Contributions sub-account as a separate
distribution from any amount distributed from the Participant’s other
sub-accounts in the Plan, even if the amounts are distributed at the same time.

(4)                     Correction of Excess Contributions. In the case of a
distribution of excess contributions to a Highly Compensated Employee, such
excess contributions shall be deemed to be pre-tax Deferral Contributions to
the extent such Highly Compensated Employee made pre-tax Deferral Contributions
for the year, and any remainder shall be deemed to be Roth Deferral
Contributions.

(5)                     Roth Deferral Contributions Defined. A Roth Deferral Contribution is an
elective deferral contribution that is:

(A)      Designated irrevocably by the participant at the time of the
cash or deferred election as a Roth Deferral Contribution that is being made in
lieu of all or a portion of the pre-tax

 3
 

elective deferrals the participant is otherwise
eligible to make under the Plan; and

(B)       Treated
by the employer as includible in the participant’s income at the time the
participant would have received that amount in cash if the participant had not
made a cash or deferred election.

2.                         Section
5.07, “Qualified Nonelective Employer Contributions,” is hereby amended in its
entirety to provide as follows:

The Employer may, in its
discretion, make a Qualified Nonelective Employer Contribution for the Plan
Year in any amount necessary to satisfy or help to satisfy the “ADP” test,
described in Section 6.03, and/or the “ACP” test, described in Section 6.06.
Qualified Nonelective Employer contributions shall be allocated based on
Participant’s “testing compensation,” as defined in Subsection 6.01(t), rather
than Compensation, as defined in Subsection 2.01(j). Any Qualified
Nonelective Employer Contribution shall be allocated only as provided in this
Section 5.07 (notwithstanding anything to the contrary in Section 1.09 or in
any other Plan provision).

Notwithstanding anything to
the contrary in Section 1.09 or in any other Plan provision, Qualified
Nonelective Employer Contributions shall be allocated to Participants who were
Active Participants at any time during the Plan Year and are Non-Highly
Compensated Employees pursuant to either (a) or (b) below.

(a)                    If
the Employer has not elected Section 1.09(a)(1) in the Adoption Agreement,
Qualified Nonelective Employer Contributions shall be allocated in the ratio
which each such Participant’s “testing compensation,” as defined in Subsection
6.01(t), for the Plan Year bears to the total of all such Participants’ “testing
compensation” for the Plan Year.

(b)                   If
the Employer has elected Section 1.09(a)(1) in the Adoption Agreement,
Qualified Nonelective Employer Contributions shall be allocated as provided in
such Section 1.09(a)(1), provided, however, that in no event shall any such
allocation to an eligible Participant exceed 5% of the “testing compensation”
of such Participant for the Plan Year, and, provided further that,
notwithstanding the above, in the event the Employer elects to disaggregate the
Plan pursuant to Treasury Regulation Section 1.401(k)-1(b)(4) and consistent
with Code section 410(b)(4)(B), the Employer may choose to provide Qualified
Nonelective Employer Contributions to only those otherwise

 4
 

eligible Participants who
are covered by the resulting component plan that covers the non-excludable
Participants.

Subject to subsection (b)
hereof, Active Participants shall not be required to satisfy any Hours of
Service or employment requirement for the Plan Year in order to receive an
allocation of Qualified Nonelective Employer Contributions.

Qualified Nonelective
Employer Contributions shall be distributable only in accordance with the
distribution provisions that are applicable to Deferral Contributions;
provided, however, that a Participant shall not be permitted to take a hardship
withdrawal of amounts credited to his Qualified Nonelective Employer
Contributions Account after the later of December 31, 1988 or the last day of
the Plan Year ending before July 1, 1989.

3.                         Section 6.09, “Income or Loss on
Distributable Contributions,” is hereby amended in its entirety to provide as
follows:

The income or loss allocable
to “excess deferrals”, “excess contributions”, and “excess aggregate
contributions” shall be determined under the following method: The income or
loss attributable to such distributable contributions shall be the sum of (i)
the income or loss on such contributions for the “determination year”,
determined under any reasonable method, plus (ii) the income or loss on such
contributions for the “gap period”, determined under such reasonable method.
Any reasonable method used to determine income or loss hereunder shall be used
consistently for all Participants in determining the income or loss allocable
to distributable contributions hereunder and shall be the same method that is
used by the Plan in allocating income or loss to Participants’ Accounts. For
purposes of this paragraph, the “gap period” means the period between the end
of the “determination year” and the date of distribution; provided, however,
that income or loss for the “gap period” may be determined as of a date that is
no more than seven days before the date of distribution.

4.                         Section 6.10, “Deemed Satisfaction of ‘ADP’
Test,” is hereby amended in its entirety to provide as follows:

Notwithstanding any other
provision of this Article 6 to the contrary, for any Plan Year beginning on or
after January 1, 1999, if the Employer has elected one of the safe harbor
contributions in Subsection 1.10(a)(3) or 1.11 (a)(3) of the
Adoption Agreement and complies with the notice requirements described herein
for such Plan Year, the Plan shall be deemed to have satisfied the “ADP” test
described in Section 6.03. The Employer shall provide to each Active
Participant during the Plan Year a comprehensive notice of the Active
Participant’s rights and obligations

 5
 

under the Plan. Such notice
shall be written in a manner calculated to be understood by the average Active
Participant. The Employer shall provide the notice to each Active Participant
within one of the following periods, whichever is applicable:

(a)                     if
the employee is an Active Participant 90 days before the beginning of the Plan
Year, within the period beginning 90 days and ending 30 days before the first
day of the Plan Year; or

(b)                    if
the employee becomes an Active Participant after the date described in
subsection (a) above, within the period beginning 90 days before and ending on
the date he becomes an Active Participant;

provided, however, that such
notice shall not be required to be provided to an Active Participant earlier
than is required under any guidance published by the Internal Revenue Service.

If an Employer that provides
notice that the Plan may be amended to provide a safe harbor Nonelective
Employer Contribution for the Plan Year does amend the Plan to provide such
contribution, the Employer shall provide a supplemental notice to all Active
Participants stating that a safe harbor Nonelective Employer Contribution in
the specified amount shall be made for the Plan Year. Such supplemental notice
shall be provided to Active Participants at least 30 days before the last day
of the Plan Year.

Notwithstanding the
foregoing, if the Employer has elected a more stringent eligibility requirement
in Section 1.04 of the Adoption Agreement for such 401(k) safe harbor
contributions than for Deferral Contributions, the Plan may be disaggregated
pursuant to Treasury Regulation section 1.401(k)-3(h)(3), consistent with Code
section 410(b)(4) (B), and deemed to have satisfied the “ADP” test
only with respect to that portion of the Plan that satisfies Code section
401(k)(12). The remainder of the Plan shall be subjected to the “ADP” test
described in Section 6.03.

If the Employer elected to provide safe harbor
Matching Employer Contributions pursuant to Subsection 1.10(a)(3) of the
Adoption Agreement or to have deemed satisfaction of the “ACP” test with
respect to Matching Employer Contributions pursuant to the Addendum Re Safe
Harbor Nonelective Employer Contribution to the Adoption Agreement, then,
notwithstanding any election the Employer might have made pursuant to
Subsection 1.10(d) of the Adoption Agreement (except for an election to apply
paragraph (6) thereof), no continuing eligibility

 6
 

requirements shall apply to
any Matching Employer Contributions provided under the Plan (but an election to
apply paragraph (6) of Subsection 1.10(d) is unaffected).

In the event that the Plan
provides for Catch-up Contributions and the Employer elects to make Safe Harbor
Matching Employer Contributions pursuant to Section 1.10(a)(3), then,
notwithstanding anything to the contrary herein, in the event that the Addendum
Re Safe Harbor Matching Employer Contribution to the Adoption Agreement would
otherwise require Matching Employer Contributions to be made with respect to
Catch-up Contributions, then the Employer shall provide such Matching Employer
Contributions with respect to Catch-up Contributions to the extent necessary to
comply with such Matching Employer Contribution requirements.

5.                         Subsection
(a) of Section 10.05, “Hardship Withdrawals,” is hereby amended by replacing
paragraph (5) thereof and adding new paragraphs (6) and (7) as provided below:

(5)                    payments
for burial or funeral expenses for the Participant’s deceased parent, spouse,
child, or dependent (as defined in Code section 152, and, for taxable years
beginning on or after January 1, 2005, without regard to subsection (d)(1)(B)
thereof);

(6)                    expenses
for the repair of damage to the Participant’s principal residence that would
qualify for the casualty deduction under Code section 165 (determined without
regard to whether the loss exceeds 10% of adjusted gross income); or

(7)                    any
other financial need determined to be immediate and heavy under rules and
regulations issued by the Secretary of the Treasury or his delegate; provided,
however, that any such financial need shall constitute an immediate and heavy
need under this paragraph (7) no sooner than administratively practicable
following the date such rule or regulation is issued.

[Signature Page to Follow]

 7
 

IN WITNESS WHEREOF, this Amendment
has been executed by the undersigned Employer as evidence of its adoption
effective as of the date first above written.

	
  

  	
   

  	
  THE CHILDREN’S PLACE RETAIL

  
	
  

  	
   

  	
  STORES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  WITNESS:

  	
  By:

  	
  /s/ Steven Balasiano

  
	
   

  	
  Name:

  	
  Steven Balasiano

  
	
   

  	
   

  	
  Title: 

  	
  Senior Vice President, Chief 

  
	
   

  	
   

  	
  Administrative
  Officer and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  By:

  	
  /s/ Susan Riley

  
	
   

  	
   

  	
  Name:

  	
  Susan Riley

  
	
   

  	
   

  	
  Title: 

  	
  Senior Vice President, Chief 

  
	
   

  	
   

  	
  Financial Officer

  
										

 

 

 8

AMENDMENT TO

THE CHILDREN’S PLACE

401(k) SAVINGS PLAN

AMENDMENT, dated this 8th day of December 2006, to The Children’s Place 401(k)
Savings Plan (the “Plan”), as amended and restated effective as of January 1,
2006.

WITNESSETH:

WHEREAS, The Children’s Place Retail Stores, Inc. (the “Company”) sponsors and
maintains the Plan; and

WHEREAS, the Company desires to amend the eligibility requirements for the Plan’s
Safe Harbor Matching Employer Contributions; and

WHEREAS, the Company desires to amend the Plan’s Matching Employer Contributions
to include Non-Discretionary Matching Employer Contributions on behalf of
Participants who qualify as Highly Compensated Employees in the amount of fifty
percent (50%) of Participants’ Deferral Contributions, limited to five percent
(5%) of the Participants’ Compensation; and

WHEREAS, Section 16.02 of the Plan’s Basic Plan Document reserves to the Company
the right to make amendments to the Plan that affect the Plan’s Prototype
Status at any time and from time to time;

NOW, THEREFORE:

FIRST

Effective for Plan Years
beginning on and after January 1, 2007, Section 1.04(b)(2)(B) of the Plan’s
Adoption Agreement is hereby amended in its entirety, to read as follows:

The special Eligibility
Service requirement is: (B) - 12 month(s) of Eligibility Service (Fill
in (A), (B) or (C) from Subsection 1.04(b)(1) above).

SECOND

Effective for Plan Years
beginning on and after January 1, 2006, Section 1.10(a) of the Plan’s Adoption
Agreement is hereby amended in its entirety to read as follows:

Non-Discretionary
Matching Employer Contributions - Notwithstanding anything contained in the Plan to the contrary, the
Employer shall make a Matching Employer Contribution on behalf of each Active
Participant who qualifies as a Highly Compensated Employee in an amount equal
to fifty percent (50%) of the first five percent (5%) of each such Active
Participant’s Compensation contributed to the Plan as a Deferral Contribution.

Safe Harbor
Matching Employer Contributions - Effective only for Plan Years beginning on or after January 1, 1999,
if the Employer elects one of the safe harbor formula Options provided in the
Safe Harbor Matching Employer Contribution Addendum to the Adoption Agreement
and provides written notice each Plan Year to all Active Participants of their
rights and obligations under the Plan, the Plan shall be deemed to satisfy the “ADP”
test and, under certain circumstances, the “ACP” test.

IN WITNESS WHEREOF, this Amendment has been executed by the undersigned Employer as
evidence of its adoption effective as of the date first above written.

	
  

  	
  THE CHILDREN’S PLACE RETAIL

  STORES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
  By:

  	
  /s/ Steven Balasiano

  
	
   

  	
  Name:

  	
  Steven Balasiano

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President, Chief 

  
	
   

  	
  Administrative Officer
  and General Counsel

  
						

 

 

 

	
  WITNESS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Susan Riley

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Susan Riley

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President, Chief 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
										

 

 2

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