Document:

Exhibit

Exhibit 4.2

DESCRIPTION OF THE COMPANY’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

The following description of the material terms of the common stock of MidWestOne Financial Group, Inc. (the “Company,” which is also referred to herein as “we,” “our” or “us”) is only a summary. This summary does not purport to be a complete description of the terms and conditions of the Company’s common stock in all respects and is subject to and qualified in its entirety by reference to the Company’s Amended and Restated Articles of Incorporation, as amended by the first, second and third amendments thereto (“Articles of Incorporation”) and the Company’s Second Amended and Restated Bylaws, as amended (“Bylaws”), each of which are filed as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part, as well as the Iowa Business Corporation Act, as amended (the “IBCA”), and any other documents referenced in the summary and from which the summary is derived.
Description of Capital Stock
General
Our Articles of Incorporation provide that we are authorized to issue, without shareholder action, a total of 30,000,000 shares of common stock, par value $1.00 per share, and 500,000 shares of preferred stock, no par value per share. The preferred stock may be issued in one or more series and with such terms and conditions, at such times and for such consideration as our board of directors may determine. 
Common Stock
General. Under our Articles of Incorporation, we have the authority to issue 30,000,000 shares of our common stock, par value $1.00 per share. Our common stock is listed for trading on the Nasdaq Global Select Market under the symbol “MOFG.”
Each share of our common stock has the same relative rights and is identical in all respects to every other share of our common stock. Our shares of common stock are neither redeemable nor convertible, and the holders thereof have no preemptive or subscription rights to purchase any of our securities. 
Voting Rights. Each outstanding share of our common stock is entitled to one vote on all matters submitted to a vote of shareholders. There is no cumulative voting in the election of directors. The board of directors is classified into three classes, with approximately one-third of the directors up for election each year.
Liquidation Rights. Upon our liquidation, dissolution or winding up, the holders of our common stock are entitled to receive, pro rata, our assets which are legally available for distribution, after payment of all debts and other liabilities and subject to the prior rights of any holders of preferred stock then outstanding.
Dividends Payable on Shares of Common Stock. In general, the holders of outstanding shares of our common stock are entitled to receive dividends out of assets legally available therefor at such times and in such amounts as our board of directors may from time to time determine. The ability of our board of directors to declare and pay dividends on our common stock may be affected by both general corporate law considerations and policies of the Board of Governors of the Federal Reserve applicable to bank holding companies. 
Anti-Takeover Provisions.
General. Our Articles of Incorporation and Bylaws may have the effect of discouraging, delaying or preventing a change in control or an unsolicited acquisition proposal that a shareholder might consider favorable, including a proposal that might result in the payment of a premium over the market price for the shares held by shareholders. These provisions are summarized in the following paragraphs.

Exhibit 4.2

Authorized Shares of Capital Stock. Authorized but unissued shares of our common stock and preferred stock under our Articles of Incorporation could (within the limits imposed by applicable law and Nasdaq Marketplace Rules) be issued in one or more transactions that could make a change of control of us more difficult, and therefore more unlikely. The additional authorized shares could be used to discourage persons from attempting to gain control of us by diluting the voting power of shares then outstanding or increasing the voting power of persons who would support the board of directors in a potential takeover situation, including by preventing or delaying a proposed business combination that is opposed by the board of directors although perceived to be desirable by some shareholders.
Limitations on Right to Call Special Meetings; Shareholder Proposal Notice Requirements. Under our Bylaws, a special meeting of our shareholders may be called only by: (i) the Chairman of our board of directors, our Chief Executive Officer or our President; or (ii) in accordance with Section 490.702 of the IBCA which requires written demand by shareholders owning at least 10% of the total voting power of the outstanding stock entitled to vote on the issue proposed to be considered at the special meeting. Additionally, our Bylaws require that shareholder proposals meet certain advanced notice and minimum informational requirements. These provisions could have the effect of delaying until the next annual shareholders’ meeting shareholder actions which are favored by the holders of a majority of our outstanding voting securities.
State Anti-Takeover Laws. The IBCA contains an anti-takeover provision referred to as the “business combinations with interested shareholders” provision. This provision prevents a corporation from engaging in any business combination with an “interested shareholder” (as defined in the IBCA) for a period of three years following the time that the shareholder became an interested shareholder, unless one of the following conditions applies: (i) prior to the time that the shareholder became an interested shareholder, the board of directors of the corporation approved either the business combination or the transaction that resulted in the shareholder becoming an interested shareholder; (ii) upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or (iii) at or subsequent to the time the shareholder became an interested shareholder, the business combination is approved by the board of directors and authorized at an annual or special meeting of shareholders by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested shareholder.
The Bank Holding Company Act of 1956. The ability of a third party to acquire our stock is also limited under applicable U.S. banking laws, including regulatory approval requirements. The Bank Holding Company Act of 1956, as amended, requires any “bank holding company” to obtain the approval of the Federal Reserve before acquiring, directly or indirectly, more than 5% of our outstanding common stock. Federal law also prohibits any person or company from acquiring “control” of an FDIC-insured depository institution or its holding company without prior notice to the appropriate federal bank regulator. “Control” is conclusively presumed to exist upon the acquisition of 25% or more of the outstanding voting securities of a bank or bank holding company, but may arise under certain circumstances between 10% and 24.99% ownership.exhibit101esop

                                     MIDWESTONE FINANCIAL GROUP, INC.  EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST                             

 

                              TABLE OF CONTENTS                                     ARTICLE I                                  DEFINITIONS                                    ARTICLE II                                ADMINISTRATION   2.1   POWERS AND RESPONSIBILITIES OF THE EMPLOYER .......................................15  2.2   DESIGNATION OF ADMINISTRATIVE AUTHORITY .............................................16  2.3   ALLOCATION AND DELEGATION OF RESPONSIBILITIES ..................................16  2.4   POWERS AND DUTIES OF THE ADMINISTRATOR ................................................16  2.5   RECORDS AND REPORTS............................................................................................17  2.6   APPOINTMENT OF ADVISERS ...................................................................................17  2.7   PAYMENT OF EXPENSES ............................................................................................18  2.8   CLAIMS PROCEDURE ..................................................................................................18  2.9   CLAIMS REVIEW PROCEDURE ..................................................................................18                                    ARTICLE III                                   ELIGIBILITY   3.1   CONDITIONS OF ELIGIBILITY ...................................................................................19  3.2   EFFECTIVE DATE OF PARTICIPATION ....................................................................19  3.3   DETERMINATION OF ELIGIBILITY ..........................................................................19  3.4   TERMINATION OF ELIGIBILITY ................................................................................20  3.5   REHIRED EMPLOYEES AND BREAKS IN SERVICE ...............................................20                                    ARTICLE IV                        CONTRIBUTION AND ALLOCATION   4.1   FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION............................21  4.2   TIME OF PAYMENT OF EMPLOYER CONTRIBUTION ..........................................21  4.3   ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS ................21  4.4   MAXIMUM ANNUAL ADDITIONS .............................................................................24  4.5   DIRECTED INVESTMENT ACCOUNT........................................................................26  4.6   QUALIFIED MILITARY SERVICE ...............................................................................27                                    ARTICLE V                       FUNDING AND INVESTMENT POLICY   5.1   INVESTMENT POLICY .................................................................................................27   

 

    5.2   TRANSACTIONS INVOLVING COMPANY STOCK ..................................................28                                     ARTICLE VI                                   VALUATIONS    6.1   VALUATION OF THE TRUST FUND ..........................................................................29   6.2   METHOD OF VALUATION ..........................................................................................29                                     ARTICLE VII                 DETERMINATION AND DISTRIBUTION OF BENEFITS    7.1   DETERMINATION OF BENEFITS UPON RETIREMENT .........................................30   7.2   DETERMINATION OF BENEFITS UPON DEATH .....................................................30   7.3   DETERMINATION OF BENEFITS IN EVENT OF DISABILITY ..............................32  7.4    DETERMINATION OF BENEFITS UPON TERMINATION .......................................32  7.5    DISTRIBUTION OF BENEFITS ....................................................................................34  7.6    HOW PLAN BENEFIT WILL BE DISTRIBUTED .........................................................36  7.7    REQUIRED MINIMUM DISTRIBUTIONS ....................................................................37  7.8    DISTRIBUTION FOR MINOR OR INCOMPETENT INDIVIDUAL ............................42  7.9    LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN.............................42  7.10   NONTERMINABLE PROTECTIONS AND RIGHTS ....................................................43  7.11   PRE-RETIREMENT DISTRIBUTION ...........................................................................43  7.12   QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION .............................43  7.13   DIRECT ROLLOVER .....................................................................................................44  7.14   CORRECTIVE DISTRIBUTIONS ..................................................................................46                                    ARTICLE VIII                                     TRUSTEE   8.1    BASIC RESPONSIBILITIES OF THE TRUSTEE .........................................................46  8.2    INVESTMENT POWERS AND DUTIES OF THE TRUSTEE .....................................47  8.3    OTHER POWERS OF THE TRUSTEE ..........................................................................48  8.4    VOTING COMPANY STOCK ........................................................................................50  8.5    DUTIES OF THE TRUSTEE REGARDING PAYMENTS ...........................................51   8.6   TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES ...............................51   8.7   ANNUAL REPORT OF THE TRUSTEE........................................................................51   8.8   AUDIT ..............................................................................................................................52   8.9   RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE ..............................52     

 

    8.10  TRANSFER OF INTEREST ............................................................................................53   8.11 TRUSTEE INDEMNIFICATION ....................................................................................53                                        ARTICLE IX                    AMENDMENT, TERMINATION AND MERGERS   9.1    AMENDMENT ................................................................................................................53   9.2   TERMINATION ..............................................................................................................54   9.3   MERGER, CONSOLIDATION OR TRANSFER OF ASSETS .....................................54                                     ARTICLE X                                    TOP HEAVY    10.1  TOP HEAVY PLAN REQUIREMENTS ........................................................................55   10.2  DETERMINATION OF TOP HEAVY STATUS ...........................................................55                                     ARTICLE XI                                 MISCELLANEOUS    11.1  PARTICIPANT'S RIGHTS ..............................................................................................58   11.2  ALIENATION ..................................................................................................................58   11.3  CONSTRUCTION OF PLAN ..........................................................................................59   11.4  GENDER AND NUMBER ..............................................................................................59   11.5  LEGAL ACTION .............................................................................................................59   11.6  PROHIBITION AGAINST DIVERSION OF FUNDS ...................................................59   11.7  EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE.........................................60   11.8  INSURER'S PROTECTIVE CLAUSE ............................................................................60   11.9  RECEIPT AND RELEASE FOR PAYMENTS ..............................................................60   11.10 ACTION BY THE EMPLOYER .....................................................................................60   11.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY ......................60   11.12 HEADINGS ......................................................................................................................61   11.13 ELECTRONIC MEDIA ...................................................................................................61   11.14 PLAN CORRECTION .....................................................................................................61   11.15 APPROVAL BY INTERNAL REVENUE SERVICE ....................................................62   11.16 UNIFORMITY .................................................................................................................62   11.17 SECURITIES AND EXCHANGE COMMISSION APPROVAL ....................................62      

 

                                   ARTICLE XII                           PARTICIPATING EMPLOYERS   12.1  ADOPTION BY OTHER EMPLOYERS ........................................................................62  12.2  REQUIREMENTS OF PARTICIPATING EMPLOYERS .............................................62  12.3  DESIGNATION OF AGENT ..........................................................................................63  12.4  EMPLOYEE TRANSFERS .............................................................................................63  12.5  PARTICIPATING EMPLOYER CONTRIBUTION AND FORFEITURES .................63  12.6  AMENDMENT ................................................................................................................63  12.7  DISCONTINUANCE OF PARTICIPATION..................................................................64  12.8  ADMINISTRATOR'S AUTHORITY ..............................................................................64     

 

 

            1.4  "Aggregate Account" means, with respect to each Participant, the value of all   accounts maintained on behalf of a Participant, whether attributable to Employer or Employee   contributions, subject to the provisions of Section 10.2.            1.5  "Anniversary Date" means the last day of the Plan Year.            1.6  "Beneficiary" means the person (or entity) to whom the share of a deceased   Participant's interest in the Plan is payable.            1.7  "Code" means the Internal Revenue Code of 1986, as amended or replaced from time   to time.            1.8  "Company Stock" means common stock issued by the Employer (or by a corporation   which is a member of the controlled group of corporations of which the Employer is a member)   which is readily tradable on an established securities market. If there is no common stock which   meets the foregoing requirement, the term "Company Stock" means common stock issued by the   Employer (or by a corporation which is a member of the same controlled group) having a   combination of voting power and dividend rights equal to or in excess of: (A) that class of common   stock of the Employer (or of any other such corporation) having the greatest voting power, and (B)   that class of common stock of the Employer (or of any other such corporation) having the greatest   dividend rights. Noncallable preferred stock shall be deemed to be "Company Stock" if such stock is   convertible at any time into stock which constitutes "Company Stock" hereunder and if such   conversion is at a conversion price which (as of the date of the acquisition by the Trust) is   reasonable. For purposes of the preceding sentence, pursuant to Regulations, preferred stock shall be   treated as noncallable if after the call there will be a reasonable opportunity for a conversion which   meets the requirements of the preceding sentence.            1.9  "Company Stock Account" means the account of a Participant which is credited with   the shares of Company Stock purchased and paid for by the Trust Fund or contributed to the Trust   Fund.               A separate accounting shall be maintained with respect to that portion of the   Company Stock Account attributable to a Participant's or the Participant's Beneficiary's election   pursuant to Section 7.5(c)(3) to reinvest cash dividends in Company Stock. Any such Company   Stock allocated to the Company Stock Account shall be fully Vested at all times and shall not be   subject to Forfeiture for any reason.            1.10  "Compensation" means, with respect to any Participant and except as otherwise   provided herein, such Participant's wages, salaries, fees for professional services and other amounts  received (without regard to whether or not an amount is paid in cash) for personal services actually  rendered in the course of employment with the Employer maintaining the Plan to the extent that the  amounts are includible in gross income (including, but not limited to, commissions paid salesmen,  compensation for services on the basis of a percentage of profits, commissions on insurance  premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a   nonaccountable plan as described in Regulation 1.62-2(c)) for a Plan Year (the "determination   period").                   Compensation shall exclude (a)(1) contributions made by the Employer to a plan   of deferred compensation to the extent that the contributions are not includible in the gross   income of the Participant for the taxable year in which contributed, (2) Employer contributions   made on behalf of an Employee to a simplified employee pension plan described in Code   Section 408(k) to the extent such contributions are excludable from the Employee's gross   income, (3) any distributions from a plan of deferred compensation; (b) amounts realized from   the exercise of a non-qualified stock option, or when restricted stock (or property) held by an   Employee either becomes freely transferable or is no longer subject to a substantial risk of                                                                                    2 

 

    forfeiture; (c) amounts realized from the sale, exchange or other disposition of stock acquired  under a qualified stock option; and (d) other amounts which receive special tax benefits, or  contributions made by the Employer (whether or not under a salary reduction agreement)  towards the purchase of any annuity contract described in Code Section 403(b) (whether or not  the contributions are actually excludable from the gross income of the Employee).                For purposes of this Section, the determination of Compensation shall be made  by:                      (a)   excluding (even if includible in gross income) reimbursements or              other expense allowances, fringe benefits (cash or noncash), moving expenses,              deferred compensation, and welfare benefits.                      (b)   including amounts which are contributed by the Employer pursuant              to a salary reduction agreement and which are not includible in the gross income              of the Participant under Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B),              403(b) or 457(b), and Employee contributions described in Code              Section 414(h)(2) that are treated as Employer contributions. For this purpose,              amounts not includible in gross income under Code Section 125 shall be deemed              to include any amounts not available to a Participant in cash in lieu of group              health coverage because the Participant is unable to certify that the Participant has              other health coverage, provided the Employer does not request or collect              information regarding the Participant's other health coverage as part of the              enrollment process for the health plan.                      (c)  excluding pre-participation Compensation paid during the Plan              Year while not a Participant in the component of the Plan for which              Compensation is being used.                      (d)  including Military Differential Pay effective for Plan Years              beginning after December 31, 2008.                      (e)   effective for Plan Years beginning on and after July 1, 2007, making              the following adjustments for amounts that are paid after the Participant's severance              from employment with the Employer. Any other payment of compensation paid              after severance of employment that is not described in the following types of              compensation is not Compensation.                       (1)  Compensation shall include regular pay after severance of                    employment if:                                               (i)  The payment is regular compensation for services during                          the Participant's regular working hours, or compensation for                          services outside the Participant's regular working hours (such as                          overtime or shift differential), commissions, bonuses, or other                          similar payments; and                                                                                                             3 

 

                            (ii)  The payment would have been paid to the Participant prior                          to a severance from employment if the Participant had continued in                          employment with the Employer, and                                                    (iii)  The payment is made by the later of 2 1/2 months after a                          Participant's severance from employment with the Employer or the                          end of the Limitation Year that includes the date of the                          Participant's severance from employment with the Employer.                      (2)   Leave cash-outs shall be included in Compensation if those                    amounts would have been included in the definition of Compensation if                    they were paid prior to the Participant's severance from employment with                    the Employer, and the amounts are for unused accrued bona fide sick,                    vacation, or other leave, but only if the Participant would have been able                    to use the leave if employment had continued, and such payment is made                    by the later of 2 1/2 months after a Participant's severance from                    employment with the Employer or the end of the Limitation Year that                    includes the date of the Participant's severance from employment with the                    Employer.                      (3)   Deferred compensation shall be included in Compensation if those                   amounts would have been included in the definition of Compensation if                    they were paid prior to the Participant's severance from employment with                    the Employer maintaining the Plan, and the amounts are received pursuant                    to a nonqualified unfunded deferred compensation plan, but only if the                    payment would have been paid if the Participant had continued in                    employment with the Employer and only to the extent that the payment is                    includible in the Participant's gross income, and such payment is made by                    the later of 2 1/2 months after a Participant's severance from employment                    with the Employer or the end of the Limitation Year that includes the date                    of the Participant's severance from employment with the Employer.                Compensation in excess of $200,000 (or such other amount provided in the Code)  shall be disregarded. Such amount shall be adjusted for increases in the cost of living in  accordance with Code Section 401(a)(17)(B), except that the dollar increase in effect on  January 1 of any calendar year shall be effective for the Plan Year beginning with or within such  calendar year. For any "determination period" of less than twelve (12) months, the Compensation  limit shall be an amount equal to the Compensation limit for the calendar year in which the  "determination period" begins multiplied by the ratio obtained by dividing the number of full  months in the short "determination period" by twelve (12). A "determination period" is not less  than twelve (12) months solely because a Participant's Compensation does not include  Compensation paid during a determination period while the Participant was not a Participant in  the Plan (or a component of the Plan).                If any Employees are excluded from the Plan (or from any component of the  Plan), then Compensation for any such Employees who become eligible or cease to be eligible to  participate in the Plan (or in the component of the Plan) during a Plan Year shall only include  Compensation while such Employees are Eligible Employees of the Plan (or of such component  of the Plan).                                                                                  4 

 

                    For purposes of this Section, if the Plan is a plan described in Code Section 413(c)  or 414(f) (a plan maintained by more than one Employer), the limitation applies separately with  respect to the Compensation of any Participant from each Employer maintaining the Plan.                 If, in connection with the adoption of any amendment, the definition of  Compensation has been modified, then, except as otherwise provided herein, for Plan Years prior   to the Plan Year which includes the adoption date of such amendment, Compensation means  compensation determined pursuant to the terms of the Plan then in effect.           1.11   "Contract" or "Policy" means any life insurance policy, retirement income policy  or annuity policy (group or individual) issued pursuant to the terms of the Plan. In the event of  any conflict between the terms of this Plan and the terms of any contract purchased hereunder,  the Plan provisions shall control.          1.12 "Distribution Calendar Year" means a calendar year for which a minimum  distribution pursuant to Section 7.7 is required. For distributions beginning before the  Participant's death, the first Distribution Calendar Year is the calendar year immediately  preceding the calendar year which contains the Participant's required beginning date under  Section 7.7. For distributions beginning after the Participant's death, the first Distribution  Calendar Year is the calendar year in which distributions are required to begin under Section 7.7.  The required minimum distribution for the Participant's first Distribution Calendar Year will be  made on or before the Participant's required beginning date. The required minimum distribution  for other Distribution Calendar Years, including the required minimum distribution for the  Distribution Calendar Year in which the Participant's required beginning date occurs, will be  made on or before December 31st of that Distribution Calendar Year.           1.13   "Early Retirement Date." This Plan does not provide for a retirement date prior to  Normal Retirement Date.            1.14   "Eligible Employee" means any Employee, except as provided below. The  following Employees shall not be eligible to participate in this Plan:                        (a)   Employees of Affiliated Employers, unless such Affiliated              Employers have specifically adopted this Plan in writing.                                        (b) Individuals who are not reported on the payroll records of the               Employer as common law employees. In particular, it is expressly intended that               individuals who are not treated as common law employees by the Employer on its               payroll records, or partners or other Self-Employed Individuals who are treated as              independent contractors, are not Eligible Employees and are excluded from Plan               participation even if a court or administrative agency determines that such               individuals are common law employees and not independent contractors.                        (c)   Employees who are Leased Employees within the meaning of               Code Sections 414(n)(2) and 414(o)(2).                        (d)   Employees who are nonresident aliens (within the meaning of               Code Section 7701(b)(1)(B)) and who receive no earned income (within the                                                                                    5 

 

                  meaning of Code Section 911(d)(2)) from the Employer which constitutes income              from sources within the United States (within the meaning of Code              Section 861(a)(3)).           1.15   "Employee" means any person who is employed by the Employer or Affiliated  Employer. Employee shall include Leased Employees within the meaning of Code  Sections 414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan described  in Code Section 414(n)(5) and such Leased Employees do not constitute more than 20% of the  recipient's non-highly compensated work force.           1.16   "Employer" means MidWestOne Financial Group, Inc. and any successor which  shall maintain this Plan; and any predecessor which has maintained this Plan. The Employer is a  "C" corporation with principal offices in the State of Iowa. In addition, where appropriate, the  term Employer shall include any Participating Employer (as defined in Section 12.1) which shall  adopt this Plan.           1.17   "ESOP" means an employee stock ownership plan that meets the requirements of   Code Section 4975(e)(7) and Regulation 54.4975-11.            1.18  "Fiduciary" means any person who (a) exercises any discretionary authority or   discretionary control respecting management of the Plan or exercises any authority or control   respecting management or disposition of its assets, (b) renders investment advice for a fee or   other compensation, direct or indirect, with respect to any monies or other property of the Plan or   has any authority or responsibility to do so, or (c) has any discretionary authority or discretionary   responsibility in the administration of the Plan.            1.19  "Fiscal Year" means the Employer's accounting year of 12 months commencing   on January 1 of each year and ending the following December 31.            1.20  "Forfeiture" means that portion of a Participant's Account that is not Vested, and   occurs on the earlier of:                        (a)   the distribution of the entire Vested portion of the Participant's               Account of a Former Participant who has severed employment with the Employer.               For purposes of this provision, if the Former Participant has a Vested benefit of               zero, then such Former Participant shall be deemed to have received a distribution               of such Vested benefit as of the year in which the severance of employment               occurs, or                        (b)   the last day of the Plan Year in which a Former Participant who               has severed employment with the Employer incurs five (5) consecutive 1-Year               Breaks in Service.                  Regardless of the preceding provisions, if a Former Participant is eligible to share   in the allocation of Employer contributions or Forfeitures in the year in which the Forfeiture   would otherwise occur, then the Forfeiture will not occur until the end of the first Plan Year for   which the Former Participant is not eligible to share in the allocation of Employer contributions   or Forfeitures. Furthermore, the term "Forfeiture" shall also include amounts deemed to be   Forfeitures pursuant to any other provision of this Plan.                                                                                    6 

 

           1.21   "Former Participant" means a person who has been a Participant, but who has  ceased to be a Participant for any reason.          1.22  "415 Compensation" with respect to any Participant means such Participant's  wages, salaries, fees for professional services and other amounts received (without regard to  whether or not an amount is paid in cash) for personal services actually rendered in the course of  employment with the Employer maintaining the Plan to the extent that the amounts are includible  in gross income (including, but not limited to, amounts would have been received and includible  in gross income but for an election under Code Section 125(a), 132(f)(4), 402(e)(3),  402(h)(1)(B), 402(k), or 457(b)), plus Military Differential Pay, for Limitation Years beginning  on or after January 1, 2009, commissions paid salesmen, compensation for services on the basis  of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits,  and reimbursements or other expense allowances under a nonaccountable plan (as described in  Regulation 1.62-2(c)) for a Plan Year.                "415 Compensation" shall exclude (a)(1) contributions made by the Employer to a  plan of deferred compensation to the extent that, the contributions are not includible in the gross  income of the Participant for the taxable year in which contributed, (2) Employer contributions  made on behalf of an Employee to a simplified employee pension plan described in Code  Section 408(k) to the extent such contributions are excludable from the Employee's gross  income, (3) any distributions from a plan of deferred compensation; (b) amounts realized from  the exercise of a non-qualified stock option, or when restricted stock (or property) held by an  Employee either becomes freely transferable or is no longer subject to a substantial risk of  forfeiture; (c) amounts realized from the sale, exchange or other disposition of stock acquired  under a qualified stock option; and (d) other amounts which receive special tax benefits, or  contributions made by the Employer (whether or not under a salary reduction agreement)  towards the purchase of any annuity contract described in Code Section 403(b) (whether or not  the contributions are actually excludable from the gross income of the Employee).                Notwithstanding the above, the determination of 415 Compensation shall be made  by:                                  (a)  including amounts not includible in gross income under Code              Section 125 shall be deemed to include any amounts not available to a Participant              in cash in lieu of group health coverage because the Participant is unable to certify              that the Participant has other health coverage, provided the Employer does not              request or collect information regarding the Participant's other health coverage as              part of the enrollment process for the health plan.                      (b)   effective for Limitation Years beginning on and after July 1, 2007,              making the following adjustments for amounts that are paid after the Participant's              severance from employment with the Employer. Any other payment of              compensation paid after severance of employment that is not described in the              following types of compensation is not considered compensation within the              meaning of Code Section 415(c)(3), even if payment is made within the time              period specified above.                                                                                     7 

 

                        (1)   415 Compensation shall include regular pay after severance of                     employment if:                                                 (i)  The payment is regular compensation for services during                           the Participant's regular working hours, or compensation for                           services outside the Participant's regular working hours (such as                           overtime or shift differential), commissions, bonuses, or other                           similar payments; and                                                      (ii)  The payment would have been paid to the Participant prior                           to a severance from employment if the Participant had continued in                           employment with the Employer, and                                                      (iii)  The payment is made by the later of 2 1/2 months after a                           Participant's severance from employment with the Employer or the                           end of the Limitation Year that includes the date of the                           Participant's severance from employment with the Employer.                        (2)   Leave cash-outs shall be included in 415 Compensation if those                     amounts would have been included in the definition of 415 Compensation                     if they were paid prior to the Participant's severance from employment                     with the Employer and the amounts are for unused accrued bona fide sick,                     vacation, or other leave, but only if the Participant would have been able                     to use the leave if employment had continued, and such amounts are paid                     by the later of 2 1/2 months after a Participant's severance from                     employment with the Employer or the end of the Limitation Year that                     includes the date of the Participant's severance from employment with the                     Employer, and represents.                        (3)   Deferred compensation shall be included in 415 Compensation if                    those amounts would have been included in the definition of 415                    Compensation if they were paid prior to the Participant's severance from                    employment with the Employer maintaining the Plan and the amounts are                    received pursuant to a nonqualified unfunded deferred compensation plan,                    but only if the payment would have been paid if the Participant had                    continued in employment with the Employer and only to the extent that                     the payment is includible in the Participant's gross income, and such                     payment is made by the later of 2 1/2 months after a Participant's                    severance from employment with the Employer or the end of the                    Limitation Year that includes the date of the Participant's severance from                    employment with the Employer.          1.23   "Highly Compensated Employee" means an Employee described in Code  Section 414(q) and the Regulations thereunder, and generally means any Employee who:                       (a)    was a "five percent owner" as defined in Section 1.27(b) at any              time during the "determination year" or the "look-back year"; or                                                                                      8 

 

                        (b)   for the "look-back year" had "415 Compensation" from the               Employer in excess of $80,000. The $80,000 amount is adjusted at the same time               and in the same manner as under Code Section 415(d), except that the base period               is the calendar quarter ending September 30, 1996.                  The "determination year" means the Plan Year for which testing is being   performed, and the "look back year" means the immediately preceding twelve (12) month period.                A highly compensated former Employee is based on the rules applicable to  determining Highly Compensated Employee status as in effect for the "determination year," in  accordance with Regulation 1.414(q)-1T, A-4 and IRS Notice 97-45 (or any superseding  guidance).                In determining who is a Highly Compensated Employee, Employees who are  non-resident aliens and who received no earned income (within the meaning of Code  Section 911(d)(2)) from the Employer constituting United States source income within the  meaning of Code Section 861(a)(3) shall not be treated as Employees. If a Nonresident Alien  Employee has U.S. source income, that Employee is treated as satisfying this definition if all of  such Employee's U.S. source income from the Employer is exempt from U.S. income tax under  an applicable income tax treaty. Additionally, all Affiliated Employers shall be taken into  account as a single employer and Leased Employees within the meaning of Code  Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased Employees  are covered by a plan described in Code Section 414(n)(5) and are not covered in any qualified  plan maintained by the Employer. The exclusion of Leased Employees for this purpose shall be  applied on a uniform and consistent basis for all of the Employer's retirement plans. Highly  Compensated Former Employees shall be treated as Highly Compensated Employees without  regard to whether they performed services during the "determination year."           1.24   "Highly Compensated Participant" means any Highly Compensated Employee  who is eligible to participate in the component of the Plan being tested.          1.25   "Hour of Service" means (1) each hour for which an Employee is directly or  indirectly compensated or entitled to compensation by the Employer for the performance of  duties (these hours will be credited to the Employee for the computation period in which the  duties are performed); (2) each hour for which an Employee is directly or indirectly compensated  or entitled to compensation by the Employer (irrespective of whether the employment  relationship has terminated) for reasons other than performance of duties (such as vacation,  holidays, sickness, jury duty, disability, lay-off, military duty or leave of absence) during the  applicable computation period (these hours will be calculated and credited pursuant to  Department of Labor regulation 2530.200b-2 which is incorporated herein by reference);  (3) each hour for which back pay is awarded or agreed to by the Employer without regard to  mitigation of damages (these hours will be credited to the Employee for the computation period  or periods to which the award or agreement pertains rather than the computation period in which  the award, agreement or payment is made). The same Hours of Service shall not be credited both  under (1) or (2), as the case may be, and under (3).                 Notwithstanding (2) above, (i) no more than 501 Hours of Service are required to  be credited to an Employee on account of any single continuous period during which the  Employee performs no duties (whether or not such period occurs in a single computation period);                                                                                    9 

 

    (ii) an hour for which an Employee is directly or indirectly paid, or entitled to payment, on  account of a period during which no duties are performed is not required to be credited to the  Employee if such payment is made or due under a plan maintained solely for the purpose of  complying with applicable worker's compensation, or unemployment compensation or disability  insurance laws; and (iii) Hours of Service are not required to be credited for a payment which  solely reimburses an Employee for medical or medically related expenses incurred by the  Employee.                For purposes of (2) above, a payment shall be deemed to be made by or due from  the Employer regardless of whether such payment is made by or due from the Employer directly,  or indirectly through, among others, a trust fund, or insurer, to which the Employer contributes  or pays premiums and regardless of whether contributions made or due to the trust fund, insurer,  or other entity are for the benefit of particular Employees or are on behalf of a group of  Employees in the aggregate.                For purposes of this Section, Hours of Service will be credited for employment  with other Affiliated Employers. The provisions of Department of Labor regulations  2530.200b-2(b) and (c) are incorporated herein by reference.          1.26  "Investment Manager" means any Fiduciary described in Act Section 3(38).          1.27  "Key Employee" means an Employee as defined in Code Section 416(i) and the  Regulations thereunder. Generally, any Employee or former Employee (as well as each of the  Employee's or former Employee's Beneficiaries) is considered a Key Employee if the  Employee's or former Employee's, at any time during the Plan Year that contains the  "determination date" (within the meaning of Section 10.2) has been included in one of the  following categories:                      (a)   an officer of the Employer (as that term is defined within the              meaning of the Regulations under Code Section 416) having annual "415              Compensation" greater than $130,000 (as adjusted under Code Section 416(i)(1)).                      (b)   a "five percent owner" of the Employer. "Five percent owner"              means any person who owns (or is considered as owning within the meaning of              Code Section 318) more than five percent (5%) of the outstanding stock of the              Employer or stock possessing more than five percent (5%) of the total combined              voting power of all stock of the Employer or, in the case of an unincorporated              business, any person who owns more than five percent (5%) of the capital or              profits interest in the Employer.                      (c)   a "one percent owner" of the Employer having an annual "415              Compensation" from the Employer of more than $150,000. "One percent owner"              means any person who owns (or is considered as owning within the meaning of              Code Section 318) more than one percent (1%) of the outstanding stock of the              Employer or stock possessing more than one percent (1%) of the total combined              voting power of all stock of the Employer or, in the case of an unincorporated              business, any person who owns more than one percent (1%) of the capital or              profits interest in the Employer.                                                                                    10 

 

                  For purposes of this Section, the determination of "415 Compensation" shall be   made by including amounts which are contributed by the Employer pursuant to a salary   reduction agreement and which are not includible in the gross income of the Participant under   Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee   contributions described in Code Section 414(h)(2) that are treated as Employer contributions.                 In determining percentage ownership hereunder, employers that would otherwise   be aggregated under Code Sections 414(b), (c), (m) and (o) shall be treated as separate   employers. In determining whether an individual has 415 Compensation of more than $150,000  or $130,000 as adjusted, 415 Compensation from each employer required to be aggregated under   Code Sections 414(b), (c), (m) and (o) shall be taken into account.            1.28  "Late Retirement Date" means a Participant's actual Retirement Date after having   reached Normal Retirement Date.            1.29  "Leased Employee" means any person (other than an Employee of the recipient   Employer) who pursuant to an agreement between the recipient Employer and any other person   or entity ("leasing organization") has performed services for the recipient (or for the recipient   and related persons determined in accordance with Code Section 414(n)(6)) on a substantially   full time basis for a period of at least one year, and such services are performed under primary   direction or control by the recipient Employer. Contributions or benefits provided a Leased   Employee by the leasing organization which are attributable to services performed for the   recipient Employer shall be treated as provided by the recipient Employer. Furthermore,   Compensation for a Leased Employee shall only include Compensation from the leasing   organization that is attributable to services performed for the recipient Employer. A Leased   Employee shall not be considered an Employee of the recipient Employer:                        (a)   if such employee is covered by a money purchase pension plan               providing:                        (1)   a nonintegrated employer contribution rate of at least 10% of                     compensation, as defined in Code Section 415(c)(3);                        (2) immediate participation;                        (3)   full and immediate vesting; and                        (b)   if Leased Employees do not constitute more than 20% of the               recipient Employer's nonhighly compensated work force.            1.30  "Military Differential Pay" means any differential wage payments made to an   individual that represents an amount which, when added to the individual's military pay,   approximates the amount of compensation that was paid to the individual while working for the  Employer. Notwithstanding the preceding sentence, for compensation determination periods  beginning after December 31, 2008, an individual receiving a differential wage payment, as  defined by Code Section 3401(h)(2), is treated as an Employee of the Employer making the  payment, and the differential wage payment is treated as 415 Compensation.                                                                                            11 

 

            The Plan is not treated as failing to meet the requirements of any provision described in   Code Section 414(u)(1)(C) (or corresponding Plan provisions) by reason of any contribution or  benefit which is based on the differential wage payment. The preceding sentence applies only if  all Employees of the Employer performing service in the uniformed services described in Code  Section 3401(h)(2)(A) are entitled to receive differential wage payments (as defined in Code  Section 3401(h)(2)) on reasonably equivalent terms and, if eligible to participate in a retirement  plan maintained by the Employer, to make contributions based on the payments on reasonably  equivalent terms (taking into account Code Sections 410(b)(3), (4), and (5)).          1.31   "Non-Highly Compensated Participant" means any Participant who is not a  Highly Compensated Employee.                A Participant is a Non-Highly Compensated Participant for a particular Plan Year  if such Participant does not meet the definition of a Highly Compensated Employee in effect for  that Plan Year.          1.32   "Non-Key Employee" means any Employee or former Employee (and such  Employee's or former Employee's Beneficiaries) who is not a Key Employee.           1.33   "Normal Retirement Age" means the Participant's 65 birthday. A Participant shall  become fully Vested in the Participant's Account upon attaining Normal Retirement Age (if the  Participant is an Employee on or after such date).           1.34   "Normal Retirement Date" means the Participant's Normal Retirement Age.            1.35   "1-Year Break in Service" means the applicable computation period during which  an Employee has not completed more than 500 Hours of Service with the Employer. Further,  solely for the purpose of determining whether a Participant has incurred a 1-Year Break in  Service, Hours of Service shall be recognized for "authorized leaves of absence" and "maternity  and paternity leaves of absence." Years of Service and 1-Year Breaks in Service shall be  measured on the same computation period.                 "Authorized leave of absence" means an unpaid, temporary cessation from active  employment with the Employer pursuant to an established nondiscriminatory policy, whether  occasioned by illness, military service, or any other reason.                 A "maternity or paternity leave of absence" means an absence from work for any  period by reason of the Employee's pregnancy, birth of the Employee's child, placement of a  child with the Employee in connection with the adoption of such child, or any absence for the  purpose of caring for such child for a period immediately following such birth or placement. For  this purpose, Hours of Service shall be credited for the computation period in which the absence  from work begins, only if credit therefore is necessary to prevent the Employee from incurring a  1-Year Break in Service, or, in any other case, in the immediately following computation period.  The Hours of Service credited for a "maternity or paternity leave of absence" shall be those  which would normally have been credited but for such absence, or, in any case in which the  Administrator is unable to determine such hours normally credited, eight (8) Hours of Service  per day. The total Hours of Service required to be credited for a "maternity or paternity leave of  absence" shall not exceed the number of Hours of Service needed to prevent the Employee from  incurring a 1-Year Break in Service.                                                                                    12 

 

           1.36   "Other Investments Account" means the account of a Participant which is credited  with such Participant's share of the net gain (or loss) of the Plan and Employer contributions in  other than Company Stock and which is debited with payments made to pay for Company Stock.          1.37  "Participant" means any Eligible Employee who participates in the Plan and has  not for any reason become ineligible to participate further in the Plan.          1.38  "Participant's Account" means the account established and maintained by the  Administrator for each Participant with respect to such Participant's total interest in the Plan and  Trust resulting from the Employer contributions.          1.39  "Participant's Account Balance" means the account balance as of the last  Valuation Date in the calendar year immediately preceding the Distribution Calendar Year  (valuation calendar year) increased by the amount of any contributions made and allocated or  Forfeitures allocated to the account balance as of dates in the valuation calendar year after the  Valuation Date and decreased by distributions made in the valuation calendar year after the  Valuation Date. The account balance for the valuation calendar year includes any amounts rolled  over or transferred to the Plan either in the valuation calendar year or in the Distribution  Calendar Year if distributed or transferred in the valuation calendar year.          1.40  "Plan" means this instrument, including all amendments thereto.          1.41  "Plan Year" means the Plan's accounting year of twelve (12) months commencing  on January 1 of each year and ending the following December 31.          1.42  "Regulation" means the Income Tax Regulations as promulgated by the Secretary  of the Treasury or a delegate of the Secretary of the Treasury, and as amended from time to time.          1.43  "Retired Participant" means a person who has been a Participant, but who has  become entitled to retirement benefits under the Plan.          1.44  "Retirement Date" means the date as of which a Participant retires for reasons  other than Total and Permanent Disability, whether such retirement occurs on a Participant's  Normal Retirement Date or Late Retirement Date (see Section 7.1).          1.45  "Terminated Participant" means a person who has been a Participant, but whose  employment has been terminated other than by death, Total and Permanent Disability or  retirement.          1.46  "Top Heavy Plan" means a plan described in Section 10.2(a).          1.47  "Top Heavy Plan Year" means a Plan Year during which the Plan is a Top Heavy  Plan.          1.48  "Total and Permanent Disability" means a physical or mental condition of a  Participant resulting from bodily injury, disease, or mental disorder which renders such  Participant incapable of continuing usual and customary employment with the Employer. The                                                                                  13 

 

    disability of a Participant shall be determined by a licensed physician chosen by the  Administrator. The determination shall be applied uniformly to all Participants.           1.49  "Trustee" means the person or entity named as trustee herein or in any separate  trust forming a part of this Plan, and any successors.          1.50  "Trust Fund" means the assets of the Plan and Trust as the same shall exist from  time to time.          1.51  "Valuation Date" means the Anniversary Date and may include any other date or  dates deemed necessary or appropriate by the Administrator for the valuation of the Participant's  accounts during the Plan Year, which may include any day that the Trustee, any transfer agent  appointed by the Trustee or the Employer or any stock exchange used by such agent, are open for  business.          1.52  "Vested" means the nonforfeitable portion of any account maintained on behalf of  a Participant.          1.53  "Year of Service" means the computation period of twelve (12) consecutive  months, herein set forth, during which an Employee has at least 1000 Hours of Service.                For purposes of eligibility for participation, the initial computation period shall  begin with the date on which the Employee first performs an Hour of Service. The participation  computation period beginning after a 1-Year Break in Service shall be measured from the date  on which an Employee again performs an Hour of Service. The participation computation period  shall shift to the Plan Year which includes the anniversary of the date on which the Employee  first performed an Hour of Service. If there is a shift to the Plan Year, then an Employee who is  credited with the required Hours of Service in both the initial computation period (or the  computation period beginning after a 1-Year Break in Service) and the Plan Year which includes  the anniversary of the date on which the Employee first performed an Hour of Service, shall be  credited with two (2) Years of Service for purposes of eligibility to participate.                For vesting purposes, the computation periods shall be the Plan Year, including  periods prior to the Effective Date of the Plan.                The computation period shall be the Plan Year if not otherwise set forth herein.                Notwithstanding the foregoing, for any short Plan Year, the determination of  whether an Employee has completed a Year of Service shall be made in accordance with  Department of Labor regulation 2530.203-2(c). However, in determining whether an Employee  has completed a Year of Service for benefit accrual purposes in the short Plan Year, the number  of the Hours of Service required shall be proportionately reduced based on the number of full  months in the short Plan Year.                Years of Service with Iowa State Bank & Trust, First State Bank (Conrad),  MidWestOne Investment Services, Inc., Cook & Son Agency, Inc., and ISB Financial shall be  recognized.                Years of Service with any Affiliated Employer shall be recognized.                                                                                  14 

 

                                          ARTICLE II                                 ADMINISTRATION     2.1    POWERS AND RESPONSIBILITIES OF THE EMPLOYER                       (a)    In addition to the general powers and responsibilities otherwise              provided for in this Plan, the Employer shall be empowered to appoint and              remove the Trustee and the Administrator from time to time as it deems necessary              for the proper administration of the Plan to ensure that the Plan is being operated              for the exclusive benefit of the Participants and their Beneficiaries in accordance              with the terms of the Plan, the Code, and the Act. The Employer may appoint              counsel, specialists, advisers, agents (including any nonfiduciary agent) and other              persons as the Employer deems necessary or desirable in connection with the              exercise of its fiduciary duties under this Plan. The Employer may compensate              such agents or advisers from the assets of the Plan as fiduciary expenses (but not              including any business (settlor) expenses of the Employer), to the extent not paid              by the Employer.                       (b)    The Employer may, by written agreement or designation, appoint              at its option an Investment Manager (qualified under the Investment Company              Act of 1940 as amended), investment adviser, or other agent to provide direction              to the Trustee with respect to any or all of the Plan assets. Such appointment shall              be given by the Employer in writing in a form acceptable to the Trustee and shall              specifically identify the Plan assets with respect to which the Investment Manager              or other agent shall have authority to direct the investment.                        (c)   The Employer shall establish a "funding policy and method," i.e., it               shall determine whether the Plan has a short run need for liquidity (e.g., to pay               benefits) or whether liquidity is a long run goal and investment growth (and               stability of same) is a more current need, or shall appoint a qualified person to do               so. The Employer or its delegate shall communicate such needs and goals to the               Trustee, who shall coordinate such Plan needs with its investment policy. The               communication of such a "funding policy and method" shall not, however,               constitute a directive to the Trustee as to the investment of the Trust Funds. Such               "funding policy and method" shall be consistent with the objectives of this Plan               and with the requirements of Title I of the Act.                        (d)   The Employer shall periodically review the performance of any               Fiduciary or other person to whom duties have been delegated or allocated by it               under the provisions of this Plan or pursuant to procedures established hereunder.               This requirement may be satisfied by formal periodic review by the Employer or               by a qualified person specifically designated by the Employer, through day-to-day               conduct and evaluation, or through other appropriate ways.                        (e)   The Employer will furnish Plan Fiduciaries and Participants with               notices and information statements when voting rights must be exercised pursuant               to Section 8.4.                                                                                       15 

 

      2.2   DESIGNATION OF ADMINISTRATIVE AUTHORITY                  The Employer shall be the Administrator. The Employer may appoint any person,   including, but not limited to, the Employees of the Employer, to perform the duties of the   Administrator. Any person so appointed shall signify acceptance by filing written acceptance   with the Employer. Upon the resignation or removal of any individual performing the duties of   the Administrator, the Employer may designate a successor.      2.3   ALLOCATION AND DELEGATION OF RESPONSIBILITIES                  If more than one person is appointed as Administrator, the responsibilities of each   Administrator may be specified by the Employer and accepted in writing by each Administrator.  In the event that no such delegation is made by the Employer, the Administrators may allocate  the responsibilities among themselves, in which event the Administrators shall notify the  Employer and the Trustee in writing of such action and specify the responsibilities of each  Administrator. The Trustee thereafter shall accept and rely upon any documents executed by the  appropriate Administrator until such time as the Employer or the Administrators file with the   Trustee a written revocation of such designation.      2.4   POWERS AND DUTIES OF THE ADMINISTRATOR                  The primary responsibility of the Administrator is to administer the Plan for the   exclusive benefit of the Participants and their Beneficiaries, subject to the specific terms of the  Plan. The Administrator shall administer the Plan in accordance with its terms and shall have the  power and discretion to construe the terms of the Plan and to determine all questions arising in  connection with the administration, interpretation, and application of the Plan. Any such  determination by the Administrator shall be conclusive and binding upon all persons. The  Administrator may establish procedures, correct any defect, supply any information, or reconcile  any inconsistency in such manner and to such extent as shall be deemed necessary or advisable  to carry out the purpose of the Plan; provided, however, that any procedure, discretionary act,  interpretation or construction shall be done in a nondiscriminatory manner based upon uniform  principles consistently applied and shall be consistent with the intent that the Plan shall continue  to be deemed a qualified plan under the terms of Code Section 401(a), and shall comply with the  terms of the Act and all regulations issued pursuant thereto. The Administrator shall have all  powers necessary or appropriate to accomplish the Administrator's duties under the Plan.                The Administrator shall be charged with the duties of the general administration  of the Plan as set forth under the terms of the Plan, including, but not limited to, the following:                       (a)   the discretion to determine all questions relating to the eligibility of              Employees to participate or remain a Participant hereunder and to receive benefits              under the Plan;                       (b)    to compute, certify, and direct the Trustee with respect to the              amount and the kind of benefits to which any Participant shall be entitled              hereunder;                       (c)   to authorize and direct the Trustee with respect to all              nondiscretionary or otherwise directed disbursements from the Trust;                                                                                    16 

 

                          (d)   to maintain all necessary records for the administration of the Plan;                       (e)    to interpret the provisions of the Plan and to make and publish such              rules for regulation of the Plan as are consistent with the terms hereof;                       (f)    to determine the size and type of any Contract to be purchased              from any insurer, and to designate the insurer from which such Contract shall be              purchased;                       (g)    to compute and certify to the Employer and to the Trustee from              time to time the sums of money necessary or desirable to be contributed to the              Plan;                       (h)    to consult with the Employer and the Trustee regarding the short              and long-term liquidity needs of the Plan in order that the Trustee can exercise              any investment discretion in a manner designed to accomplish specific objectives;                       (i)   to establish and communicate to Participants a procedure for              allowing each Participant to direct the Trustee as to the distribution of such              Participant's Company Stock Account pursuant to Section 4.5;                      (j)   to establish and communicate to Participants a procedure and              method to insure that each Participant will vote Company Stock allocated to such              Participant's Company Stock Account pursuant to Section 8.4;                       (k)    to determine the validity of, and take appropriate action with              respect to, any qualified domestic relations order received by it; and                       (l)   to assist any Participant regarding the Participant's rights, benefits,              or elections available under the Plan.     2.5    RECORDS AND REPORTS                The Administrator shall keep a record of all actions taken and shall keep all other  books of account, records, policies, and other data that may be necessary for proper  administration of the Plan and shall be responsible for supplying all information and reports to  the Internal Revenue Service, Department of Labor, Participants, Beneficiaries and others as  required by law.     2.6    APPOINTMENT OF ADVISERS                 The Administrator, or the Trustee with the consent of the Administrator, may  appoint counsel, specialists, advisers, agents (including nonfiduciary agents) and other persons as  the Administrator or the Trustee deems necessary or desirable in connection with the  administration of this Plan, including but not limited to agents and advisers to assist with the  administration and management of the Plan, and thereby to provide, among such other duties as  the Administrator may appoint, assistance with maintaining Plan records and the providing of  investment information to the Plan's investment fiduciaries.                                                                                    17 

 

        2.7    PAYMENT OF EXPENSES                All expenses of administration may be paid out of the Trust Fund unless paid by the  Employer. Such expenses shall include any expenses incident to the functioning of the  Administrator, or any person or persons retained or appointed by any Named Fiduciary incident to  the exercise of their duties under the Plan, including, but not limited to, fees of accountants, counsel,  Investment Managers, and other specialists and their agents, the costs of any bonds required  pursuant to Act Section 412, and other costs of administering the Plan. Until paid, the expenses shall  constitute a liability of the Trust Fund.     2.8    CLAIMS PROCEDURE                Claims for benefits under the Plan may be filed in writing with the Administrator.  Written or electronic notice of the disposition of a claim shall be furnished to the claimant within  90 days (45 days if the claim involves disability benefits) after the application is filed, or such  period as is required by applicable law or Department of Labor regulation. In the event the claim  is denied, the reasons for the denial shall be specifically set forth in the notice in language  calculated to be understood by the claimant, pertinent provisions of the Plan shall be cited, and,  where appropriate, an explanation as to how the claimant can perfect the claim will be provided.  In addition, the claimant shall be furnished with an explanation of the Plan's claims review  procedure.     2.9    CLAIMS REVIEW PROCEDURE                Any Employee, former Employee, or Beneficiary of either, who has been denied a   benefit by a decision of the Administrator pursuant to Section 2.8 shall be entitled to request the   Administrator to give further consideration to a claim by filing with the Administrator a written   request for a hearing. Such request, together with a written statement of the reasons why the   claimant believes the claim should be allowed, shall be filed with the Administrator no later than  60 days (45 days if the denied benefit involves disability benefits) after receipt of the written or  electronic notification provided for in Section 2.8. The Administrator shall then conduct a  hearing within the next 60 days (45 days if the claim involves disability benefits), at which the  claimant may be represented by an attorney or any other representative of such claimant's  choosing and expense and at which the claimant shall have an opportunity to submit written and  oral evidence and arguments in support of the claim. At the hearing the claimant or the claimant's  representative shall have an opportunity to review all documents in the possession of the  Administrator which are pertinent to the claim at issue and its disallowance. Either the claimant  or the Administrator may cause a court reporter to attend the hearing and record the proceedings.  In such event, a complete written transcript of the proceedings shall be furnished to both parties  by the court reporter. The full expense of any such court reporter and such transcripts shall be  borne by the party causing the court reporter to attend the hearing. A final decision as to the  allowance of the claim shall be made by the Administrator within 60 days (45 days if the claim  involves disability benefits) of receipt of the appeal (unless there has been an extension of 60  days (45 days if the claim involves disability benefits) due to special circumstances, provided the  delay and the special circumstances occasioning it are communicated to the claimant within the  60 day period (45 day period if the claim involves disability benefits)). Such communication   shall be written in a manner calculated to be understood by the claimant and shall include                                                                                    18 

 

      specific reasons for the decision and specific references to the pertinent Plan provisions on which   the decision is based.                                       ARTICLE III                                    ELIGIBILITY     3.1    CONDITIONS OF ELIGIBILITY                 Any Eligible Employee who has completed one (1) Year of Service and has  attained age 18 shall be eligible to participate hereunder as of the date such Employee has  satisfied such requirements. However, any Employee who was a Participant in the Plan prior to  the effective date of this amendment and restatement shall continue to participate in the Plan.     3.2    EFFECTIVE DATE OF PARTICIPATION                 An Eligible Employee shall become a Participant effective as of the earlier of the  first day of the Plan Year or the first day of the seventh month of such Plan Year coinciding with  or next following the date such Employee met the eligibility requirements of Section 3.1,  provided said Employee was still employed as of such date (or if not employed on such date, as  of the date of rehire if a 1-Year Break in Service has not occurred or, if later, the date that the  Employee would have otherwise entered the Plan had the Employee not terminated  employment).                 If an Eligible Employee satisfies the Plan's eligibility requirement conditions by  reason of recognition of service with a predecessor employer, such Employee will become a  Participant as of the day the Plan credits service with a predecessor employer or, if later, the date  the Employee would have otherwise entered the Plan had the service with the predecessor  employer been service with the Employer.                If an Employee, who has satisfied the Plan's eligibility requirements and would  otherwise have become a Participant, shall go from a classification of a noneligible Employee to  an Eligible Employee, such Employee shall become a Participant on the date such Employee  becomes an Eligible Employee or, if later, the date that the Employee would have otherwise  entered the Plan had the Employee always been an Eligible Employee.                If an Employee, who has satisfied the Plan's eligibility requirements and would  otherwise become a Participant, shall go from a classification of an Eligible Employee to a  noneligible class of Employees, such Employee shall become a Participant in the Plan on the  date such Employee again becomes an Eligible Employee, or, if later, the date that the Employee  would have otherwise entered the Plan had the Employee always been an Eligible Employee.  However, if such Employee incurs a 1-Year Break in Service, eligibility will be determined  under the Break in Service rules set forth in Section 3.5.     3.3    DETERMINATION OF ELIGIBILITY                The Administrator shall determine the eligibility of each Employee for participation  in the Plan based upon information furnished by the Employer. Such determination shall be  conclusive and binding upon all persons, as long as the same is made pursuant to the Plan and the  Act. Such determination shall be subject to review pursuant to Section 2.9.                                                                                    19 

 

         3.4   TERMINATION OF ELIGIBILITY                  In the event a Participant shall go from a classification of an Eligible Employee to an   ineligible Employee, such Former Participant shall continue to vest in the Plan for each Year of  Service completed while a noneligible Employee, until such time as the Participant's Account shall  be forfeited or distributed pursuant to the terms of the Plan. Additionally, the Former Participant's  interest in the Plan shall continue to share in the earnings of the Trust Fund.     3.5    REHIRED EMPLOYEES AND BREAKS IN SERVICE                       (a)   If any Participant becomes a Former Participant due to severance              from employment with the Employer and is reemployed by the Employer before a              1-Year Break in Service occurs, the Former Participant shall become a Participant              as of the reemployment date.                      (b)    If any Employee becomes a former Employee due to severance              from employment with the Employer and is reemployed after a 1-Year Break in              Service has occurred, Years of Service shall include Years of Service prior to the              1-Year Break in Service subject to the following rules:                      (1)    In the case of a former Employee who under the Plan does not have a                    nonforfeitable right to any interest in the Plan resulting from Employer                    contributions, Years of Service before a period of 1-Year Break in Service                    will not be taken into account if the number of consecutive 1-Year Breaks                    in Service equal or exceed the greater of (A) five (5) or (B) the aggregate                     number of pre-break Years of Service. Such aggregate number of Years of                     Service will not include any Years of Service disregarded under the                    preceding sentence by reason of prior 1-Year Breaks in Service.                      (2)   A former Employee who has not had Years of Service before a                    1-Year Break in Service disregarded pursuant to (1) above, shall                    participate in the Plan as of the date of reemployment.                      (c)   After a Former Participant who has severed employment with the              Employer incurs five (5) consecutive 1-Year Breaks in Service, the Vested              portion of said Former Participant's Account attributable to pre-break service shall              not be increased as a result of post-break service. In such case, separate accounts              will be maintained as follows:                      (1)    one account for nonforfeitable benefits attributable to pre-break                    service; and                      (2)   one account representing the Participant's Employer derived account                    balance in the Plan attributable to post-break service.                      (d)    If any Participant becomes a Former Participant due to severance              of employment with the Employer and is reemployed by the Employer before              five (5) consecutive 1-Year Breaks in Service, and such Former Participant had                                                                                    20 

 

                  received a distribution of the entire Vested interest prior to reemployment, then               the forfeited account shall be reinstated only if the Former Participant repays the              full amount which had been distributed. Such repayment must be made before the              earlier of five (5) years after the first date on which the Participant is subsequently              reemployed by the Employer or the close of the first period of five (5) consecutive              1-Year Breaks in Service commencing after the distribution. If a distribution              occurs for any reason other than a severance of employment, the time for              repayment may not end earlier than five (5) years after the date of distribution. In              the event the Former Participant does repay the full amount distributed, the              undistributed forfeited portion of the Participant's Account must be restored in              full, unadjusted by any gains or losses occurring subsequent to the Valuation Date              preceding the distribution. The source for such reinstatement may be Forfeitures              occurring during the Plan Year. If such source is insufficient, then the Employer              will contribute an amount which is sufficient to restore any such forfeited              Accounts provided, however, that if a discretionary contribution is made for such              year, such contribution shall first be applied to restore any such Accounts and the              remainder shall be allocated in accordance with Section 4.3.                            If a non-Vested Former Participant was deemed to have received a              distribution and such Former Participant is reemployed by the Employer before              five (5) consecutive 1-Year Breaks in Service, then such Participant will be              deemed to have repaid the deemed distribution as of the date of reemployment.                                       ARTICLE IV                         CONTRIBUTION AND ALLOCATION     4.1    FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION                       (a)    For each Plan Year, the Employer shall contribute to the Plan such              amount as shall be determined by the Employer.                       (b)    The Employer contribution shall not be limited to years in which               the Employer has current or accumulated net profit. Additionally, to the extent               necessary, the Employer shall contribute to the Plan the amount necessary to               provide the top heavy minimum contribution. All contributions by the Employer               shall be made in cash or, if there is no prohibited transaction within the meaning               of Labor regulation 2509.94-3, in such property as is acceptable to the Trustee.      4.2   TIME OF PAYMENT OF EMPLOYER CONTRIBUTION                  The Employer may make its contribution to the Plan for a particular Plan Year at   such time as the Employer, in its sole discretion, determines. If the Employer makes a   contribution for a particular Plan Year after the close of that Plan Year, the Employer will   designate to the Trustee the Plan Year for which the Employer is making its contribution.      4.3   ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS                        (a)   The Administrator shall establish and maintain an account in the               name of each Participant to which the Administrator shall credit as of each                                                                                    21 

 

                  Anniversary Date, or other Valuation Date, all amounts allocated to each such   Participant as set forth herein.                        (b)   The Employer shall provide the Administrator with all information   required by the Administrator to make a proper allocation of the Employer   contribution for each Plan Year. Within a reasonable period of time after the date  of receipt by the Administrator of such information, the Administrator shall  allocate such contribution to each Participant's Account in the same proportion  that each such Participant's Compensation for the year bears to the total  Compensation of all Participants for such year.                             Only Participants who have completed a Year of Service during  the Plan Year and are actively employed on the last day of the Plan Year shall be  eligible to share in the discretionary contribution for the year.                       (c)    The Company Stock Account of each Participant shall be credited  as of each Anniversary Date with the Participant's allocable share of Company  Stock (including fractional shares) purchased and paid for by the Plan or  contributed in kind by the Employer. Stock dividends on Company Stock held in  the Participant's Company Stock Account shall be credited to the Participant's  Company Stock Account when paid to the Plan. Cash dividends on Company  Stock held in the Participant's Company Stock Account shall be credited to the  Participant's Other Investments Account when paid to the Plan.                             Notwithstanding the above, if the Employer elected to be an  S corporation under Code Section 1362(a) and a distribution under Code Section  1368(a) is made, then the Administrator shall direct that such distribution on  S corporation Company Stock held in the Participant's Company Stock Account  shall be credited to the Participant's Other Investment Account when paid to the  Plan.                      (d)    Except as provided above with respect to stock dividends on  Company Stock, as of each Valuation Date, before the current valuation period  allocation of Employer contributions, any earnings or losses (net appreciation or  net depreciation) of the Trust Fund shall be allocated in the same proportion that  each Participant's and Former Participant's nonsegregated accounts (other than  each Participant's Company Stock Account) bear to the total of all Participants'  and Former Participants' nonsegregated accounts (other than each Participant's  Company Stock Account) as of such date.                      (e)    On or before each Anniversary Date any amounts which became  Forfeitures since the last Anniversary Date may be made available to reinstate  previously forfeited account balances of Former Participants, if any, in  accordance with Section 3.5(d), be used to satisfy any contribution that may be  required pursuant to Section 7.9, or used to pay any administrative expenses of  the Plan. The remaining Forfeitures, if any, shall be used to reduce the  contribution of the Employer hereunder for the Plan Year in which such  Forfeitures occur.                                                                           22 

 

                       (f)   For any Top Heavy Plan Year, Non-Key Employees not otherwise  eligible to share in the allocation of contributions as provided above, shall receive  the minimum allocation provided for in Section 4.3(h) if eligible pursuant to the  provisions of Section 4.3(j).                       (g)   Notwithstanding the foregoing, Participants who are not actively  employed on the last day of the Plan Year due to Retirement (Normal or Late),  Total and Permanent Disability or death shall not share in the allocation of  contributions for that Plan Year.                       (h)   Minimum Allocations Required for Top Heavy Plan Years:  Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the  Employer contributions allocated to the Participant's Account of each Non-Key  Employee shall be equal to at least three percent (3%) of such Non-Key  Employee's "415 Compensation" (reduced by contributions and forfeitures, if any,  allocated to each Non-Key Employee in any defined contribution plan included  with this Plan in a Required Aggregation Group). However, if (1) the sum of the  Employer contributions allocated to the Participant's Account of each Key  Employee for such Top Heavy Plan Year is less than three percent (3%) of each  Key Employee's "415 Compensation" and (2) this Plan is not required to be  included in an Aggregation Group to enable a defined benefit plan to meet the  requirements of Code Section 401(a)(4) or 410, then the sum of the Employer  contributions allocated to the Participant's Account of each Non-Key Employee  shall be equal to the largest percentage allocated to the Participant's Account of  any Key Employee.                             However, no such minimum allocation shall be required in this  Plan for any Non-Key Employee who participates in another defined contribution  plan subject to Code Section 412 included with this Plan in a Required  Aggregation Group where the other plan provides the minimum allocation.                       (i)  For purposes of the minimum allocations set forth above, the  percentage allocated to the Participant's Account of any Key Employee shall be  equal to the ratio of the sum of the Employer contributions allocated on behalf of  such Key Employee divided by the "415 Compensation" for such Key Employee.                       (j)   For any Top Heavy Plan Year, the minimum allocations set forth  above shall be allocated to the Participant's Account of all Non-Key Employees  who are Participants and who are employed by the Employer on the last day of  the Plan Year, including Non-Key Employees who have (1) failed to complete a  Year of Service; (2) failed to receive an allocation of Employer contributions  merely because the Participant's Compensation was less than a stated amount, or  (3) declined to make mandatory contributions (if required) to the Plan.                      (k)    For the purposes of this Section, "415 Compensation" in excess of  $150,000 (or such other amount provided in the Code) shall be disregarded. Such  amount shall be adjusted for increases in the cost of living in accordance with  Code Section 401(a)(17)(B), except that the dollar increase in effect on January 1  of any calendar year shall be effective for the Plan Year beginning with or within                                                          23 

 

                such calendar year. If "415 Compensation" for any prior determination period is              taken into account in determining a Participant's minimum benefit for the current              Plan Year, the "415 Compensation" for such determination period is subject to the              applicable annual "415 Compensation" limit in effect for that prior period. For              this purpose, in determining the minimum benefit in Plan Years beginning on or              after January 1, 1989, the annual "415 Compensation" limit in effect for              determination periods beginning before that date is $200,000 (or such other              amount as adjusted for increases in the cost of living in accordance with Code              Section 415(d) for determination periods beginning on or after January 1, 1989,              and in accordance with Code Section 401(a)(17)(B) for determination periods              beginning on or after January 1, 1994). For determination periods beginning prior              to January 1, 1989, the $200,000 limit shall apply only for Top Heavy Plan Years              and shall not be adjusted. For any short Plan Year the "415 Compensation" limit              shall be an amount equal to the "415 Compensation" limit for the calendar year in              which the Plan Year begins multiplied by the ratio obtained by dividing the              number of full months in the short Plan Year by twelve (12).                      (l)  Notwithstanding anything in this Section to the contrary, all              information necessary to properly reflect a given transaction may not be available              until after the date specified herein for processing such transaction, in which case              the transaction will be reflected when such information is received and processed.              Subject to express limits that may be imposed under the Code, the processing of              any contribution, distribution or other transaction may be delayed for any              legitimate business reason (including, but not limited to, failure of systems or              computer programs, failure of the means of the transmission of data, force              majeure, the failure of a service provider to timely receive values or prices, and              the correction for errors or omissions or the errors or omissions of any service              provider). The processing date of a transaction will be binding for all purposes of              the Plan.                      (m)  Effective as of the first day of the first Plan Year beginning in              2007, for benefit accrual purposes, the Plan treats an individual who dies or              becomes disabled (as defined in Section 1.48) while performing qualified military              service with respect to the Employer as if the individual had resumed employment              in accordance with the individual's reemployment rights under the Uniformed              Services Employment and Reemployment Rights Act (USERRA) on the day              preceding death or disability (as the case may be) and terminated employment on              the actual date of death or disability.    4.4   MAXIMUM ANNUAL ADDITIONS                      (a)   Notwithstanding the foregoing, the maximum "annual additions"              credited to a Participant's accounts for any "limitation year" shall equal the lesser              of: (1) $40,000 adjusted annually as provided in Code Section 415(d) pursuant to              the Regulations, or (2) one-hundred percent (100%) of the Participant's "415              Compensation" for such "limitation year." If the Employer contribution that              would otherwise be contributed or allocated to the Participant's accounts would              cause the "annual additions" for the "limitation year" to exceed the maximum              "annual additions," the amount contributed or allocated will be reduced so that the                                                                                  24 

 

                  "annual additions" for the "limitation year" will equal the maximum "annual   additions," and any amount in excess of the maximum "annual additions," which   would have been allocated to such Participant may be allocated to other   Participants. For any short "limitation year," the dollar limitation in (1) above   shall be reduced by a fraction, the numerator of which is the number of full   months in the short "limitation year" and the denominator of which is twelve (12).                        (b)   For purposes of applying the limitations of Code Section 415,   "annual additions" means the sum credited to a Participant's accounts for any   "limitation year" of (1) Employer contributions, (2) Employee contributions,   (3) forfeitures, (4) amounts allocated, after March 31, 1984, to an individual   medical account, as defined in Code Section 415(l)(2) which is part of a pension   or annuity plan maintained by the Employer, (5) amounts derived from   contributions paid or accrued after December 31, 1985, in taxable years ending   after such date, which are attributable to post-retirement medical benefits   allocated to the separate account of a key employee (as defined in Code   Section 419A(d)(3)) under a welfare benefit plan (as defined in Code   Section 419(e)) maintained by the Employer and (6) allocations under a   simplified employee pension plan. Except, however, the "415 Compensation"   percentage limitation referred to in paragraph (a)(2) above shall not apply to:   (1) any contribution for medical benefits after separation from service (within the   meaning of Code Sections 401(h) or 419A(f)(2)) which is otherwise treated as an   "annual addition," or (2) any amount otherwise treated as an "annual addition"   under Code Section 415(l)(1).                        (c)  For purposes of applying the limitations of Code Section 415, the   transfer of funds from one qualified plan to another is not an "annual addition." In   addition, the following are not Employee contributions for the purposes of   Section 4.4(b): (1) rollover contributions (as defined in Code Sections 402(c),   403(a)(4), 403(b)(8), 408(d)(3) and 457(e)(16)); (2) repayments of loans made to   a Participant from the Plan; (3) repayments of distributions received by an   Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of  distributions received by an Employee pursuant to Code Section 411(a)(3)(D)   (mandatory contributions); and (5) Employee contributions to a simplified   employee pension excludable from gross income under Code Section 408(k)(6).                      (d)    For purposes of applying the limitations of Code Section 415, the   "limitation year" shall be the Plan Year.                        (e)   For the purpose of this Section, all qualified defined contribution   plans (whether terminated or not) ever maintained by the Employer shall be   treated as one defined contribution plan.                        (f)   For the purpose of this Section, if the Employer is a member of a   controlled group of corporations, trades or businesses under common control (as   defined by Code Section 1563(a) or Code Section 414(b) and (c) as modified by   Code Section 415(h)), is a member of an affiliated service group (as defined by   Code Section 414(m)), or is a member of a group of entities required to be                                                            25 

 

                  aggregated pursuant to Regulations under Code Section 414(o), all Employees of               such Employers shall be considered to be employed by a single Employer.                       (g)    If this is a plan described in Code Section 413(c) (other than a plan               described in Code Section 414(f)), then all of the benefits or contributions              attributable to a Participant from all of the Employers maintaining this Plan shall              be taken into account in applying the limits of this Section with respect to such              Participant. Furthermore, in applying the limitations of this Section with respect              to such a Participant, the total "415 Compensation" received by the Participant              from all of the Employers maintaining the Plan shall be taken into account.                       (h)(1)  If a Participant participates in more than one defined contribution              plan maintained by the Employer which have different Anniversary Dates, the              maximum "annual additions" under this Plan shall equal the maximum "annual              additions" for the "limitation year" minus any "annual additions" previously              credited to such Participant's accounts during the "limitation year."                       (2)    If a Participant participates in both a defined contribution plan                    subject to Code Section 412 and a defined contribution plan not subject to                    Code Section 412 maintained by the Employer which have the same                    Anniversary Date, "annual additions" will be credited to the Participant's                    accounts under the defined contribution plan subject to Code Section 412                    prior to crediting "annual additions" to the Participant's accounts under the                    defined contribution plan not subject to Code Section 412.                      (3)    If a Participant participates in more than one defined contribution                    plan not subject to Code Section 412 maintained by the Employer which                    have the same Anniversary Date, the maximum "annual additions" under                    this Plan shall equal the product of (A) the maximum "annual additions"                    for the "limitation year" minus any "annual additions" previously credited                    under subparagraphs (1) or (2) above, multiplied by (B) a fraction (i) the                    numerator of which is the "annual additions" which would be credited to                    such Participant's accounts under this Plan without regard to the                    limitations of Code Section 415 and (ii) the denominator of which is such                    "annual additions" for all plans described in this subparagraph.                       (i)   Notwithstanding anything contained in this Section to the contrary,              the limitations, adjustments and other requirements prescribed in this Section              shall at all times comply with the provisions of Code Section 415 and the              Regulations thereunder.     4.5    DIRECTED INVESTMENT ACCOUNT                      (a)    Each "Qualified Participant" may elect within ninety (90) days              after the close of each Plan Year during the "Qualified Election Period" to direct              the Trustee in writing as to the distribution in cash and/or Company Stock of 25              percent of the total number of shares of Company Stock acquired by or              contributed to the Plan that have ever been allocated to such "Qualified              Participant's" Company Stock Account (reduced by the number of shares of                                                                                    26 

 

                Company Stock previously distributed in cash and/or Company Stock pursuant to              a prior election). In the case of the election year in which the last election can be              made by the Participant, the preceding sentence shall be applied by substituting              "50 percent" for "25 percent." If the "Qualified Participant" elects to direct the              Trustee as to the distribution of the Participant's Company Stock Account, such              direction shall be effective no later than 180 days after the close of the Plan Year              to which such direction applies.                            Notwithstanding the above, if the fair market value (determined              pursuant to Section 6.1 at the Plan Valuation Date immediately preceding the first              day on which a "Qualified Participant" is eligible to make an election) of              Company Stock acquired by or contributed to the Plan and allocated to a              "Qualified Participant's" Company Stock Account is $500 or less, then such              Company Stock shall not be subject to this paragraph. For purposes of              determining whether the fair market value exceeds $500, Company Stock held in              accounts of all employee stock ownership plans (as defined in Code              Section 4975(e)(7)) and tax credit employee stock ownership plans (as defined in              Code Section 409(a)) maintained by the Employer or any Affiliated Employer              shall be considered as held by the Plan.                      (b)   For the purposes of this Section the following definitions shall              apply:                      (1) "Qualified Participant" means any Employee who has completed                    ten (10) Years of Service as a Participant and has attained age 55.                      (2)   "Qualified Election Period" means the six (6) Plan Year period                    beginning with the later of (i) the first Plan Year in which the Participant                    first became a "Qualified Participant," or (ii) the first Plan Year beginning                    after December 31, 1986.    4.6   QUALIFIED MILITARY SERVICE                Notwithstanding any provision of this Plan to the contrary, contributions, benefits  and service will be provided in accordance with Code Section 414(u).                                     ARTICLE V                       FUNDING AND INVESTMENT POLICY    5.1   INVESTMENT POLICY                      (a)   The Plan is designed to invest primarily in Company Stock.                      (b)   With due regard to subparagraph (a) above, the Administrator may              also direct the Trustee to invest funds under the Plan in other property described              in the Trust or in life insurance policies to the extent permitted by              subparagraph (c) below, or the Trustee may hold such funds in cash or cash              equivalents.                                                                                    27 

 

                      (c)   With due regard to subparagraph (a) above, the Administrator may              also direct the Trustee to invest funds under the Plan in insurance policies on the              life of any "keyman" Employee. The proceeds of a "keyman" insurance policy              may not be used for the repayment of any indebtedness owed by the Plan which is              secured by Company Stock. In the event any "keyman" insurance is purchased by              the Trustee, the premiums paid thereon during any Plan Year, net of any policy              dividends and increases in cash surrender values, shall be treated as the cost of              Plan investment and any death benefit or cash surrender value received shall be              treated as proceeds from an investment of the Plan.                      (d)   The Plan may not obligate itself to acquire Company Stock from a              particular holder thereof at an indefinite time determined upon the happening of              an event such as the death of the holder.                      (e)   The Plan may not obligate itself to acquire Company Stock under a              put option binding upon the Plan. However, at the time a put option is exercised,              the Plan may be given an option to assume the rights and obligations of the              Employer under a put option binding upon the Employer.                      (f)   All purchases of Company Stock shall be made at a price which, in              the judgment of the Administrator, does not exceed the fair market value thereof.              All sales of Company Stock shall be made at a price which, in the judgment of the              Administrator, is not less than the fair market value thereof. The valuation rules              set forth in Article VI shall be applicable.    5.2   TRANSACTIONS INVOLVING COMPANY STOCK                      (a)   No portion of the Trust Fund attributable to (or allocable in lieu of)              Company Stock acquired by the Plan in a sale to which Code Section 1042              applies may accrue or be allocated directly or indirectly under any plan              maintained by the Employer meeting the requirements of Code Section 401(a):                      (1)   during the "Nonallocation Period," for the benefit of                            (i)  any taxpayer who makes an election under Code                          Section 1042(a) with respect to Company Stock,                            (ii)  any individual who is related to the taxpayer (within the                          meaning of Code Section 267(b)), or                      (2)   for the benefit of any other person who owns (after application of                   Code Section 318(a) applied without regard to the employee trust                   exception in Code Section 318(a)(2)(B)(i)) more than 25 percent of                                       (i)   any class of outstanding stock of the Employer or Affiliated                         Employer which issued such Company Stock, or                                       (ii)   the total value of any class of outstanding stock of the                         Employer or Affiliated Employer.                                                                                  28 

 

                        (b)   Except, however, subparagraph (a)(1)(ii) above shall not apply to              lineal descendants of the taxpayer, provided that the aggregate amount allocated              to the benefit of all such lineal descendants during the "Nonallocation Period"              does not exceed more than five (5) percent of the Company Stock (or amounts              allocated in lieu thereof) held by the Plan which are attributable to a sale to the              Plan by any person related to such descendants (within the meaning of Code              Section 267(c)(4)) in a transaction to which Code Section 1042 is applied.                      (c)  A person shall be treated as failing to meet the stock ownership              limitation under paragraph (a)(2) above if such person fails such limitation:                      (1)   at any time during the one (1) year period ending on the date of                    sale of Company Stock to the Plan, or                      (2)   on the date as of which Company Stock is allocated to Participants                    in the Plan.                      (d)   For purposes of this Section, "Nonallocation Period" means the              period beginning on the date of the sale of the Company Stock and ending on the             date which is ten (10) years after the date of sale.                      (e)   Notwithstanding any provision of this Section to the contrary, a              sale to which Code Section 1042 applies shall not be made during the period in              which the Employer has elected to be an S corporation under Code              Section 1362(a).                                     ARTICLE VI                                  VALUATIONS    6.1   VALUATION OF THE TRUST FUND                The Administrator shall direct the Trustee, as of each Valuation Date, to  determine the net worth of the assets comprising the Trust Fund as it exists on the Valuation  Date. In determining such net worth, the Trustee shall value the assets comprising the Trust Fund  at their fair market value (or their contractual value in the case of a Contract or Policy) as of the  Valuation Date and shall deduct all expenses for which the Trustee has not yet obtained  reimbursement from the Employer or the Trust Fund.    6.2   METHOD OF VALUATION                Valuations must be made in good faith and based on all relevant factors for  determining the fair market value of securities. In the case of a transaction between a Plan and a  disqualified person, value must be determined as of the date of the transaction. For all other Plan  purposes, value must be determined as of the most recent Valuation Date under the Plan. An  independent appraisal will not in itself be a good faith determination of value in the case of a  transaction between the Plan and a disqualified person. However, in other cases, a determination  of fair market value based on at least an annual appraisal independently arrived at by a person  who customarily makes such appraisals and who is independent of any party to the transaction                                                                                  29 

 

      will be deemed to be a good faith determination of value. Company Stock not readily tradeable   on an established securities market shall be valued by an independent appraiser meeting   requirements similar to the requirements of the Regulations prescribed under Code   Section 170(a)(1).                                       ARTICLE VII                 DETERMINATION AND DISTRIBUTION OF BENEFITS     7.1    DETERMINATION OF BENEFITS UPON RETIREMENT                Every Participant may terminate employment with the Employer and retire for the  purposes hereof on the Participant's Normal Retirement Date. However, a Participant may  postpone the termination of employment with the Employer to a later date, in which event the  participation of such Participant in the Plan, including the right to receive allocations pursuant to  Section 4.3, shall continue until such Participant's Late Retirement Date. Upon a Participant's  Retirement Date, or as soon thereafter as is practicable, the Trustee shall distribute, at the  election of the Participant, all amounts credited to such Participant's Account in accordance with  Sections 7.5 and 7.6.     7.2    DETERMINATION OF BENEFITS UPON DEATH                       (a)    Upon the death of a Participant before the Participant's Retirement              Date or other termination of employment, all amounts credited to such              Participant's Account shall become fully Vested. If elected, distribution of the              Participant's Account shall commence not later than one (1) year after the close of              the Plan Year in which such Participant's death occurs. The Administrator shall              direct the Trustee, in accordance with the provisions of Sections 7.5 and 7.6, to              distribute the value of the deceased Participant's accounts to the Participant's              Beneficiary.                       (b)    Upon the death of a Former Participant, the Administrator shall              direct the Trustee, in accordance with the provisions of Sections 7.5 and 7.6, to              distribute any remaining Vested amounts credited to the accounts of a deceased              Former Participant to such Former Participant's Beneficiary.                       (c)    The Administrator may require such proper proof of death and              such evidence of the right of any person to receive payment of the value of the              account of a deceased Participant or Former Participant as the Administrator may              deem desirable. The Administrator's determination of death and of the right of any              person to receive payment shall be conclusive.                       (d)    The Beneficiary of the death benefit payable pursuant to this              Section shall be the Participant's spouse. Except, however, the Participant may              designate a Beneficiary other than the spouse if:                       (1)    the spouse has waived the right to be the Participant's Beneficiary,                    or                                                                                      30 

 

                        (2)   the Participant is legally separated or has been abandoned (within        the meaning of local law) and the Participant has a court order to such        effect (and there is no "qualified domestic relations order" as defined in        Code Section 414(p) which provides otherwise), or                      (3)    the Participant has no spouse, or                      (4)    the spouse cannot be located.                            In such event, the designation of a Beneficiary shall be made on a  form satisfactory to the Administrator. A Participant may at any time revoke a  designation of a Beneficiary or change a Beneficiary by filing written (or in such  other form as permitted by the Internal Revenue Service) notice of such  revocation or change with the Administrator. However, the Participant's spouse  must again consent in writing (or in such other form as permitted by the Internal  Revenue Service) to any change in Beneficiary unless the original consent  acknowledged that the spouse had the right to limit consent only to a specific  Beneficiary and that the spouse voluntarily elected to relinquish such right.                      (e)    In the event no valid designation of Beneficiary exists, or if the  Beneficiary is not alive at the time of the Participant's death, the death benefit will   be paid in the following order of priority to:                        (1)   the Participant's surviving spouse;                  (2)   the Participant's children, including adopted children, per stirpes;                  (3)   the Participant's surviving parents in equal shares; or                  (4)   the Participant's estate.                              If the Beneficiary does not predecease the Participant, but dies   prior to distribution of the death benefit, the death benefit will be paid to the   Beneficiary's designated Beneficiary (or if there is no designated Beneficiary, to   the Beneficiary's estate).                        (f)  Notwithstanding anything in this Section to the contrary, if a   Participant has designated the spouse as a Beneficiary, then a divorce decree or a   legal separation that relates to such spouse shall revoke the Participant's   designation of the spouse as a Beneficiary unless the decree or a qualified   domestic relations order (within the meaning of Code Section 414(p)) provides   otherwise.                        (g)   Any consent by the Participant's spouse to waive any rights to the   death benefit must be in writing (or in such other form as permitted by the   Internal Revenue Service), must acknowledge the effect of such waiver, and be   witnessed by a Plan representative or a notary public. Further, the spouse's   consent must be irrevocable and must acknowledge the specific nonspouse   Beneficiary.                                                            31 

 

                           (h)   In the case of a death occurring on or after January 1, 2007, if a               Participant dies while performing qualified military service (as defined in Code               Section 414(u)), the Participant's Beneficiary is entitled to any additional benefits               (other than benefit accruals relating to the period of qualified military service)               provided under the Plan as if the Participant had resumed employment and then               terminated employment on account of death. Moreover, the Plan will credit the               Participant's qualified military service as service for vesting purposes, as though               the Participant had resumed employment under the Uniformed Services               Employment and Reemployment Rights Act (USERRA) immediately prior to the               Participant's death.      7.3   DETERMINATION OF BENEFITS IN EVENT OF DISABILITY                In the event of a Participant's Total and Permanent Disability prior to the   Participant's Retirement Date or other termination of employment, all amounts credited to such   Participant's Account shall become fully Vested. In the event of a Participant's Total and   Permanent Disability, the Administrator, in accordance with the provisions of Sections 7.5 and   7.6, shall direct the distribution to such Participant of all Vested amounts credited to such   Participant's Account. If such Participant elects, distribution shall commence not later than   one (1) year after the close of the Plan Year in which Total and Permanent Disability occurs.     7.4    DETERMINATION OF BENEFITS UPON TERMINATION                        (a)  If a Participant's employment with the Employer is terminated for               any reason other than death, Total and Permanent Disability or retirement, then               such Participant shall be entitled to such benefits as are provided hereinafter               pursuant to this Section 7.4.                              If a portion of a Participant's Account is forfeited, Company Stock               allocated to the Participant's Company Stock Account must be forfeited only after               the Participant's Other Investments Account has been depleted. If interest in more               than one class of Company Stock has been allocated to a Participant's Account,               the Participant must be treated as forfeiting the same proportion of each such               class.                              Distribution of the funds due to a Terminated Participant shall be               made on the occurrence of an event which would result in the distribution had the               Terminated Participant remained in the employ of the Employer (upon the              Participant's death, Total and Permanent Disability or Normal Retirement).              However, at the election of the Participant, the Administrator shall direct the              Trustee that the entire Vested portion of the Terminated Participant's Account to               be payable to such Terminated Participant as soon as administratively feasible              after termination of employment. Any distribution under this paragraph shall be               made in a manner which is consistent with and satisfies the provisions of               Sections 7.5 and 7.6, including, but not limited to, all notice and consent               requirements of Code Section 411(a)(11) and the Regulations thereunder.                             If the value of a Terminated Participant's Vested benefit derived              from Employer and Employee contributions does not exceed $5,000, then the                                                                                   32 

 

                            Participant's Vested benefit shall be paid to such Participant as soon as             administratively feasible after termination of employment.                                        For purposes of this Section 7.4, if the value of a Terminated            Participant's Vested benefit is zero, the Terminated Participant shall be deemed to            have received a distribution of such Vested benefit.                                  (b)   The Vested portion of the Participant's Account attributable to             certain Employer contributions shall be a percentage of the total amount credited             to the Participant's Account determined on the basis of the Participant's number of             Years of Service.                                        The Vested portion of the Participant's Account attributable to             Employer discretionary contributions made pursuant to Section 4.1(a) is            determined according to the following schedule:                                           Vesting Schedule  Employer Discretionary Contributions                       Years of Service          Percentage                                        Less than 2                0 %     2 20 %     3 40 %     4 60 %     5 80 %     6 100 %                                  (c)   Notwithstanding the vesting schedule above, the Vested percentage            of a Participant's Account shall not be less than the Vested percentage attained as             of the later of the effective date or adoption date of this amendment and             restatement.                                  (d)   Notwithstanding the vesting schedule above, upon the complete             discontinuance of the Employer contributions to the Plan or upon any full or             partial termination of the Plan, all amounts then credited to the account of any             affected Participant shall become 100% Vested and shall not thereafter be subject             to Forfeiture.                                  (e)   The computation of a Participant's nonforfeitable percentage of             such Participant's interest in the Plan shall not be reduced as the result of any             direct or indirect amendment to this Plan. In the event that the Plan is amended to             change or modify any vesting schedule, or if the Plan is amended in any way that             directly or indirectly affects the computation of the Participant's nonforfeitable             percentage, or if the Plan is deemed amended by an automatic change to a top             heavy vesting schedule, then each Participant with at least three (3) Years of             Service as of the expiration date of the election period may elect to have such             Participant's nonforfeitable percentage computed under the Plan without regard to             such amendment or change. If a Participant fails to make such election, then such             Participant shall be subject to the new vesting schedule. The Participant's election                                                                                33 

 

                period shall commence on the adoption date of the amendment and shall end sixty              (60) days after the latest of:                      (1)   the adoption date of the amendment,                      (2)   the effective date of the amendment, or                      (3)  the date the Participant receives written notice of the amendment                    from the Employer or Administrator.                      (f)   In determining Years of Service for purposes of vesting under the              Plan, Years of Service prior to the vesting computation period in which an              Employee attains age eighteen shall be excluded.     7.5   DISTRIBUTION OF BENEFITS                      (a)  The Administrator, pursuant to the election of the Participant, shall              direct the Trustee to distribute to a Participant or such Participant's Beneficiary              any amount to which the Participant is entitled under the Plan in one or more of              the following methods:                       (1) One lump-sum payment.                      (2)   For purposes of Section 7.7, payments over a period certain in                   monthly, quarterly, semiannual, or annual installments, provided the                   Participant's total Vested interest in the Plan exceeds $5,000. The period                   over which such payment is to be made shall not extend beyond the earlier                   of the Participant's life expectancy (or the joint life expectancy of the                   Participant and the Participant's "designated Beneficiary").                                 (b) Any distribution to a Participant who has a benefit which exceeds             $1,000, shall require such Participant's written (or in such other form as permitted by             the Internal Revenue Service) consent if such distribution is to commence prior to             the time the benefit is "immediately distributable." A benefit is "immediately             distributable" if any part of the benefit could be distributed to the Participant (or             surviving spouse) before the Participant attains (or would have attained if not             deceased) the later of the Participant's Normal Retirement Age or age 62. With             regard to this required consent:                     (1)   The Participant must be informed of the right to defer receipt of the                   distribution, and for notices provided in Plan Years beginning after                   December 31, 2006, such notification must also include a description of                   how much larger benefits will be if the commencement of distributions is                   deferred. If a Participant fails to consent, it shall be deemed an election to                   defer the commencement of payment of any benefit. However, any election                   to defer the receipt of benefits shall not apply with respect to distributions                   which are required under Section 7.7.                                                                                    34 

 

                        (2)   Notice of the rights specified under this paragraph shall be provided         no less than thirty (30) days and no more than one hundred eighty (180) days         (ninety (90) days for Plan Years beginning before January 1, 2007) before         the date the distribution commences.                        (3)   Written (or such other form as permitted by the Internal Revenue         Service) consent of the Participant to the distribution must not be made         before the Participant receives the notice and must not be made more than         one hundred eighty (180) days (ninety (90) days for Plan Years beginning         before January 1, 2007) before the date the distribution commences.                        (4)  No consent shall be valid if a significant detriment is imposed under         the Plan on any Participant who does not consent to the distribution.                              Any such distribution may commence less than thirty (30) days   after the notice required under Regulation 1.411(a)-11(c) is given, provided that:   (1) the Administrator clearly informs the Participant that the Participant has a  right to a period of at least thirty (30) days after receiving the notice to consider   the decision of whether or not to elect a distribution (and, if applicable, a   particular distribution option), and (2) the Participant, after receiving the notice,   affirmatively elects a distribution.                        (c)  Notwithstanding anything herein to the contrary, the Administrator   may direct that cash dividends on shares of Company Stock allocable to   Participants' Company Stock Accounts be:                        (1)   Paid by the Employer directly in cash to the Participants in the         Plan or their Beneficiaries.                        (2)   Paid to the Plan and distributed in cash to Participants in the Plan         or their Beneficiaries no later than ninety (90) days after the close of the         Plan Year in which paid.                  (3)   At the election of Participants or their Beneficiaries, paid in         accordance with paragraph (1) or (2) above, or paid to the Plan and         reinvested in Company Stock; provided, however, that if cash dividends         are reinvested in Company Stock, then Company Stock allocated to the         Participant's Company Stock Account shall have a fair market value not         less than the amount of cash dividends which would have been allocated         to such Participant's Other Investment Account for the year. This         paragraph (3) shall not apply while the Employer elected to be an         S corporation under Code Section 1362(a).                        (4)   Allocated to Participants' Other Investment Accounts.                        (d)   Any part of a Participant's benefit which is retained in the Plan   after the Anniversary Date on which the Participant's participation ends will   continue to be treated as a Company Stock Account or as an Other Investments                                                            35 

 

                Account (subject to Section 7.4(a)) as provided in Article IV. However, neither              account will be credited with any further Employer contributions.                      (e)   Required minimum distributions (Code Section 401(a)(9)).              Notwithstanding any provision in the Plan to the contrary, the distribution of a              Participant's benefits shall be made in accordance with the requirements of              Section 7.7.                      (f)   Except as limited by Sections 7.5 and 7.6, whenever the Trustee is              to make a distribution or to commence a series of payments, the distribution or              series of payments may be made or begun on such date or as soon thereafter as is              practicable. However, unless a Former Participant elects in writing to defer the              receipt of benefits (such election may not result in a death benefit that is more              than incidental), the payment of benefits shall begin not later than the sixtieth              (60th) day after the close of the Plan Year in which the latest of the following              events occurs:                       (1)  the date on which the Participant attains the earlier of age 65 or the                    Normal Retirement Age specified herein;                      (2)   the tenth (10th) anniversary of the year in which the Participant                    commenced participation in the Plan; or                      (3)   the date the Participant terminates his service with the Employer.                      (g)   If a distribution is made to a Participant who has not severed              employment and who is not fully Vested in the Participant's Account and the              Participant may increase the Vested percentage in such account, then, at any              relevant time the Participant's Vested portion of the account will be equal to an              amount ("X") determined by the formula:                                  X equals P(AB plus D) - D                            For purposes of applying the formula: P is the Vested percentage at              the relevant time, AB is the account balance at the relevant time, and D is the              amount of distribution.    7.6   HOW PLAN BENEFIT WILL BE DISTRIBUTED                      (a)  Distribution of a Participant's benefit may be made in cash or              Company Stock or both, provided, however, that if a Participant or Beneficiary so              demands, such benefit shall be distributed only in the form of Company Stock.              Prior to making a distribution of benefits, the Administrator shall advise the              Participant or the Participant's Beneficiary, in writing (or such other form as              permitted by the Internal Revenue Service), of the right to demand that benefits be              distributed solely in Company Stock.                                                                                      36 

 

                           (b)   If a Participant or Beneficiary demands that benefits be distributed               solely in Company Stock, distribution of a Participant's benefit will be made              entirely in whole shares or other units of Company Stock. Any balance in a              Participant's Other Investments Account will be applied to acquire for distribution              the maximum number of whole shares or other units of Company Stock at the              then fair market value. Any fractional unit value unexpended will be distributed in              cash. If Company Stock is not available for purchase by the Trustee, then the              Trustee shall hold such balance until Company Stock is acquired and then make              such distribution, subject to Sections 7.5(f) and 7.7.                      (c)   The Trustee will make distribution from the Trust only on              instructions from the Administrator.                      (d)    Notwithstanding anything contained herein to the contrary, if the              Employer charter or by-laws restrict ownership of substantially all shares of              Company Stock to Employees and the Trust Fund, as described in Code              Section 409(h)(2)(B)(ii)(I), then the Administrator shall distribute a Participant's              Account entirely in cash without granting the Participant the right to demand              distribution in shares of Company Stock.                      (e)    Except as otherwise provided herein, Company Stock distributed              by the Trustee may be restricted as to sale or transfer by the by-laws or articles of              incorporation of the Employer, provided restrictions are applicable to all              Company Stock of the same class. If a Participant is required to offer the sale of              Company Stock to the Employer before offering to sell Company Stock to a third              party, in no event may the Employer pay a price less than that offered to the              distributee by another potential buyer making a bona fide offer and in no event              shall the Trustee pay a price less than the fair market value of the Company Stock.    7.7    REQUIRED MINIMUM DISTRIBUTIONS                            (a) General Rules                      (1)   Precedence. The requirements of this Section will take precedence                    over any inconsistent provisions of the Plan.                                        (2)   Requirements of Treasury Regulations Incorporated. All                    distributions required under this Section will be determined and made in                    accordance with the Regulations under Code Section 401(a)(9).                                        (3)   TEFRA Section 242(b)(2) Elections. Notwithstanding the other                    provisions of this Section and the Plan, distributions may be made under a                    designation made before January 1, 1984, in accordance with Section                    242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and                    the provisions of the Plan that relate to Section 242(b)(2) of TEFRA.                                                                                       37 

 

                 (b)  Time and Manner of Distribution                (1)   Required Beginning Date. The Participant's entire interest will be       distributed, or begin to be distributed, to the Participant no later than the       Participant's required beginning date.               (2)   Death of Participant Before Distributions Begin. If the       Participant dies before distributions begin, the Participant's entire interest       will be distributed, or begin to be distributed, no later than as follows as       elected by the Participant or the Participant's designated beneficiary:                           (i)   If the Participant's surviving spouse is the Participant's sole             designated beneficiary, then, except as otherwise provided herein,             distributions to the surviving spouse will begin by December 31st             of the calendar year immediately following the calendar year in             which the Participant died, or by December 31st of the calendar             year in which the Participant would have attained age 70 1/2, if             later.                           (ii)   If the Participant or the Participant's designated beneficiary             so elects, or if the Participant's surviving spouse is not the             Participant's sole designated beneficiary, then, except as provided             in Section 7.7(b)(3) below, distributions to the designated             beneficiary will begin by December 31st of the calendar year             immediately following the calendar year in which the Participant             died.                           (iii)  If the Participant or the Participant's designated beneficiary             so elects, or if there is no designated beneficiary as of September             30th of the year following the year of the Participant's death, the             Participant's entire interest will be distributed by December 31st of             the calendar year containing the fifth anniversary of the             Participant's death.                           (iv) Participants or Beneficiaries may elect on an individual             basis whether the 5-year rule (described in (iii) above) or the life             expectancy rule (described in (i) and (ii) above) applies to             distributions after the death of a Participant who has a designated             Beneficiary. The election must be made no later than the earlier of             September 30th of the calendar year in which distribution would be             required to begin under this Section otherwise, or by             September 30th of the calendar year which contains the fifth             anniversary of the Participant's (or, if applicable, surviving             spouse's) death.                           (v)    If the Participant's surviving spouse is the Participant's sole             designated beneficiary and the surviving spouse dies after the             Participant but before distributions to the surviving spouse begin,                                                          38 

 

                             this Section 7.7(b)(2), other than Section 7.7(b)(2)(i), will apply as              if the surviving spouse were the Participant.                             For purposes of this Section 7.7(b)(2) and Section 7.7(b)(3) unless        Section 7.7(b)(2)(v) applies, distributions are considered to begin on the        Participant's required beginning date. If Section 7.7(b)(2)(v) applies,        distributions are considered to begin on the date distributions are required        to begin to the surviving spouse under Section 7.7(b)(2)(i).                (3)   Forms of Distribution. Unless the Participant's interest is        distributed in a single sum on or before the required beginning date, as of        the first distribution calendar year distributions will be made in accordance        with Sections 7.7(c) and 7.7(d).                 (c)   Required minimum distributions during Participant's lifetime          (1)   Amount of Required Minimum Distribution For Each        Distribution Calendar Year. During the Participant's lifetime, the        minimum amount that will be distributed for each distribution calendar        year is the lesser of:                            (i)   the quotient obtained by dividing the Participant's account              balance by the distribution period in the Uniform Lifetime Table              set forth in Regulation Section 1.401(a)(9)-9, Q&A-2, using the              Participant's age as of the Participant's birthday in the distribution              calendar year; or                            (ii)  if the Participant's sole designated beneficiary for the              distribution calendar year is the Participant's spouse, the quotient              obtained by dividing the Participant's account balance by the              number in the Joint and Last Survivor Table set forth in Regulation              Section 1.401(a)(9)-9, Q&A-3, using the Participant's and spouse's              attained ages as of the Participant's and spouse's birthdays in the              distribution calendar year.                      (2)   Lifetime Required Minimum Distributions Continue Through        Year of Participant's Death. Required minimum distributions will be        determined under this Section 7.7(c) beginning with the first distribution        calendar year and up to and including the distribution calendar year that        includes the Participant's date of death.                 (d)   Required minimum distributions after Participant's death          (1)   Death On or After Date Distributions Begin.                      (i)   Participant Survived by designated beneficiary. If the              Participant dies on or after the date distributions begin and there is              a designated beneficiary, the minimum amount that will be              distributed for each distribution calendar year after the year of the                                                          39 

 

                        Participant's death is the quotient obtained by dividing the         Participant's account balance by the longer of the remaining life         expectancy of the Participant or the remaining life expectancy of         the Participant's designated beneficiary, determined as follows:                              (A)   The Participant's remaining life expectancy is               calculated using the age of the Participant in the year of               death, reduced by one for each subsequent year.                              (B)  If the Participant's surviving spouse is the               Participant's sole designated beneficiary, the remaining life               expectancy of the surviving spouse is calculated for each               distribution calendar year after the year of the Participant's               death using the surviving spouse's age as of the spouse's               birthday in that year. For distribution calendar years after               the year of the surviving spouse's death, the remaining life               expectancy of the surviving spouse is calculated using the               age of the surviving spouse as of the spouse's birthday in               the calendar year of the spouse's death, reduced by one for               each subsequent calendar year.                              (C)  If the Participant's surviving spouse is not the               Participant's sole designated beneficiary, the designated               beneficiary's remaining life expectancy is calculated using               the age of the beneficiary in the year following the year of              the Participant's death, reduced by one for each subsequent              year.                      (ii)  No designated beneficiary. If the Participant dies on or        after the date distributions begin and there is no designated        beneficiary as of September 30th of the year after the year of the        Participant's death, the minimum amount that will be distributed        for each distribution calendar year after the year of the Participant's        death is the quotient obtained by dividing the Participant's account        balance by the Participant's remaining life expectancy calculated        using the age of the Participant in the year of death, reduced by one        for each subsequent year.                (2)   Death Before Date Distributions Begin.                (i)   Participant Survived by designated beneficiary. Except        as provided in Section 7.7(b)(3), if the Participant dies before the        date distributions begin and there is a designated beneficiary, the        minimum amount that will be distributed for each distribution        calendar year after the year of the Participant's death is the quotient        obtained by dividing the Participant's account balance by the        remaining life expectancy of the Participant's designated        beneficiary, determined as provided in Section 7.7(d)(1).                                                        40 

 

                             (ii)  No designated beneficiary. If the Participant dies before             the date distributions begin and there is no designated beneficiary             as of September 30th of the year following the year of the             Participant's death, distribution of the Participant's entire interest             will be completed by December 31st of the calendar year             containing the fifth anniversary of the Participant's death.                             (iii) Death of Surviving Spouse Before Distributions to              Surviving Spouse Are Required to Begin. If the Participant dies              before the date distributions begin, the Participant's surviving              spouse is the Participant's sole designated beneficiary, and the              surviving spouse dies before distributions are required to begin to              the surviving spouse under Section 7.7(b)(2)(i), this              Section 7.7(d)(2) will apply as if the surviving spouse were the              Participant.                 (e) Definitions. For purposes of this Section, the following definitions apply:                (1)   "Designated beneficiary" means the individual who is designated        as the Beneficiary under the Plan and is the designated beneficiary under        Code Section 401(a)(9) and Regulation Section 1.401(a)(9)-1, Q&A-4.                (2) "Distribution calendar year" means a calendar year for which a        minimum distribution is required. For distributions beginning before the        Participant's death, the first distribution calendar year is the calendar year        immediately preceding the calendar year which contains the Participant's        "Required beginning date." For distributions beginning after the        Participant's death, the first distribution calendar year is the calendar year        in which distributions are required to begin under Section 7.7(b). The        required minimum distribution for the Participant's first distribution        calendar year will be made on or before the Participant's "Required        beginning date." The required minimum distribution for other distribution        calendar years, including the required minimum distribution for the        distribution calendar year in which the Participant's "Required beginning        date" occurs, will be made on or before December 31st of that distribution        calendar year.                       (3)   "Life expectancy" means the life expectancy as computed by use        of the Single Life Table in Regulation Section 1.401(a)(9)-9.                (4)   "Participant's account balance" means the Participant's account        balance as of the last valuation date in the calendar year immediately        preceding the "Distribution calendar year" (valuation calendar year)        increased by the amount of any contributions made and allocated or        Forfeitures allocated to the account balance as of the dates in the valuation        calendar year after the valuation date and decreased by distributions made        in the valuation calendar year after the valuation date. The account balance        for the valuation calendar year includes any amounts rolled over or        transferred to the Plan either in the valuation calendar year or in the                                                          41 

 

                      "Distribution calendar year" if distributed or transferred in the valuation                    calendar year.                      (5)   "Required beginning date" means, with respect to any Participant,                    April 1st of the calendar year following the later of the calendar year in                    which the Participant attains age 70 1/2 or the calendar year in which the                    Participant retires, except that benefit distributions to a "5-percent owner"                    must commence by April 1st of the calendar year following the calendar                    year in which the Participant attains age 70 1/2.                      (6)   "5-percent owner" means a Participant who is a 5-percent owner as                    defined in Code Section 416 at any time during the Plan Year ending with                    or within the calendar year in which such owner attains age 70 1/2. Once                    distributions have begun to a 5-percent owner under this Section they must                    continue to be distributed, even if the Participant ceases to be a 5-percent                    owner in a subsequent year.                (f)   2009 Transition Rules.                      (1)   Notwithstanding the provisions of the Plan relating to required                    minimum distributions under Code Section 401(a)(9), a Participant or                    Beneficiary who would have been required to receive required minimum                    distributions for 2009 but for the enactment of Code Section 401(a)(9)(H)                    ("2009 RMDs"), and who would have satisfied that requirement by                    receiving distributions that are equal to the 2009 RMDs will not receive                    those distributions for 2009 unless the Participant or Beneficiary chooses                    to receive such distributions. Participants and Beneficiaries described in                    the preceding sentence will be given the opportunity to elect to receive the                    distributions described in the preceding sentence.    7.8   DISTRIBUTION FOR MINOR OR INCOMPETENT INDIVIDUAL                In the event a distribution is to be made to a minor or incompetent individual, then  the Administrator may direct that such distribution be paid to the court appointed legal guardian or  any other person authorized under state law to receive such distribution, or if none, then in the case  of a minor individual, to a parent of such individual, or to the custodian for such individual under  the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the laws of the state in  which said individual resides. Such a payment to the guardian, custodian or parent of a minor or  incompetent individual shall fully discharge the Trustee (or Insurer), Employer, and Plan from  further liability on account thereof.    7.9   LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN                In the event that all, or any portion, of the distribution payable to a Participant or  Beneficiary hereunder shall, at the later of the Participant's attainment of age 62 or Normal  Retirement Age, remain unpaid solely by reason of the inability of the Administrator, after  sending a registered letter, return receipt requested, to the last known address, and after further  diligent effort, to ascertain the whereabouts of such Participant or Beneficiary, the amount so  distributable may either, at the discretion of the Administrator, be treated as a Forfeiture or paid                                                                                  42 

 

    directly to an individual retirement account described in Code Section 408(a) or individual  retirement annuity described in Code Section 408(b) pursuant to the Plan. However, the  foregoing shall also apply prior to the later of a Participant's attainment of age 62 or Normal  Retirement Age if, pursuant to the terms of the Plan, a mandatory distribution may be made to  the Participant without the Participant's consent and the amount of such distribution is not more  than $1,000. In the event a Participant or Beneficiary is located subsequent to a Forfeiture, such  benefit shall be restored, first from Forfeitures, if any, and then from an additional Employer  contribution if necessary. However, regardless of the preceding, a benefit which is lost by reason  of escheat under applicable state law is not treated as a Forfeiture for purposes of this Section nor  as an impermissible forfeiture under the Code.    7.10  NONTERMINABLE PROTECTIONS AND RIGHTS                If the Plan ever had an exempt loan, then no Company Stock acquired with the  proceeds of such exempt loan may be subject to a put, call, or other option, or buy-sell or similar  arrangement when held by and when distributed from the Trust Fund, whether or not the Plan is  then an ESOP. The protections and rights granted in this Section are nonterminable, and such  protections and rights shall continue to exist under the terms of this Plan so long as any  Company Stock acquired with the proceeds of an exempt loan is held by the Trust Fund or by  any Participant or other person for whose benefit such protections and rights have been created,  and neither the repayment of such loan nor the failure of the Plan to be an ESOP, nor an  amendment of the Plan shall cause a termination of said protections and rights. An exempt loan  for purposes of this paragraph is a loan that was made by a disqualified person or a loan to the  Plan which is guaranteed by a disqualified person. A disqualified person for purposes of this  paragraph means a person who is a Fiduciary, a person providing services to the Plan, an  Employer any of whose Employees are covered by the Plan, an employee organization any of  whose members are covered by the Plan, an owner, direct or indirect, of 50% or more of the total  combined voting power of all classes of voting stock or of the total value of all classes of the  stock, or an officer, director, 10% or more shareholder, or a highly compensated Employee.    7.11  PRE-RETIREMENT DISTRIBUTION                      (a)   Distributions while still employed. At such time as a Participant              shall have attained the age of 62 years, the Administrator, at the election of the              Participant who has not severed employment with the Employer, shall direct the              Trustee to distribute up to 25% of the Vested amount then credited to the accounts              maintained on behalf of the Participant. The Vested amount will be determined as              of the last day of the Plan Year in which the Participant attained the age of 62              years. In the event that the Administrator makes such a distribution, the              Participant shall continue to be eligible to participate in the Plan on the same basis              as any other Employee. Any distribution made pursuant to this Section shall be              made in a manner consistent with Sections 7.5 and 7.6, including, but not limited              to, all notice and consent requirements of Code Section 411(a)(11) and the              Regulations thereunder.    7.12  QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION                All rights and benefits, including elections, provided to a Participant in this Plan  shall be subject to the rights afforded to any "alternate payee" under a "qualified domestic                                                                                  43 

 

      relations order." Furthermore, a distribution to an "alternate payee" shall be permitted if such   distribution is authorized by a "qualified domestic relations order," even if the affected   Participant has not separated from service and has not reached the "earliest retirement age" under   the Plan. For the purposes of this Section, "alternate payee," "qualified domestic relations order"   and "earliest retirement age" shall have the meaning set forth under Code Section 414(p).                            Effective on and after April 6, 2007, a domestic relations order that otherwise  satisfies the requirements for a qualified domestic relations order ("QDRO") will not fail to be a  QDRO: (i) solely because the order is issued after, or revises, another domestic relations order or  QDRO; or (ii) solely because of the time at which the order is issued, including issuance after the  Participant's death. A domestic relations order described in this paragraph is subject to the same  requirements and protections that apply to QDROs.     7.13   DIRECT ROLLOVER                       (a)   This Section applies to distributions made on or after              January 1, 2002. Notwithstanding any provision of the Plan to the contrary that              would otherwise limit a "distributee's" election under this Section, a "distributee"              may elect, at the time and in the manner prescribed by the Administrator, to have              any portion of an "eligible rollover distribution" that is equal to at least $500 paid              directly to an "eligible retirement plan" specified by the "distributee" in a "direct              rollover."                       (b)    For purposes of this Section the following definitions shall apply:                       (1)    An "eligible rollover distribution" means any distribution                    described in Code Section 402(c)(4) and generally includes any                    distribution of all or any portion of the balance to the credit of the                    distributee, except that an eligible rollover distribution does not include:                    any distribution that is one of a series of substantially equal periodic                    payments (not less frequently than annually) made for the life (or life                    expectancy) of the "distributee" or the joint lives (or joint life                    expectancies) of the "distributee" and the "distributee's" designated                    beneficiary, or for a specified period of ten (10) years or more; any                     distribution to the extent such distribution is required under Code Section                    401(a)(9); the portion of any other distribution(s) that is not includible in                    gross income (determined without regard to the exclusion for net                    unrealized appreciation with respect to employer securities); and any other                    distribution reasonably expected to total less than $200 during a year. Any                    amount that is distributed on account of hardship shall not be an eligible                    rollover distribution and the "distributee" may not elect to have any                    portion of such a distribution paid directly to an "eligible retirement plan."                      (2)    An "eligible retirement plan" is an individual retirement account                    described in Code Section 408(a), an individual retirement annuity                    described in Code Section 408(b) (other than an endowment contract), a                    qualified trust (an employees' trust) described in Code Section 401(a)                    which is exempt from tax under Code Section 501(a) and which agrees to                    separately account for amounts transferred into such plan from this Plan,                                                                                    44 

 

                        an annuity plan described in Code Section 403(a), an eligible deferred         compensation plan described in Code Section 457(b) which is maintained         by a state, political subdivision of a state, or any agency or instrumentality         thereof which agrees to separately account for amounts transferred into         such plan from this Plan, and an annuity contract described in Code         Section 403(b) that accepts the distributee's eligible rollover distribution.         However, in the case of an "eligible rollover" distribution to the surviving         spouse, an eligible retirement plan is an individual retirement account or         individual retirement annuity. The definition of eligible retirement plan         shall also apply in the case of a distribution to a surviving spouse, or to a         spouse or former spouse who is the alternate payee under a qualified         domestic relation order, as defined in Code Section 414(p).                            In addition, for distributions made after December 31, 2007, a        Participant may elect to directly roll over an "eligible rollover distribution"        to a Roth IRA described in Code Section 408A(b).                       (3)    A "distributee" includes an Employee or former Employee. In        addition, the Employee's or former Employee's surviving spouse and the        Employee's or former Employee's spouse or former spouse who is the        alternate payee under a qualified domestic relations order, as defined in        Code Section 414(p), are "distributees" with regard to the interest of the        spouse or former spouse.                      For distributions after December 31, 2006, a nonspouse beneficiary        who is a "designated beneficiary" under Code Section 401(a)(9)(E) and        the Regulations thereunder, by a direct trustee-to-trustee transfer ("direct        rollover"), may roll over all or any portion of his or her distribution to an        individual retirement account the beneficiary establishes for purposes of        receiving the distribution. In order to be able to roll over the distribution,        the distribution otherwise must be an "eligible rollover distribution." If the        Participant's named beneficiary is a trust, the Plan may make a direct        rollover to an individual retirement account on behalf of the trust,        provided the trust satisfies the requirements to be a designated beneficiary        within the meaning of Code Section 401(a)(9)(E). A nonspouse        beneficiary may not roll over an amount which is a required minimum        distribution, as determined under applicable Regulations and other        Revenue Service guidance. If the Participant dies before his or her        required beginning date and the nonspouse Beneficiary rolls over to an        IRA the maximum amount eligible for rollover, the beneficiary may elect        to use either the 5-year rule or the life expectancy rule, pursuant to        Regulations Section 1.401(a)(9)-3, A-4(c), in determining the required        minimum distributions from the IRA that receives the non-spouse        beneficiary's distribution.                       (4)   A "direct rollover" is a payment by the Plan to the "eligible        retirement plan" specified by the "distributee."                       (c)   Any "direct rollover" of Company Stock to an IRA (an individual  retirement account described in Code Section 408(a) or an individual retirement                                                            45 

 

                  annuity described in Code Section 408(b) (other than an endowment contract)),               shall be subject to the following requirements:                                          (1)   If the Employer is an electing S corporation under Code                    Section 1362(a), then the Employer must repurchase the Company Stock                    immediately upon the Plan's distribution of the Company Stock to an IRA;                                        (2)    Either the Employer actually repurchases the Company Stock                    contemporaneously, and effective the same day as, the distribution, or the                    Plan assumes the rights and obligations of the Employer to repurchase the                    Company Stock immediately upon the Plan's distribution of the Company                    Stock to an IRA and the Plan actually repurchases the Company Stock                    contemporaneously with, and effective on the same day as, the                    distribution; and                                        (3)    No income (including tax-exempt income) loss, deduction, or                    credit attributable to the distributed Company Stock under Code                    Section 1366 is allocated to the Participant's IRA.                      (d)   Participant Notice. A Participant entitled to an eligible rollover              distribution must receive a written explanation of his/her right to a direct rollover,              the tax consequences of not making a direct rollover, and, if applicable, any              available special income tax elections. The notice must be provided within the              same 30-to-180 (90 for Plan Years beginning before January 1, 2007) day              timeframe applicable to the Participant consent notice. The direct rollover notice              must be provided to all Participants, unless the total amount the Participant will              receive as a distribution during the calendar year is expected to be less than $200.     7.14   CORRECTIVE DISTRIBUTIONS                Nothing in this Article shall preclude the Administrator from making a  distribution to a Participant to the extent such distribution is made to correct a qualification  defect in accordance with the correction procedures under the IRS's Employee Plans Compliance  Resolution System or any other voluntary compliance programs.                                      ARTICLE VIII                                     TRUSTEE     8.1    BASIC RESPONSIBILITIES OF THE TRUSTEE                       (a)    The Trustee shall have the following categories of responsibilities:                       (1)    Consistent with the "funding policy and method" determined by                    the Employer, to invest, manage, and control the Plan assets subject,                    however, to the direction of the Employer or an Investment Manager                    appointed by the Employer or any agent of the Employer;                                                                                     46 

 

                       (2)    At the direction of the Administrator, to pay benefits required                   under the Plan to be paid to Participants, or, in the event of their death, to                    their Beneficiaries; and                      (3)   To maintain records of receipts and disbursements and furnish to                    the Employer and/or Administrator for each Plan Year a written annual                    report pursuant to Section 8.7.                      (b)   In the event that the Trustee shall be directed by the Employer, an             Investment Manager or other agent appointed by the Employer with respect to the             investment of any or all Plan assets, the Trustee shall have no liability with             respect to the investment of such assets, but shall be responsible only to execute              such investment instructions as so directed.                     (1)    The Trustee shall be entitled to rely fully on the written (or other                   form acceptable to the Administrator and the Trustee, including, but not                    limited to, voice recorded) instructions of the Employer, or any Fiduciary                    or nonfiduciary agent of the Employer, in the discharge of such duties, and                    shall not be liable for any loss or other liability, resulting from such                    direction (or lack of direction) of the investment of any part of the Plan                   assets.                     (2)    The Trustee may delegate the duty of executing such instructions                   to any nonfiduciary agent, which may be an affiliate of the Trustee or any                    Plan representative.                      (c)   If there shall be more than one Trustee, they shall act by a majority              of their number, but may authorize one or more of them to sign papers on their              behalf.    8.2   INVESTMENT POWERS AND DUTIES OF THE TRUSTEE                      (a)   The Trustee shall invest and reinvest the Trust Fund to keep the             Trust Fund invested without distinction between principal and income and in such              securities or property, real or personal, wherever situated, as the Trustee shall              deem advisable, including, but not limited to, stocks, common or preferred,              open-end or close-end mutual funds, bonds and other evidences of indebtedness             or ownership, and real estate or any interest therein. The Trustee shall at all times             in making investments of the Trust Fund consider, among other factors, the short             and long-term financial needs of the Plan on the basis of information furnished by             the Employer. In making such investments, the Trustee shall not be restricted to             securities or other property of the character expressly authorized by the applicable             law for trust investments; however, the Trustee shall give due regard to any             limitations imposed by the Code or the Act so that at all times the Plan may             qualify as an Employee Stock Ownership Plan and Trust.                     (b)    The Trustee may employ a bank or trust company pursuant to the             terms of its usual and customary bank agency agreement, under which the duties                                                                                  47 

 

                of such bank or trust company shall be of a custodial, clerical and record-keeping              nature.                      (c)   The Trustee may transfer to a common, collective, pooled trust              fund or money market fund maintained by any corporate Trustee or affiliate              thereof hereunder, all or such part of the Trust Fund as the Trustee may deem              advisable, and such part or all of the Trust Fund so transferred shall be subject to              all the terms and provisions of the common, collective, pooled trust fund or              money market fund which contemplate the commingling for investment purposes              of such trust assets with trust assets of other trusts. The Trustee may transfer any              part of the Trust Fund intended for temporary investment of cash balances to a              money market fund maintained by American Trust & Savings Bank or its              affiliates. The Trustee may withdraw from such common, collective, pooled trust              fund or money market fund all or such part of the Trust Fund as the Trustee may              deem advisable.                      (d)   In the event the Trustee invests any part of the Trust Fund,              pursuant to the directions of the Administrator, in any shares of stock issued by              the Employer, and the Administrator thereafter directs the Trustee to dispose of              such investment, or any part thereof, under circumstances which, in the opinion of              counsel for the Trustee, require registration of the securities under the Securities              Act of 1933 and/or qualification of the securities under the Blue Sky laws of any              state or states, then the Employer at its own expense, will take or cause to be              taken any and all such action as may be necessary or appropriate to effect such              registration and/or qualification.    8.3   OTHER POWERS OF THE TRUSTEE                The Trustee, in addition to all powers and authorities under common law,  statutory authority, including the Act, and other provisions of the Plan, shall have the following  powers and authorities, to be exercised in the Trustee's sole discretion:                      (a)  To purchase, or subscribe for, any securities or other property and              to retain the same. In conjunction with the purchase of securities, margin accounts              may be opened and maintained;                      (b)   To vote upon any stocks, bonds, or other securities; to give general              or special proxies or powers of attorney with or without power of substitution; to              exercise any conversion privileges, subscription rights or other options, and to              make any payments incidental thereto; to oppose, or to consent to, or otherwise              participate in, corporate reorganizations or other changes affecting corporate              securities, and to delegate discretionary powers, and to pay any assessments or              charges in connection therewith; and generally to exercise any of the powers of an              owner with respect to stocks, bonds, securities, or other property. However, the              Trustee shall not vote proxies relating to securities for which it has not been              assigned full investment management responsibilities. In those cases where              another party has such investment authority or discretion, the Trustee will deliver              all proxies to said party who will then have full responsibility for voting those              proxies;                                                                                  48 

 

                                      (c)    To cause any securities or other property to be registered in the  Trustee's own name or in the name of a nominee or in a street name provided such  securities or other property are held on behalf of the Plan by (i) a bank or trust  company, (ii) a broker or dealer registered under the Securities Exchange Act of  1934, or a nominee of such broker or dealer, or (iii) a clearing agency as defined  in Section 3(a)(23) of the Securities Exchange Act of 1934;                       (d)    To keep such portion of the Trust Fund in cash or cash balances as  the Trustee may, from time to time, deem to be in the best interests of the Plan,  without liability for interest thereon;                       (e)    To make, execute, acknowledge, and deliver any and all  documents of transfer and conveyance and any and all other instruments that may  be necessary or appropriate to carry out the powers herein granted;                       (f)   To invest funds of the Trust in time deposits or savings accounts  bearing a reasonable rate of interest or in cash or cash balances without liability  for interest thereon, including the specific authority to invest in any type of  deposit of the Trustee (or of a financial institution related to a Trustee);                       (g)    To invest in shares of investment companies registered under the  Investment Company Act of 1940, including any money market fund advised by  or offered through American Trust & Savings Bank;                       (h)    To deposit monies in federally insured savings accounts or  certificates of deposit in banks or savings and loan associations including the  specific authority to make deposit into any savings accounts or certificates of  deposit of the Trustee (or a financial institution related to the Trustee);                      (i)   To vote Company Stock as provided in Section 8.4;                      (j)   To consent to or otherwise participate in reorganizations,  recapitalizations, consolidations, mergers and similar transactions with respect to  Company Stock or any other securities and to pay any assessments or charges in  connection therewith;                      (k)    To deposit such Company Stock (but only if such deposit does not  violate the provisions of Section 8.4 hereof) or other securities in any voting trust,  or with any protective or like committee, or with a trustee or with depositories  designated thereby;                      (l)   To sell or exercise any options, subscription rights and conversion  privileges and to make any payments incidental thereto;                      (m)   To exercise any of the powers of an owner, with respect to such  Company Stock and other securities or other property comprising the Trust Fund.  The Administrator, with the Trustee's approval, may authorize the Trustee to act  on any administrative matter or class of matters with respect to which direction or                                                            49 

 

                  instruction to the Trustee by the Administrator is called for hereunder without               specific direction or other instruction from the Administrator;                        (n)   To sell, purchase and acquire put or call options if the options are              traded on and purchased through a national securities exchange registered under              the Securities Exchange Act of 1934, as amended, or, if the options are not traded              on a national securities exchange, are guaranteed by a member firm of the New              York Stock Exchange regardless of whether such options are covered; and                       (o)    To do all such acts and exercise all such rights and privileges,               although not specifically mentioned herein, as the Trustee may deem necessary to               carry out the purposes of the Plan.      8.4   VOTING COMPANY STOCK                  The Trustee shall vote all Company Stock held by it as part of the Plan assets.   Provided, however, that if any agreement entered into by the Trust provides for voting of any  shares of Company Stock pledged as security for any obligation of the Plan, then such shares of  Company Stock shall be voted in accordance with such agreement. If the Trustee does not timely  receive voting directions from a Participant or Beneficiary with respect to any Company Stock  allocated to that Participant's or Beneficiary's Company Stock Account, the Trustee shall vote  such Company Stock.                Notwithstanding the foregoing, if the Employer has a registration-type class of  securities, each Participant or Beneficiary shall be entitled to direct the Trustee as to the manner  in which the Company Stock which is entitled to vote and which is allocated to the Company  Stock Account of such Participant or Beneficiary is to be voted. If the Employer does not have a  registration-type class of securities, each Participant or Beneficiary in the Plan shall be entitled to  direct the Trustee as to the manner in which voting rights on shares of Company Stock which are  allocated to the Company Stock Account of such Participant or Beneficiary are to be exercised  with respect to any corporate matter which involves the voting of such shares with respect to the  approval or disapproval of any corporate merger or consolidation, recapitalization,  reclassification, liquidation, dissolution, sale of substantially all assets of a trade or business, or  such similar transaction as prescribed in Regulations. For purposes of this Section the term  "registration-type class of securities" means: (A) a class of securities required to be registered  under Section 12 of the Securities Exchange Act of 1934; and (B) a class of securities which  would be required to be so registered except for the exemption from registration provided in  subsection (g)(2)(H) of such Section 12.                If the Employer does not have a registration-type class of securities and the  by-laws of the Employer require the Plan to vote an issue in a manner that reflects a one-man,  one-vote philosophy, each Participant or Beneficiary shall be entitled to cast one vote on an issue  and the Trustee shall vote the shares held by the Plan in proportion to the results of the votes cast  on the issue by the Participants and Beneficiaries.                                                                                        50 

 

      8.5   DUTIES OF THE TRUSTEE REGARDING PAYMENTS                  At the direction of the Administrator, the Trustee shall, from time to time, in   accordance with the terms of the Plan, make payments out of the Trust Fund. The Trustee shall   not be responsible in any way for the application of such payments.      8.6   TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES                  The Trustee shall be paid such reasonable compensation as set forth in the  Trustee's fee schedule (if the Trustee has such a schedule) or as agreed upon in writing by the  Employer and the Trustee. However, an individual serving as Trustee who already receives  full-time pay from the Employer shall not receive compensation from the Plan. In addition, the  Trustee shall be reimbursed for any reasonable expenses, including reasonable counsel fees  incurred by it as Trustee. Such compensation and expenses shall be paid from the Trust Fund  unless paid or advanced by the Employer. All taxes of any kind whatsoever that may be levied or  assessed under existing or future laws upon, or in respect of, the Trust Fund or the income  thereof, shall be paid from the Trust Fund.     8.7    ANNUAL REPORT OF THE TRUSTEE                      (a)   Within a reasonable period of time after the later of the              Anniversary Date or receipt of the Employer contribution for each Plan Year, the              Trustee, or its agent, shall furnish to the Employer and Administrator a written              statement of account with respect to the Plan Year for which such contribution              was made setting forth:                       (1)    the net income, or loss, of the Trust Fund;                       (2)    the gains, or losses, realized by the Trust Fund upon sales or other                    disposition of the assets;                       (3)    the increase, or decrease, in the value of the Trust Fund;                        (4)   all payments and distributions made from the Trust Fund; and                        (5)   such further information as the Trustee and/or Administrator                     deems appropriate.                        (b)   The Employer, promptly upon its receipt of each such statement of               account, shall acknowledge receipt thereof in writing and advise the Trustee               and/or Administrator of its approval or disapproval thereof. Failure by the               Employer to disapprove any such statement of account within thirty (30) days               after its receipt thereof shall be deemed an approval thereof. The approval by the               Employer of any statement of account shall be binding on the Employer and the               Trustee as to all matters contained in the statement to the same extent as if the               account of the Trustee had been settled by judgment or decree in an action for a               judicial settlement of its account in a court of competent jurisdiction in which the               Trustee, the Employer and all persons having or claiming an interest in the Plan                                                                                    51 

 

                  were parties. However, nothing contained in this Section shall deprive the Trustee               of its right to have its accounts judicially settled if the Trustee so desires.      8.8   AUDIT                        (a)   If an audit of the Plan's records shall be required by the Act and the               regulations thereunder for any Plan Year, the Administrator shall direct the               Trustee to engage on behalf of all Participants an independent qualified public               accountant for that purpose. Such accountant shall, after an audit of the books and               records of the Plan in accordance with generally accepted auditing standards,               within a reasonable period after the close of the Plan Year, furnish to the               Administrator and the Trustee a report of the audit setting forth the accountant's               opinion as to whether any statements, schedules or lists that are required by Act               Section 103 or the Secretary of Labor to be filed with the Plan's annual report, are              presented fairly in conformity with generally accepted accounting principles              applied consistently.                      (b)    All auditing and accounting fees shall be an expense of and may, at              the election of the Employer, be paid from the Trust Fund.                       (c)    If some or all of the information necessary to enable the              Administrator to comply with Act Section 103 is maintained by a bank, insurance              company, or similar institution, regulated, supervised, and subject to periodic              examination by a state or federal agency, then it shall transmit and certify the              accuracy of that information to the Administrator as provided in Act              Section 103(b) within one hundred twenty (120) days after the end of the Plan              Year or by such other date as may be prescribed under regulations of the              Secretary of Labor.     8.9    RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE                       (a)   Unless otherwise agreed to by both the Trustee and the Employer,              a Trustee may resign at any time by delivering to the Employer, at least thirty (30)              days before its effective date, a written notice of resignation.                       (b)    Unless otherwise agreed to by both the Trustee and the Employer,              the Employer may remove a Trustee at any time by delivering to the Trustee, at              least thirty (30) days before its effective date, a written notice of such Trustee's              removal.                       (c)    Upon the death, resignation, incapacity, or removal of any Trustee,              a successor may be appointed by the Employer; and such successor, upon              accepting such appointment in writing and delivering same to the Employer, shall,              without further act, become vested with all the powers and responsibilities of the              predecessor as if such successor had been originally named as a Trustee herein.              Until such a successor is appointed, the remaining Trustee or Trustees shall have              full authority to act under the terms of the Plan.                                                                                       52 

 

                      (d)   The Employer may designate one or more successors prior to the              death, resignation, incapacity, or removal of a Trustee. In the event a successor is              so designated by the Employer and accepts such designation, the successor shall,             without further act, become vested with all the powers and responsibilities of the              predecessor as if such successor had been named as Trustee herein immediately              upon the death, resignation, incapacity, or removal of the predecessor.                     (e)    Whenever any Trustee hereunder ceases to serve as such, the             Trustee shall furnish to the Employer and Administrator a written statement of             account with respect to the portion of the Plan Year during which the individual             or entity served as Trustee. This statement shall be either (i) included as part of             the annual statement of account for the Plan Year required under Section 8.7 or             (ii) set forth in a special statement. Any such special statement of account should             be rendered to the Employer no later than the due date of the annual statement of              account for the Plan Year. The procedures set forth in Section 8.7 for the approval              by the Employer of annual statements of account shall apply to any special              statement of account rendered hereunder and approval by the Employer of any              such special statement in the manner provided in Section 8.7 shall have the same              effect upon the statement as the Employer's approval of an annual statement of              account. No successor to the Trustee shall have any duty or responsibility to              investigate the acts or transactions of any predecessor who has rendered all              statements of account required by Section 8.7 and this subparagraph.    8.10  TRANSFER OF INTEREST                Notwithstanding any other provision contained in this Plan, the Trustee at the  direction of the Administrator shall transfer the Vested interest, if any, of a Participant to another  trust forming part of a pension, profit sharing or stock bonus plan maintained by such  Participant's new employer and represented by said employer in writing as meeting the  requirements of Code Section 401(a), provided that the trust to which such transfers are made  permits the transfer to be made.                8.11  TRUSTEE INDEMNIFICATION                The Employer agrees to indemnify and hold harmless the Trustee against any and  all claims, losses, damages, expenses and liabilities the Trustee may incur in the exercise and  performance of the Trustee’s power and duties hereunder, unless the same are determined to be  due to gross negligence or willful misconduct.                                     ARTICLE IX                   AMENDMENT, TERMINATION AND MERGERS    9.1   AMENDMENT                      (a)   The Employer shall have the right at any time to amend this Plan              subject to the limitations of this Section. However, any amendment which affects              the rights, duties or responsibilities of the Trustee or Administrator, may only be              made with the Trustee's or Administrator's written consent. Any such amendment              shall become effective as provided therein upon its execution. The Trustee shall                                                                                  53 

 

                not be required to execute any such amendment unless the amendment affects the              duties of the Trustee hereunder.                      (b)   No amendment to the Plan shall be effective if it authorizes or              permits any part of the Trust Fund (other than such part as is required to pay taxes              and administration expenses) to be used for or diverted to any purpose other than              for the exclusive benefit of the Participants or their Beneficiaries or estates; or              causes any reduction in the amount credited to the account of any Participant; or              causes or permits any portion of the Trust Fund to revert to or become property of              the Employer.                      (c)  Except as permitted by Regulations (including              Regulation 1.411(d)-4) or other IRS guidance, no Plan amendment or transaction              having the effect of a Plan amendment (such as a merger, plan transfer or similar              transaction) shall be effective if it eliminates or reduces any "Section 411(d)(6)             protected benefit" or adds or modifies conditions relating to "Section 411(d)(6)              protected benefits" which results in a further restriction on such benefit unless              such "Section 411(d)(6) protected benefits" are preserved with respect to benefits              accrued as of the later of the adoption date or effective date of the amendment.              "Section 411(d)(6) protected benefits" are benefits described in Code              Section 411(d)(6)(A), early retirement benefits and retirement-type subsidies, and              optional forms of benefit.    9.2   TERMINATION                      (a)   The Employer shall have the right at any time to terminate the Plan              by delivering to the Trustee and Administrator written notice of such termination.              Upon any full or partial termination, all amounts credited to the affected              Participants' Accounts shall become 100% Vested as provided in Section 7.4 and              shall not thereafter be subject to forfeiture, and all unallocated amounts (other              than the Unallocated Suspense Account), including Forfeitures, shall be allocated              to the accounts of all Participants in accordance with the provisions hereof.                      (b)   Upon the full termination of the Plan, the Employer shall direct the              distribution of the assets of the Trust Fund to Participants in a manner which is              consistent with and satisfies the provisions of Sections 7.5 and 7.6. Except as              permitted by Regulations, the termination of the Plan shall not result in the              reduction of "Section 411(d)(6) protected benefits" in accordance with              Section 9.1(c).    9.3   MERGER, CONSOLIDATION OR TRANSFER OF ASSETS                This Plan and Trust may be merged or consolidated with, or its assets and/or  liabilities may be transferred to any other plan and trust only if the benefits which would be  received by a Participant of this Plan, in the event of a termination of the Plan immediately after  such transfer, merger or consolidation, are at least equal to the benefits the Participant would  have received if the Plan had terminated immediately before the transfer, merger or  consolidation, and such transfer, merger or consolidation does not otherwise result in the                                                                                  54 

 

    elimination or reduction of any "Section 411(d)(6) protected benefits" in accordance with  Section 9.1(c).                                     ARTICLE X                                   TOP HEAVY    10.1  TOP HEAVY PLAN REQUIREMENTS                For any Top Heavy Plan Year, the Plan shall provide the special vesting  requirements of Code Section 416(b) pursuant to Section 7.4 of the Plan and the special  minimum allocation requirements of Code Section 416(c) pursuant to Section 4.3 of the Plan.    10.2  DETERMINATION OF TOP HEAVY STATUS                      (a)   This Plan shall be a Top Heavy Plan for any Plan Year in which, as              of the "determination date," (1) the Present Value of Accrued Benefits of Key              Employees and (2) the sum of the Aggregate Accounts of Key Employees under             this Plan and all plans of an Aggregation Group, exceeds sixty percent (60%) of             the Present Value of Accrued Benefits and the Aggregate Accounts of all Key and             Non-Key Employees under this Plan and all plans of an Aggregation Group.                           If any Participant is a Non-Key Employee for any Plan Year, but              such Participant was a Key Employee for any prior Plan Year, such Participant's              Present Value of Accrued Benefit and/or Aggregate Account balance shall not be             taken into account for purposes of determining whether this Plan is a Top Heavy             Plan (or whether any Aggregation Group which includes this Plan is a Top Heavy             Group). In addition, if a Participant or Former Participant has not performed any             services for any Employer maintaining the Plan at any time during the one-year             period ending on the "determination date," any accrued benefit for such             Participant or Former Participant shall not be taken into account for the purposes             of determining whether this Plan is a Top Heavy Plan.                     (b)    Aggregate Account: A Participant's Aggregate Account as of the             "determination date" is the sum of:                     (1)    the Participant's Account balance as of the most recent valuation                   occurring within a twelve (12) month period ending on the "determination                   date." However, with respect to Employees not performing services for the                   Employer during the year ending on the "determination date," the                   Participant's Account balance as of the most recent valuation occurring                   within a twelve (12) month period ending on the "determination date"                   shall not be taken into account for purposes of this Section.                     (2)    an adjustment for any contributions due as of the "determination                   date." Such adjustment shall be the amount of any contributions actually                   made after the Valuation Date but due on or before the "determination                   date," except for the first Plan Year when such adjustment shall also                   reflect the amount of any contributions made after the "determination                   date" that are allocated as of a date in that first Plan Year.                                                                                  55 

 

                                     (3)    any Plan distributions made within the Plan Year that includes the        "determination date" or, with respect to distributions made for a reason        other than severance from employment, disability or death, within the        five (5) preceding Plan Years. The preceding sentence shall also apply to        distributions under a terminated plan which, had it not been terminated,        would have been aggregated with the Plan under Code        Section 416(g)(2)(A)(i). In the case of distributions made after the        Valuation Date and prior to the "determination date," such distributions        are not included as distributions for top heavy purposes to the extent that        such distributions are already included in the Participant's Aggregate        Account balance as of the Valuation Date.                       (4)   any Employee contributions, whether voluntary or mandatory.        However, amounts attributable to tax deductible qualified voluntary        employee contributions shall not be considered to be a part of the        Participant's Aggregate Account balance.                       (5)   with respect to unrelated rollovers and plan-to-plan transfers (ones        which are both initiated by the Employee and made from a plan        maintained by one employer to a plan maintained by another employer), if        this Plan provides the rollovers or plan-to-plan transfers, it shall always        consider such rollovers or plan-to-plan transfers as a distribution for the        purposes of this Section. If this Plan is the plan accepting such rollovers or        plan-to-plan transfers, it shall not consider such rollovers or plan-to-plan        transfers as part of the Participant's Aggregate Account balance.                       (6)   with respect to related rollovers and plan-to-plan transfers (ones        either not initiated by the Employee or made to a plan maintained by the        same employer), if this Plan provides the rollover or plan-to-plan transfer,        it shall not be counted as a distribution for purposes of this Section. If this        Plan is the plan accepting such rollover or plan-to-plan transfer, it shall        consider such rollover or plan-to-plan transfer as part of the Participant's        Aggregate Account balance, irrespective of the date on which such        rollover or plan-to-plan transfer is accepted.                       (7)   For the purposes of determining whether two employers are to be        treated as the same employer in (5) and (6) above, all employers        aggregated under Code Sections 414(b), (c), (m) and (o) are treated as the        same employer.                       (c)   "Aggregation Group" means either a Required Aggregation Group  or a Permissive Aggregation Group as hereinafter determined.                       (1) Required Aggregation Group: In determining a Required        Aggregation Group hereunder, each plan of the Employer in which a Key        Employee is a participant in the Plan Year containing the Determination        Date or any of the four preceding Plan Years, and each other plan of the        Employer which enables any plan in which a Key Employee participates                                                          56 

 

                        to meet the requirements of Code Sections 401(a)(4) or 410, will be         required to be aggregated. Such group shall be known as a Required         Aggregation Group.                        In the case of a Required Aggregation Group, each plan in the group will         be considered a Top Heavy Plan if the Required Aggregation Group is a         Top Heavy Group. No plan in the Required Aggregation Group will be         considered a Top Heavy Plan if the Required Aggregation Group is not a         Top Heavy Group.                        (2)   Permissive Aggregation Group: The Employer may also include         any other plan not required to be included in the Required Aggregation        Group, provided the resulting group, taken as a whole, would continue to        satisfy the provisions of Code Sections 401(a)(4) and 410. Such group        shall be known as a Permissive Aggregation Group.                       In the case of a Permissive Aggregation Group, only a plan that is part of        the Required Aggregation Group will be considered a Top Heavy Plan if        the Permissive Aggregation Group is a Top Heavy Group. No plan in the        Permissive Aggregation Group will be considered a Top Heavy Plan if the        Permissive Aggregation Group is not a Top Heavy Group.                       (3)   Only those plans of the Employer in which the Determination        Dates fall within the same calendar year shall be aggregated in order to        determine whether such plans are Top Heavy Plans.                       (4)    An Aggregation Group shall include any terminated plan of the        Employer if it was maintained within the last five (5) years ending on the        Determination Date.                       (d)    "Determination date" means (a) the last day of the preceding Plan  Year, or (b) in the case of the first Plan Year, the last day of such Plan Year.                       (e)   Present Value of Accrued Benefit: In the case of a defined benefit  plan, the Present Value of Accrued Benefit for a Participant other than a Key  Employee, shall be as determined using the single accrual method used for all  plans of the Employer and Affiliated Employers, or if no such single method  exists, using a method which results in benefits accruing not more rapidly than the  slowest accrual rate permitted under Code Section 411(b)(1)(C). The  determination of the Present Value of Accrued Benefit shall be determined as of  the most recent valuation date that falls within or ends with the 12-month period  ending on the Determination Date except as provided in Code Section 416 and the  Regulations thereunder for the first and second plan years of a defined benefit  plan.                                                                            57 

 

                        (f)  "Top Heavy Group" means an Aggregation Group in which, as of               the Determination Date, the sum of:                        (1)   the Present Value of Accrued Benefits of Key Employees under all                     defined benefit plans included in the group, and                        (2)   the Aggregate Accounts of Key Employees under all defined                     contribution plans included in the group,                              exceeds sixty percent (60%) of a similar sum determined for all               Participants.                                       ARTICLE XI                                 MISCELLANEOUS      11.1  PARTICIPANT'S RIGHTS                  This Plan shall not be deemed to constitute a contract between the Employer and   any Participant or to be a consideration or an inducement for the employment of any Participant   or Employee. Nothing contained in this Plan shall be deemed to give any Participant or   Employee the right to be retained in the service of the Employer or to interfere with the right of   the Employer to discharge any Participant or Employee at any time regardless of the effect which  such discharge shall have upon the Employee as a Participant of this Plan.     11.2   ALIENATION                        (a)    Subject to the exceptions provided below, and as otherwise              permitted by the Code and Act, no benefit which shall be payable out of the Trust              Fund to any person (including a Participant or the Participant's Beneficiary) shall              be subject in any manner to anticipation, alienation, sale, transfer, assignment,              pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell,              transfer, assign, pledge, encumber, or charge the same shall be void; and no such              benefit shall in any manner be liable for, or subject to, the debts, contracts,              liabilities, engagements, or torts of any such person, nor shall it be subject to              attachment or legal process for or against such person, and the same shall not be              recognized by the Trustee, except to such extent as may be required by law.                       (b)    Subsection (a) shall not apply to a "qualified domestic relations              order" defined in Code Section 414(p), and those other domestic relations orders              permitted to be so treated by the Administrator under the provisions of the              Retirement Equity Act of 1984. The Administrator shall establish a written              procedure to determine the qualified status of domestic relations orders and to              administer distributions under such qualified orders. Further, to the extent              provided under a "qualified domestic relations order," a former spouse of a              Participant shall be treated as the spouse or surviving spouse for all purposes              under the Plan.                       (c)    Subsection (a) shall not apply to an offset to a Participant's accrued              benefit against an amount that the Participant is ordered or required to pay the                                                                                    58 

 

                  Plan with respect to a judgment, order, or decree issued, or a settlement entered               into in accordance with Code Sections 401(a)(13)(C) and (D).      11.3  CONSTRUCTION OF PLAN                  This Plan and Trust shall be construed and enforced according to the Code, the   Act and the laws of the State of Iowa, other than its laws respecting choice of law, to the extent   not pre-empted by the Act.      11.4  GENDER AND NUMBER                  Wherever any words are used herein in the masculine, feminine or neuter gender,   they shall be construed as though they were also used in another gender in all cases where they   would so apply, and whenever any words are used herein in the singular or plural form, they   shall be construed as though they were also used in the other form in all cases where they would   so apply.      11.5  LEGAL ACTION                  In the event any claim, suit, or proceeding is brought regarding the Trust and/or   Plan established hereunder to which the Trustee, the Employer or the Administrator may be a   party, and such claim, suit, or proceeding is resolved in favor of the Trustee, the Employer or the   Administrator, they shall be entitled to be reimbursed from the Trust Fund for any and all costs,  attorney's fees, and other expenses pertaining thereto incurred by them for which they shall have   become liable provided there has been no breach of fiduciary duty by the party seeking   reimbursement.      11.6  PROHIBITION AGAINST DIVERSION OF FUNDS                       (a)    Except as provided below and otherwise specifically permitted by              law, it shall be impossible by operation of the Plan or of the Trust, by termination              of either, by power of revocation or amendment, by the happening of any               contingency, by collateral arrangement or by any other means, for any part of the               corpus or income of any Trust Fund maintained pursuant to the Plan or any funds               contributed thereto to be used for, or diverted to, purposes other than the               exclusive benefit of Participants, Former Participants, or their Beneficiaries.                        (b)   In the event the Employer shall make an excessive contribution               under a mistake of fact pursuant to Act Section 403(c)(2)(A), the Employer may               demand repayment of such excessive contribution at any time within one (1) year               following the time of payment and the Trustees shall return such amount to the               Employer within the one (1) year period. Earnings of the Plan attributable to the               contributions may not be returned to the Employer but any losses attributable               thereto must reduce the amount so returned.                        (c)   Except for Section 4.1(b), any contribution by the Employer to the               Trust Fund is conditioned upon the deductibility of the contribution by the               Employer under the Code and, to the extent any such deduction is disallowed, the               Employer may, within one (1) year following the final determination of the                                                                                    59 

 

                disallowance, whether by agreement with the Internal Revenue Service or by final              decision of a competent jurisdiction, demand repayment of such disallowed              contribution and the Trustee shall return such contribution within one (1) year             following the disallowance. Earnings of the Plan attributable to the contribution              may not be returned to the Employer, but any losses attributable thereto must              reduce the amount so returned.    11.7  EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE                The Employer, Administrator and Trustee, and their successors, shall not be  responsible for the validity of any Contract issued hereunder or for the failure on the part of the  insurer to make payments provided by any such Contract, or for the action of any person which  may delay payment or render a Contract null and void or unenforceable in whole or in part.    11.8  INSURER'S PROTECTIVE CLAUSE                Except as otherwise agreed upon in writing between the Employer and the  insurer, an insurer which issues any Contracts hereunder shall not have any responsibility for the  validity of this Plan or for the tax or legal aspects of this Plan. The insurer shall be protected and  held harmless in acting in accordance with any written direction of the Trustee, and shall have no  duty to see to the application of any funds paid to the Trustee, nor be required to question any  actions directed by the Trustee. Regardless of any provision of this Plan, the insurer shall not be  required to take or permit any action or allow any benefit or privilege contrary to the terms of  any Contract which it issues hereunder, or the rules of the insurer.    11.9  RECEIPT AND RELEASE FOR PAYMENTS                Any payment to any Participant, the Participant's legal representative,  Beneficiary, or to any guardian or committee appointed for such Participant or Beneficiary in  accordance with the provisions of the Plan, shall, to the extent thereof, be in full satisfaction of  all claims hereunder against the Trustee and the Employer, either of whom may require such  Participant, legal representative, Beneficiary, guardian or committee, as a condition precedent to  such payment, to execute a receipt and release thereof in such form as shall be determined by the  Trustee or Employer.    11.10 ACTION BY THE EMPLOYER                Whenever the Employer under the terms of the Plan is permitted or required to do  or perform any act or matter or thing, it shall be done and performed by a person duly authorized  by its legally constituted authority.    11.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY                The "named Fiduciaries" of this Plan are (1) the Employer, (2) the Administrator  and (3) the Trustee, and (4) any Investment Manager appointed hereunder. The named  Fiduciaries shall have only those specific powers, duties, responsibilities, and obligations as are  specifically given them under the Plan including, but not limited to, any agreement allocating or  delegating their responsibilities, the terms of which are incorporated herein by reference. In  general, the Employer shall have the sole responsibility for making the contributions provided                                                                                  60 

 

      for under Section 4.1; and shall have the authority to appoint and remove the Trustee and the  Administrator; to formulate the Plan's "funding policy and method;" and to amend or terminate,  in whole or in part, the Plan. The Administrator shall have the sole responsibility for the  administration of the Plan, including, but not limited to, the items specified in Article II of the  Plan, as the same may be allocated or delegated thereunder. The Trustee shall have the sole  responsibility of management of the assets held under the Trust, except to the extent directed  pursuant to Article II or with respect to those assets, the management of which has been assigned  to an Investment Manager, who shall be solely responsible for the management of the assets  assigned to it, all as specifically provided in the Plan. Each named Fiduciary warrants that any  directions given, information furnished, or action taken by it shall be in accordance with the  provisions of the Plan, authorizing or providing for such direction, information or action.  Furthermore, each named Fiduciary may rely upon any such direction, information or action of  another named Fiduciary as being proper under the Plan, and is not required under the Plan to  inquire into the propriety of any such direction, information or action. It is intended under the  Plan that each named Fiduciary shall be responsible for the proper exercise of its own powers,  duties, responsibilities and obligations under the Plan as specified or allocated herein. No named  Fiduciary shall guarantee the Trust Fund in any manner against investment loss or depreciation  in asset value. Any person or group may serve in more than one Fiduciary capacity.     11.12  HEADINGS                The headings and subheadings of this Plan have been inserted for convenience of  reference and are to be ignored in any construction of the provisions hereof.     11.13 ELECTRONIC MEDIA                The Administrator may use telephonic or electronic media to satisfy any notice  requirements required by this Plan, to the extent permissible under regulations (or other generally  applicable guidance). In addition, a Participant's consent to an immediate distribution may be  provided through telephonic or electronic means, to the extent permissible under regulations (or  other generally applicable guidance). The Administrator also may use telephonic or electronic  media to conduct plan transactions such as enrolling participants, making (and changing) deferral  elections, electing (and changing) investment allocations, applying for Plan loans, and other  transactions, to the extent permissible under regulations (or other generally applicable guidance).    11.14 PLAN CORRECTION                The Administrator in conjunction with the Employer may undertake such  correction of Plan errors as the Administrator deems necessary, including correction to preserve  tax qualification of the Plan under Code Section 401(a) or to correct a fiduciary breach under the  Act. Without limiting the Administrator's authority under the prior sentence, the Administrator,  as it determines to be reasonable and appropriate, may undertake correction of Plan document,  operational, demographic and employer eligibility failures under a method described in the Plan  or under the IRS Employee Plans Compliance Resolution System ("EPCRS") or any successor  program to EPCRS. The Administrator, as it determines to be reasonable and appropriate, also  may undertake or assist the appropriate fiduciary or plan official in undertaking correction of a  fiduciary breach, including correction under the DOL Voluntary Fiduciary Correction Program  ("VFC") or any successor program to VFC.                                                                                       61 

 

      11.15 APPROVAL BY INTERNAL REVENUE SERVICE                  Notwithstanding anything herein to the contrary, if, pursuant to an application for   qualification filed by or on behalf of the Plan by the time prescribed by law for filing the   Employer's return for the taxable year in which the Plan is adopted, or such later date that the   Secretary of the Treasury may prescribe, the Commissioner of Internal Revenue Service or the   Commissioner's delegate should determine that the Plan does not initially qualify as a tax-exempt   plan under Code Sections 401 and 501, and such determination is not contested, or if contested,   is finally upheld, then if the Plan is a new plan, it shall be void ab initio and all amounts   contributed to the Plan by the Employer, less expenses paid, shall be returned within one (1) year   and the Plan shall terminate, and the Trustee shall be discharged from all further obligations. If   the disqualification relates to an amended plan, then the Plan shall operate as if it had not been   amended.      11.16 UNIFORMITY                  All provisions of this Plan shall be interpreted and applied in a uniform,  nondiscriminatory manner. In the event of any conflict between the terms of this Plan and any  Contract purchased hereunder, the Plan provisions shall control.     11.17  SECURITIES AND EXCHANGE COMMISSION APPROVAL                The Employer may request an interpretative letter from the Securities and  Exchange Commission stating that the transfers of Company Stock contemplated hereunder do  not involve transactions requiring a registration of such Company Stock under the Securities Act  of 1933. In the event that a favorable interpretative letter is not obtained, the Employer reserves   the right to amend the Plan and Trust retroactively to their Effective Dates in order to obtain a   favorable interpretative letter or to terminate the Plan.                                       ARTICLE XII                            PARTICIPATING EMPLOYERS      12.1  ADOPTION BY OTHER EMPLOYERS                  Notwithstanding anything herein to the contrary, with the consent of the   Employer and Trustee, any other corporation or entity, whether an affiliate or subsidiary or not,   may adopt this Plan and all of the provisions hereof, and participate herein and be known as a   Participating Employer, by a properly executed document evidencing said intent and will of such   Participating Employer.      12.2  REQUIREMENTS OF PARTICIPATING EMPLOYERS                        (a)   Each such Participating Employer shall be required to use the same               Trustee as provided in this Plan.                        (b)   The Trustee may, but shall not be required to, commingle, hold and               invest as one Trust Fund all contributions made by Participating Employers, as               well as all increments thereof.                                                                                       62 

 

                        (c)   Any expenses of the Plan which are to be paid by the Employer or               borne by the Trust Fund shall be paid by each Participating Employer in the same               proportion that the total amount standing to the credit of all Participants employed               by such Employer bears to the total standing to the credit of all Participants.      12.3  DESIGNATION OF AGENT                  Each Participating Employer shall be deemed to be a party to this Plan; provided,   however, that with respect to all of its relations with the Trustee and Administrator for the   purpose of this Plan, each Participating Employer shall be deemed to have designated   irrevocably the Employer as its agent. Unless the context of the Plan clearly indicates the   contrary, the word "Employer" shall be deemed to include each Participating Employer as related  to its adoption of the Plan.     12.4   EMPLOYEE TRANSFERS                In the event an Employee is transferred between Participating Employers,  accumulated service and eligibility shall be carried with the Employee involved. No such transfer  shall effect a termination of employment hereunder, and the Participating Employer to which the   Employee is transferred shall thereupon become obligated hereunder with respect to such   Employee in the same manner as was the Participating Employer from whom the Employee was   transferred.      12.5  PARTICIPATING EMPLOYER CONTRIBUTION AND FORFEITURES                  Any contribution or Forfeiture subject to allocation during each Plan Year shall be   allocated only among those Participants of the Employer or Participating Employer making the   contribution or by which the forfeiting Participant was employed. However, if the contribution is   made, or the forfeiting Participant was employed, by an Affiliated Employer, in which event   such contribution or Forfeiture shall be allocated among all Participants of all Participating   Employers who are Affiliated Employers in accordance with the provisions of this Plan. On the   basis of the information furnished by the Administrator, the Trustee may keep separate books   and records concerning the affairs of each Participating Employer hereunder and as to the   accounts and credits of the Employees of each Participating Employer. The Trustee may, but   need not, register Contracts so as to evidence that a particular Participating Employer is the   interested Employer hereunder, but in the event of an Employee transfer from one Participating   Employer to another, the employing Participating Employer shall immediately notify the Trustee   thereof.      12.6  AMENDMENT                  Any Participating Employer that is an Affiliated Employer hereby authorizes the   Employer to make amendments on its behalf, unless otherwise agreed among all affected parties.   If a Participating Employer is not an Affiliated Employer, then amendment of this Plan by the   Employer at any time when there shall be a Participating Employer shall, unless otherwise   agreed to by the affected parties, only be by the written action of each and every Participating   Employer and with the consent of the Trustee where such consent is necessary in accordance   with the terms of this Plan.                                                                                       63 

 

      12.7  DISCONTINUANCE OF PARTICIPATION                  Any Participating Employer shall be permitted to discontinue or revoke its   participation in the Plan at any time. At the time of any such discontinuance or revocation,   satisfactory evidence thereof and of any applicable conditions imposed shall be delivered to the   Trustee. The Trustee shall thereafter transfer, deliver and assign Contracts and other Trust Fund  assets allocable to the Participants of such Participating Employer to such new trustee as shall  have been designated by such Participating Employer, in the event that it has established a  separate qualified retirement plan for its Employees provided, however, that no such transfer  shall be made if the result is the elimination or reduction of any "Section 411(d)(6) protected  benefits" as described in Section 9.1(c). If no successor is designated, the Trustee shall retain  such assets for the Employees of said Participating Employer pursuant to the provisions of  Article VII hereof. In no such event shall any part of the corpus or income of the Trust as it  relates to such Participating Employer be used for or diverted for purposes other than for the  exclusive benefit of the Employees of such Participating Employer.     12.8   ADMINISTRATOR'S AUTHORITY                The Administrator shall have authority to make any and all necessary rules or  regulations, binding upon all Participating Employers and all Participants, to effectuate the  purpose of this Article.                                                                                     64 

 

 

                       SUPPLEMENTAL PARTICIPATION AGREEMENT                  A Participation Agreement made and entered into this 1st day of January, 2013,   between MidWestOne Bank (hereinafter referred to as the "Participating Employer"),   MidWestOne Financial Group, Inc. (hereinafter referred to as the "Employer"), and American   Trust & Savings Bank (hereinafter referred to as the "Trustees").                  WHEREAS, the Participating Employer desires to reward its employees for   faithful service, to establish a bond between employer and employee, to provide an incentive for   efficient and conscientious work, to provide a fund for retirement, disability, or death, and to   retain high-calibre fellow employees; and                  WHEREAS, there exists a Employee Stock Ownership Plan entered into on the   31st day of December, 1985 namely the MidWestOne Financial Group, Inc. Employee Stock   Ownership Plan and Trust, called the "Plan," between the Employer and the Trustees (a copy  being attached hereto as and made a part hereof by reference); and                 WHEREAS, Plan Section 12.1 provides that any other Participating Employer   may, with the consent of the Employer, adopt the Plan and participate therein by a properly   executed document evidencing said intent of said Participating Employer;                 NOW, THEREFORE, the Participating Employer hereby becomes a party to the  Plan, effective the 1st day of December, 2006, and the Employer and the Trustees hereby consent   to such adoption and participation upon the following terms:                  (1)   Wherever a right or obligation is imposed upon the Employer by the terms               of the Plan, the same shall extend to the Participating Employer as the               "Employer" under the Plan and shall be separate and distinct from that imposed               upon the Employer. It is the intention of the parties that the Participating               Employer shall be a party to the Plan and treated in all respects as the Employer               thereunder, with its employees to be considered as the Employees or Participants,               as the case may be, thereunder. However, the participation of the Participating               Employer in the Plan shall in no way diminish, augment, modify, or in any way               affect the rights and duties of the Employer, its Employees, or Participants, under               the Plan.                  (2)   The Trustees hereby agree to receive and allocate contributions made to               the Plan by the Employer and by the Participating Employer, as well as to do and               perform all acts that are necessary to keep records and accounts of all funds held               for Participants who are Employees of the respective employers.                  (3)   The execution of this Agreement by this Participating Employer shall be               construed as the adoption of the Plan in every respect as if said Plan had this date               been executed between the Participating Employer and the Trustees, except as               otherwise expressly provided herein or in any amendment that may subsequently               be adopted hereto.                  (4)   All actions required by the Plan and Trust to be taken by the Employer               shall be effective with respect to the Participating Employer if taken by the    

 

                 Employer and pursuant to Plan Section 12.3, the Participating Employer hereby  irrevocably designates the Employer as its agent for such purposes.                  

 

 

                       SUPPLEMENTAL PARTICIPATION AGREEMENT                  A Participation Agreement made and entered into this 1st day of January, 2013,   between MidWestOne Insurance (hereinafter referred to as the "Participating Employer"),  MidWestOne Financial Group, Inc. (hereinafter referred to as the "Employer") and American  Trust & Savings Bank (hereinafter referred to as the "Trustees").                 WHEREAS, the Participating Employer desires to reward its employees for   faithful service, to establish a bond between employer and employee, to provide an incentive for   efficient and conscientious work, to provide a fund for retirement, disability, or death, and to   retain high-calibre fellow employees; and                  WHEREAS, there exists a Employee Stock Ownership Plan entered into on the   31st day of December, 1985 namely the MidWestOne Financial Group, Inc. Employee Stock   Ownership Plan and Trust, called the "Plan," between the Employer and the Trustees (a copy  being attached hereto and made a part hereof by reference); and                 WHEREAS, Plan Section 12.1 provides that any other Participating Employer   may, with the consent of the Employer, adopt the Plan and participate therein by a properly   executed document evidencing said intent of said Participating Employer;                 NOW, THEREFORE, the Participating Employer hereby becomes a party to the  Plan, effective the 1st day of January, 2009, and the Employer and the Trustees hereby consent   to such adoption and participation upon the following terms:                  (1)   Wherever a right or obligation is imposed upon the Employer by the terms               of the Plan, the same shall extend to the Participating Employer as the               "Employer" under the Plan and shall be separate and distinct from that imposed               upon the Employer. It is the intention of the parties that the Participating               Employer shall be a party to the Plan and treated in all respects as the Employer               thereunder, with its employees to be considered as the Employees or Participants,               as the case may be, thereunder. However, the participation of the Participating               Employer in the Plan shall in no way diminish, augment, modify, or in any way               affect the rights and duties of the Employer, its Employees, or Participants, under               the Plan.                  (2)   The Trustees hereby agree to receive and allocate contributions made to               the Plan by the Employer and by the Participating Employer, as well as to do and               perform all acts that are necessary to keep records and accounts of all funds held               for Participants who are Employees of the respective employers.                  (3)   The execution of this Agreement by this Participating Employer shall be               construed as the adoption of the Plan in every respect as if said Plan had this date               been executed between the Participating Employer and the Trustees, except as               otherwise expressly provided herein or in any amendment that may subsequently               be adopted hereto.                  (4)   All actions required by the Plan and Trust to be taken by the Employer               shall be effective with respect to the Participating Employer if taken by the    

 

                 Employer and pursuant to Plan Section 12.3, the Participating Employer hereby  irrevocably designates the Employer as its agent for such purposes.                  

 

 

 

 

 

                            FOURTH AMENDMENT TO THE                         MIDWESTONE FINANCIAL GROUP, INC.                   EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST        MidWestOne Financial Group, Inc., an Iowa corporation, as Employer sponsor (“Employer”), hereby amends  the MidWestOne Financial Group, Inc. Employee Stock Ownership Plan and Trust (“Plan”).                                               WHEREAS,  the Employer is amending the Plan to credit prior service for Central Bank for diversification  purposes; and      WHEREAS, the Employer has the authority to make amendments to the Plan,      THEREFORE,  in  consideration  of  the  above  premises,  the  Employer  amends Article 4.5 of the  Plan  as  follows, effective January 1, 2016:          4.5   DIRECTED INVESTMENT ACCOUNT                      (a)   Each "Qualified Participant" may elect within ninety (90) days after the close of              each Plan Year during the "Qualified Election Period" to direct the Trustee in writing as to the              distribution in cash and/or Company Stock of 25 percent of the total number of shares of              Company Stock acquired by or contributed to the Plan that have ever been allocated to such              "Qualified Participant's" Company Stock Account (reduced by the number of shares of Company              Stock previously distributed in cash and/or Company Stock pursuant to a prior election). In the              case of the election year in which the last election can be made by the Participant, the preceding              sentence shall be applied by substituting "50 percent" for "25 percent." If the "Qualified              Participant" elects to direct the Trustee as to the distribution of the Participant's Company Stock              Account, such direction shall be effective no later than 180 days after the close of the Plan Year              to which such direction applies.                            Notwithstanding the above, if the fair market value (determined pursuant to              Section 6.1 at the Plan Valuation Date immediately preceding the first day on which a "Qualified              Participant" is eligible to make an election) of Company Stock acquired by or contributed to the              Plan and allocated to a "Qualified Participant's" Company Stock Account is $500 or less, then              such Company Stock shall not be subject to this paragraph. For purposes of determining whether              the fair market value exceeds $500, Company Stock held in accounts of all employee stock              ownership plans (as defined in Code Section 4975(e)(7)) and tax credit employee stock              ownership plans (as defined in Code Section 409(a)) maintained by the Employer or any              Affiliated Employer shall be considered as held by the Plan.                      (b)   For the purposes of this Section the following definitions shall apply:                      (1)   "Qualified Participant" means any Employee who has completed ten (10) Years                     of Service as a Participant and has attained age 55.  In determining Years of Service as a                     Participant for former Central Bank Employees, all prior service will be considered.                    (2)   "Qualified Election Period" means the six (6) Plan Year period beginning with                    the later of (i) the first Plan Year in which the Participant first became a "Qualified                    Participant," or (ii) the first Plan Year beginning after December 31, 1986.                                    *****************************

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