Document:

Exhibit 10.9

CLARIFICATION AGREEMENT

CyberOptics Corporation, a Minnesota
Corporation (the “Company”) and Jeffrey Bertelsen (“Executive”) have previously entered into a Severance
Pay Agreement dated May 19, 2008, as amended (the “Agreement”) and wish to clarify the definition of “termination
of employment” for all purposes of such agreement. Accordingly, the Company and Executive agree that, for all purposes of
the Agreement, “termination” or “termination of employment” shall mean a “separation from service”
as that term is defined in Code Section 409A and the regulations thereunder.

The Company and Executive have executed this
Clarification Agreement, as of December 31, 2011.

 

	CyberOptics Corporation	 	EXECUTIVE:	 
	 	 	 	 	 
	By 	/s/ Kathleen P. Iverson	 	/s/ Jeffrey Bertelsen	 
	 	Its 	Chief Executive Officer	 	Jeffrey BertelsenExhibit 10.10

CLARIFICATION AGREEMENT

CyberOptics Corporation, a Minnesota
Corporation (the “Company”) and Daniel Good (“Executive”) have previously entered into a Severance Pay
Agreement dated May 1, 2010 (the “Agreement”) and wish to clarify the definition of “termination of employment”
for all purposes of such agreement. Accordingly, the Company and Executive agree that, for all purposes of the Agreement, “termination”
or “termination of employment” shall mean a “separation from service” as that term is defined in Section
409A of the internal revenue Code of 1986, as amended, and the regulations thereunder.

The Company and Executive have executed this
Clarification Agreement, as of December 31, 2011.

 

	CyberOptics Corporation	 	EXECUTIVE:	 
	 	 	 	 	 
	By 	/s/ Kathleen P. Iverson	 	/s/ Daniel Good	 
	 	Its 	Chief Executive Officer	 	Daniel GoodExhibit 10.3

COMMUNICATIONS SYSTEMS, INC.

EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

January 1, 2009

TABLE OF CONTENTS 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page 

 
	
 ARTICLE 1

 	
  

 
	
  

 	
 NAME AND PURPOSE

 	
  

 	
 1

 
	
  

 	
  

 	
 1.1

 	
 Name

 	
  

 	
 1

 
	
  

 	
  

 	
 1.2

 	
 Purpose

 	
  

 	
 2

 
	
  

 	
  

 	
  

 
	
 ARTICLE 2

 	
  

 	
  

 
	
  

 	
 DEFINITIONS AND INTERPRETATIONS

 	
  

 	
 2

 
	
  

 	
  

 	
 2.1

 	
 General Definitions

 	
  

 	
 2

 
	
  

 	
  

 	
 2.2

 	
 Qualifying Employer Securities Definitions

 	
  

 	
 13

 
	
  

 	
  

 	
 2.3

 	
 Limitation Definitions

 	
  

 	
 16

 
	
  

 	
  

 	
 2.4

 	
 Top Heavy Definitions

 	
  

 	
 17

 
	
  

 	
  

 	
 2.5

 	
 Interpretation

 	
  

 	
 20

 
	
  

 	
  

 	
  

 
	
 ARTICLE 3

 	
  

 	
  

 
	
  

 	
 PARTICIPATION IN THE PLAN

 	
  

 	
 20

 
	
  

 	
  

 	
 3.1

 	
 Eligibility

 	
  

 	
 20

 
	
  

 	
  

 	
 3.2

 	
 Designation of Beneficiary

 	
  

 	
 21

 
	
  

 	
  

 	
 3.3

 	
 Termination of Participation

 	
  

 	
 22

 
	
  

 	
  

 	
 3.4

 	
 Recommencement of Participation

 	
  

 	
 22

 
	
  

 	
  

 	
 3.5

 	
 Election Not to Participate

 	
  

 	
 23

 
	
  

 	
  

 	
  

 
	
 ARTICLE 4

 	
  

 	
  

 
	
  

 	
 CONTRIBUTIONS

 	
  

 	
 23

 
	
  

 	
  

 	
 4.1

 	
 Employer Contributions

 	
  

 	
 23

 
	
  

 	
  

 	
 4.2

 	
 Participant Contributions

 	
  

 	
 23

 
	
  

 	
  

 	
 4.3

 	
 Rollover Contributions and Trustee to Trustee Transfers

 	
  

 	
 24

 
	
  

 	
  

 	
 4.4

 	
 Transfer to Trustee

 	
  

 	
 24

 
	
  

 	
  

 	
 4.5

 	
 Reversion to Employer

 	
  

 	
 25

 
	
  

 	
  

 	
  

 
	
 ARTICLE 5

 	
  

 	
  

 
	
  

 	
 ALLOCATION OF CONTRIBUTIONS

 	
  

 	
 25

 
	
  

 	
  

 	
 5.1

 	
 Certification of Contribution and Compensation

 	
  

 	
 25

 
	
  

 	
  

 	
 5.2

 	
 Separate Accounts

 	
  

 	
 25

 
	
  

 	
  

 	
 5.3

 	
 Participants Entitled to an Allocation of Employer Contributions

 	
  

 	
 25

 
	
  

 	
  

 	
 5.4

 	
 Method of Allocation of Contributions

 	
  

 	
 26

 
	
  

 	
  

 	
 5.5

 	
 Allocation Does Not Vest

 	
  

 	
 28

 
	
  

 	
  

 	
 5.6

 	
 Valuation of Participant Accounts

 	
  

 	
 28

 
	
  

 	
  

 	
 5.7

 	
 Limitations on Allocations

 	
  

 	
 29

 
	
  

 	
  

 	
  

 
	
 ARTICLE 6

 	
  

 	
  

 
	
  

 	
 INVESTMENT IN EMPLOYER SECURITIES

 	
  

 	
 31

 
	
  

 	
  

 	
 6.1

 	
 Borrowing from Disqualified Persons

 	
  

 	
 31

 
	
  

 	
  

 	
 6.2

 	
 Release of Encumbered Employer Securities

 	
  

 	
 32

 
	
  

 	
  

 	
 6.3

 	
 Stock Dividends, Splits, Rights, Warrants, Options, and Other
 Reorganizations

 	
  

 	
 33

 
	
  

 	
  

 	
 6.4

 	
 Voting Rights

 	
  

 	
 34

 
	
  

 	
  

 	
 6.5

 	
 Tender or Exchange Offers

 	
  

 	
 35

 

i

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 6.6

 	
 Diversification of Investment

 	
  

 	
 35

 
	
  

 	
  

 	
 6.7

 	
 Restrictions on Buy-Sell Arrangements

 	
  

 	
 36

 
	
  

 	
  

 	
 6.8

 	
 Put Option

 	
  

 	
 36

 
	
  

 	
  

 	
 6.9

 	
 Right of First Refusal and Call Option

 	
  

 	
 36

 
	
  

 	
  

 	
 6.10

 	
 Exercise of Option

 	
  

 	
 37

 
	
  

 	
  

 	
 6.11

 	
 Substitute Offeree

 	
  

 	
 38

 
	
  

 	
  

 	
 6.12

 	
 Notice

 	
  

 	
 38

 
	
  

 	
  

 	
 6.13

 	
 Transfer Restriction

 	
  

 	
 38

 
	
  

 	
  

 	
 6.14

 	
 Rights Nonterminable

 	
  

 	
 38

 
	
  

 	
  

 	
 6.15

 	
 Independent Appraisal

 	
  

 	
 38

 
	
  

 	
  

 	
 6.16

 	
 Employer Securities of S Corporation

 	
  

 	
 38

 
	
  

 	
  

 	
 6.17

 	
 Effect of Code and Regulations Nonterminable

 	
  

 	
 40

 
	
  

 	
  

 	
  

 
	
 ARTICLE 7

 	
  

 	
  

 
	
  

 	
 VESTING

 	
  

 	
 40

 
	
  

 	
  

 	
 7.1

 	
 Vesting of Participant Contributions

 	
  

 	
 40

 
	
  

 	
  

 	
 7.2

 	
 Vesting of Employer Contributions

 	
  

 	
 40

 
	
  

 	
  

 	
 7.3

 	
 Determination of Years of Service

 	
  

 	
 42

 
	
  

 	
  

 	
 7.4

 	
 Forfeitures and Restoration of Nonvested Amounts

 	
  

 	
 43

 
	
  

 	
  

 	
  

 
	
 ARTICLE 8

 	
  

 	
  

 
	
  

 	
 PAYMENTS OF BENEFITS

 	
  

 	
 44

 
	
  

 	
  

 	
 8.1

 	
 Notice

 	
  

 	
 44

 
	
  

 	
  

 	
 8.2

 	
 Amount of Benefits and Valuation

 	
  

 	
 45

 
	
  

 	
  

 	
 8.3

 	
 Modes of Payment

 	
  

 	
 45

 
	
  

 	
  

 	
 8.4

 	
 Medium of Payment

 	
  

 	
 46

 
	
  

 	
  

 	
 8.5

 	
 Time for Payment

 	
  

 	
 47

 
	
  

 	
  

 	
 8.6

 	
 Undistributed Accounts

 	
  

 	
 48

 
	
  

 	
  

 	
 8.7

 	
 S Corporation Distributions

 	
  

 	
 48

 
	
  

 	
  

 	
 8.8

 	
 C Corporation Dividends

 	
  

 	
 49

 
	
  

 	
  

 	
 8.9

 	
 Unclaimed Accounts

 	
  

 	
 50

 
	
  

 	
  

 	
 8.10

 	
 Facility of Payment

 	
  

 	
 51

 
	
  

 	
  

 	
  

 
	
 ARTICLE 9

 	
  

 	
  

 
	
  

 	
 MINIMUM DISTRIBUTION REQUIREMENTS

 	
  

 	
 51

 
	
  

 	
  

 	
 9.1

 	
 Effective Date

 	
  

 	
 51

 
	
  

 	
  

 	
 9.2

 	
 Precedence

 	
  

 	
 51

 
	
  

 	
  

 	
 9.3

 	
 Requirements of Treasury Regulations Incorporated

 	
  

 	
 51

 
	
  

 	
  

 	
 9.4

 	
 Time and Manner of Distribution

 	
  

 	
 51

 
	
  

 	
  

 	
 9.5

 	
 Forms of Distribution

 	
  

 	
 52

 
	
  

 	
  

 	
 9.6

 	
 Required Minimum Distributions During Participant’s Lifetime

 	
  

 	
 52

 
	
  

 	
  

 	
 9.7

 	
 Required Minimum Distributions After Participant’s Death

 	
  

 	
 53

 
	
  

 	
  

 	
 9.8

 	
 Definitions

 	
  

 	
 54

 
	
  

 	
  

 	
 9.9

 	
 Election to Allow Participants or Beneficiaries to Elect 5-Year Rule

 	
  

 	
 55

 
	
  

 	
  

 	
  

 
	
 ARTICLE 10

 	
  

 	
  

 
	
  

 	
 TOP HEAVY PROVISIONS

 	
  

 	
 55

 
	
  

 	
  

 	
 10.1

 	
 Preemption

 	
  

 	
 55

 
	
  

 	
  

 	
 10.2

 	
 Minimum Contribution

 	
  

 	
 55

 

ii

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 10.3

 	
 Minimum Vesting

 	
  

 	
 56

 
	
  

 	
  

 	
  

 
	
 ARTICLE 11

 	
  

 	
  

 
	
  

 	
 CLAIMS PROCEDURE

 	
  

 	
 57

 
	
  

 	
  

 	
 11.1

 	
 Claims for Benefits

 	
  

 	
 57

 
	
  

 	
  

 	
 11.2

 	
 Denial of Benefits

 	
  

 	
 57

 
	
  

 	
  

 	
 11.3

 	
 Review Procedure

 	
  

 	
 58

 
	
  

 	
  

 	
 11.4

 	
 Decision on Review

 	
  

 	
 59

 
	
  

 	
  

 	
  

 
	
 ARTICLE 12

 	
  

 	
  

 
	
  

 	
 ADMINISTRATIVE COMMITTEE

 	
  

 	
 60

 
	
  

 	
  

 	
 12.1

 	
 Appointment

 	
  

 	
 60

 
	
  

 	
  

 	
 12.2

 	
 Resignation and Termination

 	
  

 	
 60

 
	
  

 	
  

 	
 12.3

 	
 Chairman and Agents

 	
  

 	
 60

 
	
  

 	
  

 	
 12.4

 	
 Meetings

 	
  

 	
 61

 
	
  

 	
  

 	
 12.5

 	
 Records

 	
  

 	
 61

 
	
  

 	
  

 	
 12.6

 	
 Powers

 	
  

 	
 61

 
	
  

 	
  

 	
 12.7

 	
 Compensation

 	
  

 	
 62

 
	
  

 	
  

 	
 12.8

 	
 Indemnity

 	
  

 	
 62

 
	
  

 	
  

 	
 12.9

 	
 Powers Denied

 	
  

 	
 62

 
	
  

 	
  

 	
 12.10

 	
 Action When There is a Vacancy

 	
  

 	
 63

 
	
  

 	
  

 	
 12.11

 	
 Settlement of Claims

 	
  

 	
 63

 
	
  

 	
  

 	
 12.12

 	
 Discretionary Powers

 	
  

 	
 63

 
	
  

 	
  

 	
 12.13

 	
 Employment of Professionals and Assistants

 	
  

 	
 63

 
	
  

 	
  

 	
 12.14

 	
 Bond

 	
  

 	
 63

 
	
  

 	
  

 	
  

 
	
 ARTICLE 13

 	
  

 	
  

 
	
  

 	
 TRUSTEE

 	
  

 	
 64

 
	
  

 	
  

 	
 13.1

 	
 Duty and Liability of Trustee

 	
  

 	
 64

 
	
  

 	
  

 	
 13.2

 	
 General Scope of Powers

 	
  

 	
 64

 
	
  

 	
  

 	
 13.3

 	
 Investment Powers

 	
  

 	
 67

 
	
  

 	
  

 	
 13.4

 	
 Appointment of Investment Manager

 	
  

 	
 68

 
	
  

 	
  

 	
 13.5

 	
 More Than One Trustee

 	
  

 	
 68

 
	
  

 	
  

 	
 13.6

 	
 Individual Trustees

 	
  

 	
 69

 
	
  

 	
  

 	
 13.7

 	
 Annual Account

 	
  

 	
 69

 
	
  

 	
  

 	
 13.8

 	
 Person Dealing with Trustee

 	
  

 	
 69

 
	
  

 	
  

 	
 13.9

 	
 Prohibited Transactions

 	
  

 	
 69

 
	
  

 	
  

 	
 13.10

 	
 Indemnity

 	
  

 	
 70

 
	
  

 	
  

 	
 13.11

 	
 Resignation and Appointment

 	
  

 	
 70

 
	
  

 	
  

 	
 13.12

 	
 Removal of Trustee

 	
  

 	
 70

 
	
  

 	
  

 	
 13.13

 	
 Continuation of the Trust

 	
  

 	
 70

 
	
  

 	
  

 	
  

 
	
 ARTICLE 14

 	
  

 	
  

 
	
  

 	
 CLAIMS AGAINST THE TRUST FUND

 	
  

 	
 71

 
	
  

 	
  

 	
 14.1

 	
 Anti-Alienation of Benefits

 	
  

 	
 71

 
	
  

 	
  

 	
 14.2

 	
 Charge for Litigation

 	
  

 	
 71

 
	
  

 	
  

 	
 14.3

 	
 Qualified Domestic Relations Orders

 	
  

 	
 71

 
	
  

 	
  

 	
 14.4

 	
 Independent Fund

 	
  

 	
 73

 
	
  

 	
  

 	
 14.5

 	
 Payments Delayed Due To Disputes

 	
  

 	
 73

 

iii

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE 15

 	
  

 	
  

 
	
  

 	
 MILITARY SERVICE AND LEAVE OF ABSENCE

 	
  

 	
 73

 
	
  

 	
  

 	
 15.1

 	
 Compulsory Military Service

 	
  

 	
 73

 
	
  

 	
  

 	
 15.2

 	
 Voluntary Military Service

 	
  

 	
 74

 
	
  

 	
  

 	
 15.3

 	
 Participation During Leave of Absence

 	
  

 	
 74

 
	
  

 	
  

 	
  

 
	
 ARTICLE 16

 	
  

 	
  

 
	
  

 	
 PARTICIPATING EMPLOYERS

 	
  

 	
 75

 
	
  

 	
  

 	
 16.1

 	
 Adoption of Plan

 	
  

 	
 75

 
	
  

 	
  

 	
 16.2

 	
 Requirements of Participating Employers

 	
  

 	
 75

 
	
  

 	
  

 	
 16.3

 	
 Allocation of Contributions

 	
  

 	
 75

 
	
  

 	
  

 	
 16.4

 	
 Accounting for Employees

 	
  

 	
 75

 
	
  

 	
  

 	
 16.5

 	
 Separate Records

 	
  

 	
 76

 
	
  

 	
  

 	
 16.6

 	
 Amendment

 	
  

 	
 76

 
	
  

 	
  

 	
 16.7

 	
 Discontinuance of Participation

 	
  

 	
 76

 
	
  

 	
  

 	
  

 
	
 ARTICLE 17

 	
  

 	
  

 
	
  

 	
 RIGHTS OF EMPLOYER TO AMEND, DISCONTINUE OR TERMINATE

 	
  

 	
 77

 
	
  

 	
  

 	
 17.1

 	
 Amendment

 	
  

 	
 77

 
	
  

 	
  

 	
 17.2

 	
 Termination of Plan

 	
  

 	
 77

 
	
  

 	
  

 	
 17.3

 	
 Trust Term

 	
  

 	
 77

 
	
  

 	
  

 	
 17.4

 	
 Termination of Trust

 	
  

 	
 78

 
	
  

 	
  

 	
  

 
	
 ARTICLE 18

 	
  

 	
  

 
	
  

 	
 SUCCESSOR EMPLOYER AND MERGER OR CONSOLIDATION OF PLANS

 	
  

 	
 78

 
	
  

 	
  

 	
 18.1

 	
 Successor Employer

 	
  

 	
 78

 
	
  

 	
  

 	
 18.2

 	
 Merger and Consolidation

 	
  

 	
 78

 
	
  

 	
  

 	
  

 
	
 ARTICLE 19

 	
  

 	
  

 
	
  

 	
 MISCELLANEOUS

 	
  

 	
 79

 
	
  

 	
  

 	
 19.1

 	
 Inspection of Books

 	
  

 	
 79

 
	
  

 	
  

 	
 19.2

 	
 Right to Terminate Employment

 	
  

 	
 79

 
	
  

 	
  

 	
 19.3

 	
 Liability of Employer

 	
  

 	
 79

 
	
  

 	
  

 	
 19.4

 	
 Defense Under Tax Laws

 	
  

 	
 79

 
	
  

 	
  

 	
 19.5

 	
 Governing Law

 	
  

 	
 79

 
	
  

 	
  

 	
 19.6

 	
 Binding Effect

 	
  

 	
 80

 
	
  

 	
  

 	
 19.7

 	
 Qualification Under Tax Laws

 	
  

 	
 80

 
	
  

 	
  

 	
 19.8

 	
 Earlier Effective Date to Maintain Tax Qualification

 	
  

 	
 80

 

iv

COMMUNICATIONS SYSTEMS, INC.

EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

          This
Agreement, restating the Communications Systems, Inc. Employee Stock Ownership
Plan and Trust (“Plan”), is adopted by Communications Systems, Inc., a
Minnesota corporation, (the “Employer”) and Curtis A. Sampson, Jeffrey K. Berg
and Paul N. Hanson (collectively, the “Trustee”) and is effective as of January
1, 2009.

W I T N E S S E T H:

          WHEREAS,
the Employer established a stock bonus and employee stock ownership plan for
the benefit of its Employees effective January 1, 1985 which satisfies the
requirements of a stock bonus and employee stock ownership plan under Sections
401(a) and 4975(e)(7) of the Internal Revenue Code; and

          WHEREAS,
the Plan has been amended and restated from time to time and has continued in
force at all times since its effective date; and

          WHEREAS,
the Employer desires to restate the Plan to comply with changes in federal law;
and

          WHEREAS,
Curtis A. Sampson, Jeffrey K. Berg and Paul N. Hanson have agreed to continue
to serve as Trustees of the Trust established hereunder;

          NOW,
THEREFORE, the Communications Systems, Inc. Employee Stock Ownership Plan and
Trust is amended and restated in its entirety effective as of January 1, 2009
to read as follows:

ARTICLE 1

NAME AND PURPOSE

          1.1          Name.
The name of the employee stock ownership plan set forth in this instrument is
the Communications Systems, Inc. Employee Stock Ownership Plan, and the name of
the employee stock ownership trust which is part of that Plan and the terms of
which are set forth in this instrument is the Communications Systems, Inc.
Employee Stock Ownership Trust.

1

          1.2     Purpose. The purpose of the Plan is to provide the
eligible Employees of the Employer with an ownership interest in the common
stock of the Employer in order to increase their loyalty to the Employer and
their interest in the Employer’s business. The Plan is designed to invest
primarily in Employer Securities and is designated as an employee stock ownership
plan under Section 4975(e)(7) of the Code. The purpose of the Trust is to
facilitate the administration of the Plan for the exclusive benefit of
Participants and their Beneficiaries.

ARTICLE 2

DEFINITIONS AND INTERPRETATIONS

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.1

 	
 General Definitions.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (1)

 	
  “Administrative Committee” or “Committee” shall mean the Committee
 described herein. In the absence of an appointment of individuals to serve on
 the Committee, the Employer shall serve as the Committee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (2)

 	
  “Affiliate” shall mean a trade or business
 which is under common control with the Employer under the provisions of
 Section 414 of the Code, including controlled groups of corporations under
 Section 414(b) of the Code and partnerships and proprietorships pursuant to
 Section 414(c) of the Code, an affiliated service group as defined in Section
 414(m) of the Code and any other entity required to be aggregated with the
 Employer pursuant to regulations under Section 414(o) of the Code; provided,
 however, that such trade or business shall be deemed an Affiliate for all
 purposes hereunder, unless specifically provided otherwise, only from the
 date it came under the common control of the Employer.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (3)

 	
  “Alternate Payee” shall mean a:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 spouse;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 former
 spouse;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 child; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 other
 dependent

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 of a
 Participant who is recognized by a Qualified Domestic Relations Order as
 having a right to receive all, or a portion of, a Participant’s Beneficial
 Interest under the Plan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 An Alternate
 Payee is treated as a Beneficiary for all purposes under the Plan.

 

2

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (4)

 	
  “Anniversary Date” shall mean the last day
 of any Plan Year.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (5)

 	
  “Beneficial Interest” shall mean the amount
 of a Participant’s account in the Trust that is distributable to the
 Participant or the Participant’s Beneficiary in accordance with the terms of
 the Plan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (6)

 	
  “Beneficiary” shall mean any person entitled
 to receive benefits which may be payable upon or after a Participant’s death.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (7)

 	
  “Board of Directors” shall mean the elected
 Board of Directors of Communications Systems, Inc.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (8)

 	
  “Break in Service” shall mean a Plan Year
 during which the Employee did not complete more than 500 Hours of Service
 with the Employer. However, a Participant shall be credited with up to 501
 Hours of Service during the Plan Year in which the Participant begins a
 Parental Leave, if such crediting is necessary to prevent a Break in Service
 in such Plan Year; otherwise, such Hours of Service shall be credited in the
 following Plan Year. A Participant shall also be credited with Hours of
 Service for any periods of unpaid leave during the Plan Year subject to the
 Family and Medical Leave Act of 1993, if such crediting is necessary to
 prevent a Break in Service in such Plan Year.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (9)

 	
  “Code” shall mean the Internal Revenue Code
 of 1986, and amendments thereto.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (10)

 	
  “Compensation”
 shall mean, except as provided below, the regular or base salary or wages,
 overtime, commissions and bonuses received by a Participant from the Employer
 during the Plan Year, including the value of any noncash property includable
 in base salary or wages. Compensation shall also include any amount which is
 contributed by the Employer pursuant to a salary reduction agreement and
 which is not includible in the gross income of the Employee under Sections
 125, 132(f)(4), 402(g)(3), 402(h)(1)(B) or 403(b) of the Code.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Compensation
 shall not include reimbursements or other expense allowances, fringe benefits
 (cash and noncash), moving expenses, deferred compensation, welfare benefits,
 contributions by the Employer to this Plan or to any pension, profit sharing
 or annuity plan intended to qualify under Section 401 of the Code, as
 amended, amounts realized from the exercise, sale or exchange of stock
 options, or amounts paid to an Employee for services rendered while the
 Employee is not a Participant as herein defined. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For Plan
 Years beginning on or after July 1, 2007, payments made within 21⁄2 months
 after severance from employment (within the meaning of Section
 401(k)(2)(B)(i)(I) of the Code) or the end of the Plan Year that includes the
 date of severance from employment will be Compensation if such payments are
 included when determining the Participant’s Net Compensation for the concurrent
 Limitation Year. However, payments made after 21⁄2 months after severance from
 employment shall not be excluded from Compensation if such payments are made
 to an individual who does not currently perform services for the Employer
 because of qualified military service (within the meaning of Section
 414(u)(1) of the Code) or who is permanently and totally disabled (as defined
 in Section 22(e)(3) of the Code). 

 

3

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For Plan
 Years beginning on or after July 1, 2007, Compensation may include amounts
 earned but not paid during the Plan Year solely because of the timing of pay
 periods and pay dates, provided the amounts are paid during the first few
 weeks of the next Plan Year, the amounts are included on a uniform and
 consistent basis with respect to all similarly situated Employees, and no
 Compensation is included in more than one Plan Year.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Notwithstanding
 the foregoing, the annual Compensation of each Participant taken into account
 in determining allocations shall not exceed $200,000, as adjusted for
 cost-of-living increases in accordance with Section 401(a)(17)(B) of the
 Code. Annual Compensation means Compensation during the Plan Year or such
 other consecutive12-month period over which Compensation is otherwise
 determined under the Plan (the determination period). The cost-of-living
 adjustment in effect for a calendar year applies to annual Compensation for
 the determination period that begins with or within such calendar year. If
 any Plan Year consists of a period of less than 12 months, the maximum
 Compensation limit, as adjusted, shall be prorated based on the number of
 months in such short Plan Year.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Net
 Compensation (as defined in the second paragraph of Section 2.1(25)) shall be
 substituted for the foregoing definition in any Plan Year in which the
 average percentage of Net Compensation included under the foregoing
 definition for the Highly Compensated Participants as a group exceeds by more
 than a de minimis amount the average percentage of Net Compensation included
 for the Employer’s other Employees as a group.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (11)

 	
  “Direct Rollover” shall mean a payment by
 the Plan to the Eligible Retirement Plan specified by the Distributee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (12)

 	
  “Disability” shall mean a physical or mental
 condition of a Participant resulting from a bodily injury or disease or
 mental disorder that renders the Participant incapable of continuing
 employment with the Employer. Disability of any Participant shall be
 determined by the Employer in accordance with uniform principles consistently
 applied, upon the basis of such medical and other evidence that the Employer
 deems necessary and desirable.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (13)

 	
  “Distributee” includes a Participant, former
 Participant or Beneficiary. In addition, the Participant’s or former
 Participant’s surviving spouse and the Participant’s or former Participant’s
 spouse or former spouse who is the Alternate Payee under a Qualified Domestic
 Relations Order, as defined in Section 414(p) of the Code, are Distributees
 with regard to the interest of the spouse or former spouse.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (14)

 	
  “Earliest Retirement Age” shall mean, for
 purposes of a Qualified Domestic Relations Order, the earlier of:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the date on
 which the Participant is entitled to a distribution under the Plan; or

 

4

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the later of
 the day the Participant attains age 50, or the earliest date on which the
 Participant’s Beneficial Interest could commence under the Plan if the
 Participant separated from service.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Earliest
 Retirement Age shall also mean a date earlier than (i) or (ii) if such date
 is specified in the Qualified Domestic Relations Order.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (15)

 	
  “Effective Date” of this restated Plan
 document shall mean January 1, 2009. This Plan and Trust was originally
 effective on January 1, 1985.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (16)

 	
  “Eligible Retirement Plan” shall mean any of
 the following that accepts the Distributee’s Eligible Rollover Distribution:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 an
 individual retirement account described in Section 408(a) of the Code;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 an
 individual retirement annuity described in Section 408(b) of the Code; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 effective
 January 1, 2008, a Roth IRA described in Section 408A(b) of the Code;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 an annuity
 plan described in Section 403(a) of the Code;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
 a qualified
 trust described in Section 401(a) of the Code; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)

 	
 an annuity
 contract described in Section 403(b) of the Code or an eligible plan under
 Section 457(b) of the Code maintained by a state, political subdivision of a
 state, or any agency or instrumentality of a state or political subdivision of
 a state and which agrees to separately account for amounts transferred into
 such plan from this Plan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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 Relations Order.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (17)

 	
  “Eligible Rollover Distribution” shall mean
 any distribution of all or any portion of the balance to the credit of the
 Distributee, except that an Eligible Rollover Distribution does not include:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 any
 distribution that is one of a series of substantially equal periodic payments
 (not less frequently than annually) made for the life (or life expectancy) of
 the Distributee or the joint lives (or joint life expectancies) of the
 Distributee and the Distributee’s designated Beneficiary, or for a specified
 period of ten years or more;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 any
 distribution to the extent such distribution is required under Section
 401(a)(9) of the Code;

 

5

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 the portion
 of any distribution that is not includible in gross income (determined
 without regard to the exclusion for net unrealized appreciation with respect
 to Employer Securities);

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 any hardship
 distribution; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
 any other
 distribution(s) reasonably expected to total less than $200 during a year.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For
 distributions after December 31, 2006, Eligible Rollover Distribution shall
 mean for a non-spouse Beneficiary a Direct Rollover of all or any portion of
 the Beneficiary’s distribution to an “inherited” individual retirement
 account the Beneficiary establishes for purposes of receiving the
 distribution. In order to be able to roll over the distribution, the
 distribution otherwise must satisfy the definition of an Eligible Rollover
 Distribution. Such distribution is not subject to the direct rollover
 requirements of Section 401(a)(31) of
 the Code, the notice requirements of Section 402(f) of the Code or the
 mandatory withholding requirements of Section 3405(c) of the Code.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (18)

 	
  “Employee” shall mean a person performing
 services for the Employer who is classified by the Employer as an employee
 for income tax withholding and reporting purposes. The Employer’s
 classification of a person for purposes of the Plan shall be conclusive. No reclassification
 of a person’s status with the Employer for any reason, without regard to
 whether it is initiated by a court, governmental agency or otherwise and
 without regard to whether or not the Employer agrees to such
 reclassification, shall result in the person being considered an Employee for
 Plan purposes.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (19)

 	
  “Employer” shall mean Communications
 Systems, Inc., a Minnesota corporation, as sponsoring employer, and
 Transition Networks, Inc. and JDL Technologies, Inc., as participating
 employers, and such additional Affiliates of the Employer or other
 corporation or entity as may participate in the Plan upon approval of such
 participation by the Board of Directors. For purposes of service counted for
 eligibility and vesting, employment with an Affiliate shall be deemed
 employment with the Employer. Communications Systems, Inc. is authorized to
 act on behalf of participating employers with respect to all Plan matters.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (20)

 	
  “Employer Contributions” shall mean all
 contributions with respect to a Plan Year made to the Plan by the Employer.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (21)

 	
  “Entry Date” shall mean January 1 or July 1
 of each Plan Year.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (22)

 	
  “Highly Compensated Participant” shall mean,
 except as otherwise provided in Section 414(q) of the Code, a Participant who:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 was a 5%
 owner of the Employer during the Plan Year in which the determination is made
 or during the preceding Plan Year; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 received
 more than $100,000 (as adjusted from time to time by the Secretary of the
 Treasury under Section 414(q)(1) of the Code) in Net Compensation from the
 Employer during the preceding Plan Year and was one of the top 20% of
 Employees by Net Compensation during the Plan Year.

 

6

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For purposes
 of this definition, the following rules shall apply:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (A)

 	
 The term
 Employer shall include any Affiliate of the Employer, and Net Compensation
 from any such Affiliates shall be aggregated.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (B)

 	
 In
 determining the number of the top 20% of Employees there shall be excluded
 from the group any Employee who either: has not attained age 21, has worked
 less than 6 months, normally works less than 171⁄2 hours per week, normally
 works less than 6 months per year, is a nonresident alien who does not earn
 income from sources within the United States, is covered by a collective
 bargaining agreement between the Employees’ representative and the Employer
 under which the retirement benefits were the subject of good faith bargaining
 between the parties, or may otherwise be excluded under the Code and the
 regulations promulgated thereunder.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (C)

 	
 For purposes
 of determining whether an employee is a Highly Compensated Participant, the
 term compensation shall mean compensation as defined in Section 415(c)(3) of
 the Code.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (D)

 	
 The
 determination of who is a Highly Compensated Participant, including the
 determination of the number and identity of Employees in the top-paid group,
 will be made in accordance with the provisions of Section 414(q) of the Code
 and the regulations promulgated thereunder.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (E)

 	
 The
 determination of who is a Highly Compensated Participant, including the
 determination of the number and identity of Employees in the top-paid group,
 will be made in the same manner for all plans of the Employer.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (F)

 	
 A former
 employee shall be treated as a “Highly Compensated Former Participant” if
 such employee was a Highly Compensated Participant upon separation from
 service or at any time after attaining age fifty-five (55).

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (23)

 	
  “Hour of Service” shall mean each hour for
 which the Employee is paid, or entitled to payment, for the performance of
 duties for the Employer or an Affiliate. These hours shall be credited in the
 Plan Year in which the services are performed. Hour of Service shall also
 include each hour for which the Employee is paid, or entitled to payment, by
 the Employer or an Affiliate on account of a period of time during which no
 duties are performed (irrespective of whether the employment relationship has
 terminated) due to vacation, holiday, illness, incapacity (including
 Disability), layoff, jury duty, military duty or Employer or
 Affiliate-approved leave of absence, subject to the following exceptions:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 No more than
 501 Hours of Service shall be credited to an Employee for any single
 continuous period during which the Employee performs no duties for the
 Employer or an Affiliate.

 

7

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 No Hours of
 Service shall be credited to an Employee for a period during which no duties
 are performed for the Employer or an Affiliate and payment is made or due to
 the Employee under applicable workers’ compensation, unemployment
 compensation or disability insurance laws.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 No Hours of
 Service shall be credited to an Employee for a period during which no duties
 are performed for the Employer or an Affiliate and payments are made to the
 Employee solely as reimbursement for medical or medically-related expenses
 incurred by the Employee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The number
 of Hours of Service that an Employee shall receive for any period of time for
 which the Employee is paid or is entitled to payment by the Employer or an
 Affiliate but during which no duties are performed for the Employer or an
 Affiliate shall be computed in accordance with the rules set forth in Section
 2530.200b-2 and 3 of the Labor Regulations.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Hours of
 Service shall also include each hour for which back pay (irrespective of
 mitigation of damages) has been awarded or agreed to by the Employer or an
 Affiliate, provided that the hour has not been credited to the Employee
 previously. Each such hour shall be credited to the Employee for the Plan
 Year or other computation period to which the award or agreement pertains.
 Each Employee shall also be credited with Hours of Service for any customary
 period of work, based on a 40-hour week, or a pro rata portion thereof,
 during which the Employee is on an Employer or Affiliate-approved leave of
 absence and for which the Employee is not otherwise awarded Hours of Service.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The number
 of an Employee’s Hours of Service shall be determined in accordance with this
 paragraph. Where the Employer or an Affiliate has records from which the
 number of an Employee’s Hours of Service may be ascertained, the number shall
 be computed from those records, except as otherwise permitted by the next
 sentence. The number of Hours of Service for any Employee described by the
 preceding sentence may be computed in accordance with the method defined
 below so long as that method is applied to such Employee in a
 nondiscriminatory manner. Where the Employer or an Affiliate does not have
 records from which the number of an Employee’s Hours of Service can be
 ascertained, the Employee shall be credited with 45 Hours of Service for each
 week during which the Employee is entitled to at least one Hour of Service.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Hours of
 Service shall also be credited for an individual considered an employee of
 the Employer or an Affiliate under Sections 414(n) and 414(o) of the Code and
 the regulations promulgated thereunder, even though such individual is not
 eligible to participate in the Plan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (24)

 	
  “Leased Employee” shall mean any person
 (other than an Employee of the Employer) who pursuant to an agreement between
 the Employer and any other person (“leasing organization”) has performed
 services for the Employer (or for the Employer and related persons as defined
 in Section 414(n)(6) of the Code) on a substantially full time basis for a
 period of at least one (1) year provided such services are performed under
 the primary direction or control of the Employer. 

 

8

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (25)

 	
  “Net Compensation” shall mean, for purposes
 of determining Highly Compensated Participants, Key Employees, minimum
 contributions in a Top Heavy Plan, and the limitation on Annual Additions,
 the wages, salaries, and fees for professional services and other amounts
 received (without regard to whether or not an amount is paid in cash) for
 personal services actually rendered in the course of employment with the
 Employer to the extent that the amounts are includable in gross income
 (including, but not limited to, commissions paid salespersons, compensation
 for services on the basis of a percentage of profits, commissions on
 insurance premiums, tips, bonuses, fringe benefits, and reimbursements or
 other expense allowances under a nonaccountable plan (as described in Reg.
 §1.62-2(c)), amounts that are includible in the gross income of an Employee
 under the rules of Sections 409A or 457(f)(1)(A) of the Code or because the
 amounts are constructively received by the Employee, and excluding the
 following: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Employer
 contributions (other than elective contributions described in Sections
 402(e)(3), 408(k)(6), 408(p)(2)(A)(i) or 457(b) of the Code) to a plan of
 deferred compensation (including a simplified employee pension described in
 Section 408(k) of the Code or a simple retirement account described in
 Section 408(p) of the Code, and whether or not qualified) which are not
 includible in the Employee’s gross income for the taxable year in which
 contributed, and any distributions (whether or not includible in gross income
 when distributed) from a plan of deferred compensation (whether or not
 qualified);

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 amounts
 realized from the exercise of a nonstatutory stock option (that is, an option
 other than a statutory stock option as defined in Reg. §1.421-1(b)), or when
 restricted stock (or property) held by the Employee either becomes freely
 transferable or is no longer subject to a substantial risk of forfeiture;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 amounts
 realized from the sale, exchange or other disposition of stock acquired under
 a statutory stock option; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 other
 amounts which received special tax benefits, or contributions made by the
 Employer (whether or not under a salary reduction agreement) towards the
 purchase of an annuity contract described in Section 403(b) of the Code (whether
 or not the contributions are actually excludable from the gross income of the
 Employee); and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
 other items
 of remuneration that are similar to any of the items listed in (i) through
 (iv) above.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Net
 Compensation for a Limitation Year is the Net Compensation actually paid or
 made available in gross income during such Limitation Year. Notwithstanding
 the preceding sentence, Net Compensation for a Participant in a defined
 contribution plan who is permanently and totally disabled (as defined in
 Section 22(e)(3) of the Code) is the Net Compensation such Participant would
 have received for the Limitation Year if the Participant had been paid at the
 rate of Net Compensation paid immediately before becoming permanently and
 totally disabled. 

 

9

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Net
 Compensation includes any amount which is contributed by the Employer
 pursuant to a salary reduction agreement and which is not includible in the
 gross income of the Employee under Sections 125, 132(f)(4), 402(g)(3) or 457
 of the Code. Amounts under Section 125 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. An
 amount will be treated as an amount under Section 125 only if 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For
 Limitation Years beginning on or after July 1, 2007, payments made within 21⁄2
 months after severance from employment (within the meaning of Section
 401(k)(2)(B)(i)(I) of the Code) or the end of the Limitation Year that
 includes the date of severance from employment will be compensation within
 the meaning of Section 415(c)(3) of the Code if they are payments that,
 absent a severance from employment, would have been paid to the Employee
 while the Employee continued in employment with the Employer and are regular
 compensation for services during the Employee’s regular working hours,
 compensation for services outside the Employee’s regular working hours (such
 as overtime or shift differential), commissions, bonuses, or other similar
 compensation, and payments for accrued bona fide sick, vacation or other
 leave, but only if the Employee would have been able to use the leave if
 employment had continued. Any payments not described above are not considered
 Net Compensation if paid after severance from employment, even if they are
 paid within 21⁄2 months following severance from employment, except for
 payments to an individual who does not currently perform services for the
 Employer by reason of qualified military service (within the meaning of
 Section 414(u)(1) of the Code) to the extent these payments do not exceed the
 amounts the individual would have received if the individual had continued to
 perform services for the Employer rather than entering qualified military
 service.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (26)

 	
  “Non-Highly Compensated Participant” shall
 mean any Participant who is not a Highly Compensated Participant.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (27)

 	
  “Normal Retirement Age” shall mean the day a
 Participant attains the age of 65.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (28)

 	
  “Parental Leave” shall mean certain periods
 of absence from work due to:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 pregnancy of
 the Employee;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 birth of a
 child of the Employee;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 placement of
 a child in connection with adoption of the child by the Employee; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 caring for
 the child by the Employee during the period immediately following the birth
 or placement for adoption.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Employer
 may require written certification (including a physician’s statement) from
 the Employee that the leave qualifies hereunder. A Parental Leave shall only
 permit a Participant to avoid a Break in Service, and shall not affect other
 provisions of this Plan.

 

10

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (29)

 	
  “Participant” shall mean an Employee of the
 Employer who becomes a Participant as provided in Section 3.1 hereof. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (30)

 	
  “Participant Contributions”
 shall mean, to the extent permitted by the Employer, contributions made to
 the Plan by Participants, and shall be classified as follows:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
  “Rollover Contribution”
 shall mean a distribution from another eligible retirement plan, as specified
 below, which an Employee contributes to the Plan in accordance with Section
 4.3, and which the Plan receives either directly from the Employee or, at the
 election of the Employee, by means of a direct rollover from the other
 eligible retirement plan. Rollover Contributions shall include distributions
 from:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (1)

 	
 a qualified
 plan described in Sections 401(a) or 403(a) of the Code, excluding after-tax
 employee contributions;

 
	
  

 	
  

 	
  

 	
 (2)

 	
 an annuity
 contract described in Section 403(b) of the Code, excluding after-tax
 employee contributions;

 
	
  

 	
  

 	
  

 	
 (3)

 	
 an eligible
 plan under Section 457(b) of the Code which is maintained by a state,
 political subdivision of a state, or any agency or instrumentality of a state
 or political subdivision of a state;

 
	
  

 	
  

 	
  

 	
 (4)

 	
 the portion
 of a distribution from an individual retirement account or annuity described
 in Sections 408(a) or (b) of the Code that is eligible to be rolled over and
 would otherwise be includible in gross income.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
  “Trustee to Trustee Transfer”
 shall mean a transfer directly from the trustee of another qualified retirement
 plan to this Plan, which is either initiated by the trustee or, to the extent
 permitted by law, initiated by the Employee other than as a direct rollover
 described in Section 8.3.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (31)

 	
  “Plan” shall mean the Communications
 Systems, Inc. Employee Stock Ownership Plan.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (32)

 	
  “Plan Year” shall mean the 12 month period
 ending on December 31 of each year.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (33)

 	
  “Qualification Procedures” shall mean
 written procedures adopted by the Employer to:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 determine
 whether domestic relations orders meet the requirements for Qualified
 Domestic Relations Orders; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 to
 administer distributions under such orders.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Employer
 shall implement the procedures within a reasonable time after receipt of a
 domestic relations order. Qualification Procedures must permit an Alternate
 Payee to designate a representative for receipt of copies of notices sent to
 the Alternate Payee with respect to a Qualified Domestic Relations Order.

 

11

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (34)

 	
  “Qualified Domestic Relations Order” shall
 mean a judgment, decree or order, including approval of a property settlement
 agreement, that relates to provision of child support, alimony payments, or
 marital property rights to an Alternate Payee, is made pursuant to state
 domestic relations law (including a state community property law) and creates
 an Alternate Payee’s right to all or a portion of the benefits payable to a
 Participant under the Plan. A Qualified Domestic Relations Order must satisfy
 all of the requirements of Section 414(p) of the Code and must specify:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the name and
 last known mailing address of each Alternate Payee;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the amount
 or percentage of the Participant’s benefits to be paid to the Alternate Payee
 or the manner in which the amount is to be determined;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 the number
 of payments or period for which payments are required; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 each plan to
 which the order relates.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 An order
 does not qualify under this definition if it requires the Employer to provide
 a benefit or option not available under the Plan, requires the Plan to
 provide increased benefits or requires payment of benefits to an Alternate
 Payee that are required to be paid to another Alternate Payee under a
 previously existing Qualified Domestic Relations Order.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (35)

 	
  “Required Beginning Date” shall mean the
 April 1 of the calendar year following the later of the calendar year in
 which the Participant attains age 701⁄2 or retires, except as provided below.
 Notwithstanding the above, the Participant shall still have the option of
 having the Required Beginning Date be the April 1 of the calendar year
 following the calendar year in which the Participant attains age 701⁄2.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If the
 Participant is a 5% owner, the Required Beginning Date shall be April 1 of
 the calendar year following the year in which the Participant attains age
 701⁄2, regardless of whether the Participant has retired. For purposes of this
 Section, a Participant is a 5% owner if such Participant is a 5% owner as
 defined in Section 416(i) of the Code (determined in accordance with Section
 416 but without regard to whether the Plan is Top Heavy) at any time during
 the Plan Year ending with or within the calendar year in which such owner
 attains age 661⁄2 or any subsequent Plan Year.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (36)

 	
  “Termination of Employment” of a Participant
 or Employee shall mean complete severance from employment with the Employer.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (37)

 	
  “Trust” shall mean the Communications
 Systems, Inc. Employee Stock Ownership Trust.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (38)

 	
  “Trust Fund” or “Fund” shall mean the total of contributions made hereunder,
 or the investments purchased, increased by profits, income, refunds and
 recoveries received, and decreased by investment losses and expenses incurred
 in the administration of the Trust and by benefits released or paid.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (39)

 	
  “Trustee” shall mean the undersigned Trustee
 or Trustees or any duly appointed successor Trustee.

 

12

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (40)

 	
  “Valuation Date” shall mean the Anniversary
 Date and any other date as of which the valuation of the Trust Fund is deemed
 necessary by the Trustee in a nondiscriminatory manner.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (41)

 	
  “Year of Service” shall mean a Plan Year
 during which an Employee completes 1,000 or more Hours of Service with the
 Employer or an Affiliate.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.2

 	
 Qualifying Employer Securities Definitions.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (1)

 	
  “Deemed-Owned Shares” shall mean, with
 respect to any person:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 the stock in
 an S corporation constituting Employer Securities which is allocated to such
 person under the Plan, and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 such
 person’s share of the stock in such corporation which is held by the Plan but
 which is not allocated under the Plan to Participants. For this purpose, a
 person’s share of unallocated S corporation stock held by the Plan is the
 amount of the unallocated stock that would be allocated to such person if the
 unallocated stock were allocated to all Participants in the same proportions
 as the most recent stock allocation under the Plan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (2)

 	
  “Disqualified Person” shall mean, except for
 purposes of Section 6.16, a person described in Section 4975(e)(2) of the
 Code. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For purposes
 of Section 6.16, Disqualified Person means any person if:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the
 aggregate number of Deemed-Owned Shares of such person and the members of
 such person’s family is at least 20 percent of the number of Deemed-Owned
 Shares of stock in the S corporation, or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 in the case
 of a person not described in (i) above, the number of Deemed-Owned shares of
 such person is at least 10 percent of the number of Deemed-Owned shares of
 stock in such corporation.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 In the case
 of a Disqualified Person described in (i) above, any member of such person’s
 family with Deemed-Owned Shares shall be treated as a Disqualified Person.
 For this purpose “member of the family” means, with respect to any individual,
 (1) the spouse of the individual, (2) an ancestor or lineal descendant of the
 individual or the individual’s spouse, (3) a brother or sister of the
 individual or the individual’s spouse and any lineal descendant of the
 brother or sister, and (4) the spouse of any individual described in (2) or
 (3). A spouse of an individual who is legally separated from such individual
 under a decree of divorce or separate maintenance shall not be treated as
 such individual’s spouse.

 

13

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (3)

 	
  “Employer Securities” shall mean common
 stock issued by the Employer, or an Affiliate, which is readily tradable on
 an established securities market. If there is no common stock that meets the
 preceding requirement, the term Employer Securities shall mean common stock
 issued by the Employer, or an Affiliate, having a combination of voting power
 and dividend rights equal to or in excess of:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 that class
 of common stock of the Employer, or Affiliate, having the greatest voting
 power; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 that class
 of common stock of the Employer, or Affiliate, having the greatest dividend
 rights.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Provided the
 Employer is not an S corporation, the term Employer Securities shall also
 mean noncallable preferred stock issued by the Employer if such stock is
 convertible at any time into stock which meets the requirements of the
 preceding sentences and if the conversion price is reasonable.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For purposes
 of transactions that do not involve an Exempt Loan, the term Employer
 Securities shall mean either stock or a marketable obligation of the Employer
 or an Affiliate, as defined in Section 407(d)(5) of the Employee Retirement
 Income Security Act of 1974.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (4)

 	
  “Exempt Loan” or “Loan” shall mean a loan made to the Plan by a Disqualified
 Person or which a Disqualified Person guarantees and which satisfies the
 requirements of Section 4975(d)(3) of the Code and Section 54.4975-7(b) of
 the Treasury Regulations, as amended from time to time.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (5)

 	
  “Independent Appraiser” shall mean an
 independent appraiser as defined in Section 401(a)(28) of the Code. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (6)

 	
  “Impermissible Accrual” shall occur to the extent (and only to the
 extent) that Employer Securities consisting of stock in an S corporation
 owned by the Plan and any assets attributable thereto are held under the Plan
 for the benefit of a Disqualified Person during a Nonallocation Year. For
 this purpose, assets attributable to S corporation securities include any
 distributions, within the meaning of Section 1368 of the Code, made on S
 corporation stock held in a Disqualified Person’s Plan account (including
 earnings thereon), plus any proceeds from the sale of S corporation
 securities held for a Disqualified Person’s Plan account (including any
 earnings thereon).

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (7)

 	
  “Impermissible Allocation” shall mean any allocation for a
 Disqualified Person directly or indirectly under any qualified plan of the
 Employer that occurs during a Nonallocation Year to the extent that a
 contribution or other annual addition is made, or the Disqualified Person
 otherwise accrues additional benefits, under this Plan or any other qualified
 plan of the Employer (including a release and allocation of assets from a
 suspense account, as described at Section 54.4975-11(c) and (d) of the
 Treasury Regulations) that, for the Nonallocation Year, would otherwise have
 been added to the account of the Disqualified Person under the Plan and
 invested in Employer Securities consisting of stock in an S corporation owned
 by the Plan but for a provision in the Plan to comply with Section 409(p) of the
 Code.

 

14

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (8)

 	
  “Nonallocation Period” shall mean the period
 beginning on the date of the sale of Employer Securities and ending on the
 later of:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the date
 which is 10 years after the date of sale; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the date of
 the Plan allocation attributable to the final payment of the Exempt Loan
 taken in connection with such sale.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (9)

 	
  “Nonallocation Year” shall mean any Plan
 Year if, at any time during such Plan Year, (1) the Plan holds Employer
 Securities consisting of stock in an S corporation, and (2) Disqualified
 Persons (as that term is defined for purposes of Section 6.16) own at least
 50 percent of the number of shares of stock in the S corporation.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (10)

 	
  “Qualified Election Period” shall mean the
 six Plan Year period beginning with the Plan Year in which the Participant
 first becomes a Qualified Participant.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (11)

 	
  “Qualified Holder” shall mean:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the
 Participant;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the
 Participant’s donee; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 a person
 (including an estate or its distributee) to whom the Employer Securities pass
 by reason of the Participant’s death.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (12)

 	
  “Qualified Participant” shall mean a
 Participant who has attained the age of 55 and who has completed at least 10
 years of participation in the Plan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (13)

 	
  “Registration-Type Class of Employer Securities”
 shall mean a class of Employer Securities required to be registered under
 Section 12 of the Securities Exchange Act of 1934 and a class of Employer
 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.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (14)

 	
  “Synthetic Equity” shall mean any stock
 option, warrant, restricted stock, deferred issuance stock right, or similar
 interest or right that gives the holder the right to acquire or receive stock
 of the S corporation in the future. Except to the extent provided in
 regulations, Synthetic Equity also includes a stock appreciation right,
 phantom stock unit, or similar right to a future cash payment based on the
 value of such stock or appreciation in such value.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (15)

 	
  “Total Distribution” shall mean a
 distribution to a Participant or a Participant’s Beneficiary, within one
 taxable year of such recipient, of the entire balance to the credit of the
 Participant.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (16)

 	
  “Value of Employer Securities” shall mean:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 in the case
 of Employer Securities listed on a national exchange, the closing price of
 such Employer Securities on the date the securities are contributed to the
 Plan; or

 

15

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 in the case
 of Employer Securities not listed on a national exchange, the fair market
 value as determined in good faith and in accordance with regulations
 prescribed by the Secretary of the Treasury, provided, however, that if the
 Plan has a nonterminable put option that requires the Employer or
 shareholders of the Employer with substantial net worth to purchase Employer
 Securities from the Plan at the discretion of the Trustee, then the Value
 shall be adjusted to reflect a controlling interest (i.e., enterprise value)
 and shall not be discounted to reflect a minority or nonmarketable
 interest. In a transaction between
 the Plan and a Disqualified Person, Value shall be determined as of the
 transaction date. In other cases,
 Value shall be determined as of the most recent Valuation Date.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.3

 	
 Limitation Definitions.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (1)

 	
  “Annual Addition”
 shall mean the sum of the following amounts credited to a Participant’s
 accounts with this Plan and any other qualified plan maintained by the
 Employer or an Affiliate for the Plan Year:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Employer
 Contributions;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 Participant
 Contributions, including excess deferrals (other than excess deferrals that
 are distributed in accordance with Reg. §1.402(g)-1(e)(2)), distributed or
 recharacterized excess contributions, and excess aggregate contributions, if
 any, but excluding catch-up contributions, Rollover Contributions and Trustee
 to Trustee Transfers;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 any
 forfeitures that are, under the Plan, reallocated and not used to reduce
 Employer Contributions;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 amounts
 allocated to an individual medical account, as defined in Section 415(l)(2)
 of the Code, which is part of a pension or annuity plan maintained by the
 Employer;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
 amounts
 allocated to a separate account of a Key Employee under an Employer-sponsored
 welfare benefit fund, as defined in Section 419(e) of the Code, which will
 provide postretirement medical benefits;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)

 	
 mandatory
 employee contributions, as defined in Section 411(c)(2)(C) of the Code and
 Reg. §1.411(c)-1(c)(4), to a defined benefit plan; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vii)

 	
 annual
 additions under an annuity contract described in Section 403(b) of the Code.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Annual
 Additions shall not include restorative payments, as defined in Reg.
 §1.415(c)-1(b)(2)(ii)(C), allocated to a Participant’s account, which include
 payments made to restore losses to the Plan resulting from actions (or a
 failure to act) by a Plan fiduciary.

 

16

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (2)

 	
  “Limitation Year”
 shall mean (for federal income tax purposes) the Plan Year. The adoption of
 this Plan by the Employer shall be its choice of this Limitation Year for
 purposes of Section 415 of the Code and the regulations issued thereunder.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.4

 	
 Top Heavy Definitions.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (1)

 	
  “Account Balance”,
 for any individual, shall mean, as of the Determination Date, the sum of the
 individual’s:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 account
 balance as of the most recent Valuation Date occurring within a 12-month
 period ending on the Determination Date;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 contributions
 (Employer and Participant) actually made to the Plan on or before the
 Determination Date;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 Employer
 Contributions due as of the Determination Date, if the Plan is subject to the
 minimum funding requirements of Section 412 of the Code; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 the
 aggregate distributions made with respect to such individual under the Plan
 during the 1-year period (5-year period in determining whether the Plan is
 top-heavy for Plan Years beginning before January 1, 2002) ending on the
 Determination Date;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 but less any
 contribution constituting a rollover from a plan not maintained by the
 Employer or an Affiliate.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (2)

 	
  “Aggregation Group”
 shall mean:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 each
 qualified plan of the Employer in which at least one Key Employee
 participates or participated at any time during the Plan Year containing the
 Determination Date or any of the four preceding Plan Years (regardless of
 whether the plan has terminated); and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 any other
 qualified plan of the Employer which enables a plan described in (i) to meet
 the requirements of Sections 401(a)(4) or 410 of the Code.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (3)

 	
  “Determination Date”
 shall mean, with respect to the first Plan Year, the last day of such Plan
 Year, and with respect to any subsequent Plan Year, the preceding Anniversary
 Date.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (4)

 	
  “Key Employee”
 shall mean, for Plan Years beginning before January 1, 2002, an active or
 former Employee of the Employer who, at any time during the Plan Year
 containing the Determination Date or the four preceding Plan Years, is:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 an officer
 of the Employer with Net Compensation greater than 50% of the amount in
 effect under Section 415(b)(1)(A) of the Code for the Plan Year;

 

17

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 one of the
 10 Employees with Net Compensation greater than the amount in effect under
 Section 415(c)(1)(A) of the Code and owning the largest interests in the
 Employer;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 a 5% owner
 of the Employer; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 a 1% owner
 of the Employer having Net Compensation from the Employer of more than
 $150,000.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For Plan
 Years beginning after December 31, 2001, “Key Employee” shall mean an active
 or former Employee of the Employer who, at any time during the Plan Year
 containing the Determination Date is:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 an officer
 of the Employer with Net Compensation greater than $130,000 (as adjusted
 under Section 416(i)(1) of the Code for Plan Years beginning after December
 31, 2002);

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 a 5% owner
 of the Employer; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 a 1% owner
 of the Employer having Net Compensation from the Employer of more than
 $150,000.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The status
 of an Employee as Key Employee shall further be determined in accordance with
 the rules set forth in Section 416(i) of the Code and the regulations issued
 thereunder. For purposes of this paragraph, ownership shall be determined in
 accordance with Section 318 of the Code. The Beneficiary of a Key Employee
 shall be treated as a Key Employee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (5)

 	
  “Non-Key Employee”
 shall mean an Employee who is not a Key Employee, including any Employee who
 is a former Key Employee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (6)

 	
  “Permissive Aggregation Group”
 shall mean the Aggregation Group of plans plus any other plans of the
 Employer which, when considered as a group with the Aggregation Group, would
 continue to satisfy the requirements of Sections 401(a)(4) and 410 of the
 Code.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (7)

 	
  “Top Heavy.” The
 Plan or Aggregation Group is Top Heavy for the Plan Year if either of the
 following conditions exist:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 The Plan is
 not part of an Aggregation Group and the Top Heavy Ratio for such Plan
 exceeds 60%.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 The Plan is
 part of an Aggregation Group and the Top Heavy Ratio for such Aggregation
 Group exceeds 60%.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 In
 determining whether a Plan or Aggregation Group is Top Heavy, the Account
 Balance and present value of accrued benefits of any individual who has not
 performed services for the Employer for a 1-year period ending on the
 Determination Date (5-year period in determining whether the Plan or
 Aggregation Group is Top Heavy for Plan Years beginning before January 1, 2002)
 or who is a Non-Key Employee but who was a Key Employee with respect to a
 prior Determination Date shall be disregarded. The status of the Plan as Top
 Heavy shall further be determined in accordance with the rules set forth in
 Section 416(g) of the Code and the regulations issued thereunder.

 

18

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (8)

 	
  “Top Heavy Ratio”
 shall mean:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 If the
 Employer maintains one or more defined contribution plans (including any
 simplified employee pension plan) and the Employer has not maintained any defined
 benefit plan which during the 5-year period ending on the Determination
 Date(s) has or has had accrued benefits, the Top Heavy Ratio for this Plan
 alone or for the Aggregation Group or Permissive Aggregation Group as
 appropriate is a fraction, the numerator of which is the sum of the Account
 Balances of all Key Employees as of the Determination Date(s) (including any
 part of any Account Balance distributed in the 1-year period ending on the
 Determination Date(s) or 5-year period ending on the Determination Date in
 the case of a distribution made for a reason other than Termination of
 Employment, death or Disability and in determining whether the Plan is Top
 Heavy for Plan Years beginning before January 1, 2002), and the denominator
 of which is the sum of all Account Balances (including any part of any
 Account Balance distributed in the 1-year period ending on the Determination
 Date(s) or 5-year period ending on the Determination Date in the case of a
 distribution made for a reason other than Termination of Employment, death or
 Disability and in determining whether the plan is Top Heavy for Plan Years
 beginning before January 1, 2002), both computed in accordance with Section
 416 of the Code and the regulations thereunder. Both the numerator and
 denominator of the Top Heavy Ratio are increased to reflect any contribution
 not actually made as of the Determination Date, but which is required to be
 taken into account on that date under Section 416 of the Code and the
 regulations thereunder.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 If the
 Employer maintains one or more defined contribution plans (including any
 simplified employee pension plan) and the Employer maintains or has
 maintained one or more defined benefit plans which during the 5-year period
 ending on the Determination Date(s) has or has had any accrued benefits, the
 Top Heavy Ratio for any Aggregation Group or Permissive Aggregation Group as
 appropriate is a fraction, the numerator of which is the sum of Account
 Balances under the aggregated defined contribution plan or plans for all Key
 Employees, determined in accordance with (i) above, and the present value of
 accrued benefits under the aggregated defined benefit plan or plans for all
 Key Employees as of the Determination Date(s), and the denominator of which
 is the sum of the Account Balances under the aggregated defined contribution
 plan or plans for all participants, determined in accordance with (i) above,
 and the present value of accrued benefits under the defined benefit plan or
 plans for all participants as of the Determination Date(s), all determined in
 accordance with Section 416 of the Code and the regulations thereunder. The
 accrued benefits under a defined benefit plan in both the numerator and
 denominator of the Top Heavy Ratio are increased for any distribution of an
 accrued benefit made in the 1-year period ending on the Determination Date
 (5-year period ending on the Determination Date in the case of a distribution
 made for a reason other than Termination of Employment, death or Disability
 and in determining whether the Plan is Top Heavy for Plan Years beginning
 before January 1, 2002).

 

19

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
           2.5     Interpretation. The words defined in
 this Article 2 shall have the meanings assigned to them except where
 specified otherwise in this Agreement. Whenever appropriate, words used
 herein in the singular shall include the plural and the plural may be read as
 the singular.

 

ARTICLE 3

PARTICIPATION IN THE PLAN

          3.1     Eligibility.
Every Employee who was a Participant in the Plan immediately prior to January
1, 2009 shall continue to be a Participant in this Plan as restated effective
January 1, 2009.

20

          Every
other Employee shall enter the Plan as a Participant as of the Entry Date next
occurring after the Employee has satisfied each of the following requirements:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The Employee
 has completed 1,000 or more Hours of Service for the Employer during a period
 of 12 consecutive months, commencing on the date the Employee first performs
 an Hour of Service for the Employer. Subsequent eligibility periods shall be
 Plan Years commencing with the Plan Year which contains the first anniversary
 of the Employee’s employment commencement date.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The Employee
 is not included in any of the following classifications:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Employees
 covered by a collective bargaining agreement between the Employees’
 representative and the Employer under which retirement benefits were the
 subject of good faith bargaining between the parties, unless such agreement
 provides for coverage under this Plan;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 nonresident
 aliens who receive no earned income from sources within the United States as
 defined in the Code; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 Leased
 Employees. 

 

          An
Employee or Leased Employee who has satisfied the requirements of (a) above but
has not become a Participant because of inclusion in a classification of
subsection (b) above shall become a Participant when the Employee or Leased
Employee is no longer included in any of the classifications of subsection (b).
An Employee who satisfies the above requirements, but whose Termination of Employment
with the Employer occurs on or before the Entry Date, shall not become a
Participant on that date. Such an individual shall become a Participant on the
day that the individual again becomes an Employee and satisfies the
requirements of subsection (b) above.

21

          3.2     Designation
of Beneficiary. Upon commencement of participation
in the Plan, each Participant shall complete, sign and file with the Employer a
designation of Beneficiary on a form to be provided by the Employer. On said
form, the Participant shall designate a Beneficiary (or Beneficiaries), which
may be an individual, the Participant’s estate, or a trust, to whom shall be
paid any sum which may be payable on account of the Participant’s death
(reserving, however, to the Participant the power to change the designation of
Beneficiary from time to time) and where applicable, a particular form of
benefit. The spouse of a married Participant shall be the Beneficiary of the
entire vested and nonforfeitable benefit payable upon the death of the
Participant unless the Participant’s spouse irrevocably consents in writing to
the designation of another Beneficiary. Such spousal consent shall identify the
specific alternate Beneficiary, and where applicable, a particular form of benefit,
acknowledge the effect of such designation, and be witnessed by a Plan
representative or a notary public. Any subsequent change by the Participant in
the designation of a Beneficiary shall require specific written consent by the
Participant’s spouse unless the spouse has previously consented in writing to
voluntarily waive the right to consent to subsequent Beneficiary changes, and
such consent acknowledges the spouse’s right to otherwise limit consent to a
specific Beneficiary. However, the designation of a Beneficiary other than the
Participant’s spouse shall be effective if the Employer determines that the
foregoing consent may not be obtained because there is no spouse, because the
spouse cannot be located, or because of other circumstances described in
regulations issued by the Secretary of the Treasury.

          If
a Participant shall fail to validly designate a Beneficiary, or if no
designated Beneficiary survives the Participant, the following designated
persons shall be the Beneficiaries in the order named:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the
 Participant’s spouse, if living;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the
 Participant’s lawful descendants per stirpes, including any lawfully adopted
 descendants;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the estate
 of the Participant.

 

In no event
shall the Employer be named as or become a Beneficiary.

          3.3     Termination
of Participation. Participation in the Plan shall
terminate on the later of a Participant’s Termination of Employment, or the
date following the expiration of a period of layoff or leave of absence approved
by the Employer, if the Employee does not then return to employment with the
Employer.

          3.4     Recommencement
of Participation. An Employee whose status as a
Participant is terminated shall again become a Participant on the day that the
Employee again performs an Hour of Service for the Employer and satisfies the
requirements of Section 3.1(b), and the Employee shall be eligible to share in
Employer Contributions in accordance with this Plan immediately upon
reemployment. 

22

          3.5     Election
Not to Participate. An Employee who may be
eligible to become a Participant may elect not to become a Participant. Also, any Participant may elect not to be
entitled to share in further Employer contributions to the Plan and in forfeitures
occurring under the Plan. An election
described in this Section shall be made in writing and delivered to the
Employer. The election shall be
effective as of the first day of the Plan Year in progress during which the
written notice is filed unless the written notice specifies the first day of a
subsequent Plan Year. The election
shall also be effective for each and every subsequent Plan Year. However, an Employee or Participant who has
made an election under this Section may terminate the election by filing a
written statement to that effect with the Employer. Said written statements shall be effective as of the first day of
the Plan Year in progress on the day when the written statement was filed or as
of the first day of any subsequent Plan Year designated in the written
statement. The filing of a written
statement terminating an election under this Section 3.5 shall not entitle the
Employee or Participant to any share of Employer contributions and forfeitures
for Plan Years ending before the effective date of the termination of the
election under this section.

ARTICLE 4

CONTRIBUTIONS

          4.1     Employer
Contributions. The Employer may, but is not
required to, contribute to the Plan for each of its taxable years ending during
the existence of the Plan. An Employer Contribution shall be attributed to the
Plan Year ending on the same day as the taxable year for which the contribution
is made, or if the Plan Year does not end on the same day as the Employer’s
taxable year, the contribution shall be attributable to the Plan Year within
which the taxable year ends.

          An
Employer Contribution may be made to this Plan without regard to the
accumulated or current net profits of the Employer and to that extent, this
Plan shall be a discretionary contribution plan.

          4.2     Participant
Contributions. Except as permitted in Section 4.3,
Participants shall not be required or permitted to make contributions to the
Plan from their Compensation or otherwise. 

23

          4.3     Rollover
Contributions and Trustee to Trustee Transfers.
Where an Employee has received, or will receive, a distribution from another
eligible retirement plan which is exempt from taxation under the Code, the Employer
may instruct the Trustee to accept the amount of said distribution:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 as a
 Rollover Contribution to the Plan; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 as a Trustee
 to Trustee Transfer from the other qualified retirement plan.

 

          The
Employer shall not direct the Trustee to accept a Rollover Contribution unless
the Employer has reason to believe that, if the Trustee accepts the Rollover
Contribution, the Employee will avoid taxation under the Code on the
contribution and the Plan will not be required to make available to the
Employee any optional form of benefit not currently available to the Employee
under the Plan. A Rollover Contribution or Trustee to Trustee Transfer may be
accepted from an Employee or another qualified retirement plan before the
Employee becomes a Participant. No Trustee to Trustee Transfer shall be
accepted from a qualified retirement plan requiring an annuity form of
distribution.

          Rollover
Contributions, Trustee to Trustee Transfers and earnings and losses thereon may
be segregated into a separate account for accounting purposes. Unless otherwise
instructed in writing by the Employee, Rollover Contributions and Trustee to
Trustee Transfers may also be segregated for investment purposes. Rollover
Contributions or Trustee to Trustee Transfers shall be subject to the same
requirements of this Plan as are applicable to Employer Contributions to the
Plan on behalf of the Participant. 

          4.4     Transfer
to Trustee. Employer Contributions for any Plan
Year shall be paid to the Trustee within the time prescribed by law, including
extensions of time, if any, for the filing of the Employer’s federal income tax
return for the taxable year. All Employer Contributions shall be subject to the
following rules:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Employer
 Contributions made by a mistake of fact shall be returned to the Employer
 within one year after the contribution is paid, provided that the Employer
 discovers the mistake of fact and demands repayment within said year.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Employer
 Contributions to the Plan are conditioned upon initial qualification of the
 Plan under Section 401 of the Code provided, however, that the application
 for qualification is submitted within the time prescribed for filing the
 Employer’s tax return, or such later date as the Secretary may prescribe and,
 if the Plan does not qualify, contributions made while the Plan did not so
 qualify shall be returned to the Employer within one year after the date of
 denial of initial qualification of the Plan.

 

24

	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Employer
 Contributions to the Plan are conditioned upon their current deductibility
 under Section 404 of the Code (unless otherwise specified by the Employer)
 and, to the extent that any contribution is not so deductible, it shall be
 returned to the Employer within one year after denial of the deduction.

 

          4.5     Reversion
to Employer. Subject to the provisions in Sections
4.4 and 5.7, principal or income of this Trust shall not be paid or revert to
the Employer or be used for any purpose whatsoever other than the exclusive
benefit of the Participants or their Beneficiaries.

ARTICLE 5

ALLOCATION OF CONTRIBUTIONS

          5.1     Certification
of Contribution and Compensation. The Employer
shall advise the Trustee of the amount of Employer Contributions, if any, to
the Trust for each Plan Year.

          5.2     Separate
Accounts. The Employer shall create and maintain a
separate account for each Participant and shall credit thereto the amount of
Participant Contributions and Employer Contributions made to the Plan on behalf
of the Participant, as applicable, as well as income and losses thereon. Within each Participant Contribution
account, separate records shall be maintained, as required, for Rollover
Contributions, Trustee to Trustee Transfers, if any, and income thereon. The Employer Contribution account shall be
separated into two accountings, one for Employer Securities and one for all
other investments. 

          To
the extent required by Revenue Procedure 87-22 and any successor thereto, the
Trustee shall establish a separate account on behalf of any Participant who is
a shareholder of the Employer, and such account shall at no time contain
Employer Securities.

25 

          5.3     Participants
Entitled to an Allocation of Employer Contributions.
The Employer Contribution to the Plan for the Plan Year, if any, shall be
allocated in accordance with Section 5.4 to the accounts of those Participants
to or for whom the Employer paid Compensation during the Plan Year and who
satisfy one of the following conditions: 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Participants
 employed by the Employer on the Anniversary Date who completed 1,000 or more
 Hours of Service for the Employer during the Plan Year (except as provided in
 Section 10.2);

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Participants
 on an authorized leave of absence on the Anniversary Date; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Participants
 who died, retired on or after Normal Retirement Age or came under a
 Disability during the Plan Year and while in the employment of the Employer.

 

          Notwithstanding
the foregoing, a Participant who is included in one or more of the
classifications of Section 3.1(b) on the Anniversary Date shall not receive an
allocation of the Employer Contribution to the Plan for the Plan Year.

          To
the extent necessary to satisfy Section 410 of the Code and regulations
promulgated thereunder, the Employer shall make an additional allocation in
accordance with Section 5.4 as follows:

	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 first, to
 those Participants employed by the Employer on the Anniversary Date who
 failed to complete 1,000 Hours of Service during the Plan Year, beginning
 with the Participant with the greatest number of Hours of Service during such
 Plan Year;

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 next, to
 those Participants who had a Termination of Employment during the Plan Year
 other than for death, Disability, or retirement, beginning with the
 Participant with the fewest number of Hours of Service during such Plan Year.

 

If two or more
Participants satisfy the criteria under either (1) or (2) above with the same
number of Hours of Service, then all such Participants with the same number of
Hours of Service shall receive an allocation.

          The
foregoing corrective allocations shall not result in a reduced benefit accrual
to any Participant and shall be effective for all purposes of the Plan and adopted
and implemented on or before the 15th day of the tenth month after the close of
the Plan Year in order to be taken into account for the preceding Plan Year.

          5.4     Method
of Allocation of Contributions. The Employer
Contribution shall be allocated to the account of each Participant eligible
under the preceding Section, in the proportion equal to the ratio that the
Compensation of that Participant during the Plan Year bears to the aggregate
Compensation of all eligible Participants during the Plan Year. Compensation
earned by an individual before becoming a Participant shall not be considered.

26

          Notwithstanding
the foregoing, no portion of the assets of the Plan attributable to (or
allocable in lieu of) Employer Securities acquired by the Plan in a sale to
which Sections 1042 or 2057 of the Code applies may accrue (or be allocated)
directly or indirectly under any plan of the Employer meeting the requirements
of Section 401(a) of the Code:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 during the
 Nonallocation Period, for the benefit of:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 a
 Participant who makes an election under Section 1042(a) of the Code with
 respect to Employer Securities or any decedent if the executor of the estate
 of such decedent makes a qualified sale to which Section 2057 of the Code
 applies;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 any
 individual who is related to the Participant or the decedent (within the
 meaning of Section 267(b) of the Code); or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the benefit
 of any other person who owns (after application of Section 318(a) of the
 Code) more than 25% of:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 any class of
 outstanding stock of the Employer which issued such Employer Securities or of
 any corporation which is a member of the same controlled group of
 corporations as the Employer; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the total
 value of any class of outstanding stock of the Employer.

 

          The
limitation of paragraph (a)(ii) above shall not apply to any individual if such
individual is a lineal descendant of the Participant, and the aggregate amount
allocated to the benefit of all such lineal descendants during the
nonallocation period does not exceed more than 5% of the Employer Securities
(or amounts allocated in lieu thereof) held by the Plan which are attributable
to the sale to the Plan by any person related to such descendants in a transaction
to which Section 1042 of the Code applied.

          A
person shall be treated as failing to meet the stock ownership limitation under
paragraph (b) above if such person fails such limitation at any time during the
one-year period ending on the date of sale of Employer Securities to the Plan,
or on the date as of which Employer Securities are allocated to Participants in
the Plan.

27

          If,
after the Employer Contribution for a Plan Year has been made and allocated, it
should appear that, through a mistake of fact, a Participant or Employee
received an incorrect allocation, the amount of the mistaken contribution must
be returned to the Employer within one year of the contribution.

          5.5     Allocation
Does Not Vest. The fact that an allocation has
been made as hereinbefore provided will not of itself operate to vest in a
Participant any right, title or interest in the Trust. Vesting will be
accomplished only at the times and on the contingencies hereinafter set forth.

          5.6     Valuation
of Participant Accounts. As of each Valuation
Date, but no less frequently than each Anniversary Date, the Employer shall
take the following steps to determine the value of each Participant’s account:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 charge the
 account of each Participant who has received a distribution since the last
 Valuation Date with any such distribution;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 obtain from
 the Trustee the fair market value of the assets of the Trust Fund as of the
 Valuation Date;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 allocate the
 earnings and losses obtained in (b) above to each Participant’s account in
 either the ratio that such account balance bears to all account balances or,
 if a share or unit accounting method is used, actual earnings and losses
 attributable to such shares or units held in each Participant’s account; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 allocate the
 Employer Contribution actually made to the Trust since the last Valuation
 Date to the Participant accounts in the manner provided in this Article and
 add any Participant Contributions made by a Participant since the last
 Valuation Date to the Participant Contribution account.

 

If an accrual
or balance-forward method of Participant accounting is used, the Employer may,
on a uniform and consistent basis, allocate to the accounts of Participants all
or a portion of Participant and Employer Contributions made to the Trust as of
the last Valuation Date and add such amount to the amount obtained under (a)
above and add the remaining balance of such contributions (if any) to
Participant accounts under step (d) above to provide for an apportionment of
earnings and losses on such contributions during such period.

          Notwithstanding
the foregoing, the performance of any or all of the preceding functions may be
delegated to the Trustee or other delegate if the Employer and such delegate
agree. 

28 

          5.7     Limitations on Allocations.

	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Prior to
 determining the Participant’s Net Compensation for the Limitation Year, the
 Employer may determine the maximum permissible amount for a Participant on
 the basis of a reasonable estimation of the Participant’s Compensation for
 the Limitation Year, uniformly determined for all Participants similarly
 situated.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 As soon as
 is administratively feasible after the end of the Limitation Year, the
 maximum permissible amount for the Limitation Year will be determined on the
 basis of the Participant’s Net Compensation for the Limitation Year.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Any excess
 Annual Additions allocated to a Participant should be corrected through the
 Employee Plans Compliance Resolution System or such other correction method
 allowed by statute, regulations or regulatory authorities.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 This
 paragraph (e) applies if, in addition to this Plan, the Participant is
 covered under another qualified defined contribution plan maintained by the
 Employer, a welfare benefit fund maintained by the Employer, an individual
 medical account maintained by the Employer, a Code Section 403(b) annuity
 contract treated as maintained by the Employer pursuant to Reg. §1.415-8(d)(2),
 or a simplified employee pension maintained by the Employer, that provides an
 Annual Addition during any Limitation Year. The Annual Additions which may be
 credited to a Participant’s account under this Plan for any such Limitation
 Year will not exceed the maximum permissible amount reduced by the Annual
 Additions credited to a Participant’s account under the other qualified
 defined contribution plans, welfare benefit funds, individual medical
 accounts, and simplified employee pensions for the same Limitation Year. If
 the Annual Additions with respect to the Participant under other qualified
 defined contribution plans, welfare benefit funds, individual medical
 accounts, and simplified employee pensions maintained by the Employer are
 less than the maximum permissible amount and the Employer Contribution that
 would otherwise be contributed or allocated to the Participant’s account
 under this Plan would cause the Annual Additions for the Limitation Year to
 exceed this limitation, the amount contributed or allocated will be reduced
 so that the Annual Additions under all such plans and funds for the
 Limitation Year will equal the maximum permissible amount. If the Annual
 Additions with respect to the Participant under such other qualified defined
 contribution plans, welfare benefit funds, individual medical accounts, and
 simplified employee pensions in the aggregate are equal to or greater than
 the maximum permissible amount, no amount will be contributed or allocated to
 the Participant’s account under this Plan for the Limitation Year. Prior to
 determining the Participant’s Net Compensation for the Limitation Year, the
 Employer may determine the maximum permissible amount for a Participant in
 the manner described in paragraph (b). As soon as is administratively
 feasible after the end of the Limitation Year, the maximum permissible amount
 for the Limitation Year will be determined on the basis of the Participant’s
 Net Compensation for the Limitation Year. If reducing contributions and
 allocations under this Plan to prevent an excess Annual Addition under
 Section 415 of the Code conflicts with provisions of any other plan or plans
 of the Employer, the provisions of such other plan or plans shall govern.

 

29

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 If, pursuant
 to paragraph (e) or as a result of the allocation of forfeitures, a
 Participant’s Annual Additions under this Plan and such other plans would
 result in an excess amount for a Limitation Year, the excess amount will be
 deemed to consist of the Annual Additions last allocated, except that Annual
 Additions attributable to a simplified employee pension will be deemed to
 have been allocated first, followed by Annual Additions to a welfare benefit
 fund or individual medical account, regardless of the actual allocation date.

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 If an excess
 amount was allocated to a Participant on an allocation date of this Plan
 which coincides with an allocation date of another plan, the excess amount
 attributed to this Plan will be the product of:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 the total
 excess amount allocated as of such date, times

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Any excess
 amount attributed to this plan will be disposed in the manner described in
 paragraph (d) above. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 For purposes
 of applying the limitations of this section for a Limitation Year, all
 defined contribution plans (as defined in Reg. §1.415(c)-1(a)(2)(i) and
 without regard to whether the plan(s) have been terminated) ever maintained
 by the Employer and all defined contribution plans of a predecessor Employer
 (in the Limitation Year in which such predecessor Employer is created) under
 which a Participant receives Annual Additions are treated as one defined
 contribution plan. The Annual Additions under a formerly affiliated plan (as
 defined in Reg. §1.415(f)-1(b)(2)(ii)) of the Employer are taken into account
 for purposes of applying the limitations of this section for the Limitation
 Year in which the cessation of affiliation took place. The limitations of
 this section are not exceeded for the first Limitation Year in which two or
 more existing plans, which previously were not required to be aggregated
 pursuant to Reg. §1.415(f), are aggregated, provided that no Annual Additions
 are credited to a Participant after the date on which the plans are required
 to be aggregated if the Annual Additions already credited to the Participant
 in the existing plans equal or exceed the maximum permissible Annual
 Addition. If the Employer maintains a multiemployer plan, as defined in
 Section 414(f) of the Code, and the multiemployer plan so provides, only the
 Annual Additions under the multiemployer plan that are provided by the
 Employer shall be treated as Annual Additions provided under a plan
 maintained by the Employer for purposes of this section.

 

30

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Notwithstanding
 anything contained herein to the contrary, the Annual Addition that may be
 contributed or allocated to a Participant’s account under this Plan or any
 other defined contribution plan maintained by the Employer or any Affiliate
 for any Limitation Year shall not exceed the lesser of:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 $40,000, as
 adjusted for increases in the cost-of-living under Section 415(d) of the
 Code, or

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 100% of the
 Participant’s Net Compensation for the Limitation Year.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Net
 Compensation limit referred to in (2) shall not apply to an individual
 medical benefit account (as defined in Section 415(l) of the Code; or a
 post-retirement medical benefits account for a Key Employee). If a Limitation
 Year consists of less than 12 months, the maximum Annual Addition shall not
 exceed the amounts listed above multiplied by the following fraction:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 number of months in short Limitation Year

 
	
  

 	
  

 	
 12

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 Notwithstanding
 the foregoing, if no more than one-third of the Employer Contribution for a
 Limitation Year is allocated to Highly Compensated Participants, then
 Employer Contributions applied to pay interest on an Exempt Loan and
 forfeitures of Employer Securities acquired through an Exempt Loan shall be
 disregarded in computing the Annual Addition.

 

ARTICLE 6

INVESTMENT IN EMPLOYER SECURITIES

          6.1     Borrowing
from Disqualified Persons. The Trustee shall have
full power and authority to borrow money, to assume indebtedness, extend
mortgages, and encumber Plan assets by mortgage or pledge; provided, however,
the following terms and conditions shall apply to all Exempt Loans:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The Trustee
 shall use the proceeds of the Exempt Loan within a reasonable time after
 receipt only for the following purposes:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 to acquire
 Employer Securities;

 

31

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 to pay such
 Exempt Loan; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 to pay a
 prior Exempt Loan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 An Exempt
 Loan shall be primarily for the benefit of Participants and their
 Beneficiaries. The interest rate of
 the Exempt Loan shall not be more than a reasonable rate of interest, and the
 interest rate for the Exempt Loan and the price of Employer Securities to be
 acquired with the Exempt Loan proceeds shall not be such that Plan assets
 might be drained off. The terms of
 the Exempt Loan shall, at the time the Exempt Loan is made, be at least as
 favorable to the Plan as the terms of a comparable loan resulting from
 arms-length negotiations between independent parties.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Any
 collateral the Trustee pledges to the Exempt Loan lender shall consist only
 of the assets purchased with the borrowed funds and those assets the Trust
 used as collateral on a prior Exempt Loan repaid with the proceeds of the
 current Exempt Loan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The Exempt
 Loan shall be for a specific term and may not be payable at the demand of any
 person, except in the case of default.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 The Exempt
 Loan lender shall have no recourse against the Plan and Trust under the
 Exempt Loan except with respect to such collateral given for the Loan,
 Employer Contributions (other than contributions of Employer Securities) that
 the Employer makes to the Trust to meet its obligations under the Loan, and
 earnings attributable to such collateral and the investment of such
 contributions. The payment made with respect to an Exempt Loan by the Plan
 during the Plan Year shall not exceed an amount equal to the sum of Employer
 Contributions and earnings received during or prior to the Plan Year, less
 such payments in prior years. The Employer and the Trustee shall account
 separately for such contributions and earnings in the books of account of the
 Plan until the Exempt Loan is repaid.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 In the event
 of default of the Exempt Loan, the value of Plan assets transferred in
 satisfaction of the Loan shall not exceed the amount of the default. If the
 lender is a Disqualified Person, the Loan shall provide for transfer of Plan
 assets upon default only upon and to the extent of the failure of the Plan to
 meet the payment schedule of the Loan. For purposes of this Section, the
 making of a guarantee does not make a person a lender.

 

          6.2     Release
of Encumbered Employer Securities. Employer
Securities acquired by the Plan from proceeds of an Exempt Loan shall be added
to and maintained in a suspense account and shall be treated as unallocated
assets of the Plan. Any unrealized appreciation or depreciation of Employer
Securities held in the suspense account shall not be credited or debited to
Participant accounts.

          With
respect to each Exempt Loan, the Trustee shall designate either of the
following methods to determine the number of shares of Employer Securities
acquired with such Exempt Loan to be released in each Plan Year during the term
of such Exempt Loan:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 For each
 Plan Year during the duration of the loan, the number of shares of Employer
 Securities released shall be determined solely with reference to principal
 payments, provided, however, that if this method is designated, (i) annual
 payments of principal and interest shall be paid at a cumulative rate that is
 not less rapid at any time than level annual payments of such amounts for 10
 years, (ii) the Exempt Loan shall not be renewed or extended beyond a 10-year
 term, including the original term of the Exempt Loan, and (iii) interest on
 the Exempt Loan shall be calculated and paid in accordance with standard
 amortization tables; or

 

32

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 For each
 Plan Year during the duration of the loan, the number of shares of Employer
 Securities released shall equal the number of encumbered shares held
 immediately before release for the current Plan Year multiplied by a
 fraction, the numerator of which is the amount of principal and interest paid
 for the Plan Year and the denominator of which is the sum of the numerator
 plus the principal and interest to be paid for all future Plan Years.

 

          If
the collateral includes more than one class of Employer Securities, the number
of shares of Employer Securities of each class to be released for a Plan Year
must be determined by applying the same fraction to each such class. Shares of
Employer Securities that are released from encumbrance pursuant to the
foregoing provisions shall be treated as withdrawn from the suspense account at
the time of such release. The withdrawn shares shall be allocated to the
accounts of eligible Participants in the same manner as Employer Contributions
are allocated under Section 5.4. The withdrawn shares shall be allocated on the
basis of actual shares of Employer Securities, or dollar values expressed as
shares of Employer Securities.

          Income
earned with respect to Employer Securities in the suspense account shall be
used, at the discretion of the Employer and to the extent permitted by law, to
repay the Exempt Loan used to purchase such Employer Securities. Any income
that is not so used must be allocated as income of the Plan.

          Notwithstanding
the foregoing, upon the spin-off of a division, operating unit, or one or more
Affiliates of the Employer into a separate corporation, the proceeds of the
sale of any shares of such corporation which are held in the Suspense Account
following such spin-off may be used to purchase additional shares of Employer
Securities or to repay the Exempt Loan.

          6.3     Stock
Dividends, Splits, Rights, Warrants, Options, and Other Reorganizations. Employer Securities received by the
Trustee due to a stock split or dividend or as a result of a reorganization or
other recapitalization shall be allocated in the same manner as the stock to
which it is attributable has been allocated. In the event any rights, warrants,
or options are issued with respect to Employer Securities, the Trustee shall
exercise them to the extent that cash is then available and to the extent that
such exercise is considered to be in the best interests of Participants. Any
rights, warrants, or options on Employer Securities that are not exercised may
be sold by the Trustee and the proceeds treated as a cash dividend received
with respect to Employer Securities.

33

          6.4     Voting
Rights. If the Employer Securities contributed to
the Plan by the Employer or acquired by the Trustee are a Registration-Type
Class of Employer Securities or are contributed or acquired in a transaction
subject to Section 133 of the Code, then each Participant shall be entitled to
direct the Trustee as to the manner in which Employer Securities allocated to
the Participant’s account and entitled to vote are to be voted.

          If
the Employer Securities are not a Registration-Type Class of Employer
Securities, then each Participant or Beneficiary shall be entitled to direct
the Trustee as to the manner in which Employer Securities allocated to the
Participant’s account are to be voted 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 similar transactions as the Secretary of the Treasury may
prescribe in regulations. 

          The
procedure for voting Employer Securities shall be as follows:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 With respect
 to Employer Securities to be voted by Participants, before any meeting of
 shareholders of the Employer, there shall be sent to each Participant a copy
 of the proxy solicitation material for the meeting, together with a form
 requesting confidential instructions to the Trustee on how to vote the
 Employer Securities credited to the Participant’s account and which the
 Participant is entitled to vote. Instructions received from Participants by
 the Trustee shall be held in the strictest confidence and shall not be
 divulged or released to any person. Upon receipt of such instructions, the
 Trustee shall vote the Employer Securities as instructed.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 In the
 exercise of voting rights, allocated shares of Employer Securities held for
 the benefit of Participants who do not give timely voting instructions shall
 be voted by the Trustee.

 

With respect
to all corporate matters upon which Participants are not entitled to vote as
described above, the Employer shall direct the Trustee on how to vote Employer
Securities. Employer Securities held in the suspense accounts described in
Sections 5.7 or 6.2 shall be voted by the Trustee as directed by the Employer,
provided that such directions are consistent with applicable law and the
Trustee’s obligations under Section 12.1 of the Plan.

34

          6.5     Tender
or Exchange Offers. In the event of the
commencement of a tender or exchange offer (an “Offer”) for shares of Employer
Securities, the Trustee shall determine whether to tender or exchange shares of
Employer Securities held by the Plan, to the extent permitted under the terms
of such Offer. Such determination by the Trustee pursuant to this Section shall
apply to both allocated shares of Employer Securities and to Employer
Securities held in the suspense accounts described in Sections 5.7 or 6.2,
provided the Trustee’s actions are consistent with applicable law and the
Trustee’s obligations under Section 12.1 of the Plan. 

          Any securities
received by the Trustee as a result of a tender or exchange of shares of
Employer Securities shall be held, and any cash so received shall be invested
in short-term investments pending any reinvestment by the Trustee, as it may
deem appropriate, consistent with the purposes of the Plan. If an Offer is
limited so that all of the shares subject to tender or exchange cannot be sold
or exchanged, the shares sold or exchanged shall be reduced pro rata in the
same ratio that the number of shares actually sold or exchanged bears to the
total number of shares tendered or exchanged. Shares sold or exchanged shall be
deemed to come first out of the shares allocated to Participants and only after
all of those shares have been sold or exchanged, out of the suspense accounts.

          6.6     Diversification
of Investment. Notwithstanding anything in the Plan
to the contrary, each Qualified Participant may direct the Trustee as to the
investment of 25% of the value of the Participant’s account balance
attributable to Employer Securities within 90 days after the Anniversary Date
of each Plan Year during the Participant’s Qualified Election Period. Within 90
days after the Anniversary Date of the last Plan Year in the Participant’s
Qualified Election Period, a Qualified Participant may direct the Trustee as to
the investment of 50% of the value of the Participant’s account balance
attributable to Employer Securities. Such election shall be subject to the
following:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The
 Participant’s direction shall be in writing and shall be effective no later
 than 180 days after the Anniversary Date of the Plan Year to which the
 direction applies.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The Trustee
 shall offer at least three investment options, other than Employer
 Securities, not inconsistent with regulations issued by the Secretary of the
 Treasury, into which investment of the Participant’s account can be directed
 either in this Plan or another qualified plan of the Employer.

 

35

	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 If the
 Trustee does not offer such investment options or if the Trustee cannot
 diversify such account, the Trustee may elect to distribute to the
 Participant the portion of the account for which diversification was elected
 in cash or in Employer Securities. If Employer Securities are distributed,
 the put option provided in Section 6.8 shall apply.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The
 percentage of diversification elected shall be determined based on the value
 of the Participant’s account balance attributable to Employer Securities as
 of the Anniversary Date of the Plan Year to which the direction applies, less
 the value of any previous amount diversified in accordance with this Section.

 

          6.7     Restrictions
on Buy-Sell Arrangements. Except as provided in
this Article, no Employer Securities acquired with the proceeds of an Exempt
Loan may be subject to a put, call, or other option, or buy-sell or similar
arrangement while held by or when distributed from the Plan, whether or not the
Plan is then a leveraged employee stock ownership plan. Also, the Plan shall
not be obligated to acquire Employer Securities from a particular security
holder at an indefinite time determined upon the happening of any event.

          6.8     Put
Option. If Employer Securities allocated to the
account of a Participant are not readily tradable on an established market,
each Participant or Beneficiary who receives a distribution of such Employer
Securities from the Plan shall have the right to require that the Employer
repurchase the Employer Securities for Value. This right shall be referred to
as a “put option.” The put option granted hereunder shall be exercisable by the
Participant or Beneficiary for a period of 60 days following the date of the
distribution of the Employer Securities and, if the put option is not exercised
within such 60-day period, for an additional period of 60 days commencing on
the first day of the following Plan Year. The Employer may grant the Trust an
option to assume the Employer’s rights and obligations to acquire Employer
Securities under the put option provided above.

          If
the Employer is a bank, as defined in Section 581 of the Code, which is
prohibited by law from redeeming or purchasing Employer Securities, then a
Participant may, in the discretion of the Employer, receive distribution in
cash. If Employer Securities are distributed to the Participant instead of
cash, then the terms of Section 6.11 shall apply.

36

          6.9     Right
of First Refusal and Call Option. The Employer
shall have the right to purchase Employer Securities distributed out of this
Plan under the following conditions:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 A Qualified
 Holder who desires to dispose of Employer Securities that are not readily
 tradable on an established securities market shall first offer to sell the
 Employer Securities to the Employer. In the case of a bona fide offer by a
 third party, the offer to the Employer shall be for the Value of the Employer
 Securities and subject to the terms and conditions of Section 6.10, unless
 the selling price and terms offered to the Participant by the third party are
 more favorable to the Participant, in which event the selling price and terms
 of the offer of the third party shall apply. The Employer shall give written
 notice to the offering Qualified Holder of its acceptance of the Qualified
 Holder’s offer within 14 days after the Qualified Holder has given written
 notice to the Employer, or the Employer’s rights hereunder shall lapse.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 In the case
 of an Employer whose charter or bylaws restrict the ownership of
 substantially all outstanding Employer Securities to Employees or to a Trust
 described in Section 401(a) of the Code, or if the Employer is an S
 Corporation, the Employer shall have a right to require that any Employer
 Securities distributed to a Participant be resold to the Employer for Value.
 This right, referred to as a “call option” shall be exercised upon terms
 specified in Section 6.10.

 

          The
Employer may grant the Trust an option to assume the Employer’s rights and
obligations with respect to all or any part of the Employer Securities offered
to the Employer under this Section.

          6.10     Exercise
of Option. If a Participant receives a
distribution in the form of Employer Securities that is subject to the put
option provided in Section 6.8, or if the Employer or Trustee exercise the
right of first refusal or call option under Section 6.9 to purchase a Qualified
Holder’s Employer Securities, the following rules shall apply:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 If the
 Participant or Beneficiary receives a Total Distribution, the purchaser
 shall, at its option, pay either the total purchase price or 20% of the total
 purchase price in cash at the closing. If an installment purchase is elected,
 the purchaser shall evidence the balance of the purchase price by executing a
 promissory note, delivered to the selling Qualified Holder at the closing.
 The purchaser shall provide adequate security for the unpaid amounts under
 the note. The note shall bear interest at a reasonable rate, and shall
 provide for not more than 5 equal annual installments with interest payable
 with each installment, the first installment being due and payable one year
 after the option is exercised. The note further shall provide for
 acceleration in the event of 30 days’ default of the payment on the interest
 or principal and shall grant to the maker of the note the right to prepay the
 note in whole or in part at any time or times without penalty.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 If the
 Participant or Beneficiary receives Employer Securities as part of an
 installment distribution, the Purchaser shall pay the total purchase price of
 the Employer Securities received in the installment distribution at the closing.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 As used
 herein, “closing” shall mean the place, date, and time to which the selling
 Qualified Holder and the purchaser may agree for purposes of a sale and
 purchase under this Section, provided that such closing shall take place not
 later than 30 days after the exercise of the option.

 

37

          6.11     Substitute
Offeree. If the Employer is prohibited by federal
or State law or by a governing regulatory agency from buying or offering to buy
Employer Securities, there shall be substituted for each reference in this
Article to “Employer” the following: “an Affiliate or shareholder of the
Employer (other than the Plan) that has a substantial net worth which is
reasonably expected to remain substantial”; and the Employer shall be given the
name or names of such person from time to time.

          6.12     Notice.
A person shall have given notice permitted or required hereunder when such
person deposits the notice in the United States mail, first class, postage
prepaid, addressed to the person entitled to the notice at the address
currently listed in the records of the Employer. Any person affected by this
Article shall have the obligation of notifying the Employer of any change of
address.

          6.13     Transfer
Restriction. Except upon the prior written consent
of the Employer and as long as Employer Securities are not readily tradable on
an established securities market, no Qualified Holder shall sell, assign, give,
pledge, encumber, transfer, or otherwise dispose of any Employer Securities
acquired from this Plan without complying with the terms of Section 6.9. If a
Qualified Holder pledges or encumbers any Employer Securities without the
Employer’s prior written consent, any security holder’s rights with respect to such
Employer Securities shall be subordinate and subject to the rights of the
Employer.

          6.14     Rights
Nonterminable. The rights and protections afforded
by Sections 6.7, 6.8, 6.9 and 6.10 of this Article shall be nonterminable.

          6.15     Independent
Appraisal. All determinations of Value of Employer
Securities that are not readily tradable on an established securities market,
with respect to activities carried on by the Plan, shall be made by an
Independent Appraiser. 

          6.16     Employer
Securities of S Corporation. Notwithstanding
Section 5.4, if the Plan holds Employer Securities consisting of stock in an S
corporation, no portion of the assets of the Plan attributable to (or allocable
in lieu of) such Employer Securities may, during a Nonallocation Year, accrue
(or be allocated directly or indirectly under any plan of the Employer meeting
the requirements of Section 401(a) of the Code) for the benefit of any
Disqualified Person pursuant to an Impermissible Accrual or an Impermissible
Allocation. If the Plan fails to meet the foregoing requirements, the Plan
shall be treated as having distributed to any Disqualified Person the amount of
the prohibited allocation at the time of such allocation.

38

          In
the case of a person who owns Synthetic Equity in the S corporation, except to
the extent provided in regulations, the shares of stock in such corporation on
which such Synthetic Equity is based shall be treated as outstanding stock in
such corporation and Deemed-Owned Shares of such person if such treatment of
Synthetic Equity of one or more such persons results in:

	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 the
 treatment of any person as a Disqualified Person, or

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 the
 treatment of any year as a Nonallocation Year.

 

For purposes
of this paragraph, Synthetic Equity shall be treated as owned by a person in
the same manner as stock is treated as owned by a person under the rules of
paragraphs (2) and (3) of Section 318(a) of the Code. If, without regard to
this paragraph, a person is treated as a Disqualified Person or a year is
treated as a Nonallocation Year, this paragraph shall not be construed to
result in the person or year not being so treated.

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Notwithstanding any other provision of this Plan, to the extent the
 Employer, Committee and/or the Trustee determine that this Section 6.16
 requires action on the part of the Committee to prevent the Plan from
 experiencing a Nonallocation Year as a result of actions taken by the
 Employer, Committee or Trustee, including, but not limited to, the allocation
 of any portion of the Trust Fund to one or more Participants in any Plan
 Year, the Committee may, in its sole discretion, transfer a pro rata portion
 of the assets of any Participants’ account that will cause such Nonallocation
 Year to (a) any other retirement plan sponsored by the Employer that is
 qualified under Code Section 401(a); or (b) a newly formed “stock bonus plan”
 formed as part of this Plan that is authorized by the Employer and the
 Trustee as of, or prior to, the date of such transfer.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Notwithstanding any other provision of this Plan, the accounts held
 under any “stock bonus plan” formed pursuant to Section 6.16(a) shall be
 administered by the Committee and the Trustee in a manner consistent with the
 Plan’s provisions generally, provided, however, that such portion of the Plan
 shall at all times:

 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Not qualify under Section 4975(e)(7) of the Code or Reg.
 §54-4975-11(a)(5) as an employee stock ownership plan; 

 

39

	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 Meet the definition of an “individual account plan” under Section
 407(d)(3) of the Employee Retirement Income Security Act of 1974 and be
 permitted to invest in Employer Securities pursuant to Section 407(d)(5) of
 the Employee Retirement Income Security Act of 1974; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 Maintain an account for any Participant participating under this
 portion of the Plan and allocate all Employer Contributions to such accounts
 in a manner that complies with Section 401(a)(4) of the Code and the
 regulations thereunder; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 Be subject to unrelated business income tax pursuant to Section 512
 of the Code to the extent of such portion of the Plan is invested in Employer
 Securities; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (v)

 	
 Be identified as a separate portion of the Plan for all annual
 reporting and disclosure purposes required under the Code and the Employee
 Retirement Income Security Act of 1974. 

 

          6.17     Effect
of Code and Regulations Nonterminable. Notwithstanding the fact
that this Plan ceases to be a leveraged employee stock ownership plan, Employer
Securities acquired with the proceeds of an Exempt Loan shall continue, after
the Trustee pays the Exempt Loan, to be subject to the provisions of Section
4975(e)(7) of the Code and Section 54.4975-7(b)(4)(10) and (12) of the Treasury
Regulations, as the same may be amended from time to time.

ARTICLE 7

VESTING

          7.1     Vesting
of Participant Contributions. A Participant shall
have a fully vested and nonforfeitable interest in Participant Contributions
allocated to the Participant’s account, and earnings thereon, at all times.

          7.2     Vesting of
Employer Contributions.

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 A
 Participant shall have a fully vested and nonforfeitable interest in Employer
 Contributions allocated to the Participant’s account, and earnings thereon,
 upon the occurrence of any one of the following events:

 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 attainment
 of the Participant’s Normal Retirement Age prior to or during employment with
 the Employer;

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 Disability
 of the Participant occurring during employment with the Employer;

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 death of the
 Participant occurring during employment with the Employer;

 

40

	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 termination
 or partial termination of the Plan or the Trust if the Participant’s rights
 or benefits under the Plan or Trust are affected by said termination or
 partial termination;

 
	
  

 	
  

 	
  

 
	
  

 	
 (v)

 	
 complete
 discontinuance of Employer Contributions to the Plan; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (vi)

 	
 a Change in
 Control of the Employer. For purposes of this subsection (vi), “Change in
 Control” of the Employer shall mean a change in control which would be
 required to be reported in response to Item 5(f) on Schedule 14A of
 Regulation 14A promulgated under the Securities Exchange Act of 1934, as
 amended (the “Exchange Act”), whether or not the Employer is then subject to
 such reporting requirement and which does not arise from a transaction or
 series of transactions authorized, recommended or approved by formal action
 taken by the Board of Directors, as defined herein, including, without
 limitation, if any “person” (as such term is sued in Sections 13(d) and
 14(d) of the Exchange Act) becomes a “beneficial owner” (as defined in
 Rule 13(d)3 under the Exchange Act), directly or indirectly, of
 securities of the Employer representing 20% or more of the combined voting
 power of the Employer’s then-outstanding securities, or if there ceases to be
 a majority of the Board of Directors, as defined herein, comprised of
 individuals described below.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For purposes
 of this subsection (vi), “Board of Directors” shall mean:
 (A) individuals who on the effective date hereof, constituted the Board
 of the Employer; and (B) any new director who subsequently was elected
 or nominated for election by a majority of the directors who held such office
 immediately prior to a Change in Control.

 

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Effective
 for a Participant who receives an allocation of Employer Contributions for
 the Plan Year beginning January 1, 2007 or any subsequent Plan Year, in
 addition to the rights under (a) above, such Participant shall have a vested
 and nonforfeitable interest in Employer Contributions allocated to the
 Participant’s account, and earnings thereon, based on the Participant’s Years
 of Service as determined in Section 7.3 in accordance with the following
 schedule:

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Participant’s

 	
  

 	
  

 	
 Vested and Nonforfeitable

 
	
  

 	
 Years of
 Service

 	
  

 	
  

 	
  

 	
 Percentage

 	
  

 
	
  

 	

 

 	
  

 	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Less than 2
 years

 	
  

 	
   0%

 
	
  

 	
 2 years but
 less than 3 years

 	
  

 	
  20%

 
	
  

 	
 3 years but
 less than 4 years

 	
  

 	
  40%

 
	
  

 	
 4 years but
 less than 5 years

 	
  

 	
  60%

 
	
  

 	
 5 years but
 less than 6 years

 	
  

 	
  80%

 
	
  

 	
 6 or more
 years

 	
  

 	
 100%

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Participants
 whose Termination of Employment occurred on or before December 31, 2006 shall
 be subject to the vesting schedule in effect when the Termination of
 Employment occurred. A Participant whose Termination of Employment occurs
 during the Plan Year beginning January 1, 2007, but who is not eligible for
 an allocation of Employer Contributions for said Plan Year, shall be subject
 to the vesting schedule in effect prior to January 1, 2007.

 

41

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Notwithstanding
 the foregoing effective date of the vesting schedule change, if there was an
 Exempt Loan outstanding on September 26, 2005, the change in vesting schedule
 described above will not apply to any Plan Year beginning before the earlier
 of the date on which the Exempt Loan (i) is fully repaid, or (ii) was, as of
 September 26, 2005, scheduled to be fully repaid.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Notwithstanding
 the vesting schedule set forth under (b) above, a Participant’s vested and
 nonforfeitable interest in Employer Contributions allocated to the
 Participant’s account and earnings thereon shall not be less than the vested
 and nonforfeitable interest attained by that Participant immediately prior to
 the later of the date of adoption or the effective date of any amendment to
 the vesting schedule under this Plan, and any such amendment shall apply only
 to Participants who are credited with an Hour of Service on or after the date
 on which such amendment becomes effective. In addition, a Participant’s
 vested and nonforfeitable interest shall not be reduced if the Plan becomes
 Top Heavy and later ceases to be Top Heavy.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each
 Participant with at least 3 Years of Service with the Employer may elect,
 within a reasonable period after the adoption of the amendment or change, to
 have the Participant’s vested and nonforfeitable interest in such
 contributions computed under the Plan without regard to such change. The
 period during which the election may be made shall commence with the date the
 change is deemed to be made and shall end 60 days after the latest of:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the date the
 amendment is adopted;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the date the
 amendment becomes effective; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 the date the
 Participant is issued written notice of the change by the Employer.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Notwithstanding
 the foregoing, for an amendment adopted after August 9, 2006, with respect to
 a Participant’s account attributable to Employer Contributions accrued as of
 the later of the adoption or the effective date of the amendment and
 earnings, the vested percentage of the Participant will be the greater of the
 vested percentage under the old vesting schedule or the vested percentage
 under the new vesting schedule.

 

          7.3     Determination
of Years of Service. An Employee shall be credited
with one Year of Service for purposes of the preceding Section for each Plan
Year during which the Employee performs 1,000 or more Hours of Service for the
Employer and any Affiliate, in accordance with the following rules:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 An
 Employee’s Years of Service prior to and after the Effective Date shall be
 counted.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 An
 Employee’s Years of Service prior to and after the Plan Year in which the
 Employee attained age 18 shall be counted.

 

42

	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 An
 Employee’s Years of Service performed after 5 consecutive one-year Breaks in
 Service shall not be considered in computing the vested and nonforfeitable
 percentage of the Employee’s account attributable to Employer Contributions
 made before the Employee’s initial Break in Service.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 In the case
 of a nonvested Participant who has incurred a Break in Service, and subsequently
 performs Years of Service for the Employer, such a Participant’s Years of
 Service with the Employer prior to the Break in Service shall be considered
 in computing the vested and nonforfeitable percentage of the Participant’s
 account attributable to Employer Contributions made after the Break in
 Service unless the Participant’s consecutive one-year Breaks in Service equal
 or exceed the greater of 5 or the aggregate number of the Participant’s Years
 of Service preceding the initial Break in Service. If any Years of Service
 are not required to be taken into account by reason of Breaks in Service
 under the preceding sentences, such Years of Service shall not be taken into
 account thereafter.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 A Leased
 Employee shall be credited with Years of Service for vesting beginning on the
 date the Leased Employee first performed services for the Employer even if
 such individual is not eligible to participate in the Plan. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 If the
 Employer maintains the Plan for a predecessor employer, service with such
 employer shall be treated as service for the Employer. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 Years of
 Service with MiLAN Technology Inc. prior to March 25, 2002 will be treated as
 service for the Employer. Years of Service with Image Systems Corporation
 prior to March 24, 2004 shall be treated as service for the Employer.

 

          7.4     Forfeitures
and Restoration of Nonvested Amounts. The
nonvested portion of a Participant’s account shall be considered a forfeiture
as of the end of the Plan Year in which the Participant incurs 5 consecutive
one-year Breaks in Service, or upon an actual or deemed distribution of
benefits under Section 8.5, if earlier. Employer Securities allocated to a
Participant’s account shall be forfeited only after other account assets, and
if more than one class of Employer Securities are allocated to the account,
each such class shall be forfeited in equal proportions. Such forfeitures shall
be allocated as of the Anniversary Date of the Plan Year in which the
forfeiture occurs. The forfeited amounts shall be first used to restore amounts
forfeited by rehired Participants as described in the following paragraph,
then, at the Employer’s discretion, used to pay any administrative expenses of
the Plan as described in Section 13.2(o), and then added to the Employer
Contribution for such Plan Year for allocation among Participants pursuant to
Section 5.4.

43

          If
a Participant receives a distribution pursuant to Section 8.5 which is less
than the value of the Participant’s account balance derived from Employer
Contributions and resumes employment covered under this Plan, the Participant’s
account balance derived from Employer Contributions will be restored to the
amount on the date of distribution, without interest, if the Participant repays
to the Plan the full amount of the distribution on or before the earlier of the
following dates:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the date by
 which the Participant incurs 5 consecutive one-year Breaks in Service
 following the date of distribution; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the date
 which is 5 years after the first date the Participant is subsequently
 reemployed.

 

          If
the amount to be restored to the Participant’s account under the preceding
sentence has been previously reallocated as provided in this Section, such
amount shall be obtained, first, from other forfeitures, and next, from an
additional Employer Contribution. If a Participant who received a distribution
later becomes eligible to receive a distribution of the restored Employer
Contribution before the Participant is fully vested, the vested percentage of
the Participant’s account upon a subsequent distribution shall be an amount “X”
determined under the formula: X=P(AB+D)-D. For purposes of applying the
formula, P is the Participant’s vested percentage as of the time the formula is
being applied; AB is the balance of the account attributable to Employer
Contributions at that time; and D is the amount of Employer Contributions
previously distributed to the Participant. The Employer shall maintain the
records necessary to apply such formula. 

ARTICLE 8

PAYMENTS OF BENEFITS

          8.1     Notice.
The Employer shall furnish each Distributee with a written statement of the
terms, conditions and forms of payment from the Trust.

44

          8.2     Amount
of Benefits and Valuation. Benefits under the Plan
shall be paid solely from the Trust Fund and the amount payable to a
Participant shall equal the fair market value of the vested portion of the
Participant’s account as of the Valuation Date described in Section 8.5.

          8.3     Mode
of Payment. Distribution of a Participant’s
account shall be made to a Participant under one of the following modes of
settlement which shall be selected by the Participant, or the Participant’s
designated Beneficiary if the Participant dies before commencement of benefits:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 By payment
 in a single lump sum.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 By payment
 in the form of annual or more frequent installments as may be conveniently
 determined. Installments shall be payable over a period that does not exceed
 the life expectancy of the Participant or the joint life expectancy of the
 Participant and the Participant’s Beneficiary, subject to the Employer
 setting limitations on the number of years over which benefits may be paid in
 the event installments would be less than $100 per month.

 

          In all events,
the amount of each distribution shall not be less than the amount required to
be distributed under Article 9.

          Notwithstanding
any provision of the Plan to the contrary, a Distributee may elect, at the time
and in the manner prescribed by the Employer, to have any portion of an
Eligible Rollover Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover.

          If
distribution of the Participant’s Beneficial Interest has commenced and the
Participant dies before the entire interest has been distributed, the remaining
portion of such interest shall be distributed at least as rapidly as under the
method of distribution in effect at the date of the Participant’s death.

          The decision
of the Participant as to the mode of settlement shall be final and the Employer
shall not be liable to the recipient (or to any heir, Beneficiary, or
representative of the Participant, or of the recipient if other than the
Participant) for such decision notwithstanding the fact that another mode of
settlement would have resulted in a greater benefit.

45

          Notwithstanding
any provision in this Plan to the contrary, investment elections, changes or
transfers, withdrawals decisions, and any other decision or election by a
Participant (or Beneficiary) under this Plan may be accomplished by electronic
or telephonic means, which includes but is not limited to the Internet, and
which are not otherwise prohibited by law and which are in accordance with
procedures and/or systems approved or arranged by the Employer or its
delegates. 

          8.4     Medium
of Payment. Except as otherwise provided in this
Section, distribution of a Participant’s Beneficial Interest from the Plan
shall be made in the form of full shares of Employer Securities and cash for
fractional shares, subject to the rights of the Employer under Article 6. If
more than one class of Employer Securities are allocated to the Participant’s
account, each such class shall be distributed in equal proportions. To the
extent that the Participant’s account has been diversified in accordance with
Section 6.6, such Participant shall not receive benefits in the form of
Employer Securities. All certificates of Employer Securities (other than a
Registration-Type Class of Employer Securities) distributed under the Plan and
subject to transfer limitations shall be endorsed as follows:

	
  

 	
  

 
	
  

 	
 “Notice is
 hereby given that the sale, transfer, or other disposition of the shares of
 capital stock represented by this certificate is subject to certain
 restrictions set forth in Article 6 of the Communications Systems, Inc.
 Employee Stock Ownership Plan and Trust; copies of the Plan and Trust are on
 file at Communications Systems, Inc.”

 

          If
the Distributee so requests, distribution of the Participant’s Beneficial
Interest shall be in cash, provided that the Trustee determines, in its
discretion, that sufficient cash is available to make all cash distributions
then required by the terms of the Plan or as requested by Distributees, and to
meet all liabilities under any Exempt Loans for the next 12 months which are
not provided for by Employer Contributions or otherwise. Notwithstanding the
foregoing, and except as provided in Section 6.9(b), the Employer may make distributions
only in the form of cash: 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 to the
 extent that the Employer has elected S corporation status;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 if the
 Employer’s articles or bylaws restrict substantial ownership of Employer
 Securities to Employees or this Trust; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 if the Plan
 is terminated in connection with a merger or sale of all (or substantially
 all) the Employer Securities of the Employer, resulting in the Plan ceasing
 to be an employee stock ownership plan under Section 4975(e)(7) of the Code.

 

46

          8.5
     Time for Payment.
The Employer shall authorize the payment of benefits from the Plan to a
Distributee to be made or begin as soon as administratively feasible following
the Participant’s Termination of Employment and the Employer’s receipt of the
Distributee’s distribution request. 

          Unless
the Participant elects a later commencement date, no payment of benefits shall
be made or begin later than 60 days after the close of the Plan Year in which
the later of the following events occurs: 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the
 Participant’s Normal Retirement Age; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the
 Participant’s Termination of Employment with the Employer.

 

In no event
shall the distribution be made or begin later than the Participant’s Required
Beginning Date. 

          If
a Participant has a Termination of Employment, and the value of the
Participant’s vested account balance (including both Participant and Employer
Contributions) is not greater than $1,000 ($5,000 prior to March 28, 2005), the
Employer shall authorize the distribution of the vested portion of such account
balance prior to the Participant’s attainment of age 62 or Normal Retirement
Age, whichever is later, without the consent of the Participant. A Participant
with an Employer Contribution account that is 0% vested shall be deemed to have
received a distribution under this paragraph upon Termination of Employment.
For purposes of determining whether a Participant’s vested account balance is
$1,000 or less, the value of a Participant’s nonforfeitable account balance
shall include that portion of the account balance that is attributable to
Rollover Contributions (and earnings allocable thereto) within the meaning of
sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the
Code. 

47

          If
a Participant has a Termination of Employment, and the value of the
Participant’s vested account balance (including both Participant and Employer
Contributions) exceeds $1,000 ($5,000 prior to March 28, 2005), the Employer
shall authorize the distribution of the vested portion of such account balance
prior to the Participant’s attainment of age 62 or Normal Retirement Age,
whichever is later, only with the written consent of the Participant, and when
required, the Participant’s spouse. Prior to receiving the Participant’s
consent, the Employer shall notify the Participant and the Participant’s
spouse, if required, of the right to defer any distribution and of the optional
forms of benefit available under the Plan. Such notification shall be furnished
not less than 30 days nor more than 180 days prior to the day on which a
distribution is made or first begins. No distribution shall be made until 30
days after such notice is given unless the Participant and the Participant’s
spouse, if required, consent to an earlier distribution. 

          If
a Participant dies before the distribution of the Participant’s Beneficial
Interest has been made, distribution shall be made pursuant to Section 9.7(b). 

          8.6     Undistributed
Accounts. At such time as the Employer may
determine in writing, the account of a Participant who has had a Termination of
Employment shall be invested in assets of the Trust other than Employer
Securities as of the Anniversary Date following the Participant’s Termination
of Employment. Such investments may include bank savings accounts, certificates
of deposits, common stocks, preferred stocks, bonds, notes, debentures, mutual
funds, and other property, real or personal, provided such investments do not
violate applicable law, and subject to the availability of cash in the Plan to
permit such investments. 

          8.7     S
Corporation Distributions. With respect to an
Employer that is an S Corporation, distributions on shares of Employer
Securities shall be applied and allocated as follows: 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 To the
 extent permitted by applicable law or as otherwise provided in subsection
 (b), S Corporation distributions from the Employer on Employer Securities
 (whether held in the suspense account under Section 6.2 or allocated to
 Participant accounts) may, in the Employer’s discretion, be: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 used to
 provide for the diversification of Employer Securities in accordance with
 Sections 6.6 or 8.6 or;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 used to
 provide for distributions in accordance with Section 8.4.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 S
 Corporation distributions on Employer Securities acquired with the proceeds
 of an Exempt Loan may, in the Employer’s discretion, be used to pay current
 obligations on an Exempt Loan or allocated as provided in Section 8.4(a)
 above. 

 

48

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 To the
 extent distributions on Employer Securities that are held in the suspense
 account under Section 6.2 used to pay an Exempt Loan, such amounts shall be
 allocated in accordance with Sections 6.2 and to the extent such
 distributions are not used to pay down the Exempt Loan, shall be allocated to
 each Participant’s Employer Contribution accounts in the same proportions as
 Employer Contributions are or would be allocated for the Plan Year among
 eligible Participants in accordance with Section 5.4. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 To the
 extent distributions on Employer Securities that are allocated to
 Participants’ Employer Contribution accounts are used to repay an Exempt Loan
 as provided in Section 8.4(b), shares released from the suspense account
 under Section 6.2 shall be allocated to Participants’ Employer Contribution
 accounts as follows: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 first,
 shares of Employer Securities with a Value equal to the distributions with
 respect to the shares of Employer Securities allocated to Participants’
 Employer Contribution accounts shall be allocated among and credited to the
 Employer Contribution accounts of such Participants, pro rata, according to
 the number of shares of Employer Securities held in such accounts on the
 distribution date;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 then any
 remaining shares of Employer Securities released from the suspense account
 shall be allocated among and credited to the Employer Contribution accounts
 of eligible Participants in accordance with Section 5.4.

 

          8.8     C
Corporation Dividends. With respect to Employer
Securities of an Employer that is a C corporation, dividends paid with respect
to such Employer Securities held by the Plan in the suspense account under
Section 6.2 may, in the Employer’s discretion, be used to repay an Exempt Loan.
Such C corporation dividends, and dividends paid with respect to Employer
Securities allocated to Participant accounts may, in the Employer’s discretion,
be: 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 allocated to
 and retained in Participant accounts; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 distributed
 to Participants in cash directly by the Employer; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 paid to the
 Plan and distributed therefrom to Participants no later than 90 days after
 the close of the Plan Year in which paid; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 at the
 election of the Participant or Beneficiary: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 paid as
 provided in (a) or (b) above, or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 paid to the
 Plan and reinvested in Employer Securities; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 used to
 repay an Exempt Loan. 

 

49

          The
distribution or allocation of C corporation dividends with respect to Employer
Securities held in the suspense account shall be made to Participants or their
accounts in the same proportions as Employer Contributions are or would be
allocated for the Plan Year among eligible Participants in accordance with
Section 5.4. However, dividends held by the Plan for a 2-year period or longer
shall be distributed in accordance with Section 8.4; dividends held by the Plan
for a lesser period may be distributed in cash. When C corporation dividends of
Employer Securities allocated to Participants’ Employer Contribution accounts
are used to repay an Exempt Loan, shares released from the suspense account
shall be allocated to Participants’ Employer Contribution accounts as follows: 

	
  

 	
  

 	
  

 
	
  

 	
 (x)

 	
 first,
 shares of Employer Securities with a fair market value at least equal to such
 dividends paid with respect to the shares of Employer Securities allocated to
 the Participants’ Employer Contribution accounts shall be allocated among and
 credited to the Employer Contribution accounts of such Participants, pro
 rata, according to the number of shares of Employer Securities held in such
 accounts on such dividend declaration date; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (y)

 	
 then any
 remaining shares of Employer Securities released from the suspense account
 shall be allocated among and credited to the Employer Contribution accounts
 of eligible Participants in accordance with Section 5.4. 

 

          8.9     Unclaimed
Accounts. In the event the Employer is unable with
reasonable effort to locate a Participant or Beneficiary entitled to a
distribution under the Plan, the accounts distributable to such Participant or
Beneficiary shall be forfeited and will be reallocated in the same manner as
described in Section 7.4. A forfeiture under this paragraph shall occur no
earlier than six (6) months after the Employer’s efforts to locate such
Participant or Beneficiary began or, if later, the earliest date applicable
Treasury regulations would permit the forfeiture. 

          If
a Participant or Beneficiary whose account has been forfeited pursuant to this
Section 8.9 makes a claim, at any time, for the forfeited account, such
forfeited account shall be restored, unadjusted for any gains or losses
occurring subsequent to the date of the forfeiture. Such restoration shall be
made during the Plan Year in which the Participant or Beneficiary makes the
claim, first from the amount, if any, of forfeitures the Employer otherwise
would allocate for the Plan Year, then from an additional amount the Employer
contributes to make the required restoration.  

50

          8.10     Facility
of Payment. In case of incompetency of a
Participant or Beneficiary entitled to receive any distribution under the Plan,
and if the Trustee shall be advised of the existence of such condition, the
Trustee shall direct distribution to a person or institution designated by a
court which has jurisdiction over such recipient or a person or institution
otherwise having legal authority under state law for the care and control of
such recipient. Any payment made in accordance with the foregoing provisions of
this Section shall constitute a complete discharge of any liability or
obligation of the Employer, the Trustee, and the Trust Fund. 

ARTICLE 9

MINIMUM DISTRIBUTION REQUIREMENTS

          9.1     Effective
Date. The provisions of this Article 9 will apply
for purposes of determining required minimum distributions for calendar years
beginning with the 2003 calendar year. 

          9.2     Precedence.
The requirements of this Article 9 will take precedence over any inconsistent
provisions of the Plan. 

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

          9.4     Time
and Manner of Distribution.

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 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. 

 

51

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 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: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 If the
 Participant’s surviving spouse is the Participant’s sole Designated
 Beneficiary, then distributions to the surviving spouse will begin by
 December 31 of the calendar year immediately following the calendar year in
 which the Participant died, or by December 31 of the calendar year in which
 the Participant would have attained age 701⁄2, if later.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 If the
 Participant’s surviving spouse is not the Participant’s sole Designated
 Beneficiary, then distributions to the Designated Beneficiary will begin by
 December 31 of the calendar year immediately following the calendar year in
 which the Participant died.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
 If there is
 no Designated Beneficiary as of December 31 of the year following the year of
 the Participant’s death, the Participant’s entire interest will be
 distributed by December 31 of the calendar year containing the fifth
 anniversary of the Participant’s death.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (4)

 	
 If the
 Participant’s surviving spouse is the Participant’s sole Designated
 Beneficiary and the surviving spouse dies after the Participant but before
 distributions to the surviving spouse begin, this Section 9.4(b), other than
 Section 9.4(b)(1), will apply as if the surviving spouse were the
 Participant.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For purposes
 of this Section 9.4(b) and Section 9.7, unless Section 9.4(b)(4) applies,
 distributions are considered to begin on the Participant’s Required Beginning
 Date. If Section 9.4(b)(4) applies, distributions are considered to begin on
 the date distributions are required to begin to the surviving spouse under
 Section 9.4(b)(1). If distributions under an annuity purchased from an
 insurance company irrevocably commence to the Participant before the
 Participant’s Required Beginning Date (or to the Participant’s surviving
 spouse before the date distributions are required to begin to the surviving
 spouse under Section 9.4(b)(1), the date distributions are considered to
 begin is the date distributions actually commence. 

 

          9.5     Forms
of Distribution. Unless the Participant’s interest
is distributed in the form of an annuity purchased from an insurance company or
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 9.6 and 9.7. If the Participant’s interest is distributed in the form
of an annuity purchased from an insurance company, distributions thereunder
will be made in accordance with the requirements of Section 401(a)(9) of the
Code and the Treasury regulations. 

          9.6     Required
Minimum Distributions During Participant’s Lifetime.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 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: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 the quotient
 obtained by dividing the Participant’s account balance by the distribution
 period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9,
 Q&A-2, of the Treasury regulations, using the Participant’s age as of the
 Participant’s birthday in the distribution calendar year; or

 

52

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 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 Section 1.401(a)(9)-9, Q&A-3, of the Treasury regulations, using the
 Participant’s and spouse’s attained ages as of the Participant’s and spouse’s
 birthdays in the distribution calendar year.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Lifetime Required Minimum Distributions Continue Through Year of
 Participant’s Death. Required minimum distributions
 will be determined under this Section 9.6 beginning with the first
 distribution calendar year and up to and including the distribution calendar
 year that includes the Participant’s date of death. 

 

          9.7     Required
Minimum Distributions After Participant’s Death.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Death On or After Date Distributions Begin. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 If the
 Participant dies on or after the date distributions begin and there is a
 Designated Beneficiary, the minimum amount that will be distributed for each
 distribution calendar year after the year of the Participant’s death is the
 quotient obtained by dividing the Participant’s account balance by the longer
 of the remaining life expectancy of the Participant or the remaining life
 expectancy of the Participant’s Designated Beneficiary, determined as
 follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 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.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 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.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 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.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 If the
 Participant dies on or after the date distributions begin and there is no
 Designated Beneficiary as of December 31 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.

 

53

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Death Before Date Distributions Begin. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 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 9.7(a). 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 If the
 Participant dies before the date distributions begin and there is no
 Designated Beneficiary as of December 31 of the year following the year of
 the Participant’s death, distribution of the Participant’s entire interest
 will be completed by December 31 of the calendar year containing the fifth
 anniversary of the Participant’s death. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
 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 9.4(b)(1), this Section 9.7(b) will apply as
 if the surviving spouse were the Participant. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 9.8

 	
 Definitions.

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Designated Beneficiary. The individual who
 is designated as the Beneficiary under Section 3.2 and is the designated
 beneficiary under Section 401(a)(9) of the Code and Section 1.401(a)(9)-4, of
 the Treasury regulations.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Distribution calendar year. 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 9.4(b). The
 required minimum distribution for the Participant’s first distribution
 calendar year will be made on or before the Participant’s Required Beginning
 Date. The required minimum distribution for other distribution calendar
 years, including the required minimum distribution for the distribution
 calendar year in which the Participant’s Required Beginning Date occurs, will
 be made on or before December 31 of that distribution calendar year. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Life expectancy. Life expectancy as computed
 by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.
 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Participant’s account balance. 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.

 

54

          9.9
     Election to Allow Participants or
Beneficiaries to Elect 5-Year Rule. Participants
or Beneficiaries may elect on an individual basis whether the 5-year rule or
the life expectancy rule in Sections 9.4(b) and 9.7(b) 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 30 of the calendar year in
which distribution would be required to begin under Section 9.4(b), or by
September 30 of the calendar year which contains the fifth anniversary of the
Participant’s (or, if applicable, surviving spouse’s) death. If neither the
Participant nor Beneficiary makes an election under this Section, distributions
will be made in accordance with Sections 9.4(b) and 9.7(b).

ARTICLE 10

TOP HEAVY PROVISIONS

          10.1     Preemption. Notwithstanding any provision of the Plan to
the contrary, the provisions of this Article shall govern in the event that the
Plan is Top Heavy as of a Determination Date.

          10.2     Minimum
Contribution.
Employer Contributions and forfeitures under this Plan (or any other defined
contribution plan maintained by the Employer or an Affiliate) for any Plan Year
during which the Plan is Top Heavy shall not be less than 3% of the Net
Compensation of each Participant employed on the Anniversary Date who is a
Non-Key Employee whether or not the Participant completed 1,000 or more Hours
of Service during the Plan Year. Employer Contributions for purposes of this
Section 10.2 shall also include matching contributions subject to Section
401(m) of the Code made under any other defined contribution plan maintained by
the Employer or an Affiliate. However, if the largest percentage of Employer
Contributions and forfeitures allocated to any Key Employee is less than 3% of
the maximum amount permitted under Section 401(a)(17) of the Code of such Key
Employee’s Net Compensation for the Plan Year, then the minimum percentage of
Net Compensation that shall be provided for any Non-Key Employee for a Plan
Year is the largest percentage of the maximum amount permitted under Section
401(a)(17) of the Code of Net Compensation allocated on behalf of any Key
Employee for that Plan Year. Any salary deferral under a qualified cash or
deferred arrangement in a plan maintained by the Employer or an Affiliate shall
be deemed to be Employer Contributions for purposes of determining the
percentage of contributions for Key Employees under this Section. When the
Employer or an Affiliate maintains more than one defined contribution plan, any
required minimum contribution shall be made in the defined contribution plans
in the following sequence:

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 all employee stock
 ownership plans, 

 

55

	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 all profit sharing and
 stock bonus plans containing cash or deferred arrangements,

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 all money
 purchase pension plans other than money purchase pension plans that are part
 of employee stock ownership plans,

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 all profit
 sharing and stock bonus plans other than profit sharing and stock bonus plans
 containing cash or deferred arrangements and employee stock ownership plans.

 

If the Employer or an
Affiliate maintains two (2) or more plans in the same category, any required
minimum contribution shall be made to the plans in chronological order as
determined by the effective date of each plan (using the original effective
date of the plan) beginning with the most recently established plan. If a
Participant is also covered by a defined benefit plan maintained by the
Employer or an Affiliate, then for each Plan Year this Plan is Top Heavy the
Participant shall receive an allocation of Employer contributions and
forfeitures under the defined contribution plan described in the preceding
sentence equal to 5% of Net Compensation, in lieu of both the foregoing minimum
contributions and any minimum benefit requirements under the defined benefit
plan.

          10.3     Minimum
Vesting. If the
Plan is Top Heavy, a Participant shall have a vested and nonforfeitable
interest in Employer Contributions allocated to the Participant’s account, and
income thereon, in accordance with the schedule that is provided in the Plan,
but which is not less favorable to the Participant than the following:

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Participant’s

 	
  

 	
 Vested
 and Nonforfeitable

 
	
 Years of Service

 	
  

 	
  

 	
  

 	
 Percentage

 	
  

 
	
  

 	
  

 	
  

 
	
 Less than 2
 years

 	
  

 	
   0%

 
	
 2 years but
 less than 3 years

 	
  

 	
  20%

 
	
 3 years but
 less than 4 years

 	
  

 	
  40%

 
	
 4 years but
 less than 5 years

 	
  

 	
  60%

 
	
 5 years but
 less than 6 years

 	
  

 	
  80%

 
	
 6 or more
 years

 	
  

 	
 100%

 

56

For purposes
of this Section, Years of Service shall be determined in accordance with the
general vesting provisions of the Plan.

ARTICLE 11

CLAIMS PROCEDURE

          11.1     Claims
for Benefits. A
Participant or Beneficiary may make a claim for Plan benefits, if the Employer
has not initiated such process, by filing a written request with the Employer
on a form to be furnished for such purpose. The Participant or Beneficiary
shall also furnish such additional information as may be reasonably necessary
to establish a right to a benefit under the Plan. If a claim is incomplete, the
Employer shall provide a notice to the Participant or Beneficiary as soon as
administratively feasible, but in no event later than required by law or
regulation.

          11.2     Denial
of Benefits. If a
claim for benefits is wholly or partially denied, the Employer shall furnish to
the claimant a notice of the decision, meeting the requirements stated below
within 90 days after receipt of the claim by the Plan (45 days if the claim
involves a determination of Disability). If special circumstances require more
than 90 days to process the claim, this period may be extended for up to an
additional 90 days (with an additional extension of 30 days if special
circumstances exist) by giving written notice to the claimant before the end of
the initial 90-day period, stating the special circumstances requiring the
extension and the date by which a decision is expected. If the claim involves a
determination of Disability and special circumstances require more than 45 days
to process the claim, this period may be extended for up to an additional 30
days (with an additional extension of 30 days if special circumstances exist)
by giving written notice to the claimant before the end of the initial 45-day
period, stating the special circumstances requiring the extension and the date
by which a decision is expected. In the case of any extension involving a claim
of Disability, the notice of extension shall specifically explain the standards
on which entitlement to a benefit is based, the unresolved issues that prevent
a decision on the claim, and the additional information needed to resolve those
issues, and the claimant will be given at least 45 days within which to provide
the specified information. In all cases, failure to provide a notice of
decision in the time specified shall constitute a denial of the claim, and the
claimant shall be entitled to require a review of the denial under the review
procedures specified below.

57

          The
notice to be provided to every claimant who is denied a claim for benefits
shall be in writing and shall set forth in a manner calculated to be understood
by the claimant, the following:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the specified reason or
 reasons for the denial;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 specific reference to
 pertinent Plan provisions on which the denial is based;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 a description of any
 additional material or information necessary for the claimant to perfect the
 claim and an explanation of why such material or information is necessary;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 an explanation of the
 Plan’s claim review procedure describing the steps to be taken by a claimant
 who wishes to submit a claim for review;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 a statement describing the
 claimant’s right to initiate a lawsuit under Section 502(a) of the Employee
 Retirement Income Security Act of 1974 if the appeal is unfavorable to the
 claimant; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 for any denial of a claim
 involving Disability where the Employer relied upon an internal rule,
 guideline, protocol, or other similar criterion in making the adverse
 determination, the notice shall set forth the specific rule, guideline,
 protocol, or other similar criterion or a statement that such a rule,
 guideline, protocol, or other similar criterion was relied upon in making the
 adverse determination and a statement that a copy of such rule, guideline,
 protocol, or other criterion will be provided free of charge to the claimant
 upon request. If the adverse benefit determination is based on a medical
 judgment, the notice also shall set forth an explanation of the scientific or
 clinical judgment for the determination, applying the Plan’s terms to the
 claimant’s medical circumstances, or a statement that such explanation will
 be provided free of charge upon request.

 

          11.3    Review
Procedure. The
purpose of the review procedure set forth herein is to provide a procedure by
which a claimant may have a reasonable opportunity to appeal a denial of a
claim to the Employer for a full and fair review. To accomplish that purpose,
the claimant or duly authorized representative:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 may request a review upon
 written application to the Employer;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 may review pertinent Plan
 documents; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 may submit issues and
 comments in writing.

 

58

A claimant (or duly
authorized representative) shall request a review by filing a written application
for review with the Employer at any time within 60 days after receipt by the
claimant of written notice of the denial of the claim (180 days if the denial
involves a claim based on Disability).

          If
the denial involved a claim based on Disability, the review of the Employer’s
initial adverse benefit determination shall not afford deference to such
determination and shall be conducted by a fiduciary of the Plan who is neither
the individual who made the initial adverse benefit determination nor a
subordinate of that individual. In deciding an appeal of any initial adverse
benefit determination that is based, in whole or in part, on a medical
judgment, the fiduciary shall consult with a health care professional who has
appropriate training and experience in the field of medicine involved in the
medical judgment. The medical or vocational experts whose advice was obtained
on behalf of the Employer in connection with its adverse benefit determination
shall be identified to the claimant or the claimant’s authorized
representative, regardless of whether the Employer relied upon the advice in
making the benefit determination. The health care professional whom the
fiduciary consults in making his review of the Employer’s initial adverse
benefit determination shall be an individual who is neither an individual whom
the Employer consulted in connection with the adverse benefit determination
that is the subject of the appeal, nor the subordinate of any such individual.

          11.4    Decision
on Review. The
decision on review of a denied claim shall be made in the following manner:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The decision on review
 shall be made by the Employer, which may hold a hearing on the denied claim.
 The Employer shall make its decision promptly, which shall ordinarily be not
 later than 60 days (45 days if the denial involved a claim based on
 Disability) after the
 Employer’s receipt of the request for review, unless special circumstances
 (such as the need to hold a hearing) require an extension of time for processing.
 In that case, a decision shall be rendered as soon as possible, but not later
 than 120 days after receipt of the request for review. If an extension of
 time is required due to special circumstances, written notice of the
 extension shall be furnished to the claimant prior to the time the extension
 commences.

 

59

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The decision on review
 shall be in writing and shall include specific reasons for the decision,
 written in a manner calculated to be understood by the claimant, and specific
 references to the pertinent Plan provisions on which the decision is based.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 In the case of a decision
 on review upholding the Employer’s initial denial of a claim based on
 Disability, the fiduciary’s notice of its decision on review shall set forth the
 following information:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 If the adverse benefit
 determination is based on a medical judgment, the notice also shall set forth
 and explanation of the scientific or clinical judgment for the determination,
 applying the Plan’s terms to the claimant’s medical circumstances, or a
 statement that such explanation will be provided free of charge upon request;
 and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 In addition, the notice
 shall include the following statement: “You and your Plan may have other
 voluntary alternatives dispute resolution of terms, such as mediation. One
 way to find out what may be available is to contact your local U.S.
 Department of Labor office and your State insurance regulatory agency.”

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 In the event the decision
 on review is not furnished to the claimant within the time required, the
 claim shall be deemed denied on review.

 

ARTICLE 12

ADMINISTRATIVE COMMITTEE

          12.1    Appointment. The Employer, in its capacity as named
fiduciary of the Plan, may appoint a separate Administrative Committee of one
or more members to perform the functions of the Employer under the Plan, in
which event the following provisions will apply. Such a Committee may be
designated as the administrator of the Plan. In the absence of such
appointment, the Employer shall be the administrator of the Plan.

          12.2    Resignation
and Termination.
A member of the Committee may resign at any time by notifying the Employer in
writing. The Employer may terminate a member of the Committee at any time by
notifying the member in writing.

          12.3    Chairman
and Agents. If
there is more than one member, the Committee shall elect a chairman who shall
be one of the members of the Committee. The Committee may authorize one or more
of its members or any agent to execute or deliver any instrument on behalf of
the Committee, including directions to the Trustee as to the disbursement of
the Trust.

60

          12.4    Meetings. The Committee shall hold such meetings upon
such notice and at such place or places and at such time or times as it may
from time to time determine. A majority of members then serving on the
Committee shall constitute a quorum for the conduct of business and the
affirmative vote of a majority of the members present at any meeting shall be
necessary to approve action taken at the meeting. Action by the Committee may
be taken without a formal meeting by the written authorization of all the
members thereof.

          12.5    Records. The Committee shall keep all records
appropriate for the performance of its powers and duties under the Plan and may
keep appropriate written records of its meetings.

          12.6    Powers. The Committee shall have full power and
authority to do each and every act and thing which it is specifically required
or permitted to do under the provisions of the Plan and in addition thereto
shall have the following discretionary powers and duties in connection with the
administration of the Plan:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 to adopt from time to time
 such bylaws, procedures and forms as the Committee considers appropriate in
 the operation and administration of the Plan and Trust;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 to determine vested
 amounts in individual cases and to direct the Trustee as to the distribution
 of benefits and as to the payment of other amounts payable from the Trust in
 accordance with the provisions of the Plan;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 to establish rules and
 procedures needed for its administration of the Plan;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 to receive information and
 review copies of all records of Participant Contributions and Employer Contributions
 and Trust accountings;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 to pay all reasonable and
 necessary expenses of the Plan from the assets of the Trust to the extent
 that they are not paid by the Employer;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 to exercise general
 administration of the Plan except to the extent responsibilities are
 expressly conferred on others;

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 to be the designated agent
 of the Plan for the service of legal process, or to designate the Employer or
 some other individual or committee to be the designated agent for the service
 of legal process;

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 to establish a funding
 policy and communicate this policy to the Trustee;

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 to approve or deny claims
 for Plan benefits made by Participants and Beneficiaries;

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 to review appeals made by
 Participants or Beneficiaries (“claimants”) who have had their claims for
 benefits under the Plan denied in whole or in part;

 

61

	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 in determining whether
 claimants are entitled to benefits under this Plan or in accordance with
 paragraphs (i) and (j) above, the Committee shall rely first, on official
 Employer records; second, on questionnaires completed by Participants if such
 questionnaires are provided to Participants by the Committee; and third, on
 such other proof as appears appropriate to the Committee in a given case.
 However, in resolving disputes which arise as to facts which must be
 established in reaching said decisions, the Committee shall rely on the
 source or sources that it considers to provide the best evidence of the facts
 in question;

 
	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 to determine conclusively
 for all parties all questions arising in the interpretation or administration
 of the Plan;

 
	
  

 	
  

 	
  

 
	
  

 	
 (m)

 	
 to employ a qualified
 investment manager to manage all or part of the Plan assets if that is deemed
 to be in the interests of the Plan’s Participants and Beneficiaries by the
 Committee;

 
	
  

 	
  

 	
  

 
	
  

 	
 (n)

 	
 to allocate fiduciary
 duties and responsibilities (other than Trustee responsibilities) among
 members of the Committee or other named fiduciaries appointed by the
 Committee to act in such capacity and to designate persons other than named
 fiduciaries to carry out fiduciary responsibilities (other than Trustee
 responsibilities) under the Plan to the extent that it is deemed advisable by
 the Committee. For purposes of this subparagraph, Trustee responsibility shall
 mean any responsibility provided in the Trust to manage or control the assets
 of the Plan, other than power of the Committee to appoint an investment
 manager in accordance with Section 402(c)(3) of the Employee Retirement
 Income Security Act of 1974. Before the Committee delegates any duties or
 responsibilities as provided herein, it must first obtain approval for such
 delegation from the Board of Directors of the Employer. The Committee shall
 periodically review the performance of any person to whom it has delegated
 such responsibilities. It is intended under this Plan and Trust that each
 fiduciary shall be responsible for the proper exercise of its own powers,
 duties, responsibilities and obligations under this Plan and the Trust, and
 shall not be responsible for any act or failure to act of another fiduciary.

 

          12.7    Compensation. No member of the Committee shall receive any
compensation from the Trust for services provided.

          12.8    Indemnity. The Employer shall indemnify each member of
the Committee against any and all claims, loss, damages, expenses (including
counsel fees approved by the Committee), and liability (including any amounts
paid in settlement with the Committee’s approval) arising from any loss or
damage or depreciation which may result in connection with the execution of the
Committee’s duties or the exercise of the Committee’s discretion or from any
other action or failure to act hereunder, except when the same is judicially
determined to be due to gross negligence or willful misconduct of such member.

          12.9    Powers
Denied. No action
of the Committee shall:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 alter the
 amount of contributions otherwise payable to the Plan;

 

62

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 cause the
 Plan and Trust to fail to qualify under Sections 401(a) and 501(a) of the
 Code, or cause any portion of Employer Contributions to the Plan to fail to
 be deductible by the Employer under Section 404(a) of the Code;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 increase the
 duties or liabilities of the Trustee without its written consent; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 cause the
 funds contributed to this Trust or the assets of this Trust to ever revert to
 or be used or enjoyed by the Employer, except as provided in this Plan.

 

          12.10     Action
When There is a Vacancy. If at any time there
should be a vacancy on the Committee, then pending the appointment of a
successor to fill such vacancy, the remaining members shall have the power to
act on behalf of the Committee, provided, however, that whenever there are less
than 3 members, the action must be taken by unanimous vote.

          12.11     Settlement
of Claims. The Committee shall have the power to
accept, compromise, arbitrate, or otherwise settle any obligation, liability or
claim, but it shall not be obligated to do so unless, in its sole judgment, it
is in the interest of the Plan or Trust to do so.

          12.12     Discretionary
Powers. Whenever in this Plan and Trust
discretionary powers are given to the Committee, it shall have absolute
discretion, and its decision shall be binding upon all persons affected
thereby. The Committee shall exercise its discretion in a nondiscriminatory
manner.

          12.13     Employment
of Professionals and Assistants. The Committee
shall have the power:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 to secure
 such legal, medical, and actuarial advice or assistance as it deems necessary
 or desirable in carrying out the provisions of the Plan;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 to appoint
 or employ such other advisors or assistants as it deems necessary or
 desirable to carry out its duties.

 

The Committee
shall have full discretion to employ any person or firm that it deems qualified
to supply any of the required services set forth above; provided, however, that
the person or firm so employed shall be independent of the control of the
Employer and, where required, shall have all necessary licenses to practice
their profession.

          12.14     Bond.
To the extent not exempted by law or regulation, the Employer shall obtain a
fidelity bond that shall cover every Employee who is a fiduciary of the Plan
and every Employee who handles funds or other property of the Plan (“Plan
official”). Each fiduciary and Plan official shall be bonded in an amount which
is not less than the greater of 10% of the assets of the Plan or $1,000,
provided, however, that bonding in excess of $1,000,000 (or $500,000 if the
Plan holds no Employer Securities) shall not be required. Said bond will insure
the Plan against loss by reason of acts of fraud or dishonesty on the part of every
fiduciary and Plan official, directly or through connivance with others.

63

ARTICLE 13

TRUSTEE

          13.1     Duty
and Liability of Trustee. The Trustee shall
discharge its duties with respect to this Plan solely in the interests of the
Participants and Beneficiaries and for the exclusive purpose of providing
benefits to Participants and their Beneficiaries and defraying reasonable
expenses of administering the Plan. The Trustee shall have generally all of the
powers of owners with respect to securities or properties held in the Trust
Fund, but shall not be liable for any losses incurred upon investments, except
to the extent such Trustee failed to diversify the investments of the Plan so
as to minimize the risk of large losses (unless under the circumstances it is
clearly prudent not to do so), or failed to manage the investments of the Plan
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like character and
with like aims. Except to the extent such duties may be expressly allocated to
the Trustee, the Trustee in its capacity as such shall have no authority or
responsibility with respect to the operation and administration of the Plan.

          13.2     General
Scope of Powers. The Trustee shall have all powers
necessary for the performance of its duties. In extension, but not in
limitation of the rights, powers and discretions conferred upon the Trustee by
virtue of any statute or rule of law, or conferred upon the Trustee by other
provisions of this Plan and Trust, the Trustee shall have and may exercise from
time to time in the administration of the Trust herein created and for the
purpose of distribution after the termination thereof and for the purpose of
distributing any matured Beneficial Interest after the maturity thereof, and
without order or license of any court, any one or more of the following rights,
powers and discretions:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 To Purchase Employer Securities. To purchase
 Employer Securities with cash contributed to the Plan and to make other
 investments of funds in accordance with this Article.

 

64

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 To Pay Costs of Purchase. To pay for
 brokerage commissions, taxes, and other charges and expenses incurred in
 connection with the purchase of Employer Securities and add such items to the
 cost thereof.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 To Carry Securities in Nominee Form. To
 purchase, hold and carry investments for the Trust Fund including Employer
 Securities in the name of the Trustee, or in the name of any nominee or
 nominees selected by the Trustee, without Trust designation in any said case,
 and to invest funds of the Trust in deposits, including savings accounts,
 savings certificates, and similar interest-bearing instruments or accounts in
 itself or its affiliates, provided that such deposits bear a reasonable rate
 of interest.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 To Determine Beneficial Interests. To
 compute and determine, in a fair and nondiscriminatory way, the interest of
 Participants and Beneficiaries in the Trust Fund in the event of a
 termination of the Trust, or in the event of the maturity of the Beneficial
 Interests or for any other purpose, and any such computation or determination
 made in good faith shall be binding and conclusive upon all parties to this
 Plan and Trust and upon all persons interested or who may become interested
 in the Trust Fund.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 To Vote Employer Securities. To exercise
 voting rights with respect to Employer Securities in accordance with the
 provisions of Section 6.4.

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 To Exercise Powers of Owners in Cases of Reorganization, Merger and
 the Like. To institute, participate and join in any
 plan of reorganization or readjustment or merger or consolidation of any
 corporation, the securities of which are held by the Trust Fund, or to use
 any other means of protecting or dealing with any investments of the Trust
 Fund, and in general, to exercise each and every other power or right with
 respect to each investment of the Trust Fund as individuals generally have
 and enjoy with respect to their own investments and securities, including the
 power to give proxies, with or without power of substitution or revocation,
 and to deposit securities with any protective committee or with a trustee or
 with depositories designated by any such committee or by any such trustee or
 by any court.

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 To Segregate Funds for Proper Purposes. To
 segregate any parts or portion of the Trust Fund for the purposes of
 administration thereof, or for purposes of distribution, or for any other
 purpose deemed proper by the Trustee; provided always that the Trustee may,
 except only to the extent that the foregoing power is exercisable by the
 Trustee, hold, manage, control, invest and reinvest the Trust Fund and the
 Beneficial Interests of the various Participants therein as a common fund,
 reflecting upon its records and books from time to time appropriate parts or
 portions of principal or income apportionable to the several Beneficial
 Interests.

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 To Sue and Defend and be Indemnified on that Account.
 To institute or defend any proceedings at law or in equity concerning the
 Trust Fund or the assets thereof at the sole cost and expense of the Trust
 Fund, and of the several Beneficial Interests involved or concerned therein,
 and to compromise, settle and adjust any claims or liabilities asserted by or
 against the Trust Fund or the Trustee on such terms and for such sums or
 amounts as the Trustee in its absolute discretion, shall deem proper, but the
 Trustee shall be under no duty or obligation to institute, maintain, or
 defend any suit, action or other legal proceedings except and unless the
 Trustee shall have been indemnified to the Trustee’s satisfaction against all
 expenses and liabilities which the Trustee may sustain or anticipate by
 reason thereof. The Trustee shall not have the duty or obligation to sue or
 otherwise seek enforcement of Employer Contributions that are or may be due
 the Plan.

 

65

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 To Sell or Otherwise Dispose of Assets. To
 sell, exchange, or otherwise dispose of any investment of the Trust Fund, or
 of the several Beneficial Interests, for such price and on such terms as the
 Trustee in the Trustee’s absolute discretion shall elect, without regard to
 whether the time of payment provided in any said sale shall be greater than
 the probable or actual duration of the Trust herein created or not.

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 To Employ Agents, Servants and Attorneys. To
 select and employ or retain such agents, servants, or attorneys as the
 Trustee from time to time may deem necessary or advisable in connection with
 the management and operation of the Trust herein created, and to pay the
 fees, commissions, or salaries incurred on account thereof as an expense of
 administration of the Trust.

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 To Value Assets and the Trust Fund. To fix
 and determine, at the current fair market value thereof, the value of the
 Trust Fund annually and from time to time as may be necessary or advisable,
 in the Trustee’s opinion, for any of the purposes of this Plan and Trust,
 including power to fix and determine, in a fair and nondiscriminatory way
 selected by the Trustee, the then fair market value of each and every item
 constituting the Trust, the items composing the same, including powers, upon
 maturity of a Beneficial Interest, to select and determine, in a fair and
 nondiscriminatory way, the assets of the Trust Fund to be set apart into and
 to constitute said matured Beneficial Interest and the value of the items so
 set apart for that purpose, and any such computation, determination, or
 action of the Trustee made in good faith shall be binding and conclusive upon
 all parties to this Plan and Trust and upon all persons interested or who may
 become interested, directly or indirectly, in the Trust hereby created.

 
	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 To Determine Complex Questions of Income and Principal.
 To determine, in accordance with sound business or accounting practices, with
 respect to any receipt of the Trust Fund or of the separate Beneficial
 Interests of Participants therein, and without regard to statutes or rules of
 law that otherwise would be controlling, the part or portion thereof which is
 income and the part or portion thereof which is principal, and to charge or
 credit to principal or income, as the Trustee may from time to time elect (without
 duty or obligation to exercise this power uniformly in all cases) any
 premiums paid or received or discounts received or allowed in connection
 with, or any gain or loss resulting from the purchase, sale, call, redemption
 or payment of any security or investment acquired, held, or disposed of by
 the Trust Fund.

 
	
  

 	
  

 	
  

 
	
  

 	
 (m)

 	
 To Require Settlement and Allowance of Accounts Before Making
 Distribution. In making distribution of any
 Beneficial Interest, to demand and receive from the Participant or other
 person or persons entitled to receive the same, a complete settlement and
 accounting, before the Trustee shall be obligated to pay, distribute, or make
 available any part thereof to said Participant or to said person or persons.

 
	
  

 	
  

 	
  

 
	
  

 	
 (n)

 	
 Form and Method of Accounting. To select and
 determine the appropriate forms, methods and books of account for use by the
 Trustee in the management and administration of the Trust herein created and
 for the purpose of accounting for the same.

 

66

	
  

 	
  

 	
  

 
	
  

 	
 (o)

 	
 Compensation and Payment of Fees and Expenses.
 To receive reasonable compensation for the Trustee’s services as Trustee
 hereunder, and to pay from out of the Trust Fund all costs, fees, expenses,
 taxes, and other charges and expenses of administration and distribution of
 the Trust Fund and of the separate Beneficial Interests to the extent that
 they are not paid directly by the Employer, and the Trustee shall further be
 entitled to reimbursement for or on account of any said item of disbursement
 from and out of the Trust Fund from time to time held by the Trustee,
 distributing the same ratably over the separate Beneficial Interests of
 Participants in accordance with the ratio of their separate Beneficial
 Interests to the sum total of all said Beneficial Interests; provided, however,
 the Committee may establish uniform rules allowing for the payment of certain
 costs, fees, expenses, taxes, and other charges on a per capita basis,
 provided such payments are consistent with Department of Labor Field
 Assistance Bulletin 2003-3.

 
	
  

 	
  

 	
  

 
	
  

 	
 (p)

 	
 Borrow and Advance Funds. The Trustee is
 authorized in the Trustee’s discretion to borrow money from others and to
 secure advances to the Trust Fund at any time and from time to time upon such
 terms and conditions as the Trustee deems best, and for the sum so borrowed
 or advanced, the Trustee may issue the Trustee’s promissory note as the
 Trustee and secure the repayment thereof by the pledging of any securities or
 other property in the Trustee’s possession as Trustee hereunder, and may pay
 interest thereon for any monies borrowed from others or advanced by it for
 the benefit of the Trust. Exempt Loans by the Trustee shall be made in
 accordance with Section 6.1.

 
	
  

 	
  

 	
  

 
	
  

 	
 (q)

 	
 Life Insurance. The Trustee is authorized to
 purchase life insurance contracts on the lives of Participants as a general
 Trust Fund investment; provided, however, that proceeds from an Exempt Loan
 shall not be used by the Trustee to purchase life insurance. Such investments
 are intended to indemnify the Trust for the potential loss of Employer
 Contributions in the event of a Key Employee’s premature death.

 
	
  

 	
  

 	
  

 
	
  

 	
 (r)

 	
 To Hold and Deposit Funds. To hold
 uninvested such cash funds as may appear reasonably necessary to meet the
 anticipated cash requirements of the Plan from time to time, and to deposit
 such funds or any part thereof, either separately or together with other
 trust funds under the control of the Trustee, in its own deposit department
 or to deposit the same in the name of the Trustee in such other depositories
 as may be selected.

 

          Each
of the foregoing rights, powers and discretions conferred upon the Trustee and
each and every power possessed by trustees generally by virtue of any statute
or rule of law or other provisions of this Plan and Trust shall be
discretionary powers exercisable by the Trustee, and the Trustee shall in no
event be or become liable to anyone on account of the exercise of any said
power in good faith.

67

          13.3     Investment
Powers. Except as otherwise provided in this
Article, the Trustee shall have the exclusive authority and discretion to
invest and reinvest the income of the Trust in real and personal property of
any kind, including the commingled common funds of any corporate trustee, and
“qualifying employer securities” and/or “qualifying employer real property,” as
defined in Section 407(d) of the Employee Retirement Income Security Act in
amounts up to 100% of Trust assets. The Plan is designed to invest primarily in
Employer Securities, and the Trustee shall not be limited by the laws of any
state proscribing or limiting the investment of trust funds by trustees, either
as to types of investments or as to diversification of investments.

          The
Employer may instruct the Trustee as to investments (including the acquisition,
sale or retention of specific assets), disbursements or any other matter that
comes within the powers granted to the Trustee under this Plan. When the
Employer does instruct the Trustee, the Trustee shall have no responsibility or
accountability for making any investment, for retaining any investment, for
making any disbursement or for doing any other act directed by the Employer
other than to comply with the instructions of the Employer. The Trustee may
rely upon any instruction from the Employer given to it in writing and shall be
under no duty to inquire as to the action taken.

          13.4     Appointment
of Investment Manager. The Employer may appoint
one or more parties that are investment managers as defined in the Employee
Retirement Income Security Act of 1974, as amended, to have power to manage,
acquire, or dispose of all or part of the Trust Fund. The appointment of any
such investment manager and investment of the Trust Fund pursuant to such
appointment shall be subject to the following:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Written
 notice of each such appointment shall be given to the Trustee a reasonable
 time in advance of the date that the investment manager first exercises the
 power granted to it. Such notice shall state what portion of the Trust Fund
 is to be invested by the manager and shall direct the Trustee to segregate
 such portion of the Trust Fund into a separate account for such investment
 manager.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The Trustee
 shall not act on any direction or instruction of the investment manager until
 the Trustee has been furnished with an acknowledgment in writing by the
 investment manager that it is a fiduciary with respect to the Plan.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 There shall
 be a written agreement between the Employer and each investment manager. The
 Trustee shall receive a copy of each agreement and all amendments thereto and
 shall give written acknowledgment of receipt of same.

 

68

          13.5     More
Than One Trustee. Whenever there are 2 or more
Trustees acting hereunder, a majority in number of the Trustees acting at any
given time hereunder shall govern as to any and all business relating to this
Trust, and a decision of the majority in number of the Trustees shall be
binding and conclusive.

          13.6     Individual
Trustees. No individual Trustee shall have any
right, as such Trustee, to make any decision or to take any action respecting
the Trustee’s rights of participation hereunder, and all matters respecting an
individual Trustee’s position as a Participant shall be decided by the
remaining Trustee or Trustees, if any, or, if there is no other Trustee, by the
Employer. However, no individual Trustee who is an Employee shall receive any
compensation from the Trust for services provided as Trustee, except to
reimburse the individual for expenses actually incurred.

          13.7     Annual
Account. The Trustee shall account annually for
the Trust Fund and for its various transactions in connection therewith to the
Employer.

          13.8     Person
Dealing with Trustee. No purchaser at any sale
made by the Trustee hereunder, and no person, firm, or corporation dealing with
the Trustee shall be obligated to see to the application of any money or
property paid or delivered to the Trustee. All persons dealing with the Trustee
may act in reliance upon the signature of the Trustee and shall not be bound to
inquire as to whether or not said signature represents valid action by the
Trustee.

          13.9     Prohibited
Transactions. Except as may be expressly permitted
by law, no Trustee or other fiduciary hereunder shall permit the Plan to
engage, directly or indirectly, in any of the following transactions with a
Disqualified Person:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 sale or
 exchange, or leasing, of any property between the Plan and a Disqualified
 Person;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 lending of
 money or other extension of credit between the Plan and a Disqualified
 Person;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 furnishing
 of goods, services or facilities between the Plan and a Disqualified Person;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 transfer to,
 or use by or for the benefit of, a Disqualified Person of the income or
 assets of the Plan;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 act by a
 Disqualified Person who is a fiduciary whereby the fiduciary deals with the
 income or assets of the Plan in the fiduciary’s own interest or for the
 fiduciary’s own account; or

 

69

	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 receipt of
 any consideration for the fiduciary’s own personal account by any
 Disqualified Person who is a fiduciary from any party dealing with the Plan
 in connection with a transaction involving the income or assets of the Plan.

 

          13.10     Indemnity.
The Employer shall indemnify, save and hold harmless, jointly and severally,
the Trustee, other than a corporate Trustee, from any and all loss, damage and
liability which the Trustee may incur or sustain, arising out of the
performance of the Trustee’s duties under the Plan, except to the extent that
they result from the willful misconduct or gross negligence or lack of good
faith of the Trustee. Except to the extent otherwise required under the
Employee Retirement Income Security Act of 1974 or other applicable law, the
Trustee shall not be liable for the acts or omissions of third parties.

          13.11     Resignation
and Appointment. The Trustee, or any successor
Trustee, must accept its appointment in writing. The Trustee, or any successor
Trustee, may resign as Trustee of this Trust at any time by giving 30 days’
notice of resignation by registered mail to the Employer, or such shorter
notice as may be agreed to by the Employer. Upon such resignation becoming
effective, the resigning Trustee shall render to the Employer an account of the
administration of the Trust during the period following that covered by the
most recent account, and shall perform all acts necessary to transfer the
assets of the Trust to the successor Trustee. In the event of the resignation
of the original or any successor Trustee, the Employer shall have the power to
appoint a successor Trustee. The Employer shall also have power at any time to
appoint a Co-Trustee or Co-Trustees. No successor Trustee shall be or become
liable for any action or default of a prior Trustee.

          13.12     Removal
of Trustee. The Employer may remove a Trustee or
any successor Trustee at any given time upon 30 days’ notice of removal by
registered mail to the Trustee, or such shorter notice as may be agreed to by
the Trustee. In case of such removal, the Trustee shall be under the same duty
to account for and transfer assets of the Trust to a successor as hereinabove
provided in the case of the resignation of a Trustee; and the Employer shall
have the same power to appoint a successor Trustee.

          13.13     Continuation
of the Trust. Resignation, disqualification,
liability or removal of a Trustee shall not terminate the Trust; and any
successor Trustee, corporate or individual, shall have all powers, duties and
discretions herein conferred upon the original Trustee.

70

ARTICLE 14

CLAIMS AGAINST THE TRUST FUND

          14.1          Anti-Alienation of Benefits. Except as
otherwise provided herein, no Participant or Beneficiary shall have any
transmissible interest in the Trust Fund or in the Participant’s separate
Beneficial Interest therein, either before or after the vesting thereof, or in
any of the assets comprising the same prior to actual payment and distribution
thereof, and shall have no power to alienate, dispose of, pledge or encumber
the same, while in the possession or control of the Trustee, nor shall the
Trustee recognize any assignment thereof, either in whole or in part, nor shall
the interest of any Participant or Beneficiary be subject to attachment,
garnishment, execution or other legal process while in the hands of the
Trustee.

          14.2          Charge for Litigation. In the event
that any Participant or any person claiming by or through a Participant should
commence any equitable or legal proceedings against the Trustee, the result of
which is adverse to the plaintiff, or in the event that the Trustee should find
it necessary to commence any such proceeding against any Participant or any
person claiming by or through a Participant, the result of which is adverse to
the defendant, the cost to the Trustee of defending or bringing the proceeding,
as the case may be, shall be charged, to the extent possible and permitted by
law, to the account of the Participant and only the excess of such cost over
the amount of the Participant’s account shall be included as an expense of
administration.

          14.3          Qualified Domestic Relations Orders.
Notwithstanding any provision to the contrary herein, the Employer may assign
the interest of a Participant in the Plan (or in a successor plan of the
Employer or in the plan of a successor Employer) to an Alternate Payee pursuant
to a Qualified Domestic Relations Order. In the event the Plan receives a
Qualified Domestic Relations Order with respect to a Participant’s interest in
the Trust Fund, the following provisions shall apply:

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The Employer
 shall promptly give written notification to the Participant and to the
 Alternate Payee of receipt of a domestic relations order and of Plan
 Qualification Procedures. The Employer shall then proceed with Qualification
 Procedures to determine whether the order is a Qualified Domestic Relations
 Order and shall notify the Participant and Alternate Payee (or the Alternate
 Payee’s designated representative) of its determination.

 

71

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Disputed
 funds shall be disposed of as follows:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 During the
 period in which the Qualification Procedures are in progress, the Employer
 shall separately account for any amounts which would be payable to an
 Alternate Payee if the domestic relations order is determined to be a
 Qualified Domestic Relations Order.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 If the order
 is determined to be a Qualified Domestic Relations Order within the 18-month
 period beginning on the date the first payment would be required to be made
 under the order, the Employer shall pay the amounts designated in the Order,
 together with earnings or losses, if required, to the Alternate Payee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 If the
 Employer determines that the order is not a Qualified Domestic Relations
 Order, or if the 18-month period described in paragraph (i) above elapses and
 the qualification dispute has not been resolved, the Employer shall pay such
 amounts, together with earnings or losses, if required, to the persons who
 would have received the amounts if the order had not been issued.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 If an order
 is qualified after expiration of the 18-month period described in paragraph
 (i) above, payment of benefits to an Alternate Payee shall proceed
 prospectively and the Plan shall not be liable to an Alternate Payee for
 benefits attributable to the period prior to qualification.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 The Employer
 shall obey a Qualified Domestic Relations Order requiring that benefits be
 paid to an Alternate Payee beginning on a date on or after the Participant’s
 Earliest Retirement Age, even though the Participant does not have a
 Termination of Employment on that date. If the Alternate Payee under a
 Qualified Domestic Relations Order cannot be located, the Employer may either
 maintain a separate accounting of the amount which would have been paid to
 such Alternate Payee, or reallocate such amount among the accounts of
 Participants as a reduction of the Employer contribution. If the Alternate
 Payee is thereafter located, the reallocated amount shall be reinstated for
 the benefit of the Alternate Payee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Payment of
 benefits pursuant to a Qualified Domestic Relations Order shall be made only
 as permitted under the Plan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 To the
 extent permitted by law and except as otherwise provided under a Qualified
 Domestic Relations Order, the Employer may, on a uniform basis, charge the
 reasonable and necessary expenses associated with the review of a domestic
 relations order and the implementation of a Qualified Domestic Relations
 Order to the Plan. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Effective
 April 6, 2007, a domestic relations order that otherwise satisfies the
 requirements for a Qualified Domestic Relations Order will not fail to be a
 Qualified Domestic Relations Order: (i) solely because the order is issued
 after, or revises, another domestic relations order or Qualified Domestic
 Relations Order; or (ii) solely because of the time at which the order is
 issued, including issuance after the Participant’s death.

 

72

          14.4          Independent Fund. In the event the
Employer shall at any time go out of business, cease to exist, be dissolved,
either voluntarily or involuntarily, or have a receiver or trustee in
bankruptcy appointed for it, or be merged or consolidated into or with another
company, no part of the Trust Fund created hereunder or of any of the separate
Beneficial Interests of Participants shall in any manner whatsoever be or
become subject to the rights or claims of any of its creditors, but the Trust
herein created from its inception shall be a separate entity, aside and apart
from the Employer and its assets, and the Employer shall have no claim or right
to repossess any part of the funds or properties of the Trust or of the income
derived therefrom. 

          14.5          Payments Delayed Due To Disputes. If
the Employer determines there is a dispute concerning the payment of benefits
to a Beneficiary or Beneficiaries, or concerning the qualification of a
domestic relations order under Section 414(p) of the Code, the Employer may
delay any payment that would otherwise be made under the Plan until the Employer,
in its discretion, determines that the dispute has been resolved. The Employer
may, in its discretion, file an interpleader action in federal court, naming
the parties to the dispute, and may pay the disputed amount into the court to
be distributed in accordance with the court’s decision.

ARTICLE 15

MILITARY SERVICE AND LEAVE OF ABSENCE

          15.1          Compulsory Military Service. Any
Employee or Participant who, through the operation of a compulsory service law
of the United States of America, enters the armed forces or government service
of the United States shall be presumed for purposes of this Plan to be on leave
of absence with the consent of the Employer, provided the individual returns to
and reenters the employ of the Employer within such time after discharge or
separation from military service as may entitle the individual to reemployment
under law. Such leave of absence shall continue from the date of entry into
such armed forces or government service until the date on which employment
resumes with the Employer in accordance with the preceding sentence.

73

          15.2          Voluntary Military Service. Any
Employee or Participant who voluntarily enters the armed forces of the United
States, or who is ordered to an initial period of active duty as a member of a
reserve component of the armed forces of the United States or to full-time
training or other full-time duty as a member of the National Guard shall be
presumed for purposes of the Plan to be on leave of absence with the consent of
the Employer, provided that: (1) military service does not exceed the maximum
period which the individual could complete and remain entitled to reemployment
with the Employer under law, and (2) the individual returns to and reenters the
employ of the Employer within such time following discharge or separation from
such military services as may entitle the individual to reemployment under law.

          15.3          Participation During Leave of Absence.
If a Participant is on leave of absence with the consent of the Employer, or is
on leave of absence because of military or government service as described in
this Article, the individual shall remain a Participant during the period of
such leave of absence. However, during the period of such leave of absence,
Employer Contributions shall only be made and amounts allocated on behalf of
such Participant on account of Compensation actually paid to the Participant
during such period except as required by law. If such Participant does not
return to the employ of the Employer within the period granted for such leave
of absence or, in the case of military or government service, within the
periods provided in this Article, it shall be conclusively presumed for
purposes of the Plan that employment terminated as of the date of expiration of
such leave of absence or period provided in this Article, as the case may be.
However, if the death or Disability of such Participant occurs prior to
expiration of the applicable period, the death or Disability benefit provided
in the Plan shall be payable. Notwithstanding any provision of the Plan to the
contrary, contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of the
Code.

74

ARTICLE 16

PARTICIPATING EMPLOYERS

          16.1          Adoption of Plan. Upon approval by the
Employer, a corporation or other entity may adopt this Plan by a properly
executed document, participate herein and be known as a Participating Employer.

          16.2          Requirements of Participating Employers.
All Participating Employers shall be subject to the following rules:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Each
 Participating Employer shall be required to use the Trustee designated
 herein. If the Employer delegates its duties to a Committee, each
 Participating Employer shall be required to use the Committee designated
 herein.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The Trustee
 may, but shall not be required to, commingle, hold and invest as one Trust
 Fund all contributions made by Participating Employers.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Expenses of
 the Trust Fund shall be allocated to each Participating Employer in the same
 proportion that the total amount credited to all Participants employed by
 such Employer bears to the total amount credited to all Participants.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 With respect
 to its relation with the Trustee, each Participating Employer shall be deemed
 to have designated irrevocably the Employer as its agent.

 

          16.3          Allocation of Contributions. Employer
Contributions shall be allocated in accordance with Section 5.4 among eligible
Participants of all Employers that are Affiliates by applying a uniform
allocation rate to all such Participants.

          16.4          Accounting for Employees. If an
Employee is employed by more than one Participating Employer during the Plan
Year, service and Compensation with each Participating Employer that is an
Affiliate shall be aggregated for all purposes under the Plan, and, for
purposes of allocation of any contributions, the Employee shall be deemed to be
employed on the Anniversary Date if the Employee is employed on such date by
any Participating Employer. Such allocation shall be made in accordance with
Article 5.

75

          If
an Employee is transferred between Participating Employers that are Affiliates,
such Employee shall retain all amounts credited to the Employee’s account, and
the Employee’s accumulated Years of Service and eligibility to participate in
the Plan. No such transfer shall constitute a Termination of Employment, and
the Participating Employer to which the Employee is transferred shall be
obligated with respect to such Employee in the same manner as was the
Participating Employer from which the Employee was transferred.

          16.5          Separate Records. The Trustee shall
keep separate records concerning each Participating Employer and the accounts
of Participants employed by such Participating Employer. The transferee
Employer shall immediately notify the Trustee if an Employee transfers from one
Participating Employer to another.

          16.6          Amendment. The Board of Directors of
the Employer shall have the exclusive authority to amend this Plan without
further action or consent of any Participating Employer and each Participating
Employer to the extent required by law hereby delegates to the Board of
Directors, including to its representatives and delegates, the power and
authority to amend this Plan on behalf of the Participating Employer.

          16.7          Discontinuance of Participation. Any
Participating Employer may discontinue its participation in the Plan. At the
time of any such discontinuance, evidence of satisfaction of any applicable
conditions imposed under the Plan shall be delivered to the Trustee. The
Trustee shall thereafter transfer Trust Fund assets allocable to the
Participants of such Participating Employer to a successor Trustee designated
by the Participating Employer, if it has established a separate qualified plan
for its Employees. If no successor is designated, the Trustee shall retain such
assets for the Employees of said Participating Employer pursuant to the
provisions of the Plan. No portion of the Trust Fund attributable to such
Participating Employer shall be used other than for the exclusive benefit of
the Participants of such Participating Employer.

76

ARTICLE 17

RIGHTS OF EMPLOYER TO AMEND, DISCONTINUE OR
TERMINATE

          17.1          Amendment. Except as herein limited,
the Employer shall have the right to amend this Plan and Trust at any time to
any extent that it may deem advisable. Such amendment will be stated in an
instrument in writing executed by the Employer and adopted by the Board of
Directors or a representative of the Board as identified in the Board minutes.
Upon delivery of such instrument to the Trustee, this Plan and Trust shall be
deemed to have been amended in the manner therein set forth, and Participants
shall be bound thereby; provided, however:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 that no
 amendment shall increase the duties or liabilities of the Trustee without its
 written consent;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 that no
 amendment shall have the effect of vesting in the Employer any interest in or
 control over any of the funds or properties subject to the terms of the
 Trust;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 that no
 amendment shall have the retroactive effect so as to reduce the percentage of
 any Participant’s account which is vested and nonforfeitable; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 that no
 amendment shall have the effect of eliminating or reducing an early
 retirement benefit or retirement-type subsidy or eliminating an optional form
 of benefit with respect to benefits accrued before such amendment.

 

          17.2          Termination of Plan. It is the
expectation of the Employer that it will continue this Plan and the payment of
Employer Contributions hereunder indefinitely, but continuance of the Plan is
not assumed as a contractual obligation of the Employer, and the right is
reserved by the Employer at any time to discontinue its contributions
hereunder, or, by action of the Board of Directors, to terminate the Plan. Mere
failure of the Employer to make contributions hereto shall not terminate the
Plan until notice of termination to the Trustee; however, upon such notice by
the Employer to the Trustee, the Plan shall automatically terminate.

          17.3          Trust Term. The term of the Trust herein
created shall be for such time as may be necessary to accomplish the purposes
set forth herein and in no event shall the term exceed the limits prescribed by
the laws of the jurisdiction to which the Trust is subject. In the event such
limit should be reached at any time, or for any reason, prior to the
accomplishment of the purposes for which the Trust is created, the Trust shall
be deemed to have terminated upon the attainment of such limit.

77

          17.4          Termination of Trust. The Employer
reserves the right to terminate the Trust at any time. Upon a determination
that the termination of the Trust will not impair the Plan and Trust’s
qualification under the Code, the Trustee and Employer shall cause distribution
of all of the assets of the Trust to be made to Participants as their
respective interests may appear, provided, however, that the interests of
Participants who have received distributions pursuant to Section 7.3 which
resulted in a forfeiture of the nonvested portion of their Beneficial Interest
prior to the date of termination of the Plan shall not have the nonvested
portion restored to their accounts at the time of termination.

ARTICLE 18

SUCCESSOR EMPLOYER AND MERGER OR
CONSOLIDATION OF PLANS

          18.1          Successor Employer. In the event of a
transfer of business assets, operations, or employees from the Employer to a
successor employer, provision may be made by which the Plan and Trust will be
continued by the successor; and, in that event, such successor shall be substituted
for the Employer under the Plan. The substitution of the successor shall
constitute an assumption of Plan liabilities by the successor and the successor
shall have all of the powers, duties and responsibilities of the Employer under
the Plan.

          18.2          Merger and Consolidation. In the event
of any merger or consolidation of the Plan with, or transfer in whole or in
part of the assets and liabilities of the Trust Fund to another trust fund held
under any other plan or deferred compensation plan maintained or to be
established for the benefit of all or some of the Participants of this Plan,
the assets of the Trust Fund applicable to such Participants shall be
transferred to the other trust fund only if:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 each
 Participant would (if either this Plan or the other plan then terminated)
 receive a benefit immediately after the merger, consolidation or transfer
 which is equal to or greater than the benefit the Participant would have been
 entitled to receive immediately before the merger, consolidation or transfer
 (if this Plan had then terminated);

 

78

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 resolutions
 of the Board of Directors of the Employer under this Plan, and of any new or
 successor employer of the affected Participants, shall authorize such
 transfer of assets; and, in the case of the new or successor employer of the
 affected Participants, its resolutions shall include an assumption of
 liabilities with respect to such Participants’ inclusion in the new
 employer’s plan; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 such other
 plan and trust are qualified under Sections 401(a) and 501(a) of the Code. 

 

Notwithstanding
the foregoing, a transfer of amounts from the Trust Fund to a nonqualified
foreign trust shall be treated as a distribution from the Trust Fund.

ARTICLE 19

MISCELLANEOUS

          19.1          Inspection of Books. The Trustee may
inspect the books and records of the Employer whenever such inspection shall be
reasonably necessary in order to determine any factor pertinent to the
performance of its duties under this Plan and Trust. However, the Trustee shall
not be required to make such inspection, but may in good faith rely on any
statements of the Employer.

          19.2          Right to Terminate Employment. The
adoption and maintenance of the Plan and Trust shall not be deemed to be a
contract between the Employer and any of its Employees. Nothing herein
contained shall be deemed to give to any Employee the right to be retained in
the employ of the Employer or to interfere with the right of the Employer to
discharge any Employee at any time, nor shall it be deemed to give the Employer
the right to require any Employee to remain in its employ, nor shall it
interfere with the Employee’s right to terminate employment at any time.

          19.3          Liability of Employer. All benefits
payable under the Plan shall be paid or provided for solely from the Trust.

          19.4          Defense Under Tax Laws. The Employer
shall have the right to defend the position of the Plan and Trust herein
created as an employees’ trust as defined in Section 401 of the Code.

          19.5          Governing Law. This Plan and Trust
shall be construed, administered, and governed in all respects under the laws
of the State of Minnesota to the extent not preempted by federal law.

79

          19.6          Binding Effect. This Plan and Trust
shall be binding upon and inure to the benefit of the heirs, personal
representatives, successors and assigns of any and all of the parties hereto.

          19.7          Qualification Under Tax Laws. Except as
otherwise provided herein, and subject to receipt of a favorable determination
letter from the Internal Revenue Service, the Communications Systems, Inc.
Employee Stock Ownership Plan and Trust, as restated, shall become effective as
of the Effective Date.

          19.8          Earlier Effective Date to Maintain Tax Qualification.
Notwithstanding the Effective Date of this restatement, any provision in this
restatement of the Plan that was included in order to comply with or reflect
any change in the qualified plan rules of Section 401(a) of the Code, or in any
other applicable law, as determined by the Employer, will be effective with
respect to any person on the date the change in the applicable law becomes
applicable to that person or to the Plan, unless a different effective date is
specifically provided in the Plan document.

          Notwithstanding
anything herein to the contrary, the adoption of this restated Plan document
shall not have the retroactive effect of reducing the percentage of any Participant’s
account which is vested and nonforfeitable, or eliminating or reducing an early
retirement benefit or retirement-type subsidy with respect to benefits accrued
before such adoption.

          Except
as set forth in this Section, the prior Plan document shall be effective in all
respects for any Plan Years ending prior to January 1, 2009.

80

          IN
WITNESS WHEREOF, Communications Systems, Inc. has caused the Communications
Systems, Inc. Employee Stock Ownership Plan and Trust, as restated, to be
executed by its officer, and Curtis A. Sampson, Jeffrey K. Berg and Paul N.
Hanson have executed this Plan and Trust and hereby affirm their continued
appointments as Trustees, as of the Effective Date.

	
  

 	
  

 	
  

 
	
  

 	
 COMMUNICATIONS SYSTEMS, INC.

 
	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Karen
 Nesburg Bleick

 
	
  

 	
  

 	
  

 
	
  

 	
 Its

 	
 Vice
 President of Human Resources 

 
	
  

 	
  

 	
  

 
	
  

 	
 Date:
 October 28, 2009

 
	
  

 	
  

 	
  

 
	
  

 	
 TRUSTEES

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/Curtis A.
 Sampson

 
	
  

 	
 Curtis A.
 Sampson

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ Jeffrey
 K. Berg

 
	
  

 	
 Jeffrey K.
 Berg

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ Paul N.
 Hanson

 
	
  

 	
 Paul N. Hanson

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