Document:

Exhibit 10.3

 

PENSION PLAN

 

FOR MARK GARWOOD

 

Effective January 1, 2003

 

Section 1.                                            Purpose
of the Plan.

 

Tamalpais Bank
(the “Bank”) hereby establishes this Pension Plan (“Plan”) for its President,
Mark Garwood, effective as of January 1, 2003. 
The purpose of the Plan is to provide an incentive for Mark Garwood
(“Garwood”) to continue as President. 
This Plan is intended to be an unfunded deferred compensation plan for a
select group of management or highly compensated employees within the meaning
of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”).

 

Section 2.                                            Definitions.

 

Except as otherwise indicated, all definitions in this Plan shall have
the meanings indicated below.

 

2.1                                 “Bank”
means Tamalpais Bank, or any predecessor or successor corporation, which has
been designated by the Board as participating in the Plan, and which has
accepted such designation and has agreed to be bound by the terms of the Plan.

 

2.2                                 “Beneficiary”
means any person or entity determined as such under Section 6 who is entitled
to receive payments under the Plan because of the death of Garwood.

 

2.3                                 “Board”
means the Board of Directors of Tamalpais Bank, or any predecessor or successor
company.

 

1

 

2.4                                 “Cause”
means, for purposes of this Plan, (i) a criminal act or omission by Garwood; or
(ii) Garwood’s fraud, dishonesty, or willful misperformance in rendering
services to the Bank.

 

2.5                                 “Change
in Control” shall be deemed to take place on the occurrence of any of the
following events:  (i) a merger or
consolidation of the Bank, in which the Bank is not the surviving organization
and a majority of the capital stock of the surviving organization is owned by
persons who were not shareholders of the Bank immediately prior to such merger
or consolidation; (ii) a transfer of all or substantially all of the assets of
the Bank to an unrelated entity; (iii) any other corporate reorganization in
which there is a change in ownership of the outstanding shares of the Bank
wherein twenty-five percent (25%) or more of the outstanding shares are
transferred to any “person” (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act); or (iv) the election to the Board of
candidates who were not recommended for election by members of the Board in
office immediately prior to the election, if such candidates constitute a
majority of those elected in that particular election.

 

2.6                                 “Disability”
or “Disabled” means a condition of Garwood resulting from a medically
determinable physical or mental impairment so that Garwood is unable to perform
the material and substantive duties of Garwood’s position or profession, which
condition shall be determined by the Bank on the basis of such medical evidence
as the Bank deems warranted under the circumstances.

 

2.7                                 “Effective
Date” means January 1, 2003.

 

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

 

2.9                                 “Plan”
means the Pension Plan for Mark Garwood as set forth in this document.

 

2

 

2.10                           “Plan
Year” means the calendar year.

 

2.11                           “Year
of Service” means a calendar year of continuous service with the Bank.

 

Section 3.                                            Administration
of the Plan.

 

3.1                                 The
Plan shall be administered by the Board. 
All decisions required to be made involving the interpretation,
application and administration of the Plan shall be resolved by the Board.

 

Section 4.                                            Pension
Plan Benefit.

 

4.1                                 The
benefit under this Plan shall be equal to payments of $100,000 per year
commencing January 1, 2015, or upon Garwood’s retirement from the Bank if
later, for a period of fifteen (15) years; provided, however, that should
Garwood prior to December 31, 2014 (i) voluntarily terminate employment, (ii)
be terminated by the Bank for Cause or (iii) die, he shall be entitled to no
benefit under this Plan.

 

4.2                                 Notwithstanding
the foregoing, should Garwood be terminated by the Bank other than for Cause
prior to December 31, 2014, should Garwood become Disabled or should there
be a Change in Control, prior to Garwood’s termination of employment and prior
to December 31, 2014, his benefit hereunder shall become vested and his benefit
shall be an amount equal to $100,000 per year times the number of Years of
Service to such date over twelve (12) years, which benefit shall be payable for
fifteen years in accordance with Section 5.2 below; provided, however,
should there be a Change in Control this provision will not be effective if, and
to the extent, Garwood and the entity or individual that causes the Change in
Control agree in writing that vesting shall not be accelerated.

 

3

 

Section 5.                                            Distribution
of Benefits.

 

5.1                                 Benefit
payments will commence on January 1, 2015, or the January 1 next following
Garwood’s retirement, if later, and each yearly payment will be made in equal
monthly installments during each year of the fifteen year payment period.

 

5.2                                 Should
Garwood be terminated other than for Cause, should Garwood become Disabled or
should there be a Change in Control, prior to December 31, 2014, monthly
benefit payments in an amount equal to the percentage determined under
Section  4.2 above shall commence within 60 days after such termination,
Disability or Change in Control and shall be completed after 180 monthly
payments have been made.

 

5.3                                 If
Garwood is already receiving distribution of his benefit and dies before
complete distribution of all of his benefit, the remaining benefit payments
shall continue to be paid to Garwood’s Beneficiary as provided in this Plan.

 

Section 6.                                            Beneficiary.

 

6.1                                 Garwood
may designate, in writing, a Beneficiary or Beneficiaries to receive the
payment of his benefits in the event of his death prior to completion of such
payment.  A designation of Beneficiary
may be revoked or changed at any time by filing a new written designation with
the Bank.

 

6.2                                 If
Garwood fails to designate, in writing, a Beneficiary or Beneficiaries to
receive payment of his benefit in the event of his death, or if no validly
designated Beneficiary survives Garwood, Garwood’s Beneficiary or Beneficiaries
shall be the following in order:

 

(a)                                  surviving
spouse;

 

(b)                                 children;
or

 

(c)                                  estate.

 

4

 

Section 7.                                            Garwood’s
Rights.

 

Garwood’s (or
a Beneficiary’s) right to receive a distribution hereunder shall be an
unsecured claim against the general assets of the Bank, and neither Garwood nor
the Beneficiary shall have any rights in or against any specific assets of the
Bank.

 

Notwithstanding
the foregoing paragraph, the Bank may establish and maintain a “Rabbi” Trust,
which shall be an irrevocable trust in which the Bank may deposit amounts for
purposes of this Plan.  Any Trust assets
shall be administered in accordance with the terms of the Trust, but such
assets attributable to Garwood’s benefit under this Plan to shall be subject to
the claims of the Bank’s creditors in the event of the bankruptcy or insolvency
of the Bank, until paid to Garwood or his Beneficiaries.  The Trust shall constitute an unfunded
arrangement providing deferred compensation to a select group of management or
highly compensated employees for purposes of Title I of the ERISA.

 

Section 8.                                            Miscellaneous
Provisions.

 

8.1                                 This
Plan does not confer upon Garwood the right to be retained in the Bank’s
employ, and Garwood shall remain subject to discharge, discipline and
termination to the same extent as if this Plan did not exist.  This Plan creates no rights or obligations
other than those expressed herein.

 

8.2                                 No
right or interest of any kind in any Plan asset shall be transferable or
assignable by Garwood or his Beneficiary(ies), or be subject to alienation,
encumbrance, garnishment, attachment, execution or levy of any kind, voluntary
or involuntary.  This prohibition shall
not apply to the creation, assignment or recognition of a right to any interest
payable hereunder with respect to Garwood pursuant to a domestic relations
order that satisfies the requirements of a Qualified Domestic Relations Order
(“QDRO”) as that term is defined in

 

5

 

Section 414(p) of the Internal
Revenue Code (the “Code”) as if this Plan were qualified under Section 401(a)
of the Code.  Payment pursuant to such
domestic relations order may be made as soon as administratively feasible
following determination by the Bank that said order satisfies the requirements
of a QDRO.

 

8.3                                 If
the Bank shall at any time be merged or consolidated into or with any other
entity, or if substantially all of its assets are transferred to another
entity, the provisions of this Plan shall be binding upon and inure to the
benefit of the entity resulting from such merger or consolidation to which such
assets shall be transferred, and this provision shall apply in the event of any
subsequent merger, consolidation, or transfer.

 

8.4                                 In
the event the Bank must liquidate due to insolvency or events resulting in an
act of bankruptcy, this Plan shall terminate and all obligations to Garwood
shall be considered as payable immediately.

 

8.5                                 Except
as provided by federal law, all questions pertaining to the validity,
construction and administration of the Plan shall be determined under the laws
of California.

 

Section 9.                                            Amendments
and Termination.

 

9.1                                 The
Bank may at any time amend or terminate this Plan in whole or in part with
Garwood’s consent.

 

Section 10.                                      Expenses.

 

Costs of
administration of the Plan shall be paid by the Bank as may be determined by
the Board.

 

Section 11.                                      Execution.

 

To record the
adoption of this Plan, the Bank and Garwood have caused its appropriate
officers to affix its company name and seal hereto this
         day of
                    ,
2003.

 

6

 

	
   

  	
  Tamalpais Bank

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Mark Garwood

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

7Exhibit 10.4

 

 

 

Pensionalysis, Incorporated

PROTOTYPE

DEFINED CONTRIBUTION PLAN

Basic Document #01

 

 

 

 

Pensionalysis, Incorporated

PROTOTYPE

DEFINED CONTRIBUTION PLAN

Basic Document #01

 

TABLE
OF CONTENTS

 

	
  Article

  	
   

  	
   

  
	
   

  	
  PART 1

  
	
   

  
	
  ARTICLE 1

  	
  INTRODUCTION

  
	
  1.1.1

  	
  Adoption and Title.

  
	
  1.1.2

  	
  Effective Date.

  
	
  1.1.3

  	
  Purpose.

  
	
   

  
	
  ARTICLE 2

  	
  DEFINITIONS

  
	
  1.2.1

  	
  “Account”

  
	
  1.2.2

  	
  “ACP”

  
	
  1.2.3

  	
  “Act”

  
	
  1.2.4

  	
  “ADP”

  
	
  1.2.5

  	
  “Alternate Payee”

  
	
  1.2.6

  	
  “Anniversary Date”

  
	
  1.2.7

  	
  “Annuity Starting Date”

  
	
  1.2.8

  	
  “Average Monthly
  Compensation”

  
	
  1.2.9

  	
  “Base Benefit Percentage”

  
	
  1.2.10

  	
  “Beneficiary”

  
	
  1.2.11

  	
  “Board of Directors”

  
	
  1.2.12

  	
  “Break in Service”

  
	
  1.2.13

  	
  “Code”

  
	
  1.2.14

  	
  “Compensation”

  
	
  1.2.15

  	
  “Compensation
  Computation Period”

  
	
  1.2.16

  	
  “Controlled Account”

  
	
  1.2.17

  	
  “Covered Compensation”

  
	
  1.2.18

  	
  “Current Targ”

  
	
  1.2.19

  	
  “Date of Hire”

  
	
  1.2.20

  	
  “Direct Rollover”

  
	
  1.2.21

  	
  “Distributable Benefit”

  
	
  1.2.22

  	
  “Distributee”

  
	
  1.2.23

  	
  “Distribution
  Determination Date”

  
	
  1.2.24

  	
  “Early Retirement Age”

  
	
  1.2.25

  	
  “Early Retirement Date”

  
	
  1.2.26

  	
  “Earned Income”

  
	
  1.2.27

  	
  “Elapsed Time Method”

  
	
  1.2.28

  	
  “Elective Contribution
  Account”

  
	
  1.2.29

  	
  “Elective Contribution”

  
	
  1.2.30

  	
  “Elective Deferrals”

  
	
  1.2.31

  	
  “Eligible Employee”

  
	
  1.2.32

  	
  “Eligible Retirement Plan”

  
	
  1.2.33

  	
  “Eligible Rollover
  Distribution”

  
	
  1.2.34

  	
  “Eligibility Computation
  Period”

  
	
  1.2.35

  	
  “Employee”

  
	
  1.2.36

  	
  “Employer”

  
	
  1.2.37

  	
  “Employer Account”

  
	
  1.2.38

  	
  “Employer Contribution”

  

 

 

	
  1.2.39

  	
  “Entry Date”

  
	
  1.2.40

  	
  “Excess Aggregate
  Contributions”

  
	
  1.2.41

  	
  “Excess Benefit Percentage”

  
	
  1.2.42

  	
  “Excess Contributions”

  
	
  1.2.43

  	
  “Excess Elective Deferrals”

  
	
  1.2.44

  	
  “Excess Annual Addition”

  
	
  1.2.45

  	
  “Fiduciary”

  
	
  1.2.46

  	
  “Final Average Compensation”

  
	
  1.2.47

  	
  “Fresh-Start Date”

  
	
  1.2.48

  	
  “Frozen
  Accrued Target Benefit”

  
	
  1.2.49

  	
  “Highly Compensated
  Employee”

  
	
  1.2.50

  	
  “Hour of Service”

  
	
  1.2.51

  	
  “Insurer”

  
	
  1.2.52

  	
  “Joint and Survivor Annuity”

  
	
  1.2.53

  	
  “Leased Employee”

  
	
  1.2.54

  	
  “Life Insurance Policy”

  
	
  1.2.55

  	
  “Limitation Year”

  
	
  1.2.56

  	
  “Mass Submitter”

  
	
  1.2.57

  	
  “Matching Account”

  
	
  1.2.58

  	
  “Matching Contribution”

  
	
  1.2.59

  	
  “Matching
  Contribution Allocation Date”

  
	
  1.2.60

  	
  “Non-Elective Contribution”

  
	
  1.2.61

  	
  “Normal Retirement Age”

  
	
  1.2.62

  	
  “Normal Retirement Date”

  
	
  1.2.63

  	
  “Owner-Employee”

  
	
  1.2.64

  	
  “Participant”

  
	
  1.2.65

  	
  “Plan”

  
	
  1.2.66

  	
  “Plan Administrator”

  
	
  1.2.67

  	
  “Plan Sponsor”

  
	
  1.2.68

  	
  “Plan Year” or “Year”

  
	
  1.2.69

  	
  “Preretirement Survivor
  Annuity”

  
	
  1.2.70

  	
  “Qualified Joint
  and Survivor Annuity”

  
	
  1.2.71

  	
  “Qualified Matching
  Contribution”

  
	
  1.2.72

  	
  “Qualified
  Matching Contribution Account”

  
	
  1.2.73

  	
  “Qualified
  Non-Elective Contribution”

  
	
  1.2.74

  	
  “Qualified
  Non-Elective Contribution Account”

  
	
  1.2.75

  	
  “Qualified
  Preretirement Survivor Annuity”

  
	
  1.2.76

  	
  “Qualifying
  Employer Securities or Real Property”

  
	
  1.2.77

  	
  “Safe Harbor Profit
  Sharing Plan”

  
	
  1.2.78

  	
  “Segregated Account”

  
	
  1.2.79

  	
  “Segregated Fund”

  
	
  1.2.80

  	
  “Self-Employed Individual”

  
	
  1.2.81

  	
  “Social Security
  Integration Level”

  
	
  1.2.82

  	
  “Social Security Retirement
  Age”

  
	
  1.2.83

  	
  “Target Benefit”

  
	
  1.2.84

  	
  “Taxable Wage Base”

  
	
  1.2.85

  	
  “Trust Fund”

  
	
  1.2.86

  	
  “Trustee”

  
	
  1.2.87

  	
  “Valuation Date”

  
	
  1.2.88

  	
  “Voluntary Account”

  
	
  1.2.89

  	
  “Year of Participation”

  
	
  1.2.90

  	
  “Year of Projected
  Participation”

  
	
  1.2.91

  	
  “Year of Service”

  
	
   

  
	
   

  	
  PART 2

  
	
  ARTICLE 1

  	
  ELIGIBILITY

  
	
  2.1.1

  	
  Eligibility Requirements.

  

 

 

	
  2.1.2

  	
  Commencement of
  Participation.

  
	
  2.1.3

  	
  Participation Upon
  Re-Employment.

  
	
  2.1.4

  	
  Termination of
  Participation.

  
	
  2.1.5

  	
  Plan Administrator’s
  Determination.

  
	
  2.1.6

  	
  One-time Election
  Not to Participate.

  
	
  2.1.7

  	
  Change in Status.

  
	
  2.1.8

  	
  Existing Participants.

  
	
  2.1.9

  	
  Elapsed Time Method.

  
	
  2.1.10

  	
  Qualified Military Service.

  
	
   

  
	
  ARTICLE 2

  	
  CONTRIBUTIONS

  
	
  2.2.1

  	
  Employer Contributions.

  
	
  2.2.2

  	
  Elective
  Contributions by the Employer on Behalf of Electing Employees.

  
	
  2.2.3

  	
  Employee Contributions.

  
	
  2.2.4

  	
  Return of Contributions.

  
	
   

  
	
  ARTICLE 3

  	
  ALLOCATIONS

  
	
  2.3.1

  	
  Profit Sharing, Money
  Purchase Pension and Target Benefit Plans.

  
	
  2.3.2

  	
  Cash or Deferred Plans.

  
	
  2.3.3

  	
  Basic Allocation.

  
	
  2.3.4

  	
  Minimum Top-Heavy
  Allocation.

  
	
  2.3.5

  	
  Integration
  with Social Security - Profit Sharing Plans.

  
	
  2.3.6

  	
  Integration
  with Social Security - Money Purchase Plans.

  
	
  2.3.7

  	
  Integration
  with Social Security - Target Benefit Plans.

  
	
  2.3.8

  	
  Fail-Safe Allocation.

  
	
  2.3.9

  	
  Contributions
  on Behalf of Disabled Participants.

  
	
   

  
	
  ARTICLE 4

  	
  BENEFITS

  
	
  2.4.1

  	
  Distributable Benefit.

  
	
  2.4.2

  	
  Vesting.

  
	
  2.4.3

  	
  Leave of Absence.

  
	
  2.4.4

  	
  Re-Employment.

  
	
  2.4.5

  	
  Distribution Date.

  
	
  2.4.6

  	
  Forfeitures.

  
	
  2.4.7

  	
  Minimum Distribution.

  
	
   

  
	
  ARTICLE 5

  	
  DISTRIBUTIONS

  
	
  2.5.1

  	
  Commencement of
  Distribution.

  
	
  2.5.2

  	
  Method of Distribution.

  
	
  2.5.3

  	
  Nature of Distributions.

  
	
  2.5.4

  	
  Advance Distributions.

  
	
  2.5.5

  	
  Hardship
  Distributions of Elective Deferrals.

  
	
  2.5.6

  	
  In Service Distributions.

  
	
   

  
	
  ARTICLE 6

  	
  CONTINGENT TOP HEAVY
  PROVISIONS

  
	
  2.6.1

  	
  Top Heavy Requirements.

  
	
  2.6.2

  	
  Top Heavy Definitions.

  
	
  2.6.3

  	
  Pairing Requirements.

  
	
   

  
	
  ARTICLE 7

  	
  SPECIAL CODA LIMITATIONS

  
	
  2.7.1

  	
  Limitation on Deferral
  Percentage for Highly Compensated Employees.

  
	
  2.7.2

  	
  Multiple Plan Limitations.

  
	
  2.7.3

  	
  Limitation on
  Matching Contributions.

  

 

 

	
  2.7.4

  	
  Special Rules.

  
	
  2.7.5

  	
  Distribution
  of Excess Elective Deferrals.

  
	
  2.7.6

  	
  Distribution of
  Excess Contributions.

  
	
  2.7.7

  	
  Distribution
  of Excess Aggregate Contributions.

  
	
  2.7.8

  	
  Limitation on
  Distributions.

  
	
  2.7.9

  	
  Limitation on
  Elective Deferrals.

  
	
  2.7.10

  	
  Forfeiture of
  Matching Contributions.

  
	
   

  
	
  ARTICLE 8

  	
  SIMPLE 401(k) LIMITATIONS

  
	
  2.8.1

  	
  Establishing a Simple
  401(k).

  
	
  2.8.2

  	
  Definitions.

  
	
  2.8.3

  	
  Salary Reduction
  Contributions.

  
	
  2.8.4

  	
  Other Contributions.

  
	
  2.8.5

  	
  Limitation on Other
  Contributions.

  
	
  2.8.6

  	
  Section 415 Limitations.

  
	
  2.8.7

  	
  Election and Notice
  Requirements.

  
	
  2.8.8

  	
  Vesting Requirements.

  
	
  2.8.9

  	
  Top-Heavy Rules.

  
	
  2.8.10

  	
  Nondiscrimination Tests.

  
	
  2.8.11

  	
  Revocation.

  
	
   

  
	
  ARTICLE 9

  	
  ALTERNATIVE
  METHODS OF MEETING NONDISCRIMINATION REQUIREMENTS

  
	
  2.9.1

  	
  Safe Harbor CODA Rules.

  
	
  2.9.2

  	
  Definitions.

  
	
  2.9.3

  	
  ADP Test Safe
  Harbor Contributions.

  
	
  2.9.4

  	
  ACP Test
  Safe Harbor Matching Contributions.

  
	
   

  
	
   

  	
  PART 3

  
	
  ARTICLE 1

  	
  ACCOUNTING

  
	
  3.1.1

  	
  Accounts.

  
	
  3.1.2

  	
  Adjustments.

  
	
   

  
	
  ARTICLE 2

  	
  LIMITATIONS

  
	
  3.2.1

  	
  Limitations on Annual
  Additions.

  
	
  3.2.2

  	
  Controlled Businesses.

  
	
   

  
	
  ARTICLE 3

  	
  FIDUCIARIES

  
	
  3.3.1

  	
  Standard of Conduct.

  
	
  3.3.2

  	
  Individual Fiduciaries.

  
	
  3.3.3

  	
  Disqualification from Service.

  
	
  3.3.4

  	
  Bonding.

  
	
  3.3.5

  	
  Prior Acts.

  
	
  3.3.6

  	
  Insurance and Indemnity.

  
	
  3.3.7

  	
  Expenses.

  
	
  3.3.8

  	
  Agents, Accountants and Legal Counsel.

  
	
  3.3.9

  	
  Investment Manager.

  
	
  3.3.10

  	
  Finality of Decisions
  or Acts.

  
	
  3.3.11

  	
  Certain Custodial
  Accounts and Contracts.

  
	
  3.3.12

  	
  404(c) Election.

  
	
   

  
	
  ARTICLE 4

  	
  PLAN ADMINISTRATOR

  
	
  3.4.1

  	
  Administration of Plan.

  
	
  3.4.2

  	
  Disclosure Requirements.

  
	
  3.4.3

  	
  Information Generally
  Available.

  
	
  3.4.4

  	
  Statement of Accrued
  Benefit.

  
	
  3.4.5

  	
  Explanation of
  Rollover Treatment.

  

 

 

	
  3.4.6

  	
  Electromechanical
  Communications.

  
	
   

  
	
  ARTICLE 5

  	
  LOANS

  
	
  3.5.1

  	
  Authorization.

  
	
  3.5.2

  	
  Spousal Consent.

  
	
  3.5.3

  	
  Limitations.

  
	
  3.5.4

  	
  Availability.

  
	
  3.5.5

  	
  Prohibitions.

  
	
  3.5.6

  	
  Default.

  
	
  3.5.7

  	
  Rollovers of
  Participant Loans.

  
	
   

  
	
  ARTICLE 6

  	
  BENEFICIARIES

  
	
  3.6.1

  	
  Designation of
  Beneficiaries.

  
	
  3.6.2

  	
  Absence or Death of
  Beneficiaries.

  
	
  3.6.3

  	
  Surviving Spouse Election.

  
	
   

  
	
  ARTICLE 7

  	
  CLAIMS

  
	
  3.7.1

  	
  Claim Procedure.

  
	
  3.7.2

  	
  Appeal.

  
	
   

  
	
  ARTICLE 8

  	
  AMENDMENT AND
  TERMINATION

  
	
  3.8.1

  	
  Right to Amend.

  
	
  3.8.2

  	
  Manner of Amending.

  
	
  3.8.3

  	
  Limitations On Amendments.

  
	
  3.8.4

  	
  Voluntary Termination.

  
	
  3.8.5

  	
  Involuntary Termination.

  
	
  3.8.6

  	
  Withdrawal By Employer.

  
	
  3.8.7

  	
  Powers Pending Final
  Distribution.

  
	
  3.8.8

  	
  Delegation to Sponsor.

  
	
   

  
	
  ARTICLE 9

  	
  PORTABILITY

  
	
  3.9.1

  	
  Continuance by Successor.

  
	
  3.9.2

  	
  Merger With Other Plan.

  
	
  3.9.3

  	
  Transfer From Other Plans.

  
	
  3.9.4

  	
  Transfer to Other Plans.

  
	
   

  
	
  ARTICLE 10

  	
  INSURANCE

  
	
  3.10.1

  	
  Participants
  Insurable at Standard Rates.

  
	
  3.10.2

  	
  Uninsurable Participants.

  
	
  3.10.3

  	
  Participants
  Insurable at Above Standard Rates.

  
	
  3.10.4

  	
  Purchase of Contracts.

  
	
  3.10.5

  	
  Applications for Contracts.

  
	
  3.10.6

  	
  Incidents of Ownership.

  
	
  3.10.7

  	
  Payment of Premiums.

  
	
  3.10.8

  	
  Discontinuance
  of Insurance Contracts.

  
	
   

  
	
  ARTICLE 11

  	
  MISCELLANEOUS

  
	
  3.11.1

  	
  No Reversion to Employer.

  
	
  3.11.2

  	
  Employer Actions.

  
	
  3.11.3

  	
  Execution of
  Receipts and Releases.

  
	
  3.11.4

  	
  Rights of Participants
  Limited.

  
	
  3.11.5

  	
  Protection of the Insurer.

  
	
  3.11.6

  	
  No Responsibility
  for Act of Insurer.

  
	
  3.11.7

  	
  Inalienability.

  
	
  3.11.8

  	
  Domestic Relations Orders.

  
	
  3.11.9

  	
  Missing Persons.

  
	
  3.11.10

  	
  Notices.

  

 

 

	
  3.11.11

  	
  Governing Law.

  
	
  3.11.12

  	
  Severability of Provisions.

  
	
  3.11.13

  	
  Gender and Number.

  
	
  3.11.14

  	
  Binding Effect.

  

 

 

PART 1

 

ARTICLE 1

 

INTRODUCTION

 

1.1.1 Adoption and Title.
The parties hereby adopt a Plan and a Trust Agreement
to be known by the names set forth in the Adoption Agreement.

 

1.1.2 Effective Date.  The provisions of
this Plan and the Trust shall be effective as of the Effective Date set forth
in the Adoption Agreement.

 

1.1.3 Purpose.  This Plan and the
Trust are established for the purpose of providing retirement benefits to
eligible Employees in accordance with the Plan and the Adoption Agreement. If
the Employer designates the Plan as a Cash or Deferred Profit Sharing Plan
(CODA) in the Adoption Agreement, the Plan is also intended to enable eligible
Employees to supplement their retirement by electing to have the Employer
contribute amounts to the Plan and the Trust in lieu of payments to such
Employees in cash and the Plan and the Trust are intended to satisfy the
provisions of section 401(k) of the Internal Revenue Code of 1986, as amended.

 

1

 

ARTICLE 2

 

DEFINITIONS

 

As
used in this Plan, the Trust, and the Adoption Agreement, the following terms
shall have the following meanings:

 

1.2.1 “Account”:  The Employer
Account, Controlled Account, Elective Contribution Account, Matching Account,
Qualified Matching Account, Qualified Non-Elective Contribution Account,
Voluntary Account or Segregated Account of a Participant, as the context
requires, established and maintained for accounting purposes.

 

1.2.2 “ACP”:  The actual
contribution percentage determined in accordance with the provisions of Part
II, Article VII.

 

1.2.3 “Act”:  The Employee
Retirement Income Security Act of 1974, as amended from time to time.

 

1.2.4 “ADP”:  The actual
deferral percentage determined in accordance with the provisions of Part II,
Article VII.

 

1.2.5 “Alternate Payee”:  Alternate Payee
means any spouse, former spouse, child or other dependent of a Participant who
is recognized by a Qualified Domestic Relations Order as having a right to
receive all, or a portion of, the benefits payable under this, or any other
plan of the Employer, with respect to such Participant.

 

1.2.6 “Anniversary Date”:  Unless otherwise
specified in the Adoption Agreement, the last day of each Plan Year.

 

1.2.7 “Annuity Starting Date”:
The first day of the first period for which an amount is payable as an
annuity or any other form.

 

1.2.8 “Average Monthly
Compensation”:  Unless otherwise specified in the Adoption
Agreement, the total Compensation paid by the Employer to a Participant during
36 consecutive months within the consecutive Compensation Computation Periods
while a Participant which produce the highest Average Monthly Compensation
provided that, if the Participant’s entire period of service is less than the
specified period, the Participant’s Average Monthly Compensation shall be
determined by averaging (on a monthly basis) the Compensation received by the
Participant during the Participant’s entire period of service for the Employer
or participation in the Plan, as elected in the Adoption Agreement.

 

For the purpose of determining Average
Monthly Compensation, all Compensation shall be included, except the following
Compensation may be excluded: Compensation received before the first day of the
Compensation Computation Period which ends within the initial Plan Year of
participation, Compensation received during the Compensation Computation Period
in which the Participant attains Normal Retirement Age, Compensation received
during the Compensation Computation Period in which the Participant terminates
employment with the Employer and Compensation received during the Compensation
Computation Period in which the Plan terminates.

 

1.2.9 “Base Benefit
Percentage”:  The Base Benefit Percentage is the rate, expressed
as a percentage of Compensation, at which Employer-derived benefits are accrued
with respect to Compensation of Participants at or below the Social Security
Integration Level for the Plan Year.

 

1.2.10 “Beneficiary”:  The person or
persons entitled hereunder to receive the benefits which may be payable upon or
after a Participant’s death.

 

1.2.11 “Board of Directors”:
The Board of Directors of an incorporated Employer.

 

2

 

1.2.12 “Break in Service”:  The failure of a
Participant to complete more than five hundred (500) Hours of Service or such
lesser number specified in the Adoption Agreement during any 12 consecutive
month computation period, beginning with a Participant’s first computation
period after becoming a Participant. Under the Elapsed Time Method substitute
either 91 consecutive calendar days or 3 consecutive calendar months for 500
Hours of Service. A Year of Service and a Break in Service shall be measured on
the same computation period. Under the Elapsed Time Method of service counting,
the term “one year Period of Severance” shall be substituted for the term “1
year Break in Service”. The computation period shall be specified by the
Employer in the Adoption Agreement.

 

1.2.13 “Code”:  The Internal
Revenue Code of 1986, as amended from time to time.

 

1.2.14 “Compensation”:  The Compensation
as defined in this Section and as specified in the Adoption Agreement (or
Earned Income in the case of a Self-Employed Individual) which is actually paid
to the Participant by the Employer during the Compensation Computation Period.
The Employer shall elect in the Adoption Agreement, whether Compensation shall
include or exclude 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(e)(3), 402(h), or 403(b) of the Code.

 

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

 

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

 

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

 

If Compensation for any prior determination
period is taken into account in determining a Participant’s allocations for the
current Plan Year, the Compensation for such prior determination period is
subject to the applicable annual compensation limit in effect for that prior
period. For this purpose, in determining allocations in Plan Years beginning on
or after January 1, 1989, the annual compensation limit in effect for
determination periods beginning before that date is $200,000. In addition, in
determining allocations in Plan Years beginning on or after January 1, 1994,
the annual compensation limit in effect for determination periods beginning before
that date is $150,000.

 

For purposes of sections 403(b)(3),
415(c)(3), and 457(e)(5), an Employee who is in Qualified Military Service
shall be treated as receiving Compensation from the Employer during such period
of Qualified Military Service equal to: (A) the Compensation the Employee would
have received during such period if the Employee were not in Qualified Military
Service, determined based on the rate of pay the Employee would have received
from the Employer but for absence during the period of Qualified Military
Service, or (B) if the Compensation the Employee would have received during
such period was not reasonably certain, the Employee’s average compensation
from the Employer during the 12-month period immediately preceding the
Qualified Military Service (or, if shorter, the period of employment
immediately preceding the Qualified Military Service).

 

1.2.15 “Compensation
Computation Period”:  The period specified as the Compensation
Computation Period in the Adoption Agreement.

 

1.2.16 “Controlled Account”:
An account established and maintained for a Participant to account for
his interest in the Trust Fund over which he is permitted, under the terms of
the Plan and the

 

3

 

Plan’s investment policy, to exercise
investment control.

 

1.2.17 “Covered Compensation”:
A Participant’s Covered Compensation for a Plan Year is the average
(without indexing) of the Taxable Wage Bases in effect for each calendar year
during the 35-year period ending with the last day of the calendar year in
which the Participant attains (or will attain) Social Security Retirement Age.

 

If elected in the Adoption Agreement,
Covered Compensation for Plan Years beginning prior to 1995 shall be the
average (without indexing) of the Taxable Wage Bases for the 35 calendar years
ending with the year prior to the calendar year an individual attains Social
Security Retirement Age.)

 

In determining a Participant’s Covered
Compensation for a Plan Year, the Taxable Wage Base in effect for the current
Plan Year and any subsequent Plan Year will be assumed to be the same as the
Taxable Wage Base in effect as of the beginning of the Plan Year for which the
determination is being made. Covered Compensation will be determined based on
the year designated by the Employer in Part II.D. of the Adoption Agreement.

 

A Participant’s Covered Compensation for a
Plan Year before the 35-year period ending with the last day of the calendar
year in which the Participant attains Social Security Retirement Age is the
Taxable Wage Base in effect as of the beginning of the Plan Year. A
Participant’s Covered Compensation for a Plan Year after such 35-year period is
the Participant’s Covered Compensation for the Plan Year during which the
35-year period ends.

 

1.2.18 “Current Target Benefit”:
For each Participant, the product of: (1) the amount derived from the
formula designated in Section D of the Adoption Agreement, and (2) a fraction,
the numerator of which is the Participant’s number of Years of Participation
from the latest Fresh-Start Date, if any, through and including the later of
the year in which the Participant attains Normal Retirement Age or the current
Plan Year, and the denominator of which is the Participant’s total Years of
Projected Participation.

 

If this Plan has not had a Fresh-Start Date,
such fraction will equal 1.0 for all Participants. In any event, for those
Participants who first participated in the Plan after the latest Fresh-Start
Date, such fraction shall equal 1.0. For purposes of determining the numerator
in the fraction above, only those current and prior years during which a
Participant was eligible to receive a contribution under the Plan will be taken
into account.

 

For purposes of determining a Participant’s
Current Target Benefit, a Participant’s total Years of Projected Participation
under the Plan is the sum of (1) and (2), where (1) is the number of years
during which the Participant benefited under this Plan beginning with the
latest of: (a) the first Plan Year in which the Participant benefited under the
Plan, (b) the first Plan Year taken into account in the stated benefit formula,
and (c) any Plan Year immediately following a Plan Year in which the Plan did
not satisfy the safe harbor for target benefit plans in regulations section
1.401(a)(4)-8(b)(3), and ending with the last day of the current Plan Year, and
(2) is the number of years, if any, subsequent to the current Plan Year through
the end of the Plan Year in which the Participant attains Normal Retirement
Age.

 

1.2.19 “Date of Hire”:  The date an
Employee first completes an Hour of Service for the Employer.

 

1.2.20 “Direct Rollover”:  A payment by the
Plan to the Eligible Retirement Plan specified by the Distributee.

 

1.2.21 “Distributable Benefit”:
The benefit to which a Participant is entitled following termination of
his employment.

 

1.2.22 “Distributee”:  A Distributee
includes an Employee or former Employee. In addition, the Employee’s or former
Employee’s surviving spouse and the Employee’s or the former Employee’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.

 

1.2.23 “Distribution
Determination Date”:  The date as of which the Distributable
Benefit of a

 

4

 

Participant is
determined.

 

1.2.24 “Early Retirement Age”:
The age specified as the Early Retirement Age, if any, in the Adoption
Agreement.

 

1.2.25 “Early Retirement Date”:
The date specified as the Early Retirement Date, if any, in the Adoption
Agreement.

 

1.2.26 “Earned Income”:  The net earnings
from self-employment in the trade or business with respect to which the Plan is
established for which personal services of the Participant are a material
income-producing factor. Net earnings shall be determined without regard to
items not included in gross income and the deductions allocable to such items
but, in the case of taxable years beginning after 1989, with regard to the
deduction allowed to the taxpayer by section 164(f) of the Code. Net earnings
shall be reduced by contributions to a qualified plan to the extent deductible
under section 404 of the Code.

 

1.2.27 “Elapsed Time Method”:
The Elapsed Time Method of counting service for purposes of eligibility
to participate, vesting, and accrual of benefits (as elected in the Adoption
Agreement).

 

(a)
Under this provision, such service is determined by reference to the total
period of time which elapses while the Employee is employed (i.e., while the
employment relationship exists) with the Employer or Employers maintaining this
Plan.

 

(b)
Under this method of crediting service, an Employee’s service is required to be
taken into account for purposes of eligibility to participate and vesting as of
the date he or she first performs an Hour of Service within the meaning of
29 CFR 2530.200b-2(a)(1) for the Employer or Employers maintaining the
Plan. Service is required to be taken into account for the period of time from
the date the Employee first performs such an Hour of Service until the date he
or she severs from service with the Employer or Employer’s maintaining the
Plan.

 

(c)
The date the Employee severs from service is the earlier of the date the
Employee quits, is discharged, retires or dies, or the first anniversary of the
date the Employee is absent from service for any other reason (e.g.,
disability, vacation, leave of absence, layoff, etc.)

 

(d)
For purposes of eligibility to participate and vesting under the Elapsed Time
Method of crediting service, an Employee who has severed from service by reason
of a quit, discharge or retirement may be entitled to have a period of time of
12 months or less taken into account by the Employer or Employers maintaining the
Plan if the Employee returns to service within a certain period of time and
performs an Hour of Service within the meaning of 29 CFR 2530.200b-2(a)(1). In
general, the period of time during which the Employee must return to service
begins on the date the Employee severs from service as a result of a quit,
discharge or retirement and ends on the first anniversary of such date.
However, if the Employee is absent for any other reason (e.g., layoff) and then
quits, is discharged or retires, the period of time during which the Employee
may return and receive credit begins on the Severance from Service Date and
ends one year after the first day of absence (e.g., first day of layoff). As a
result of the operation of these rules, a severance from service (e.g., a quit),
or an absence (e.g., layoff) followed by a severance from service, never
results in a period of time of more than one year being required to be taken
into account after an Employee severs from service or is absent from service.

 

(e)
For purposes of benefit accrual under the Elapsed Time Method of crediting
service, an Employee is entitled to have his or her service taken into account
from the date he or she begins to participate in the Plan until the Severance
from Service Date. Periods of Severance under any circumstances are not
required to be taken into account.

 

(f)
Definitions only for use with the Elapsed Time Method under paragraph (b)
above:

 

(1)
Employment Commencement Date: The Employment Commencement Date, which is the
date on which an Employee first performs an Hour of Service within the meaning
of 29 CFR 2530.200b-2(a)(1) for the Employer or Employers maintaining the Plan.

 

5

 

(2)
Severance From Service Date: For purposes of this Section, and Section 1.2.91,
a “severance from service” shall occur on the earlier of—

 

(i)
The date on which an Employee quits, retires, is discharged or dies; or

 

(ii)
The first anniversary of the first date of a period in which an Employee
remains absent from service (with or without pay) with the Employer or
Employers maintaining the Plan for any reason other than quit, retirement,
discharge or death, such as vacation, holiday, sickness, Disability, leave of
absence or layoff.

 

(3)
Reemployment Commencement Date: For purposes of this Section, and Section
1.2.91, the term “reemployment commencement date” shall mean the first date,
following a Period of Severance from service which is not required to be taken
into account under the service spanning rules of this Section, on which the
Employee performs an Hour of Service within the meaning of 29 CFR
2530.200b-2(a)(1) for the Employer or Employers maintaining the Plan.

 

(4)
Participation Commencement Date: For purposes of this Section, and Section
1.2.91, the term “participation commencement date” shall mean the date a
Participant first commences participation under the Plan.

 

(5)
Period Of Severance: For purposes of this Section, and Section 1.2.91, the term
“Period of Severance” shall mean the period of time commencing on the Severance
From Service Date and ending on the date on which the Employee again performs
an Hour of Service within the meaning of 29 CFR 2530.200b-2(a)(1) for an
Employer or Employers maintaining the Plan.

 

(6)
Period Of Service:

 

(i)
General Rule: For purposes of this Section, and Section 1.2.91, the term
“period of service” shall mean a period of service commencing on the Employee’s
employment commencement date or Reemployment Commencement Date, whichever is
applicable, and ending on the Severance from Service Date.

 

(ii)
Aggregation Rule: Unless a plan provides in some manner for an “adjusted”
Employment Commencement Date or similar method of consolidating Periods of
Service, Periods of Service shall be aggregated unless such periods may be
disregarded under section 410(a)(5) or 411(a)(4) of the Code.

 

(iii)
Month of Service: 30 days are deemed to be a Month of Service under this
Section 1.2.27.

 

(iv)
Year of Service: 12 Months of Service or 365 days of service are deemed to be a
Year of Service under this Section 1.2.27.

 

(g)
Years of Service for purposes of vesting, participation and accrual of benefits
are subject to separate election in the Adoption Agreement.

 

1.2.28 “Elective
Contribution Account”:  An Account established and maintained for a
Participant to account for the Elective Contributions made on his behalf.

 

1.2.29 “Elective Contribution”:
A contribution to a cash or deferred profit sharing plan by the Employer
on behalf of an electing Employee.

 

1.2.30 “Elective Deferrals”:
Any Employer contributions made to the Plan at the election of the
Participant, in lieu of cash compensation, including contributions made
pursuant to a salary reduction agreement or other deferral mechanism.

 

With
respect to any taxable year, a Participant’s Elective Deferral is the sum of
all Employer

 

6

 

contributions made on behalf of the
Participant pursuant to an election to defer under any qualified CODA as
described in section 401(k) of the Code, any simplified employee pension cash
or deferred arrangement as described in section 408(k)(11) of the Code, any
Simple IRA Plan described in section 408(p) of the Code, any eligible deferred
compensation plan under section 457 of the Code, any plan as described under section
501(c)(18) of the Code, and any employer contributions made on the behalf of a
Participant for the purchase of an annuity contract under section 403(b) of the
Code pursuant to a salary reduction agreement. Elective Deferrals shall not
include any deferrals properly distributed as Excess Annual Additions.

 

1.2.31 “Eligible Employee”:
An Employee as defined in Section 1.2.35 who has met the eligibility
requirements of the Plan.

 

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

 

1.2.33 “Eligible
Rollover Distribution”:  An Eligible Rollover Distribution is any
distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution does not include:
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee’s Designated Beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code; any hardship
distribution described in section 401(k)(2)(B)(i)(iv) of the Code received
after 12-31-98; the portion of any other distribution(s) that is not includible
in gross income (determined without regard to the inclusion for net unrealized
appreciation with respect to employer securities); and any other
distribution(s) that is reasonably expected to total less than $200 during a
year.

 

1.2.34 “Eligibility
Computation Period”:  For purposes of determining Years of Service
and Breaks in Service for purposes of eligibility, the initial Eligibility
Computation Period is the twelve (12) consecutive month period beginning with
the employment commencement date on which the Employee first renders an Hour of
Service for the Employer, and unless otherwise specified in the Adoption
Agreement, the subsequent Eligibility Computation Periods are each subsequent
twelve (12) consecutive month period commencing on the annual anniversary of
such employment commencement date. If an Employee has a Break in Service before
satisfying the Plan’s eligibility requirements, service before such Break in
Service shall not be taken into account.

 

If
in accordance with the election in the Adoption Agreement, the subsequent
periods commence with the first Plan Year which commences prior to the first
anniversary of the Employee’s employment commencement date, an Employee who is
credited with 1,000 Hours of Service in both the initial Eligibility
Computation Period and the first Plan Year which commences prior to the first
anniversary of the Employee’s initial Eligibility Computation Period shall be
credited with two (2) Years of Service for purposes of eligibility to
participate.

 

1.2.35 “Employee”:  A person who is
currently or hereafter employed by the Employer, or by any other employer
aggregated under sections 414(b), (c), (m), (n) or (o) of the Code and the
regulations thereunder, including a Leased Employee subject to section 414(n)
of the Code and a self-employed owner of an unincorporated employer, but,
unless otherwise provided in the Adoption Agreement, excluding (a) an Employee
who is a Non-Resident Alien (within the meaning of section 7701(b)(1)(B) of the
Code deriving no earned income (within the meaning of section 911(d)(2) of the
Code) from the Employer which constitutes income from sources within the United
States (within the meaning of section 861(a)(3) of the Code); and (b) employees
who are included in the unit of Employees covered by a collective bargaining
agreement between the Employer and employee representatives, provided benefits
were the subject of good faith bargaining and two percent or less of the
employees of the Employer who are covered pursuant to that agreement are
professionals as defined in Treasury regulation section 1.410(b)-9. For this
purpose, the term “Employee Representatives” does not include any organization
more than half of whose members are Employees who are owners, officers, or
executives of the

 

7

 

Employer.

 

Except as otherwise provided in this
paragraph, if the Employer elects in the Adoption Agreement to exclude
Employees who became Employees as the result of a “Code section 410(b)(6)(C)
transaction,” then such Employees shall not be “Eligible Employees” prior to
the expiration of the transition period beginning on the date of the
transaction and ending on the last day of the first Plan Year beginning after the
date of the transaction. A “Code section 410(b)(6)(C) transaction” is an asset
or stock acquisition, merger, or similar transaction involving a change in the
Employer of the Employees of a trade or business. However, if a separate trade
or business becomes a Related Employer as the result of a “Code Section
410(b)(6)(C) transaction,” then Employees of such Related Employer will not be
treated as “Eligible Employees” prior to the date the entity adopts the Plan as
a participating Employer. For purposes of this section, “Related Employer”
means any trade or business related to the Employer by the application of
sections 414(b), (c), (m), (n), or (o) of the Code. In the case of a
standardized plan, affected Employees shall become eligible to participate on the
earlier of the adoption of this Plan by such separate entity or the expiration
of the transition period.

 

In the case of non-standardized plans,
notwithstanding any other provision of this Plan, individuals who are not
contemporaneously classified as Employees of the Employer for purposes of the
Employer’s payroll system (including, without limitation, individuals employed
by temporary help firms, technical help firms, staffing firms, employee leasing
firms, professional employer organizations or other staffing firms whether or
not deemed to be “common law” Employees or “Leased Employees” within the
meaning of section 414(n) (o) of the Code) are not considered to be Eligible
Employees of the Employer and shall not be eligible to participate in the Plan.
In the event any such individuals are reclassified as Employees for any
purpose, including without limitation, common law or statutory employees, by
any action of any third party, including, without limitation, any government
agency, or as a result of any private lawsuit, action, or administrative
proceeding, such individuals shall notwithstanding such reclassification,
remain ineligible for participation hereunder. Notwithstanding foregoing, the
exclusive means for individuals who are not contemporaneously classified as an
Employee of the Employer on the Employer’s payroll system to become eligible to
participate in this Plan is through an amendment to this Plan, duly executed by
the Employer, which specifically renders such individuals eligible for participation
hereunder.

 

The Plan Administrator shall have full and
complete discretion to determine eligibility for participation and benefits
under this Plan, including, without limitation, the determination of those
individuals who are deemed Employees of the Employer (or any controlled group
member). The Plan Administrator’s decision shall be final, binding and
conclusive on all parties having or claiming a benefit under this Plan. This
Plan is to be construed to exclude all individuals who are not considered
Employees for purposes of the Employer’s payroll system, and the Plan
Administrator is authorized to do so, despite the fact that its decision may
result in the loss of the Plan’s tax qualification.

 

1.2.36 “Employer”:  The Employer that
is a party to this Plan, or any of its affiliates, successors or assigns which
adopt the Plan; provided, however, that no mere change in the identity, form or
organization of the Employer shall affect its status under the Plan in any
manner, and, if the name of the Employer is hereafter changed, a corresponding
change shall be deemed to have been made in the name of the Plan and references
herein to the Employer shall be deemed to refer to the Employer as it is then
known.

 

1.2.37 “Employer Account”:
An Account established and maintained for a Participant for accounting
purposes to which his share of Employer contributions and Forfeitures are
added.

 

1.2.38 “Employer Contribution”:
A contribution to a money purchase pension plan, target benefit plan or
profit sharing plan other than a cash or deferred profit sharing plan by the
Employer.

 

1.2.39 “Entry Date”:  The date or dates
specified as the Entry Date in the Adoption Agreement.

 

1.2.40 “Excess
Aggregate Contributions”:  With respect to any Plan Year, the excess
of:

 

(a)
The aggregate contribution percentage amounts taken into account in computing
the numerator of the contribution percentage actually made on behalf of Highly
Compensated Employees for such Plan Year, over

 

8

 

(b)
The maximum contribution percentage amounts permitted by the ACP test
(determined hypothetically by reducing contributions made on behalf of Highly
Compensated Employees in order of their contribution beginning with the largest
of such contributions). Such determination shall be made after first
determining Excess Elective Deferrals and then determining Excess
Contributions.

 

1.2.41 “Excess Benefit
Percentage”:  The Excess Benefit Percentage is the rate,
expressed as a percentage of Compensation, at which Employer-derived benefits
are accrued with respect to Compensation of Participants above the Social
Security Integration Level for the Plan Year.

 

1.2.42 “Excess Contributions”:
With respect to any Plan Year, the excess of:

 

(a)
The aggregate amount of Employer Contributions actually taken into account in
computing the ADP of Highly Compensated Employees for such Plan Year, over

 

(b)
The maximum amount of such contributions permitted by the ADP test (determined
hypothetically by reducing contributions made on behalf of Highly Compensated
Employees in order of the contributions, beginning with the largest of such
contributions).

 

1.2.43 “Excess Elective
Deferrals”:  Those Elective Deferrals that are includible in a
Participant’s gross income under section 402(g) of the Code to the extent such
Participant’s Elective Deferrals for a taxable year exceed the dollar
limitation under such Code section. Excess Elective Deferrals shall be treated
as Annual Additions under the Plan, unless such amounts are distributed no
later than the first April 15 following the close of the Participant’s taxable
year.

 

1.2.44 “Excess Annual
Addition”:  The portion of the allocation of contributions and
Forfeitures that cannot be added to a Participant’s Accounts due to the
limitations on Annual Additions contained in the Plan.

 

1.2.45 “Fiduciary”:  The Plan
Administrator, the Trustee and any other person who has discretionary authority
or control in the management of the Plan or the disposition of Trust assets.

 

1.2.46 “Final Average
Compensation”:  The average of the Participant’s annual
Compensation, as defined in Section 1.2.14, from the Employer for the three
consecutive year period ending with or within the Plan Year; provided, that if
a Participant terminates employment before the last day of a Plan Year, the
Participant’s Final Average Compensation shall be determined based on the
Participant’s most recently completed three consecutive year period; and
provided further, that if a Participant’s entire period of employment for the
Employer is less than three consecutive years, the Participant’s Final Average
Compensation shall be determined by averaging (on an annual basis) the
Compensation received by the Participant from the Employer during the
Participant’s entire period of employment for the Employer.

 

Compensation for any year in excess of the
Taxable Wage Base in effect at the beginning of such year shall be limited to
the Participant’s Covered Compensation. A Participant’s Final Average
Compensation for a Plan Year is limited to the Participant’s Covered
Compensation. No increase in Final Average Compensation will decrease a
Participant’s Target Benefit under the Plan.

 

1.2.47 “Fresh-Start Date”:  The last day of a
Plan Year preceding a Plan Year for which provisions that would affect the
amount of the Current Target Benefit are amended.

 

1.2.48 “Frozen Accrued Target
Benefit”:  The benefit determined as of the Plan’s latest
Fresh-Start Date as if the Participant terminated employment with the Employer
as of that date, without regard to any amendment made to the Plan after that
date.

 

A Participant’s Frozen Accrued Target
Benefit is equal to the amount of the Current Target Benefit in effect on the
latest Fresh-Start Date that a Participant has accrued as of that date,
assuming that such Current Target Benefit accrues ratably from the year in
which the Participant first participated in this Plan (or, if later, the
preceding Fresh-Start Date under this Plan) through and including the Plan Year
in which the Participant attains Normal Retirement Age.

 

9

 

The amount of the Current Target Benefit in
effect on the latest Fresh-Start Date that a Participant is assumed to have
ratably accrued is determined by multiplying the Plan’s Current Target Benefit
formula in effect on that date by a fraction, the numerator of which is the
number of Years of Participation from the later of the Participant’s first Year
of Participation in this Plan or the preceding Fresh-Start Date, if any,
through and including the year that contains the latest Fresh-Start Date, and
the denominator of which is the number of Years of Participation from the later
of the Participant’s first Year of Participation in this Plan or the preceding
Fresh-Start Date, if any, through and including the later of the year in which
the Participant attains Normal Retirement Age or the current Plan Year. For
purposes of this paragraph, only those Years of Participation during which a
Participant was eligible to receive a contribution under the Plan will be taken
into account.

 

If this Plan has had a preceding Fresh-Start
Date, each Participant’s Frozen Accrued Target Benefit as of the latest
Fresh-Start Date will equal the sum of the amount of the Current Target Benefit
in effect on the latest Fresh-Start Date that a Participant is assumed to have
ratably accrued as of that date under the preceding paragraph, and the Frozen
Accrued Target Benefit determined as of the preceding Fresh-Start Date.

 

If: (1) the Current Target Benefit formula
in effect on the latest Fresh-Start Date was not expressed as a straight life
annuity for all Participants, and/or (2) the Normal Retirement Age for any
Participant on the latest Fresh-Start Date was greater than the Normal
Retirement Age for that Participant under the Current Target Benefit formula in
effect after the latest Fresh-Start Date, the Frozen Accrued Target Benefit
will be converted to an actuarially equivalent straight life annuity commencing
at the Participant’s Normal Retirement Age under the Current Target Benefit
formula in effect after the latest Fresh-Start Date, using the actuarial
assumptions in effect under the Current Target Benefit formula in effect on the
latest Fresh-Start Date.

 

Notwithstanding the above, if in the
immediately preceding Plan Year this Plan did not satisfy the safe harbor for
target benefit plans in Treasury regulations section 1.401(a)(4)-(8)(b)(3) or
was not a prior safe harbor plan, the Frozen Accrued Target Benefit for any
Participant in the Plan, determined for the next Plan Year during which the
section 1.401(a)(4)-8(b)(3) is satisfied until the year following the next
Fresh-Start Date, if any, will be zero.

 

Prior safe harbor plan means a plan adopted
and in effect on September 19, 1991, that satisfied the applicable nondiscrimination
requirements for target benefit plans on that date and in all prior periods
(taking into account no amendments to the Plan after September 19, 1991, other
than amendments necessary to satisfy section 401(l) of the Code).

 

1.2.49 “Highly Compensated
Employee”:  For Plan Years beginning after December 31, 1996, a
Highly Compensated Employee is defined as follows:

 

A
Highly Compensated Employee means any Employee who:

 

(a)
was a 5-percent owner (as defined in section 416(i)(1) of the Code) of the
Employer at any time during the year or the preceding year, or

 

(b)
for the preceding year

 

(i)
had compensation from the Employer in excess of $80,000 (as adjusted by the
Secretary of the Treasury pursuant to section 415(d) of the Code, except that
the base period shall be the calendar quarter ending September 30, 1996), and

 

(ii)
if the Employer elects in the Adoption Agreement the application of this clause
for such preceding year, was in the top-paid group of Employees for such
preceding year.

 

For
this purpose, an Employee is in the top-paid group of Employees for any year if
such Employee is in the group consisting of the top 20 percent of the Employees
when ranked on the basis of compensation paid during such year.

 

The
determination of whether an Employee had compensation in excess of $80,000, as

 

10

 

adjusted,
shall be made based on compensation paid during the preceding Plan Year, unless
the Employer has made a calendar year data election in the Adoption Agreement.
The effect of the calendar year data election is that the Look-Back Year
becomes the calendar year beginning with or within the Look-Back Year.

 

For
these purposes the applicable year of the plan for which a determination is
being made is called a Determination Year and the preceding 12-month period is
called a Look-Back Year.

 

The
top-paid group election and the calendar year data election must apply
consistently to the determination years of all plans of the Employer, except
that this consistency requirement will not apply to determination years
beginning with or within the 1997 calendar year, and for determination years
beginning on or after January 1, 1998 and before January 1, 2000, satisfaction
of the consistency requirement is determined without regard to any
nonretirement plans of the Employer.

 

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

 

For
purposes of this Subsection, the term “compensation” means compensation within
the meaning of section 415(c)(3) of the Code.

 

(c)
Generally, a former Employee shall be treated as a Highly Compensated Employee
if:

 

(i)
such Employee was a Highly Compensated Employee when such Employee separated
from service or

 

(ii)
such Employee was a Highly Compensated active Employee for any Plan Year that
ended on or after the Employee’s 55th birthday.

 

(d)
The Plan Administrator shall apply rules for rounding and tie breaking as set
forth in an administrative policy so long as such rules are reasonable,
nondiscriminatory and uniformly and consistently applied.

 

The
determination of whether a former Employee is a Highly Compensated Employee
shall be based on the rules applicable to determining Highly Compensated
Employee status as in effect for that determination year, in accordance with
section 1.414(q)-1T, A-7 and A-4 of the Temporary Income Tax regulations and
Notice 97-45.

 

1.2.50 “Hour of Service”:  An hour for which
(a) the Employee is paid, or entitled to payment by the Employer for the
performance of duties, (b) the Employee is paid or entitled to payment by the
Employer 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 leave of
absence, or (c) back pay, irrespective of mitigation of damages, has been
either awarded or agreed to by the Employer.

 

Hours of Service shall be credited to the
Employee under (a), above, for the period in which the duties are performed,
under (b), above, in the period in which the period during which no duties are
performed occurs, beginning with the first Hour of Service to which the payment
relates, and under (c), above, for the period to which the award or agreement
pertains rather than the period in which the award, agreement or payment is
made; provided, however, that Hours of Service shall not be credited under both
(a) and (b), above, as the case may be, and under (c) above. Notwithstanding
the preceding sentences, (i) no more than five hundred one (501) Hours of
Service shall be credited under (b), above, on account of any single continuous
period during which the Employee performs no duties whether or not such period
occurs in a single computation period, (ii) no Hours of Service shall be
credited to the Employee by reason of a payment made or due under a plan
maintained solely for the purpose of complying with applicable worker’s
compensation, or unemployment compensation or disability insurance laws, and
(iii) no Hours of Service shall be credited by reason of a payment which solely
reimburses an Employee for medical or medically related expenses incurred by
the Employee. The determination of Hours of Service for reasons

 

11

 

other than the
performance of duties and the crediting of Hours of Service to computation
periods shall be made in accord with the provisions of Labor regulation
sections 2530.200b-2(b) and (c) which are incorporated herein by reference.

 

Solely for the purposes of determining
whether an Employee has incurred a Break in Service, an Employee shall be
credited with the number of Hours of Service which would otherwise have been
credited to such individual but for the absence or in any case in which such
hours cannot be determined with eight (8) Hours of Service for any day that the
Employee is absent from work by reason of the Employee’s pregnancy, the birth
of a child of the Employee, the placement of a child with the Employee in
connection with the adoption of such child by the Employee or for purposes of
caring for such child for a period beginning immediately following such birth
or placement. Such Hours of Service shall be credited only in the computation
period in which the absence from work begins if the Employee would be prevented
from incurring a Break in Service in such computation period solely because
credit is given for such period of absence and, in any other case, in the
immediately following computation period. Notwithstanding the foregoing, no
credit shall be given for such service unless the Employee furnishes to the
Plan Administrator information to establish that the absence from work is for
the reasons indicated and the number of days for which there was such an
absence.

 

In the event the Employer does not maintain
records of the actual hours for which an Employee is paid or entitled to
payment, credit for service shall be given in accordance with the method
selected in the Adoption Agreement.

 

Service with another business entity that
is, along with the Employer, a member of a controlled group of corporations
under section 414(b) of the Code, an affiliated service group under section
414(m) of the Code or trades or businesses under common control under section
414(c) of the Code, or which is otherwise required to be aggregated with the
Employer pursuant to section 414(o) of the Code and the regulations issued thereunder
shall be treated as service for the Employer. Hours of Service shall be
credited for any individual considered an Employee for purposes of this Plan
under section 414(n) or section 414(o) of the Code and the regulations issued
thereunder.

 

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

 

1.2.51 “Insurer”:  Any insurance
company which has issued a Life Insurance Policy.

 

1.2.52 “Joint and Survivor
Annuity”:  A “Joint and Survivor Annuity” is an annuity for
the life of the Participant with a survivor annuity for the life of a named
Beneficiary which is not less than fifty (50%) percent and not more than one
hundred (100%) percent of the amount of the annuity which is payable during the
joint lives of the Participant and the named Beneficiary and which is the
amount of benefit which can be purchased with the Participant’s vested Account
balances. The percentage of the survivor annuity shall be fifty (50%) percent unless
a different percentage is elected by the Employer in the Adoption Agreement

 

1.2.53 “Leased Employee”:  Any person (other
than an Employee of the recipient) who pursuant to an agreement between the
recipient and any other person has performed services for the recipient (or for
the recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one (1) year and such services are performed under the primary direction
or control of the recipient; provided, that any such person shall not be taken
into account if:

 

(a)
such person is covered by a money purchase pension plan providing

 

(i)
a nonintegrated employer contribution rate of at least ten (10%) percent of
compensation, as defined in section 415(c)(3) of the Code and Section
3.2.1(h)(iii) of the Plan, but including amounts contributed by the employer
pursuant to a salary reduction agreement which are excludable from the person’s
gross income under sections 125, 132(f)(4), 402(e)(3), 402(h) or 403(b) of the
Code;

 

(ii)
immediate participation; and

 

12

 

(iii)
full and immediate vesting; and

 

(b)
Leased Employees do not constitute more than twenty(20%) percent of the workforce
of the recipient who are not Highly Compensated Employees. Contributions or
benefits provided a Leased Employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient employer.

 

1.2.54 “Life Insurance Policy”:
A life insurance, annuity or endowment policy or contract that is owned
by the Trust and is on the life of a Participant, the joint lives of a
Participant and someone in whom the Participant has an insurable interest or on
the life of someone in whom the Participant has an insurable interest.

 

1.2.55 “Limitation Year”:  Unless otherwise
specified in the Adoption Agreement, the Plan Year; provided that all qualified
plans maintained by the Employer use the same Limitation Year. If the
Limitation Year is amended to a different 12-consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year in which the
amendment is made.

 

1.2.56 “Mass Submitter”:  DATAIR Employee
Benefits Systems, Inc.

 

1.2.57 “Matching Account”:
An Account established and maintained for a Participant for accounting
purposes to which his share of Matching Contributions are added.

 

1.2.58 “Matching Contribution”:
A contribution to the Plan by the Employer which matches in whole or in
part an Elective Contribution on behalf of an electing Employee.

 

1.2.59 “Matching
Contribution Allocation Date”:  The date elected
in the Adoption Agreement for the allocation of the Matching Contribution.

 

1.2.60 “Non-Elective
Contribution”:  A contribution to a cash or deferred profit sharing
plan by the Employer which is neither a Qualified Non-Elective Contribution, a
Matching Contribution nor an Elective Contribution.

 

1.2.61 “Normal Retirement Age”:
The age specified as the Normal Retirement Age in the Adoption
Agreement, but in no event later of age 65 or the fifth anniversary of the
participation in the Plan. For this purpose only, Participation is assumed to
commence as of the first day of the first Plan Year in which the Employee
became a Participant.

 

1.2.62 “Normal Retirement
Date”:  The date specified in the Adoption Agreement as the
Normal Retirement Date upon the occurrence of which the Participant becomes
entitled to receive a benefit under the Plan.

 

1.2.63 “Owner-Employee”:  An individual who
is a sole proprietor or who is a partner owning more than ten percent (10%) of
either the capital or profits interest of the partnership.

 

1.2.64 “Participant”:  Any eligible
Employee who enters the Plan after meeting the requirements of Section 2.1.1.

 

1.2.65 “Plan”:  The defined
contribution plan for Employees as set forth in this Agreement, the Trust, and
the Adoption Agreement, together with any amendments or supplements thereto.

 

1.2.66 “Plan Administrator”:
The person, persons or entity appointed by the Employer to administer
the Plan, or, if the Employer fails to make such appointment, the Employer.

 

1.2.67 “Plan Sponsor”:  The Plan Sponsor
specified in the Adoption Agreement.

 

1.2.68 “Plan Year” or “Year”:
The 12 consecutive month period designated by the Employer in the
Adoption Agreement.

 

13

 

1.2.69 “Preretirement
Survivor Annuity”:  A survivor annuity for the life of the
surviving spouse (or other Beneficiary) of the Participant purchasable with an
amount equal to at least 50% of the vested Accounts of the Participant as of
the date of the Participant’s death, provided that any security interest held
by the Plan by reason of a loan outstanding to the Participant for which a
valid spousal consent has been obtained, if necessary, shall be taken into
account.

 

1.2.70 “Qualified
Joint and Survivor Annuity”:  An immediate annuity for the life of the
Participant with a survivor annuity for the life of the spouse which is not
less than fifty (50%) percent and not more than one hundred (100%) percent of
the amount of the annuity which is payable during the joint lives of the
Participant and the spouse and which is the amount of benefit which can be
purchased with the Participant’s vested Account balances. The percentage of the
survivor annuity shall be fifty (50%) percent unless a different percentage is
elected by the Employer in the Adoption Agreement.

 

1.2.71 “Qualified
Matching Contribution”:  Matching Contributions that are one hundred
percent (100%) vested and nonforfeitable when made, and which are subject to
the distribution restrictions which apply to the Elective Deferrals under the
Plan, however, Qualified Matching Contributions may not be distributed on
account of Hardship even though Elective Deferrals may be distributed on
account of Hardship.

 

1.2.72 “Qualified
Matching Contribution Account”:  An Account
established and maintained for a Participant to account for the Qualified
Matching Contributions made on his behalf.

 

1.2.73 “Qualified
Non-Elective Contribution”:  A contribution to a cash or deferred profit
sharing plan by the Employer which is neither a Matching Contribution nor an
Elective Contribution, is one hundred percent (100%) vested and nonforfeitable
when made, which a Participant may not elect to have paid in cash instead of
being contributed to the Plan and which may not be distributed from the Plan
(except in the case of a Hardship distribution) prior to the termination of
employment or death of the Participant, attainment of age 59-1/2 by the
Participant or termination of the Plan without establishment of a successor
plan.

 

1.2.74 “Qualified
Non-Elective Contribution Account”:  An Account
established and maintained for a Participant to account for the Qualified
Non-Elective Contributions made on his behalf.

 

1.2.75 “Qualified
Preretirement Survivor Annuity”:  A survivor annuity
for the life of the surviving spouse of the Participant, the actuarial
equivalent of which is equal to the portion of the Account balance of the
Participant as of the date of death to which the Participant had a vested and
nonforfeitable right, provided that any security interest held by the Plan by
reason of a loan outstanding to the Participant for which a valid spousal
consent has been obtained, if necessary, shall be taken into account. The
surviving spouse may elect to have such annuity distributed within a reasonable
period after the participant’s death.

 

1.2.76 “Qualifying
Employer Securities or Real Property”:  Securities or real
property of the Employer which the Trustee may acquire and hold pursuant to the
applicable provisions of the Code and the Act.

 

1.2.77 “Safe Harbor
Profit Sharing Plan”:  A plan shall be deemed a Safe Harbor Profit
Sharing Plan if the following conditions are satisfied:

 

(a)
the Participant does not or cannot elect payments in the form of a life
annuity; and

 

(b)
on the death of a Participant, the Participant’s vested account balance will be
paid to the Participant’s surviving spouse, but if there is no surviving
spouse, or if the surviving spouse has consented in a manner conforming to a
qualified election, then to the Participant’s Designated Beneficiary. The
surviving spouse may elect to have distribution of the vested Account balance
commence within the 90 day period following the date of the Participant’s
death. The Account balance shall be adjusted for gains or losses occurring
after the Participant’s death in accordance with the provisions of the Plan
governing the adjustment of Account balances for other types of distributions.
This Section 1.2.77 shall not be operative with respect to a participant in a
profit sharing plan if the plan is a direct or indirect transferee of a defined
benefit plan, money purchase

 

14

 

plan,
a target benefit plan, stock bonus, or profit sharing plan which is subject to
the survivor annuity requirements of section 401(a)(11) and section 417 of the
Code.

 

1.2.78 “Segregated Account”:
An Account established and maintained for a Participant to account for
his interest in a Segregated Fund.

 

1.2.79 “Segregated Fund”:  Assets held in the
name of the Trustee which have been segregated from the Trust Fund in
accordance with any of the provisions of the Plan.

 

1.2.80 “Self-Employed
Individual”:  An individual who has Earned Income for the taxable
year from the trade or business for which the Plan is established or who would
have had Earned Income but for the fact that the trade or business had no net
profits for the taxable year.

 

1.2.81 “Social
Security Integration Level”:  The Social Security Integration Level shall
be equal to the Taxable Wage Base or such lesser amount specified in the
Adoption Agreement. The “Taxable Wage Base” is the contribution and benefit
base in effect under section 230 of the Social Security Act on the first day of
the Plan Year for which allocations of Employer contributions and Forfeitures
are made (referred to as the Social Security Wage Base). The Social Security
Integration Level shall be deemed to be the full amount of such Social Security
Integration Level, even though a Participant’s Compensation may include less
than a full year’s compensation because of either his participation commencing
after the first day of the Compensation Computation Period or his service
terminating prior to the end of the Compensation Computation Period.

 

1.2.82 “Social
Security Retirement Age”:  Age sixty-five (65) if the Participant
attains age sixty-two (62) before January 1, 2000 (i.e., born before January 1,
1938), age sixty-six (66) if the Participant attains age sixty-two (62) after
December 31, 1999, but before January 1, 2017 (i.e., born after December
31, 1937, but before January 1, 1955), and age sixty-seven (67) if the
Participant attains age sixty-two (62) after December 31, 2016 (i.e., born
after December 31, 1954).

 

A
Participant’s Social Security Retirement Age (“SSRA”) is based on the
Participant’s year of birth as follows:

 

	
  Year of Birth

  	
   

  	
  SSRA

  	
   

  
	
  1937 or earlier

  	
   

  	
  65

  	
   

  
	
  1938 through
  1954

  	
   

  	
  66

  	
   

  
	
  after 1954

  	
   

  	
  67

  	
   

  

 

1.2.83 “Target Benefit”:  The monthly
benefit as set forth in the Adoption Agreement. Notwithstanding the foregoing,
a Participant’s actual benefit at any time shall be the value of his Employer
Account.

 

1.2.84 “Taxable Wage Base”:
The contribution and benefit base in effect under section 230 of the
Social Security Act at the beginning of the Plan Year.

 

1.2.85 “Trust Fund”:  All money and
property of every kind and character held by the Trustee pursuant to the Plan.

 

1.2.86 “Trustee”:  The persons,
corporations, associations or combination of them who shall at the time be
acting as such from time to time hereunder.

 

1.2.87 “Valuation Date”:  The date or dates
specified as the Valuation Date(s) in the Adoption Agreement.

 

1.2.88 “Voluntary Account”:
An Account established and maintained for a Participant for accounting
purposes to which his voluntary Employee contributions made prior to Plan Years
beginning after 1986 have been added.

 

1.2.89 “Year of Participation”:
Each year with the Employer with respect to which benefits are treated as
accruing on behalf of the Participant for such year pursuant to Section 2.2.1
of the Plan.

 

15

 

1.2.90 “Year of
Projected Participation”:  The sum of (1) and (2), where (1) is the
number of years during which the Participant benefited under this Plan
beginning with the latest of: (a) the first Plan Year in which the Participant
benefited under the Plan, (b) the first Plan Year taken into account in the
Target Benefit formula, and (c) any Plan Year immediately following a Plan Year
in which the Plan did not satisfy the safe harbor for target benefit plans in
regulations section 1.401(a)(4)-8(b)(3), and ending with the last day of the
current Plan Year, and (2) is the number of years if any, subsequent to the current
Plan Year through the end of the Plan Year in which the Participant attains
Normal Retirement Age.

 

For purposes of this definition of Years of
Projected Participation, if this Plan is a prior Safe Harbor Plan the Plan is
deemed to satisfy the safe harbor for target benefit plans in regulations
section 1.401(a)(4)-8(b)(3) and a Participant is treated as benefiting under
the Plan in any Plan Year beginning prior to January 1, 1994.

 

1.2.91 “Year of Service”:  A “Year of
Service” is the 12-consecutive month period (computation period) specified in
the Adoption Agreement during which an Employee completes at least one thousand
(1,000) Hours of Service. If so elected in the Adoption Agreement the hours
requirement for the completion of a Year of Service can be satisfied before the
end of the Eligibility Computation Period. See Section 1.2.27 for Elapsed Time
Method of determining a Year of Service. All Years of Service shall be taken
into account.

 

16

 

PART 2

 

ARTICLE 1

 

PARTICIPATION

 

2.1.1 Eligibility
Requirements.  Each Employee shall be eligible to
participate in this Plan and receive an appropriate allocation of contributions
upon satisfying the eligibility requirements set forth in the Adoption
Agreement.

 

2.1.2 Commencement of
Participation.  An eligible Employee shall become a
Participant in the Plan on the applicable Entry Date selected in the Adoption
Agreement.

 

2.1.3 Participation
Upon Re-Employment.  A Participant whose employment terminates
and who is subsequently re-employed shall re-enter the Plan as a Participant
immediately on the date of his reemployment. In the event that an Employee
completes the eligibility requirements set forth in the Adoption Agreement, his
employment terminates prior to becoming a Participant and he is subsequently
reemployed, such Employee shall be deemed to have met the eligibility
requirements as of the date of his reemployment and shall become a Participant
on the date of his re-employment; provided, however, that if he is re-employed
prior to the date he would have become a Participant if his employment had not
terminated, he shall become a Participant as of the date he would have become a
Participant if his employment had not terminated. Any other Employee who has not
met the eligibility requirements and whose employment terminates and who is
subsequently reemployed shall become a Participant in accordance with the
provisions of Sections 2.1.1 and 2.1.2.

 

2.1.4 Termination of
Participation.  An Employee who has become a Participant
shall remain a Participant until the entire amount of his Distributable Benefit
is distributed to him or his Beneficiary in the event of death.

 

2.1.5 Plan
Administrator’s Determination.  In the event any
question shall arise as to the eligibility of any person to become a
Participant or the commencement of participation, the Plan Administrator shall
determine such question and the Plan Administrator’s decision shall be
conclusive and binding.

 

2.1.6 One-time
Election Not to Participate.  With respect to
nonstandardized plans only, and notwithstanding anything contained in the Plan
to the contrary, an Employer may elect in the Adoption Agreement to permit an
Employee to make an election not to participate in the Plan. The election must:

 

(a)
include plans not yet established;

 

(b)
be for the duration of the Employee’s employment with the Employer;

 

(c)
be a one-time irrevocable election;

 

(d)
be made upon an Employee’s commencement of employment with the Employer or upon
the Employee’s first becoming eligible under any plan of the Employer.

 

Such a one-time irrevocable election
described in this Section shall not be treated as having been made pursuant to
a cash or deferred election.

 

In no event is an election made after
December 23, 1994, treated as a one-time irrevocable election under this
Section 2.1.8 if the election is made by an Employee who previously became
eligible under another plan (whether or not terminated) of the Employer.

 

2.1.7 Change in Status.
If any Participant continues in the employ of the Employer or an
affiliate for which service is required to be taken into account but ceases to
be an Employee for any reason (such as becoming covered by a collective
bargaining agreement unless the collective bargaining agreement

 

17

 

otherwise
provides) the Participant shall continue to be a Participant until the entire
amount of his benefit is distributed but the individual shall be deemed not to
have completed any “Years of Service” or “Years of Participation” in the case
of a Target Benefit Plan, for purposes of Article IV (“Benefits”) during the
period that the Participant is not an Employee for such reason. Such
Participant shall continue to receive credit for Years of Service completed during
the period for purposes of determining his vested and nonforfeitable interest
in his Accounts. In the event that the individual subsequently again becomes a
member of an eligible class of Employees, the individual shall participate
immediately upon the date of such change in status. If such Participant incurs
a Break in Service and is subsequently reemployed, eligibility to participate
shall be determined in accordance with Section 2.1.3. In the event that an
individual who is not a member of an eligible class of Employees becomes a
member of an eligible class, the individual shall participate immediately if
such individual has satisfied the eligibility requirements and would have
otherwise previously become a Participant.

 

2.1.8 Existing Participants.
An Employee who, on the Effective Date, was a Participant under the
provisions of the Plan as in effect immediately prior to the Effective Date
shall be a Participant on the Effective Date and the provisions of Sections
2.1.1 and 2.1.2, pertaining to participation, shall not be applicable to such
Employee unless such Employee is excluded for participation because such
Employee is a member of an excluded class. The rights of a Participant whose
employment terminated prior to the Effective Date shall be determined under the
provisions of the Plan as in effect at the time of such termination.

 

2.1.9 Elapsed Time Method.
The Employer may elect in the Adoption Agreement to use any of the
optional service counting methods permitted within the Plan for eligibility to
participate, vesting and accrual of benefits. Thus, for example, service for
eligibility may be determined by counting actual hours worked, while service
for vesting could be determined by the equivalencies as provided in the
Adoption Agreement Part II.A., or the Elapsed Time Method as provided for in
Section 1.2.27 of the Plan.

 

2.1.10 Qualified Military
Service.  Notwithstanding any provision of this 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
Internal Revenue Code.

 

18

 

ARTICLE 2

 

CONTRIBUTIONS

 

2.2.1 Employer Contributions.

 

(a)
Amount of Contribution.

 

(1)
Money Purchase Pension Plan. The Employer shall contribute to the Trust Fund
each Plan Year such amount, including any Forfeitures to be applied, as set
forth in the Adoption Agreement.

 

(2)
Profit Sharing Plan. The Employer shall contribute to the Trust Fund each Plan
Year such amount as elected in the Adoption Agreement.

 

(3)
Cash or Deferred Profit Sharing Plan.

 

(i)
Amount of Non-Elective Contribution. The Employer shall contribute to the Trust
Fund each Plan Year such amount as a Non-Elective Contribution as the Employer
elected in the Adoption Agreement.

 

(ii)
Amount of Matching Contribution. Subject to applicable limitations provided by
the Plan, the Employer shall contribute to the Trust Fund each Plan Year with
respect to the amount of Elective Contributions on behalf of each electing
Employee, a Matching Contribution determined in the manner set forth in the
Adoption Agreement, to the extent permitted under IRC section 401(m).

 

(iii)
Amount of Qualified Non-Elective Contribution and Qualified Matching
Contribution. If the Employer has elected in the Adoption Agreement to use the
Current Year Testing Method, the Employer shall contribute to the Trust Fund
each Plan Year such amount as a Qualified Non-Elective Contribution or
Qualified Matching Contribution as the Employer may determine. In addition, in
lieu of distributing Excess Contributions or Excess Aggregate Contributions as
provided in Article VII, below, and to the extent elected by the Employer in
the Adoption Agreement, the Employer may make Qualified Non-Elective Contributions
or Qualified Matching Contributions on behalf of Employees who are not Highly
Compensated Employees that are sufficient to satisfy either the ADP test or the
ACP test, or both, pursuant to regulations under the Code.

 

(4)
Target Benefit Plan. For each Plan Year the Employer shall contribute for each
eligible Participant the annual Employer contribution necessary to fund the
Target Benefit. Such amount is determined by amortizing the excess of the
present value of the Target Benefit over the theoretical reserve for each
Participant according to the following procedure:

 

(i)
The present value of the Target Benefit is determined by multiplying the Target
Benefit by the applicable factor in Table I (based on the Participant’s Normal
Retirement Age and the interest rate and mortality table selected in the
Adoption Agreement) and by the applicable factor in Table II (based on the
number of years the Participant’s Normal Retirement Age exceeds his current age
and the interest rate selected in the Adoption Agreement).

 

(ii)
For the last day of the Participant’s first year (the first Valuation Date of
the Participant), the theoretical reserve is zero. In subsequent years
(Valuation Dates) the theoretical reserve equals the prior year’s theoretical
reserve plus the prior year’s contribution (as limited by section 415 of the
Code, but without regard to any required minimum contribution under section 416
of the Code) accumulated with interest for one year at the rate specified in
the Adoption Agreement, provided that in any Plan Year following the Plan Year
in which the Participant attains Normal Retirement Age,

 

19

 

such
interest shall be zero (interest rate of 0%).

 

In
the case of a Participant in a plan which determines the Target Benefit in part
on service prior to the first day of the first Plan Year beginning on or after
January 1, 1994, the theoretical reserve as of the last day of the last Plan
Year beginning prior to January 1, 1994, shall be determined below; provided
such Target Benefit Plan was adopted and effective on September 19, 1991, and
such plan met the nondiscrimination requirements in effect for all Plan Years
beginning prior to January 1, 1994.

 

A.
Determine the present value of the Target Benefit in effect as of the last day
of the last Plan Year beginning prior to January 1, 1994 based on the interest
and mortality assumptions in effect on such date. For a Participant whose
attained age exceed his Normal Retirement Age, such present value shall be calculated
assuming his age equals his Normal Retirement Age.

 

B.
Determine the present value of future contributions as of the last day of the
same date (including the contribution for such Plan Year) based on the interest
rate in effect on such date. For this purpose only, such contribution shall be
the contribution determined by the plan on such date without regard to the
limitation of section 415 of the Code or any required minimums of section 416
of the Code.

 

C.
The theoretical reserve as of the last day of the last Plan Year beginning
before January 1, 1994 shall equal the amount determined in item A less the
amount determined in item B. The theoretical reserve as of the last day of the
first Plan Year beginning on or after January 1, 1994 shall be such theoretical
reserve plus the contribution for the prior Plan Year (as determined in item B)
increased for interest at the interest rate in effect for the prior year. For a
Participant whose attained age exceeds his Normal Retirement Age, such interest
shall be zero (interest rate of 0%).

 

(iii)
A Participant’s contribution equals the excess of i. over ii. (but not less
than zero) multiplied by the applicable factor in Table III (based on the
number of years the Participant’s Normal Retirement Age exceeds his current age
and the interest rate selected in the Adoption Agreement).

 

(iv)
If the Plan is amended to change the interest rate or mortality table the
applicable factors in Tables I, II, and III will be based on the new
assumptions in the valuation coincident with or next following the effective
date of the amendment. The theoretical reserve in (ii,) above, will be
accumulated with the old interest rate for such valuation and the new interest
rate for all subsequent valuations.

 

(b)
Limitation. The contribution for any Plan Year by the Employer shall not exceed
the maximum amount deductible from the Employer’s income for such Year for
federal income tax purposes under the applicable sections of the Code.

 

(c)
Time of Contribution. All contributions by the Employer shall be delivered to
the Trustee not later than the date fixed by law for the filing of the
Employer’s federal income tax return for the Year for which such contribution
is made (including any extensions of time granted by the Internal Revenue
Service for filing such return).

 

(d)
Determination of Amount to be Final. The determination by the Employer as to
the amount to be contributed by the Employer hereunder shall be in all respects
final, binding, and conclusive on all persons or parties having or claiming any
rights under this Agreement or under the Plan and the Trust created hereby.
Under no circumstances and in no event shall any Participant, Beneficiary, or
other person or party have any right to examine the books or records of the
Employer.

 

20

 

(e)
Rights of Trustee as to Contributions. The Trustee shall have no duty to report
any contribution to be made or to determine whether contributions delivered to
the Trustee by the Employer comply with the provisions of this Agreement. The
Trustee shall be accountable only for funds actually received by the Trustee.

 

2.2.2 Elective
Contributions by the Employer on Behalf of Electing Employees.

 

(a)
Amount of Contribution. If the Plan is designated in the Adoption Agreement as
a Cash or Deferred Profit Sharing Plan, each Employee may elect to have the
Employer contribute to the Trust on his behalf for any Plan Year during which
he is a Participant such amounts expressed either in dollars or in whole percentages
of his Compensation as he may elect which would otherwise be payable by the
Employer as Compensation (but not to exceed the dollar limitation provided by
section 402(g) of the Code as in effect at the beginning of the taxable year);
provided, that the Employer may impose reasonable limitations in a uniform,
nondiscriminatory manner on the amounts which may be so contributed in order to
satisfy applicable legal requirements and to assure the deductibility of
amounts contributed by the Employer to the Plan and any other qualified plan of
deferred compensation.

 

The
Employer may elect in the Adoption Agreement to limit Elective Contributions
made on behalf of electing Employees to a percentage of Compensation that is
less than the amount otherwise allowable by section 402(g) of the Code.

 

If
the deferral election is made on an annual or Plan Year basis, but deferrals
are taken from Compensation on some other basis, the Employer shall not adjust
(“True-Up”) deferrals at the end of the Plan Year to an annual basis.

 

An
Employee who becomes eligible to participate in the Plan and does not
affirmatively elect to receive cash or have a specified amount contributed to
the Plan shall have his Compensation automatically reduced by the amount
elected by the Employer in the Adoption Agreement and this amount shall be
contributed to the Plan as an Elective Contribution. An election not to make
Elective Contributions or to defer a different percentage of Compensation can
be made at any time.

 

The
election is effective for the first pay period and subsequent pay periods
(until superseded by a subsequent election) if filed when the Employee is hired
or if filed within a reasonable period thereafter ending before the
Compensation for the first pay period is currently available. Elections filed
at a later date are effective for payroll periods beginning in the month next
following the date the election is filed. At the time an Employee is hired, the
Employee must receive a notice that explains the automatic compensation reduction
election and the Employee’s right to elect to have no such compensation
reduction contributions made to the Plan or to alter the amount of those
contributions, including the procedure for exercising that right and the timing
for implementation of any such election. The Employee must be notified annually
of his compensation reduction percentage and the Employee’s right to change
that percentage.

 

Unless
elected otherwise in the Adoption Agreement, in the case of a current
Participant who files an election to receive cash in lieu of compensation
reduction contributions and the election is filed during the reasonable period
ending on the first day of the Plan Year, then no compensation reduction
contributions for the first pay period beginning on or after the first day of
the Plan Year or for subsequent pay periods shall be made on the Participant’s
behalf to the Plan until the Participant makes a subsequent affirmative
election to reduce his or her compensation. Such election shall become
effective for the pay periods beginning in the month following the date the
election is filed with the Plan Administrator.

 

If
so elected in the Adoption Agreement, in the case of a current Participant who
(i) has a compensation reduction contribution election in effect for less than
the automatic reduction amount elected by the Employer in the Adoption
Agreement, or (ii) has no compensation reduction contribution election in
effect, and who does not make a compensation reduction contribution election
during the reasonable period ending on the first day of any Plan Year, shall
have his or her compensation automatically reduced by the automatic reduction
amount beginning on the first

 

21

 

pay
period that begins after the first day of the Plan Year. If that Participant
thereafter makes an affirmative election to reduce his or her compensation by
another amount (or no amount), then that affirmative election will be effective
for pay periods beginning in the month following the date the election is filed
with the Plan Administrator.

 

(b)
Election. The Plan Administrator shall determine the manner in which a
Participant may elect to have Elective Contributions made to the Plan on his
behalf. The Plan Administrator shall establish reasonable periods during which
the election may be made or modified. Unless the Plan Administrator establishes
another period during which the election may be made or modified, any such
election may be made or modified during the 30 day period preceding the first
day of the Plan Year. An election by an Employee may not be made retroactively
and once made shall remain in effect until modified or terminated. An election
may be revoked at any time.

 

(c)
Payment of Contribution. Elective Contributions shall be remitted by the
Employer to the Trustee or custodian on the earliest date that they can
reasonably be segregated from the Employer’s assets, but in no event later than
the 15th business day of the month following the month in which the Participant
contributions are withheld or received by the Employer, unless under the
regulations an extension of up to 10 business days is granted by the Secretary
with respect to Participant contributions received or withheld in a single
month.

 

(d)
Hardship Distributions. An Employee may not have Elective Contributions made on
his or her behalf for the taxable year following the taxable year of a Hardship
distribution in excess of the applicable limit under section 402(g) of the Code
for such taxable year less the amount of the Employee’s Elective Deferrals for
the taxable year of the Hardship distribution.

 

2.2.3 Employee Contributions.

 

(a)
Amount of Contribution. An Employee is neither required nor permitted to
contribute to the Plan for any Plan Year beginning after the Plan Year in which
the prototype Plan is adopted by the Employer. Employee contributions for Plan
Years beginning after 1986 shall be limited so as to meet the nondiscriminatory
test of section 401(m) of the Code. The Plan Administrator shall not accept deductible
Employee contributions that are made for a taxable year beginning after
December 31, 1986. Contributions made prior to that date will be maintained in
a separate account which will be nonforfeitable at all times. The account will
share in the gains and losses of the trust in the same manner as provided in
Section 3.1.2 of the Plan. No part of the deductible voluntary contribution
account will be used to purchase life insurance.

 

(b)
Withdrawal of Contributions. In accordance with the provisions of the Plan as
in effect prior to Plan Years beginning after 1986, all or any portion of an
Employee’s contributions may be withdrawn by giving to the Plan Administrator
written notice of any proposed withdrawal. The Plan Administrator may adopt
such procedures with respect to such withdrawals as may be necessary or
appropriate. At the Plan Administrator’s direction, the Trustee shall
distribute any such withdrawal to the Participant in accordance with the
procedures adopted by the Plan Administrator. Except in the case of the
voluntary deductible contribution account, such withdrawals shall not include
any interest or other increment earned on such contributions. No Forfeitures
shall occur as a result of withdrawal of an Employee’s contributions. Notwithstanding
the foregoing, a withdrawal of an Employee’s contributions must be consented to
in writing by the Participant’s spouse.

 

2.2.4 Return of
Contributions.  Contributions by the Employer, including
Employer, Qualified Non-Elective, Non-Elective and Matching Contributions
shall be returned to the Employer in the following instances:

 

(a)
If a contribution by the Employer, including an Employer, Qualified
Non-Elective, Non-Elective or Matching Contribution is made by the Employer by
mistake of fact, then the contribution shall be returned within one year after
its payment upon the Employer’s written request.

 

(b)
If a contribution by the Employer, including an Employer, Qualified
Non-Elective, Non-

 

22

 

Elective
or Matching Contribution is conditioned on initial qualification of the Plan
under the applicable sections of the Code, and the Commissioner of Internal
Revenue determines that the Plan does not qualify, then the contribution made
incident to the initial qualification by the Employer shall be returned within
one year after the date of denial of initial qualification of the Plan;
provided, that the application for initial qualification is made by the time
prescribed by law for filing the Employer’s tax return for the taxable year in
which the Plan is adopted, or such later date as the Secretary of the Treasury
may prescribe.

 

(c)
Each contribution by the Employer, including an Employer, Qualified
Non-Elective, Non-Elective and Matching Contribution is conditioned upon the
deductibility of the contribution under the applicable sections of the Code and
to the extent of a disallowance of the deduction for part or all of the
contribution, the contribution shall be returned within one year after such
disallowance upon the Employer’s written request.

 

23

 

ARTICLE 3

 

ALLOCATIONS

 

2.3.1 Profit Sharing,
Money Purchase Pension and Target Benefit Plans.  Unless otherwise
elected by the Employer in the Adoption Agreement, as of the last day of the
Plan Year, the Employer Contributions made by the Employer with respect to the
Plan Year, and Forfeitures shall be allocated among the Employer Accounts of
Participants during the Plan Year in the manner set forth in the Adoption Agreement.
A participant is treated as benefiting under the plan for any plan year during
which the participant received or is deemed to receive an allocation in
accordance with section 1.410(b)-3(a). If a Profit Sharing Plan is integrated
with Social Security, Section 2.3.5, 2.3.6 or 2.3.7, as the case may be, shall
also apply.

 

2.3.2 Cash or Deferred
Plans.

 

(a)
Non-Elective Contributions. Unless otherwise elected by the Employer in the
Adoption Agreement, as of the last day of the Plan Year, the Non-Elective
Contributions made by the Employer with respect to the Plan Year, and
Forfeitures, shall be allocated among the Employer Accounts of Participants
during the Plan Year in the manner specified in the Adoption Agreement;
provided, that if the Plan is integrated with Social Security, Section 2.3.5
shall also apply.

 

(b)
Matching Contributions. Unless otherwise specified in the Adoption Agreement,
as of the last day of the Plan Year, the Matching Contribution made by the
Employer with respect to the Plan Year, and Forfeitures, shall be allocated to
the Matching Accounts of Participants for whom Elective Contributions were made
in the manner specified in the Adoption Agreement.

 

(c)
Elective Contributions. The Elective Contributions by the Employer on behalf of
an electing Employee shall be allocated to the Elective Contribution Account of
such electing Employee.

 

(d)
Qualified Non-Elective Contributions and Qualified Matching Contributions. As
of the last day of the Plan Year, the Qualified Non-Elective Contributions and
Qualified Matching Contributions made by the Employer with respect to the Plan
Year shall be allocated to the Qualified Non-Elective Contribution Account or
Qualified Matching Account of Participants during the Plan Year in the manner
specified in the Adoption Agreement.

 

2.3.3 Basic Allocation.
Unless otherwise elected by the Employer in the Adoption Agreement, as
of the last day of the Plan Year, the contribution made by the Employer,
including any Forfeitures to be allocated, with respect to the Plan Year shall
be allocated among the Employer Accounts of Participants during the Plan Year,
in the manner set forth in the Adoption Agreement; provided, that the Employer
contribution must satisfy the requirements of section 416 of the Code regardless
of how the Adoption Agreement is completed.

 

2.3.4 Minimum Top-Heavy
Allocation.  In the event the Plan becomes a Top-Heavy
Plan during any Plan Year, the provisions of Section 2.6.1(a) shall apply. The
allocation of Employer contributions must satisfy the requirements of section
416 of the Code regardless of how the Adoption Agreement is completed. Elective
Contributions and Matching Contributions allocated to Key Employees (as defined
in section 416(i) of the Code) are taken into account for the purpose of
determining the minimum contribution under section 416 of the Code. However,
Elective Contributions and Matching Contributions made on behalf of non-key
Employees (as defined in section 416(i) of the Code) may not be taken into
account for the purpose of satisfying the minimum contribution requirement
under section 416 of the Code.

 

2.3.5  Integration
with Social Security - Profit Sharing Plans.

 

(a)
If the Employer has elected in the Adoption Agreement that the Plan shall be
integrated with Social Security, then the applicable contributions plus
Forfeitures shall be allocated to Participants’ Accounts as follows (provided
that Steps One and Two, below, need only be applied in years in which the Plan
is Top-Heavy):

 

24

 

STEP
ONE: Contributions and Forfeitures shall be allocated to each Participant’s
Account in the ratio that each Participant’s Compensation bears to all
Participant’s Compensation, but not in excess of 3% of each Participant’s
Compensation.

 

STEP
TWO: Any contributions and Forfeitures remaining after the allocation in Step
One will be allocated to each Participant’s Account in the ratio that each
Participant’s Compensation for the Plan Year in excess of the Social Security
Integration Level bears to the excess compensation of all Participants, but not
in excess of 3%.

 

STEP
THREE: Any contributions and Forfeitures remaining after the allocation in Step
Two shall be allocated to each Participant’s Account in the ratio that the sum
of each Participant’s Compensation and Compensation in excess of the Social
Security Integration Level bears to the sum of all Participants’ Compensation
and Compensation in excess of the Social Security Integration Level, but not in
excess of the Maximum Profit Sharing Disparity Rate.

 

STEP
FOUR: Any remaining contributions and Forfeitures shall be allocated to each
Participant’s account in the ratio that each Participant’s Compensation for the
Plan Year bears to all Participants’ Compensation for that year.

 

The
Maximum Profit Sharing Disparity Rate is equal to the lesser of:

 

(1)               5.7% (minus the
percentage of Compensation allocated in Step One, if any); or,

 

(2)               5.4% (minus the
percentage of Compensation allocated in Step One, if any) if the Social
Security Integration Level (SSIL) is more than 80% but less than 100% of the
Taxable Wage Base under section 230 of the Social Security Act at the beginning
of the Plan Year (TWB); or

 

(3)               4.3% (minus the
percentage of Compensation allocated in Step One, if any) if the SSIL is greater
than 20% of the TWB, but not more than 80% of the TWB, and greater than
$10,000.

 

(b)
In the event the Plan is Top-Heavy and the Employer elects to use Steps Three
and Four of paragraph (a) above, then allocations made on account of
Compensation greater than the Social Security Integration Level shall be
reduced proportionately to the extend necessary to provide all Employees
entitled to a Top-Heavy Minimum Allocation with the required allocation.

 

2.3.6 Integration
with Social Security - Money Purchase Plans.

 

(a)
Annual overall permitted disparity limit. Notwithstanding the formula elected
in the Adoption Agreement, for any Plan Year this Plan benefits any Participant
who benefits under another qualified plan or simplified employee pension, as
defined in section 408(k) of the Code, maintained by the Employer that provides
for permitted disparity (or imputes disparity), the Employer will contribute
for each eligible Participant an amount equal to the Excess Contribution
Percentage multiplied by the Participant’s total Compensation.

 

(b)
Cumulative permitted disparity limit. Effective for Plan Years beginning on or
after January 1, 1995, the cumulative permitted disparity limit for a
Participant is 35 total cumulative permitted disparity years. Total cumulative
permitted years means the number of years credited to the Participant for
allocation or accrual purposes under this Plan, any other qualified plan or
simplified employee pension plan (whether or not terminated) ever maintained by
the Employer. For purposes of determining the Participant’s cumulative
permitted disparity limit, all years ending in the same calendar year are
treated as the same year. If the Participant has not benefited under a defined
benefit or target benefit plan for any year beginning on or after January 1,
1994, the Participant has no cumulative disparity limit.

 

(c)
The Maximum Money Purchase Disparity Rate is equal to the lesser of Base
Contribution Percentage or the applicable percentage determined in accordance
with the table below.

 

25

 

If the integration
level:

 

	
  is more than

  	
   

  	
  but not more than

  	
   

  	
  the applicable

  percentage is:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $0

  	
   

  	
  X*

  	
   

  	
  5.7%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X*
  of TWB

  	
   

  	
  80%
  of TWB

  	
   

  	
  4.3%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  80%
  of TWB

  	
   

  	
  Y**

  	
   

  	
  5.4%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  If
  TWB

  	
   

  	
   

  	
   

  	
  5.7%

  

 

*X
= the greater of $10,000 or 20 percent of the TWB

 

**Y
= any amount more than 80% of the TWB but less than 100% of the TWB.

 

If the integration level is equal to Taxable
Wage Base (TWB) the applicable percentage is 5.7%.

 

For purposes of this Paragraph the “Base
Contribution Percentage” shall be the percentage of Compensation at which
Employer-derived contributions are made with respect to Compensation at or
below the Integration Level in a Defined Contribution Plan.

 

(d)
Top-Heavy years. In the event the Plan becomes Top-Heavy the Employer shall
make an additional contribution to the Plan to provide the Minimum Top-Heavy
Allocation pursuant to section 2.3.4.

 

2.3.7 Integration
with Social Security - Target Benefit Plans.  The Plan may not
provide for permitted disparity if the Employer maintains any other plan that
provides for permitted disparity and benefits any of the same Participants.

 

Excess
Benefit Plans

 

(a)
Fixed Benefit Excess. For a Participant with less than 35 years of projected
participation, the Base Benefit Percentage and the Excess Benefit Percentage
will be reduced by being multiplied by a fraction, the numerator of which is
the participant’s Years of Projected Participation, and the denominator of
which is 35.

 

(1)
Cumulative Permitted Disparity Reduction: If the number of the participant’s
Cumulative Permitted Disparity years exceeds 35, the Excess Benefit Percentage
will be further reduced as provided below. A Participant’s Cumulative Permitted
Disparity years consists of the sum of: (1) the Participant’s Years of
Projected Participation (up to 35), (2) the number of years the Participant
benefited or is treated as having benefited under this Plan prior to the
Participant’s first Year of Projected Participation, and (3) the number of
years credited to the Participant for allocation or accrual purposes under one
or more qualified plans or simplified employee pension plans (whether or not
terminated) ever maintained by the Employer (other than years counted in (1) or
(2) above). For purposes of determining the Participant’s Cumulative Permitted
Disparity Limit, all years ending in the same calendar year are treated as the
same year.

 

If
the Cumulative Permitted Disparity Reduction is applicable, the Excess Benefit
Percentage will be reduced as follows:

 

(A)
Subtract the Participant’s Base Benefit Percentage from the Participant’s
Excess Benefit Percentage, (after modification in accordance with the paragraph
preceding this Cumulative Permitted Disparity Reduction).

 

(B)
Multiply the result determined in (A) by a fraction (not less than 0), the
numerator of which is 35 minus the sum of the years in (2) and (3) above, and
the

 

26

 

denominator
of which is 35.

 

(C)
The Participant’s Excess Benefit Percentage is equal to the sum of the result
in (B) and the Participant’s Base Benefit Percentage, as otherwise modified.

 

(2)
Overall permitted disparity limit: Notwithstanding the above, for any plan year
this plan benefits any participant who benefits under another qualified plan or
simplified employee pension plan maintained by the employer that provides for
permitted disparity (or imputes permitted disparity), the stated benefit for
all participants under this plan will be equal to the excess benefit percentage
entered into the benefit formula above multiplied by the participant’s total
average annual compensation under the plan (prorated for years of projected
participation less than 35).

 

(b)
Unit Benefit Excess. The participant’s cumulative permitted disparity limit is
equal to 35 minus: (1) the number of years the participant benefited or is
treated as having benefited under this plan prior to the participant’s first
year of projected participation, and (2) the number of years credited to the participant
for allocation or accrual purposes under one or more qualified plans or
simplified employee pension plans (whether or not terminated) ever maintained
by the employer other than years counted in (1) above or counted toward a
participant’s years of projected participation.

 

(1)
For purposes of determining the participant’s cumulative permitted disparity
limit, all years ending in the same calendar year are treated as the same year.

 

(2)
Overall Permitted Disparity Limit: Notwithstanding the Unit Benefit Excess
formulas in the Adoption Agreement, for any Plan Year this Plan benefits any
Participant who benefits under another qualified plan or simplified employee
pension maintained by the Employer that provides for Permitted Disparity (or
imputes Permitted Disparity), the stated benefit for all Participants under
this Plan will be equal to the Excess Benefit Percentage above times the
Participant’s total Average Annual Compensation times the Participant’s Years
of Projected Participation under the Plan up to the maximum Years of Projected
Participation taken into account in the Unit Benefit Excess formulas in the
Adoption Agreement.

 

Offset
Benefit Plans

 

(c)
Fixed Benefit Offset. Cumulative Permitted Disparity Reduction: If the number
of the Participant’s Cumulative Permitted Disparity years exceeds 35, the Gross
Benefit Percentage and the offset will be further reduced as provided below.

 

(1)
A Participant’s Cumulative Permitted Disparity years consists of the sum of:
(1) the Participant’s Years of Projected Participation (up to 35), (2) the
number of years the Participant benefited or is treated as having benefited
under this Plan prior to the Participant’s first Year of Projected
Participation, and (3) the number of years credited to the Participant for
allocation or accrual purposes under one or more qualified plans or simplified
employee pension plans (whether or not terminated) ever maintained by the
Employer (other than years counted in (1) or (2) above). For purposes of
determining the Participant’s Cumulative Permitted Disparity Limit, all years
ending in the same calendar year are treated as the same year.

 

(2)
If the Cumulative Permitted Disparity Reduction is applicable, the Gross
Benefit Percentage and the offset will be reduced as follows:

 

(A)
The offset will be reduced by multiplying it by a fraction (not less than 0),
the numerator of which is 35 minus the sum of the years in (2) and (3) in the
preceding paragraph, and the denominator of which is 35.

 

(B)
The Gross Benefit Percentage will be reduced by the number of percentage points
by which the offset was reduced in (A) above.

 

(3)
Overall Permitted Disparity Limit: Notwithstanding the above, for any Plan Year

 

27

 

this
Plan benefits any Participant who benefits under another qualified plan or
simplified employee pension plan maintained by the Employer that provides for
Permitted Disparity (or imputes Permitted Disparity), the stated benefit for
all Participants under this Plan will be equal to the Gross Benefit Percentage
entered in the benefit formula (without regard to the offset) multiplied by the
Participant’s Average Annual Compensation under the Plan (prorated for Years of
Projected Participation less than 35).

 

(d)
Unit Benefit Offset. The Participant’s Cumulative Permitted Disparity Limit is
equal to 35 minus: (1) the number of years the Participant benefited or is
treated as having benefited under this Plan prior to the Participant’s first
Year of Projected Participation, and (2) the number of years credited to the
Participant for allocation or accrual purposes under one or more qualified
plans or simplified employee pension plans (whether or not terminated) ever
maintained by the Employer other than years counted in (1) above or counted
toward a Participant’s Years of Projected Participation. For purposes of
determining the Participant’s Cumulative Permitted Disparity Limit, all years
ending in the same calendar year are treated as the same year.

 

(1)
The Maximum Offset Allowance will not exceed the lesser of: (1) the applicable
factor from Tables I or II in section B below, and (2) one-half of the Gross
Benefit Percentage, multiplied by a fraction (not to exceed one), the numerator
of which is the Participant’s Average Annual Compensation, and the denominator
of which is the Participant’s Final Average Compensation up to the offset
level.

 

(2)
Overall Permitted Disparity Limit: Notwithstanding the first two of the
preceding Unit Benefit Offset paragraphs, for any Plan Year this Plan benefits
any Participant who benefits under another qualified plan or simplified
employee pension plan maintained by the Employer that provides for Permitted
Disparity (or imputes Permitted Disparity), the stated benefit for all
Participants under this Plan will be equal to the Gross Benefit Percentage
(without regard to the offset) times the Participant’s Average Annual
Compensation times the Participant’s Years of Projected Participation under the
Plan up to the maximum of Years of Projected Participation taken into account
in the Unit Benefit Offset formulas.

 

2.3.8 Fail-Safe Allocation.
With respect only to non-standardized plans and notwithstanding any
provision of the Plan or Adoption Agreement to the contrary, if the Plan would
otherwise fail to satisfy the requirements of section 410(b)(1) of the Code
(the ratio percentage test) and the regulations thereunder because Employer
contributions have not been allocated to a sufficient number or percentage of
Participants for the Plan Year, and the right to receive a contribution is
conditioned upon participation on the last day of the Plan Year or the
completion of more than 501 Hours of Service, or conditioned upon membership in
a certain Employee classification, an additional contribution shall be made by
the Employer and shall be allocated to the Employer Accounts of affected
Participants, considering all the applicable exclusions of sections 410(b)(3)
and (4) of the Code subject to the following provisions:

 

(a)
The Participants eligible to share in the allocation of the Employer’s
contribution shall be expanded to include the minimum number of Participants
who are not otherwise eligible to the extent necessary to satisfy the
applicable test under the ratio percentage test of section 410(b)(1) of the
Code. The specific Participants who shall become eligible are those
Participants who are members of an eligible classification of Employees, who
are actively employed on the last day of the Plan Year, but have not met the
Plan’s Hours of Service requirement.

 

These
Participants shall be given an allocation one Participant at a time beginning
with the Participant with the greatest number of Hours of Service and
continuing in descending order until the ratio percentage test is passed. If
two or more Participants have the same number of Hours of Service then the
Participant with the lowest Compensation shall receive an allocation first.
Failsafe allocations shall be given to the smallest number of Participants
which allows the Plan to pass the ratio percentage test.

 

(b)
If the ratio percentage test is still not satisfied, the Participants eligible
to share in the allocation shall be further expanded to include the minimum
number of Participants who are members of an eligible classification of
Employees, who are not employed on the last day of the Plan Year as is
necessary to satisfy the ratio percentage test. The specific Participants who
shall

 

28

 

become
eligible are those Participants who have completed the greatest number of Hours
of Service (in excess of 500 hours) during the Plan Year.

 

These
Participants shall be given an allocation one Participant at a time in
descending order until the ratio percentage test is passed. If two or more
Participants have been credited with the same number of Hours of Service then
the Participant with the lowest Compensation shall receive an allocation first.

 

(c)
If the ratio percentage test is still not satisfied, the Participants eligible
to share in the allocation of the Employer’s contribution shall be expanded to
include the minimum number of Participants who are not otherwise eligible to
the extent necessary to satisfy the applicable test under the ratio percentage
test of section 410(b)(1) of the Code. The specific Participants who shall
become eligible are those Participants who are members of an ineligible
classification of Employees, who are actively employed on the last day of the
Plan Year, and have met the Plan’s Hours of Service requirement.

 

These
Participants shall be given an allocation one Participant at a time beginning
with the Participant with the greatest number of Hours of Service and
continuing in descending order until the ratio percentage test is passed. If
two or more Participants have the same number of Hours of Service then the
Participant with the lowest Compensation shall receive an allocation first.
Fail-Safe allocations shall be given to the smallest number of Participants
which allows the Plan to pass the ratio percentage test.

 

(d)
If the ratio percentage test is still not satisfied, the Participants eligible
to share in the allocation shall be further expanded to include the minimum
number of Participants who are members of an ineligible classification of
Employees, who are employed on the last day of the Plan Year but have not meet
the hours requirement of the Plan as is necessary to satisfy the ratio
percentage test. The specific Participants who shall become eligible are those
Participants who have completed the greatest number of Hours of Service during the
Plan Year. These Participants shall be given an allocation one Participant at a
time in descending order until the ratio percentage test is passed. If two or
more Participants have been credited with the same number of Hours of Service
then the Participant with the lowest Compensation shall receive an allocation
first.

 

(e)
If the ratio percentage test is still not satisfied, the Participants eligible
to share in the allocation shall be further expanded to include the minimum
number of Participants who are members of an ineligible classification of
Employees, who are not employed on the last day of the Plan Year as is
necessary to satisfy the ratio percentage test. The specific Participants who
shall become eligible are those Participants who have completed the greatest
number of Hours of Service (in excess of 500 hours) during the Plan Year. These
Participants shall be given an allocation one Participant at a time in
descending order until the ratio percentage test is passed. If two or more
Participants have been credited with the same number of Hours of Service then
the Participant with the lowest Compensation shall receive an allocation first.

 

(f)
The Employer may elect in the Adoption Agreement, whether to apply this Section
2.3.8.

 

2.3.9  Contributions
on Behalf of Disabled Participants.  If elected in the
Adoption Agreement by the Employer, contributions will be made to the Plan on
behalf of each Disabled Participant (within the meaning of Section 1.2.49 of
the Plan).

 

29

 

ARTICLE 4

 

BENEFITS

 

2.4.1 Distributable
Benefit.  At such time that the employment of a Participant
terminates for any reason, he or his Beneficiary shall be entitled to a benefit
equal to the vested and nonforfeitable interest in his Accounts as of the
Distribution Date. Such Accounts shall include the allocable share of
contributions and Forfeitures, if any, which may be allocated to said Accounts
as of such Distribution Date and shall be determined after making the
adjustments for which provision is made in the Plan. The vested and
nonforfeitable interest of the Participant in any of his Accounts subject to
the vesting schedule selected in the Adoption Agreement shall not increase
after the date of the Participant’s termination of employment.

 

2.4.2 Vesting.  A Participant
shall at all times be one hundred percent (100%) vested and have a
nonforfeitable interest in his Elective Contribution Account, Qualified
Non-Elective Contribution Account, and Voluntary Account. The vested and nonforfeitable
interest of the Participant in his Controlled Account shall be determined by
reference to the Account from which the funds were originally transferred. The
vested and nonforfeitable interest in a Participant’s Employer Account and
Matching Account shall be determined as hereinafter provided.

 

(a)
Normal Retirement.

 

If
a Participant terminates employment at his Normal Retirement Age, he shall be
one hundred percent (100%) vested and have a nonforfeitable interest in his
Employer Account and Matching Account.

 

(b)
Postponed Retirement. If a Participant continues in active employment following
his Normal Retirement Age, he shall continue to participate under the Plan.
From and after his Normal Retirement Age, he shall be one hundred percent
(100%) vested and have a nonforfeitable interest in his Employer Account and
Matching Account.

 

(c)
Disability. If the employment of a Participant is terminated prior to his
Normal Retirement Age as a result of a medically determinable physical or
mental impairment which may be expected to result in death or to last for a
continuous period of not less than twelve (12) months and which renders him
incapable of performing his duties, he shall vested and have a nonforfeitable
interest in his Employer Account and Matching Account as elected in the
Adoption Agreement. All determinations in connection with the permanence and
degree of such disability shall be made by the Plan Administrator in a uniform,
nondiscriminatory manner on the basis of medical evidence.

 

(d)
Death. In the event of the death of a Participant, the Participant shall be
vested and have a nonforfeitable interest in his Employer Account and Matching
Account as elected in the Adoption Agreement. The vested and nonforfeitable
interest of the Participant in any of his Accounts subject to the vesting
schedule selected in the Adoption Agreement shall not increase after the date
of the Participant’s termination of employment.

 

(e)
Termination of Plan. In the event of termination of the Plan (including
termination resulting from a complete discontinuance of contributions by the
Employer), each Participant shall be one hundred percent (100%) vested and have
a nonforfeitable interest in his Employer Account and Matching Account. In the
event of a partial termination of the Plan, each Participant with respect to
whom such partial termination has occurred shall be one hundred percent (100%)
vested and have a nonforfeitable interest in his Employer Account and Matching
Account.

 

(f)
Early Retirement, Resignation or Discharge. If the employment of a Participant
terminates by reason of early retirement, resignation or discharge prior to his
Normal Retirement Age, he shall be vested and have a nonforfeitable interest in
a percentage of his Employer Account and Matching Account taking into account
all of his Years of Service as of such termination date in accordance with the
schedule set forth in the Adoption Agreement.

 

(g)
All Other Times. A Participant shall be vested and have a nonforfeitable
interest in a

 

30

 

percentage
of his Employer Account and Matching Account determined by taking into account
all of his Years of Service in accordance with the schedule set forth in the
Adoption Agreement.

 

(h)
Elapsed Time Method. If the Employer has elected to use the Elapsed Time Method
under Part II.E. of the Adoption Agreement the Plan Administrator must:

 

(1)
credit an Employee with a number of Years of Service equal to at least the
number of whole years of the Employee’s Period of Service, whether or not such
Periods of Service were completed consecutively.

 

(2)
in determining the number of whole years of an Employee’s period service, the
non-successive Periods of Service must be aggregated and less than whole year
Periods of Service (whether of not consecutive) must be aggregated on the basis
that 12 months of service (30 days are deemed to be a month in the case of the
aggregation of fractional months) or 365 days of service equal a whole Year of
Service.

 

(3)
take into account the following Periods of Severance:

 

(i)
if an Employee severs from service by reason of a quit, discharge or retirement
and the Employee then performs an Hour of Service within the meaning of Section
1.2.50 of the Plan, within 12 months of the Severance from Service Date, the
Plan shall take into account the Period of Severance; and

 

(ii)
notwithstanding paragraph (i) above, if an Employee severs from service by
reason of a quit, discharge or retirement during an absence from service of 12
months or less for any reason other than a quit, discharge, retirement or
death, and then performs an Hour of Service within the meaning of Section
1.2.50, within 12 months of the date on which the Employee was first absent
from service, the Plan is required to take into account the Period of
Severance.

 

(4)
for purposes of determining an Employee’s nonforfeitable percentage of accrued
benefits derived from Employer contributions, after calculating an Employee’s
Period of Service in the manner prescribed in this Paragraph (h), any remaining
less than whole year, 12-month or 365-day Period of Service may be disregarded.

 

2.4.3 Leave of Absence.
A temporary cessation from active employment with the Employer pursuant
to an authorized leave of absence in accordance with the nondiscriminatory
policy of the Employer, whether occasioned by illness, military service or any
other reason shall not be treated as either a termination of employment or a
Break in Service provided that the Employee returns to employment prior to the
end of the authorized leave of absence.

 

2.4.4 Re-Employment.  Unless otherwise
elected by the Employer in the Adoption Agreement, in the case of a Participant
who has five (5) or more consecutive Breaks in Service, all Years of Service
after such Breaks in Service shall be disregarded for the purposes of vesting
the Employer-derived Account balance that accrued before such breaks, but both
pre-break and post-break service shall count for the purposes of vesting the
Employer-derived Account balance that accrues after such breaks.

 

Both Accounts shall share in the earnings
and losses of the Trust Fund. In the case of a Participant who does not have
five (5) consecutive Breaks in Service, both the pre-break and post-break
service shall count in vesting both the pre-break and post-break
Employer-derived Account balance.

 

2.4.5 Distribution Date.
The Distribution Date shall be determined as hereinafter provided.

 

(a)
General. For purposes of determining the amount to be distributed, the
Distribution Date shall be determined in the manner specified in the Adoption
Agreement.

 

(b)
Termination of Plan. In the event of termination of the Plan (including
termination resulting from a complete discontinuance of contributions by the
Employer), the Distribution Date shall be the date of such termination. In the
event of a partial termination of the Plan, as to each Participant

 

31

 

with
respect to whom such partial termination has occurred, the Distribution Date
shall be the last day of the Plan Year coinciding with or immediately following
the date of such partial termination.

 

(c)
Distributions following Distribution Date. Subject to the necessity, if any, of
obtaining the consent of a Participant and spouse, distribution of a Participant’s
Distributable Benefit shall commence within a reasonable period after the
Distribution Date, unless otherwise elected by the Participant in accordance
with the provisions of the Plan or as required by the provisions of the Plan. A
distribution shall not be made to a Participant if he in reemployed prior to
the date his benefit would have been distributed.

 

2.4.6 Forfeitures.  If an Employee
terminates service, and the value of the Employee’s vested Account balance
derived from Employer and Employee contributions is not greater than $3,500
(May elect in the Adoption Agreement to substitute a dollar amount that is
$5,000 or less, for Plan Years beginning after August 5, 1997.), and the
Employee receives a distribution of the value of the entire vested portion of
such Account balance, the nonvested portion shall be treated as a Forfeiture,
unless elected otherwise in the Adoption Agreement, the last day of the Plan
Year in which the Participant’s entire vested interest is distributed. If an
Employee would have received a distribution under the preceding sentence but
for the fact that the Employee’s vested Account balance exceeded $5,000, or
such lesser amount as elected above, when the Employee terminated service and
if at a later time such Account balance is reduced such that it is not greater
than $5,000, or such lesser amount as elected above, the Employee will receive
a distribution of such Account balance and the nonvested portion will be
treated as a forfeiture. If the value of an Employee’s vested Account balance
is zero, the Employee shall be deemed to have received a distribution of such
vested Account balance. A Participant’s vested Account balance shall not
include accumulated deductible Employee contributions within the meaning of
section 72(o)(5)(B) of the Code for Plan Years beginning prior to January 1,
1989.

 

Unless otherwise elected in the Adoption
Agreement, if an Employee terminates service, and elects, in accordance with
the provisions of the Plan, to receive the value of the Employee’s vested
Account balance, the nonvested portion shall be treated as a Forfeiture as of
the last day of the Plan Year in which all of the Participant’s vested interest
is distributed from the Plan. If the Employee elects to have distributed less
than the entire vested portion of the Account balance derived from Employer
contributions, the part of the nonvested portion that will be treated as a
Forfeiture is the total nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution attributable to Employer
contributions and the denominator of which is the total value of the vested
Employer-derived Account balance.

 

If an Employee receives a distribution of an
amount deducted from his Account when he has less than a one hundred percent
(100%) vested and nonforfeitable interest in the Account and the Employee
resumes employment covered under the Plan, the Employee’s Employer-derived
Account balance shall be restored to the amount on the date of distribution if
the Employee repays to the Plan the full amount of the distribution
attributable to Employer contributions before the earlier of five (5) years
after the first date on which the Participant is subsequently re-employed by
the Employer, or the date the Participant incurs five (5) consecutive Breaks in
Service following the date of the distribution. If an Employee is deemed to
receive a distribution pursuant to this Section, and the Employee resumes
employment covered under the Plan before the date the Participant incurs five
(5) consecutive Breaks in Service, upon the reemployment of such Employee, the
Employer-derived account balance of the Employee will be restored to the amount
on the date of such deemed distribution.

 

Unless otherwise elected in the Adoption
Agreement, such Forfeiture shall be allocated in the same manner as a
contribution by the Employer for the year in which said Forfeiture occurred.

 

If elected in the Adoption Agreement, a
Participant or Beneficiary due a benefit who cannot be located shall forfeit
such benefit in the Plan Year it is determined the Participant cannot be
located. If a benefit is forfeited because the Participant or Beneficiary
cannot be found, such benefit will be reinstated if a claim is made by the
Participant or Beneficiary.

 

The Employer may elect in the Adoption
Agreement to use Forfeitures to offset administrative expenses of the Plan to
the extent the expenses are Plan expenses and not settlor expenses.

 

If a Participant is re-employed following a
Break in Service and is entitled to restoration of any amount of

 

32

 

his Account that was forfeited as a result
of such Break in Service, such amount shall be restored in the manner specified
in the Adoption Agreement.

 

2.4.7 Minimum Distribution.
If an Employee terminates service, and the value of the Employee’s
vested Account balance derived from Employer contributions is zero, the
Employer may elect to provide such Employee with a Minimum Distribution. The
amount of such Minimum Distribution shall be elected by the Employer in the
Adoption Agreement. In no event shall the Minimum Distribution under this
Section 2.4.7 exceed Participant’s Account balance.

 

33

 

ARTICLE 5

 

DISTRIBUTIONS

 

2.5.1 Commencement
of Distribution.

 

(a)
Immediate Distribution. A Participant whose employment is terminated:

 

(i)
On account of death, Disability, Early Retirement Date or Normal Retirement
Date may elect, or his Beneficiary may elect, to begin distribution of his Distributable
Benefit within a reasonable period after the Distribution Date as of which his
Distributable Benefit is determined, or as of the date determined under
Subsection (b), below, or

 

(ii)
On account of resignation or discharge prior to his Early Retirement Date or
Normal Retirement Date, the distribution of the Participant’s Distributable
Benefit shall be governed by Subsection (b), below.

 

(b)
Deferred Distribution. Except in the case of amounts subject to Section
2.5.2(i) for which a Participant’s consent is not required, unless the Employer
elects in the Adoption Agreement to permit the Employee to elect earlier
commencement and the Employee so elects or the Employee elects to further defer
distribution, if the employment of a Participant is terminated by reason of
resignation or discharge prior to either his Early Retirement Date or his
Normal Retirement Date, distribution of his Distributable Benefit shall be
deferred and commenced on the sixtieth (60th) day after the close of the later
of the following Plan Years:

 

(i)
The Plan Year during which the Participant attains the earlier of age
sixty-five (65) or the Normal Retirement Age;

 

(ii)
The Plan Year during which the tenth (10th) anniversary of the commencement of
the Participant’s participation in the Plan occurs; or

 

(iii)
The Plan Year during which the Participant terminates service with the
Employer.

 

If, however, the Employer selects an Early
Retirement Date in the Adoption Agreement, a Participant who terminates
employment before satisfying the age requirement for early retirement but has
satisfied any service requirement shall be entitled to a distribution of his
Distributable Benefit in accordance with Subsection (a) above upon attaining
such age.

 

If the Participant meets the Disability requirements
of Section 2.4.2(c) after termination of employment he shall be entitled to a
distribution of his vested Account balance prior to attaining his Early or
Normal Retirement Age.

 

Notwithstanding the foregoing, the failure
of a Participant and spouse to consent to a distribution while a benefit is
immediately distributable, within the meaning of Section 2.5.2(k), shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this Section.

 

(c)
Required Minimum Distribution. Notwithstanding anything herein to the contrary,
unless the Participant has made an appropriate election by December 31, 1983,
to defer distribution which has not been revoked or modified, the Participant’s
benefit shall be distributed to the Participant not later than the Required
Beginning Date or shall be distributed, commencing on the Required Beginning
Date in accordance with regulations prescribed by the Secretary of the Treasury
over a period not extending beyond the life expectancy of the Participant or
the life expectancy of the Participant and a Beneficiary designated by the
Participant.

 

The amount required to be distributed for
each calendar year, beginning with distributions for the first distribution
calendar year, must at least equal the quotient obtained by dividing the
Participant’s benefit by the Applicable Life Expectancy. Unless otherwise
elected by the Employer, or the Participant (or spouse, if distributions begin
after death and the spouse is the Designated Beneficiary) by the time
distributions are

 

34

 

required to begin, the life expectancy of
the Participant and the Participant’s spouse shall be recalculated annually.
The Adoption Agreement may allow the Participant to elect not to have the life
expectancy of the Participant and the Participant’s spouse recalculated. Other
than for a life annuity, such election shall be irrevocable as to the
Participant or spouse and shall apply to all subsequent years. The life expectancy
of a non-spouse Beneficiary may not be recalculated. Life expectancy and joint
and last survivor expectancy shall be computed by use of the expected return
multiples in Tables V and VI of section 1.72-9 of the Treasury regulations. For
calendar years beginning after December 31, 1988, the amount to be distributed
each year, beginning with distributions for the first distribution calendar
year shall not be less than the quotient obtained by dividing the Participant’s
benefit by the lesser of (1) the Applicable Life Expectancy or (2) if the
Participant’s spouse is not the Designated Beneficiary, the applicable divisor
then determined from the table set forth in Q&A-4 of section 1.401(a)(9)-2
of the Proposed regulations. Distributions after the death of the Participant
shall be distributed using the Applicable Life Expectancy as the relevant
divisor without regard to Proposed regulations section 1.401(a)(9)-2. The
minimum distribution for subsequent calendar years, including the minimum
distribution for the Distribution Calendar Year in which the Participant’s
Required Beginning Date occurs, must be made on or before December 31 of that
Distribution Calendar Year.

 

(d)
Distribution After Death. Unless the Participant has made an appropriate
election by December 31, 1983, to extend the period of distribution after his
death and the election has not been revoked or modified, the following
provisions shall apply. If distribution of the Participant’s benefit has begun
and the Participant dies before his entire benefit has been distributed to him,
the remaining portion of such benefit shall be distributed at least as rapidly
as under the method of distribution being used as of the date of the
Participant’s death.

 

If the Participant dies before the
distribution of his benefit has begun, the entire interest of the Participant
shall be distributed by December 31 of the calendar year containing the fifth
(5th) anniversary of the death of such Participant, provided that if any
portion of the Participant’s benefit is payable to or for the benefit of a
Designated Beneficiary and such portion is to be distributed in accordance with
regulations issued by the Secretary of the Treasury over the life of, or over a
period not extending beyond the life expectancy of such Designated Beneficiary,
such distributions shall begin not later than December 31 of the calendar year
immediately following the calendar year of the Participant’s death or such
later date as may be provided by regulations issued by the Secretary of the
Treasury. If the Designated Beneficiary is the surviving spouse of the
Participant, the date on which the distributions are required to begin shall
not be earlier than the later of December 31 of the calendar year immediately
following the calendar year in which the Participant had died and December 31
of the calendar year in which the Participant would have attained age 70-1/2.
If the surviving spouse thereafter dies before the distributions to such spouse
begin and any benefit is payable to a contingent Beneficiary, the date on which
distributions are required to begin shall be determined as if the surviving
spouse were the Participant.

 

If the Participant has not specified the
manner in which benefits are payable by the time of his or her death, the
Participant’s Designated Beneficiary must elect the method of distribution no
later than the earlier of: (1) December 31 of the calendar year in which
distributions would be required to begin under this Section, or (2) December 31
of the calendar year which contains the fifth anniversary of the date of death
of the Participant. If the Participant has no Designated Beneficiary, or if the
Designated Beneficiary does not elect a method of distribution, distribution of
the Participant’s entire interest must be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant’s death.

 

(e)
Reserved.

 

(f)
Incidental Death Benefit Distributions. Any distribution required by the rules
applicable to incidental death benefits shall be treated as a distribution
required by this Section. All distributions required under this Section shall
be determined and made in accordance with the Proposed regulations under
section 401(a)(9) of the Code, including the minimum distribution incidental
benefit requirement of section 1.401(a)(9)-2 of the Proposed regulations.

 

(g)
Distributions. For the purposes of this Section, distribution of a
Participant’s interest is considered to begin on the Participant’s Required
Beginning Date or the date distribution is required to begin to the surviving
spouse. If distribution in the form of an annuity irrevocably commences to the
Participant before the Required Beginning Date, the date distribution is

 

35

 

considered
to begin is the date distribution actually commences.

 

(h)
Definitions.

 

(1)
Applicable Life Expectancy. The life expectancy (or joint and last survivor
expectancy) calculated using the attained age of the Participant (or Designated
Beneficiary) as of the Participant’s (or Designated Beneficiary’s) birthday in
the applicable calendar year reduced by one for each calendar year which has
elapsed since the date life expectancy was first calculated. If life expectancy
is being recalculated, the applicable life expectancy shall be the life
expectancy as so recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if life expectancy is being recalculated such
succeeding calendar year.

 

(2)
Designated Beneficiary. The individual, or Trust that is designated as the
Beneficiary under the Plan in accordance with section 401(a)(9) and the
Proposed regulations thereunder.

 

(3)
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.

 

(4)
Participant’s Benefit. (For purposes of Minimum Required Distributions only.)

 

(i)
The Account balance as of the last Valuation Date in the calendar year
immediately preceding the Distribution Calendar Year (valuation calendar year)
increased by the amount of any contributions or Forfeitures allocated to the
Account balance as of dates in the valuation calendar year after the Valuation
Date and decreased by distributions made in the valuation calendar year after
the Valuation Date.

 

(ii)
Exception for second distribution calendar year. For purposes of paragraph (i)
above, if any portion of the minimum distribution for the first Distribution
Calendar Year is made in the second Distribution Calendar Year on or before the
Required Beginning Date, the amount of the minimum distribution made in the
second Distribution Calendar Year shall be treated as if it had been made in
the immediately preceding Distribution Calendar Year.

 

(5)
Required Beginning Date.

 

(i)
General rule. The Required Beginning Date of a Participant is the first day of
April of the calendar year following the calendar year in which the Participant
attains age 70-1/2.

 

(ii)
Non-5-Percent Owner Exception. If so elected in the Adoption Agreement, the
Required Beginning Date of a Participant who is not a 5-percent owner shall be
the first day of April of the calendar year following the calendar year in
which the later of retirement or attainment of age 70-1/2 occurs.

 

Transition
Rule:

 

(A)
Any Participant who is not a 5 percent owner attaining age 70-1/2 in years
after 1995 may elect by April 1 of the calendar year following the year in
which the Participant attained age 70-1/2, (or by December 31, 1997 in the case
of a Participant attaining age 70-1/2 in 1996) to defer distributions until the
calendar year following the calendar year in which the Participant retires. If
no such election is made the Participant who is not a 5 percent owner will
begin

 

36

 

receiving
distributions by April 1 of the calendar year following the year in which the
Participant attained age 70-1/2 (or by December 31, 1997 in the case of a
Participant attaining in 1996)

 

(B)
Any Participant attaining age 70-1/2 in years prior to 1997 (may not be earlier
than January 1, 1996) may elect to stop distributions and recommence by the
April 1 of the calendar year following the year in which the Participant
retires. There is either (as elected by the Employer in the Adoption Agreement)

 

(1)
a new Annuity Starting Date upon recommencement, or

 

(2)
no new Annuity Starting Date upon recommencement.

 

(C)
The preretirement age 70-1/2 distribution option is only eliminated with
respect to Employees who reach age 70-1/2 in or after a calendar year that
begins after the later of December 31, 1998, or the adoption date of this Plan.
The preretirement age 70-1/2 distribution option is an optional form of benefit
under which benefits payable in a particular distribution form (including any
modification that may be elected after benefit commencement) commence at a time
during the period that begins on or after January 1 of the calendar year in
which an Employee attains age 70-1/2 and ends April 1 of the immediately
following calendar year.

 

(iii)
5-percent owner. A Participant is treated as a 5-percent owner for purposes of
this Section if such Participant is a 5-percent 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 66-1/2
or any subsequent Plan Year.

 

(iv)
Once distributions have begun to a 5-percent owner under this Section, they
must continue to be distributed, even if the Participant ceases to be a
5-percent owner in a subsequent year.

 

(v)
Transitional rule. Notwithstanding the other requirements of this Section and
subject to the requirements of Section 2.5.2, distribution on behalf of any
Employee, including a 5-percent owner, may be made in accordance with all of
the following requirements (regardless of when such distribution commences):

 

(1)
The distribution by the Trust is one which would not have disqualified such
Trust under section 401(a)(9) of the Internal Revenue Code as in effect prior
to amendment by the Deficit Reduction Act of 1984.

 

(2)
The distribution is in accordance with a method of distribution designated by
the Employee whose interest in the Trust is being distributed or, if the
Employee is deceased, by a Beneficiary of such Employee.

 

(3)
Such designation was in writing, was signed by the Employee or the Beneficiary,
and was made before January 1, 1984.

 

2.5.2 Method of Distribution.
Subject to the provisions of Section 2.5.1 above and any security
interest in a loan from the Plan for which any necessary spousal consent has
been obtained (to the extent such security interest is used as repayment of the
loan), distribution shall be made by one of the following methods, as
determined in accordance with the election of the Participant (or in the case
of death, his Beneficiary) with such spousal consents as may be required by
law:

 

(a)
In a single distribution, as designated by the Employer in the Adoption
Agreement; however, if the consent of the Participant is not required because
the Participant’s vested Account

 

37

 

balance
is $3,500 (May elect in the Adoption Agreement to substitute a dollar amount
that is $5,000 or less, for Plan Years beginning after August 5, 1997.) or
less, the Employer may elect to make the default method of distribution of such
Account balance a Direct Rollover. The Employer may set a minimum Account
balance to which this shall apply. This default Direct Rollover applies only if
the terminating Participant fails to request affirmatively a cash payment, a
Direct Rollover to another qualified plan, or an IRA designated by the
terminating Participant. The Plan Administrator shall select an IRA trustee,
custodian, or issuer (the “trustee) that is unrelated to the Employer, shall
establish the IRA with that trustee on behalf of the terminating Participant
who fails affirmatively to elect a Direct Rollover of a cash distribution, and
make the initial investment choices for the account.

 

(b)
In substantially equal annual, quarterly or monthly installments over a period
of more than one year but which does not exceed the period designated in the
Adoption Agreement, as selected by the Participant (provided that such period
is not greater than the Participant’s life expectancy or the Participant’s and
the Participant’s designated Beneficiaries’ joint life expectancy as of the
Annuity Starting Date), plus accrued net income. If distribution is to be so
made in installments, the Plan Administrator shall cause the undistributed
portion of the Distributable Benefit to be transferred to a Segregated Fund,
from which installment payments shall thereafter be withdrawn from time to
time.

 

(c)
By the purchase and delivery of a single premium, nontransferable, fully
refundable, annuity policy issued by a legal reserve life insurance company
payable in equal installments for the life of the participant that terminates
upon the participant’s death, or providing for payments over such period as may
be designated in the Adoption Agreement as selected by the Participant;
provided, however, unless the Employer has designated a life annuity
distribution option in the Adoption Agreement, in the event of distribution of
such an annuity policy to a Participant, such duration shall be for a fixed
duration which is less than the Participant’s life expectancy as of the Annuity
Starting Date. The refund feature under such annuity policy following the death
of the Participant shall inure to the benefit of the person or persons
designated by the Participant as his Beneficiary.

 

(d)
Any alternative method of equivalent value contained in the Plan at any time on
or after the first day of the first Plan Year beginning after 1988 to which the
Participant consents.

 

(e)
Direct Rollover. On or after January 1, 1993, notwithstanding any provision of
the Plan to the contrary that would otherwise limit a Distributee’s election
under this paragraph, a Distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an Eligible
Rollover Distribution that is equal to at least $500 paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

 

(f)
Annuity Payments

 

(1)
Requirement of Annuity Payment. The provisions of this Section 2.5.2(f) shall
apply to any Participant who is credited with at least one Hour of Service with
the Employer on or after August 23, 1984, and such other Participants as
provided in Section 2.5.2(m). Unless an optional form of benefit is selected
pursuant to a qualified election within the 90-day period ending on the Annuity
Starting Date, a married Participant’s vested Account balance will be paid in
the form of a Qualified Joint and Survivor Annuity and an unmarried
Participant’s vested Account balance will be paid in the form of a life
annuity.

 

Unless
an optional form of benefit has been selected within the election period
pursuant to a qualified election, if a Participant dies before the Annuity
Starting Date then the Participant’s vested Account balance shall be applied
toward the purchase of a Qualified Preretirement Survivor Annuity.

 

Notwithstanding
the other provisions of this Section 2.5.2(f), if the Plan is designated in the
Adoption Agreement as a Cash or Deferred Profit Sharing Plan or a Profit
Sharing Plan and the Employer does not designate a life annuity distribution
option in the Adoption Agreement, the Qualified Joint and Survivor Annuity and
Qualified Preretirement Survivor Annuity forms of distribution shall not be
available. However, a Participant’s surviving spouse shall be entitled to

 

38

 

elect
distribution of the Participant’s vested Account balance in the manner provided
by Section 3.6.3.

 

A
Participant’s vested Account balance is the aggregate value of the
Participant’s vested Account balances derived from Employer and Employee
Contributions (including rollovers), whether vested before or upon death,
including the proceeds of insurance contracts, if any, on the Participant’s
life or the life of someone in whom the Participant has an insurable interest.
The provisions hereof shall apply to a Participant who is vested in amounts
attributable to Employer contributions, Employee contributions (or both) at the
time of death or distribution.

 

The
Participant may elect to have such annuity distributed upon attainment of the
earliest retirement age under the Plan. A surviving spouse may elect to have
such annuity distributed within the ninety(90) day period commencing on the
date of the Participant’s death.

 

No
spousal consent shall be required under this Section if the plan is a Safe
Harbor Profit Sharing Plan.

 

(2)
Election to Waive Annuity Payment. A Participant may elect at any time during
the applicable election period to waive the Qualified Joint and Survivor
Annuity form of benefit or the Qualified Preretirement Survivor Annuity form of
benefit (or both) and may revoke any such election at any time during the applicable
election period.

 

(3)
Spousal Consent Required. An election to waive any annuity form of benefit
shall not take effect unless the spouse of the Participant consents in writing
to the election, such election designates a specific Beneficiary, including any
class of Beneficiaries or contingent Beneficiaries, or, solely in the case of a
waiver of a Qualified Joint and Survivor Annuity, a form of benefit which may
not be changed without spousal consent (or the consent of the spouse expressly
permits designations by the Participant without any requirement or further
consent by the spouse), and the spouse’s consent acknowledges the effect of
such election and is witnessed by a Plan representative or a notary public, or
it is established to the satisfaction of the Plan Administrator that such
consent cannot be obtained because there is no spouse or because the spouse
cannot be located.

 

Any
consent by a spouse obtained under this provision (or establishment that the
consent of a spouse may not be obtained) shall be effective only with respect
to such spouse. A consent that permits designations by the Participant without
any requirement of further consent by such spouse must acknowledge that the
spouse has the right to limit consent to a specific Beneficiary, and a specific
form of benefit where applicable, and that the spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a prior waiver may be
made by a Participant without the consent of the spouse at any time before the
commencement of benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in subsection (4) below.

 

(4)
Written Explanations. The Plan Administrator shall provide each Participant no
less than 30 days and no more than 90 days before the Annuity Starting Date a
written explanation of -

 

(a)
the terms and conditions of a Joint and Survivor Annuity;

 

(b)
the Participant’s right to make and the effect of an election to waive the
Joint and Survivor Annuity form of benefit;

 

(c)
the rights of the Participant’s spouse to consent to a Participant’s election;

 

(d)
the right to make and the effect of a revocation of an election;

 

(e)
a plan may provide the written explanation described herein after the Annuity
Starting Date.

 

39

 

The
Plan Administrator shall provide to each Participant within the applicable
period a written explanation of a Preretirement Survivor Annuity comparable to
that provided with respect to a Joint and Survivor Annuity.

 

(5)
Applicable Period. The applicable period means with respect to a Participant,
whichever of the following periods ends last:

 

(a)
The period beginning with the first day of the Plan Year in which the
Participant attains age 32 and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age 35.

 

(b)
A reasonable period ending after the individual becomes a Participant.

 

(c)
A reasonable period ending after the Plan ceases to fully subsidize costs.

 

(d)
A reasonable period ending after section 401(a)(11) of the Code first applies
to the Participant.

 

(e)
A reasonable period ending after separation from service in case of a
Participant who separates before attaining age 35. For purposes of applying the
foregoing, a reasonable period ending after the enumerated events described in
(b), (c) and (d) is the end of the two-year period beginning one year prior to
the date the applicable event occurs and ending one year after that date. In
the case of a Participant who separates from service before the Plan Year in
which age 35 is attained, notice shall be provided within the two-year period
beginning prior to separation and ending one year after separation. If such a
Participant thereafter returns to employment with the Employer, the applicable
period for such Participant shall be redetermined.

 

(6)
Applicable Election Period. The applicable election period means -

 

(a)
in the case of an election to waive a Joint and Survivor Annuity, the ninety
(90) day period ending on the Annuity Starting Date. In any case to which this
Subparagraph applies, the applicable election period under this Section
2.5.2(f) shall not end before the 30th day after the date on which such
explanation is provided; and

 

(b)
in the case of an election to waive a Preretirement Survivor Annuity, the
period which begins on the first day of the Plan Year in which the Participant
attains age thirty-five (35) and ends on the date of the Participant’s death;
provided, that in the case of a Participant who is separated from service, such
period shall not begin later than the date of such separation from service.

 

A
Participant who will not yet attain age 35 as of the end of any current Plan
Year may make a special qualified election to waive the Preretirement Survivor
Annuity for the period beginning on the date of such election and ending on the
first day of the Plan Year in which the Participant will attain age 35. Such
election shall not be valid unless the Participant receives a written
explanation of the Preretirement Survivor Annuity in such terms as are
comparable to the explanation required under subsection (4). Preretirement
Survivor Annuity coverage will be automatically reinstated as of the first day
of the Plan Year in which the Participant attains age 35. Any new waiver on or
after such date shall be subject to the full requirements of this Section.

 

(7)
Marriage Requirement. Notwithstanding the foregoing, the benefits under the Plan
shall not be provided in the form of a Joint and Survivor Annuity or a Preretirement Survivor Annuity
unless the Participant and his spouse have been married throughout the one (1)
year period ending on the earlier of the Participant’s Annuity Starting Date or
the date of the Participant’s death.

 

40

 

If
a Participant marries within one (1) year before the Annuity Starting Date and
the Participant and his spouse in such marriage have been married for at least
a one (1) year period ending on or before the date of the Participant’s death,
the Participant and such spouse shall be treated as having been married
throughout the required period. A former spouse shall be treated as the spouse
or surviving spouse and a current spouse will not be treated as the spouse or
surviving spouse to the extent provided under a Qualified Domestic Relations
Order as described in section 414(p) of the Code.

 

(g)
Terms of Annuity Contracts. Any annuity contract distributed from the Plan must
be nontransferable. The terms of any annuity contract purchased and distributed
by the Plan to a Participant or spouse shall comply with the requirements of
the Plan. If the Participant’s benefit is distributed in the form of an annuity
purchased from an insurance company, distributions thereunder shall be made in
accordance with the requirements of section 401(a)(9) of the Code and the
Proposed regulations thereunder.

 

(h)
Incidental Death Benefits. For calendar years beginning before January 1, 1989,
if the Participant’s spouse is not the Designated Beneficiary, the method of
distribution selected must assure that at least fifty (50%) percent of the
present value of the amount available for distribution is paid within the life
expectancy of the Participant.

 

(i)
Consents. If payment in the form of a Qualified Joint and Survivor Annuity is
required with respect to a Participant and either the value of a Participant’s
vested Account balance derived from Employer and Employee contributions exceeds
$5,000 or there are remaining payments to be made with respect to a particular
distribution option that previously commenced, and the Account balance is
immediately distributable, the Participant and the Participant’s spouse (or
where either the Participant or the spouse has died, the survivor) must consent
to any distribution of such Account balance.

 

If
payment in the form of a Qualified Joint and Survivor Annuity is not required
with respect to a Participant and the value of a Participant’s vested Account
balance derived from Employer and Employee Contributions exceeds $5,000, and
the Account balance is immediately distributable, the Participant must consent
to any distribution of such Account Balance. The consent shall be obtained in
writing within the 90 day period ending on the Annuity Starting Date. Neither
the consent of the Participant nor the Participant’s spouse shall be required
to the extent that a distribution is required to satisfy section 401(a)(9) or
section 415 of the Code. In addition, upon termination of the Plan if the Plan
does not offer an annuity option (purchased from a commercial provider) and if
the Employer or any entity within the same controlled group does not maintain
another defined contribution plan (other than an employee stock ownership plan
as defined in section 4975(e)(7) of the Code), the Participant’s Account
balance in the Plan will, without the Participant’s consent, be distributed to
the Participant. However, if any entity within the same controlled group as the
Employer maintains another defined contribution plan (other than an employee
stock ownership plan as defined in section 4975(e)(7) of the Code), then the
Participant’s Account balance will be transferred, without the Participant’s
consent, to the other Plan if the Participant does not consent to an immediate
distribution. Spousal consent shall not be required under this Section if the
Plan is a Safe Harbor Profit Sharing Plan.

 

(1)
Transitional Rules for Cash Out Limits. In general. This section provides
transitional rules with regard to the cash out limits for distributions made
prior to October 17, 2000.

 

(2)
Distributions subject to section 417 of the Code. If payment in the form of a
Qualified Joint and Survivor Annuity is required with regard to a Participant,
the rule in this Section (2) is substituted for the rule in the first sentence
of Section 2.5.2(i). If the value of a Participant’ s vested Account balance
derived from Employer and Employee Contributions exceeds (or at the time of any
prior distribution (1) in Plan Years beginning before August 6, 1997, exceeded
$3,500 or (2) in Plan Years beginning after August 5, 1997, exceeded) $5,000,
and the Account balance is immediately distributable, the Participant and the
Participant’s spouse (or where either the Participant or the spouse has died,
the survivor) must consent to any distribution of such Account balance.

 

41

 

(3)
Distributions not subject to section 417 of the Code. If payment in the form of
a Qualified Joint and Survivor Annuity is not required with respect to a
Participant, the rule in this Section (3) is substituted for the rule in the
first sentence of the second paragraph of Section 2.5.2(i).

 

If
the value of a Participant’s vested Account balance derived from Employer and
Employee Contributions:

 

(A)
for Plan Years beginning before August 6, 1997, exceeds $3,500 (or exceeded
$3,500 at the time of any prior distribution),

 

(B)
for Plan Years beginning after August 5, 1997, and for a distribution made
prior to March 22, 1999, exceeds $5,000 (or exceeded $5,000 at the time of any
prior distribution),

 

(C)
and for Plan Years beginning after August 5, 1997 and for a distribution made
after March 21, 1999, that either exceeds $5,000 or is a remaining payment
under a selected optional form of payment that exceeded $5,000 at the time the
selected payment began, and the Account balance is immediately distributable,
the Participant and the Participant’s spouse (or where either the Participant
or the spouse has died, the survivor) must consent to any distribution of such
Account balance.

 

(j)
Zero Benefits. If the value of the Participant’s vested and nonforfeitable
interest in the Plan at the time of his termination of employment is zero, the
Participant shall be deemed to have received a distribution of such interest.

 

(k)
Restrictions on Immediate Distributions. The Plan Administrator shall notify
the Participant and the Participant’s spouse of the right to defer any
distribution until the Participant’s Account balance in the Plan is no longer
immediately distributable. Such notification shall include a general
description of the material features and an explanation of the relative values
of the optional forms of benefit available under the Plan in a manner that
would satisfy the notice requirements of section 417(a)(3) of the Code and
shall be provided no less than 30 days and no more than 90 days prior to the
Annuity Starting Date. Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity while the Participant’s Account balance in the Plan is
immediately distributable. Furthermore, if payment in the form of a Qualified
Joint and Survivor Annuity is not required with respect to the Participant
pursuant to the Plan, only the Participant need consent to the distribution of
an Account balance that is immediately distributable. The Participant’s Account
balance is immediately distributable if any part of the Participant’s Account
balance could be distributed to the Participant (or surviving spouse) before
the Participant attains (or would have attained if not deceased) the later of
age 62 or the Normal Retirement Age.

 

Such
distribution may commence less than 30 days after the notice required under
section 1.411(a)-11(c) of the Income Tax regulations is given, provided that:

 

(1)
The Plan Administrator clearly informs the Participant that the Participant has
a right to a period of at least 30 days after receiving the notice to consider
the decision of whether or not to elect a distribution (and if applicable, a
particular distribution option),

 

(2)
The Participant, after receiving the notice, affirmatively elects a
distribution.

 

(3)
The distribution commences more than 7 days after such explanation is provided.

 

(4)
The Participant is permitted to revoke any affirmative distribution election at
least until the Annuity Starting Date or, if later, at any time prior to the
expiration of the 7 day period that begins the day after the explanation of the
Qualified Joint and Survivor Annuity is provided to the Participant; and

 

42

 

(5)
The Annuity Starting Date is a date after the date that the written explanation
was provided to the Participant.

 

(l)
Transitional Rules.

 

(1)
Any living Participant not receiving benefits on August 23, 1984, who would
otherwise not receive the benefits prescribed by the previous Sections of the
Article must be given the opportunity to elect to have the prior Sections of
this Article apply if such Participant is credited with at least one Hour of
Service under this Plan or a predecessor plan in a Plan Year beginning on or
after January 1,1976, and such Participant has at least 10 years of vesting service
when he or she separated from service.

 

(2)
Any living Participant not receiving benefits on August 23, 1984, who was
credited with at least one Hour of Service under this Plan or a predecessor
plan on or after September 2, 1974, and who is not otherwise credited with any
service in a Plan Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with Section (4)
below.

 

(3)
The respective opportunities to elect (as described above) must be afforded to
the appropriate Participants during the period commencing on August 23, 1984,
and ending on the date benefits would otherwise commence to said Participants.

 

(4)
Any Participant who has elected pursuant to Section (2) above and any
Participant who does not elect under Section (1) or who meets the requirements
of Section (1) except that such Participant does not have at least 10 years of
vesting service when he or she separates from service, shall have his benefits
distributed in accordance with all of the following requirements if benefits
would have been payable in the form of a life annuity:

 

(i)
Automatic Joint and Survivor Annuity. If benefits in the form of a life annuity
become payable to a married Participant who:

 

(1)
begins to receive payments under the Plan on or after Normal Retirement Age; or

 

(2)
dies on or after Normal Retirement Age while still working for the Employer; or

 

(3)
begins to receive payments on or after the qualified Early Retirement Age; or

 

(4)
separates from service on or after attaining Normal Retirement Age (or the
qualified Early Retirement Age) and after satisfying the eligibility
requirements for the payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits;

 

Such
benefits will be received under this Plan in the form of a Qualified Joint and
Survivor Annuity, unless the Participant has elected otherwise during the
election period. The election period must begin at least 6 months before the
Participant attains qualified Early Retirement Age and end not more than 90
days before the commencement of benefits. Any election hereunder will be in
writing and may be changed by the Participant at any time.

 

(ii)
Election of early survivor annuity. A Participant who is employed after attaining
the qualified Early Retirement Age will be given the opportunity to elect,
during the election period, to have a survivor annuity payable on death.

 

If
the Participant elects the survivor annuity, payments under such annuity must
not be less than the payments that would have been made to the spouse under the
Qualified Joint and Survivor Annuity if the Participant had retired on the day
before his or her

 

43

 

death.
Any election under this provision will be in writing and may be changed by the
Participant at any time. The election period begins on the later of (1) the
90th day before the Participant attains the qualified Early Retirement Age, or
(2) the date on which participation begins, and ends on the date the
Participant terminates employment.

 

(iii)
For purposes of this Section (4):

 

(1)
Qualified Early Retirement Age is the later of:

 

(i)
the earliest date, under the Plan, on which the Participant may elect to
receive retirement benefits;

 

(ii)
the first day of the 120th month beginning before the Participant reaches
Normal Retirement Age; or

 

(iii)
the date the Participant begins participation.

 

(2)
Qualified Joint and Survivor Annuity is an annuity for the life of the
Participant with a survivor annuity for the life of the spouse as otherwise
described in the Plan.

 

(m)
Safe Harbor Rules. This Section shall apply to a Participant in a plan
designated as either a Cash or Deferred Arrangement or Profit Sharing Plan
notwithstanding any other provision of the plan if the following conditions are
satisfied:

 

(1)
the Participant does not or cannot elect payments in the form of a life
annuity; and

 

(2)
on the death of a Participant, the Participant’s vested Account balance will be
paid to the Participant’s surviving spouse, but if there is no surviving
spouse, or if the surviving spouse has consented in a manner conforming to a
qualified election, then to the Participant’s Designated Beneficiary. The
surviving spouse may elect to have distribution of the vested Account balance
commence with the 90-day period following the date of the Participant’s death.
The Account balance shall be adjusted for gains or losses occurring after the
Participant’s death in accordance with the provisions of the Plan governing the
adjustment of Account balances for other types of distributions. This Section
(m) shall not be operative with respect to a Participant in a plan designated
as a Profit Sharing Plan or Cash of Deferred Arrangement if the Plan is a
direct or indirect transferee of a defined benefit plan, money purchase plan, a
target benefit plan, stock bonus, or profit sharing plan which is subject to
the survivor annuity requirements of section 401(a)(11) and section 417 of the
Code.

 

2.5.3 Nature of Distributions.  The nature of the
distribution of a Participant’s Distributable Benefit shall be as hereinafter
provided.

 

(a)
Trust Fund and Segregated Funds. Subject to the Joint and Survivor Annuity
requirements, except as provided in Subsection (b) with regard to Life Insurance
Policies, distribution of a Participant’s Distributable Benefit shall consist
of cash or property, or an annuity contract as provided in Section 2.5.2 above.

 

(b)
Insurance Policies. In the event that the Trustee has purchased Life Insurance
Policies on the life of the Participant, or someone in whom the Participant has
an insurable interest, the values and benefits available with respect to each
such Policy shall be distributed as follows:

 

(i)
If the Participant’s employment terminates for any reason other than death,
then the Trustee shall either surrender the Life Insurance Policy for its
available cash value and distribute the proceeds as provided in Subsection (a)
above or, at the election of the Participant, distribute the Life Insurance
Policy to the Participant, provided the Participant has a vested and
nonforfeitable interest in his Accounts in an amount at least equal to the cash
value

 

44

 

thereof.

 

(ii)
If the Participant’s employment terminates by reason of death, the Beneficiary
designated by the Participant in accordance with the terms of the Plan shall be
entitled to receive from the Trustee the full amount of the proceeds thereof.

 

The
Trustee shall apply for and be the owner of any Policies purchased under the
terms of the Plan. The Policies must provide that the proceeds are payable to
the Trustee subject to the Trustee’s obligation to pay over the proceeds to the
Designated Beneficiary. A Participant’s spouse will be the Designated beneficiary
of the proceeds of such Policies unless a qualified election has been made in
accordance with Section 2.5.2(f) of the Plan, if applicable. Under no
circumstances shall the Trust retain any part of the proceeds. In the event of
any conflict between the terms of the Plan and the terms of any Policies
purchased hereunder, the Plan provisions shall control.

 

(iii)
In the event a Life Insurance Policy on the life of someone other than the
Participant is purchased pursuant to this Plan, and such other person shall
die, the Participant may withdraw the life insurance proceeds to the extent
they exceed the cash value.

 

2.5.4 Advance Distributions.
If the Employer elects in the Adoption Agreement to permit advance
distribution to a Participant or his Beneficiary after his employment has
terminated or after he reaches Normal Retirement Age but continues his
employment, and before he is otherwise entitled to distribution of his
Distributable Benefit but in no event earlier than a reasonable period
following the Distribution Date, the Trustee upon the request of the
Participant or Beneficiary shall make advance distributions to him or to his
Beneficiary. The aggregate of such an advance distribution shall not exceed the
sum of the vested and nonforfeitable interest in the Participant’s Accounts.

 

If
the Employer elects in the Adoption Agreement to forfeit nonvested amounts
immediately upon distribution of the Employee’s entire vested Account balance
on termination of service, an Employee who terminates service and elects to
receive the value of the Employee’s vested Account balance shall forfeit the
nonvested portion. If the Employee elects to have distributed less than the
entire vested portion of the Account balance derived from Employer
contributions, the part of the nonvested portion that is treated as a
Forfeiture is the total nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution attributable to Employer
contributions and the denominator of which is the total value of the vested
Employer derived Account balance.

 

Except
as provided in the preceding paragraph, if a Participant receives a
distribution which reduces the balance in his Employer Account when he has less
than a one hundred percent (100%) vested and nonforfeitable interest in the
Account, the amount, if any, of the Participant’s vested and nonforfeitable
interest in the undistributed balance of said Account at any relevant time
shall not be less than an amount (“X”) determined by the formula: X = P (AB +
(R x D)) - (R x D). For purposes of applying the formula: P is the vested
percentage at the relevant time; AB is the Account balance at the relevant
time; D is the amount of the distribution; and R is the ratio of the Account
balance at the relevant time to the Account balance after distribution.

 

2.5.5 Hardship
Distributions of Elective Deferrals.  If the Plan is
designated in the Adoption Agreement as a Cash or Deferred Profit Sharing Plan
and the Employer elects in the Adoption Agreement to permit Hardship Distributions
of Elective Deferrals, a Participant may request a distribution from the Plan
as a result of immediate and heavy financial needs of the Participant to the
extent that the distribution is necessary to satisfy such financial needs. The
availability of Hardship Distributions to Participants is limited to
Participants who have not terminated employment.

 

Hardship
Distributions are subject to the spousal consent requirements contained in
sections 401(a)(11) and 417 of the Code unless the Plan is a Safe Harbor Profit
Sharing Plan as defined by Section 1.2.77. The determination of whether a
Participant has an immediate and heavy financial need shall be made by the Plan
Administrator. A distribution shall be deemed to be made on account of an
immediate and heavy financial need if the distribution is on account of:

 

(a)
Deductible medical expenses described in section 213(d) of the Code incurred or

 

45

 

necessary
for medical care of the Participant, his spouse or dependents;

 

(b)
Purchase (excluding mortgage payments) of a principal residence for the
Participant;

 

(c)
Cost of tuition and related educational fees for the next 12 months of
post-secondary education for the Participant, his spouse, children or dependents;
or

 

(d)
The need to prevent the eviction of the Participant from his principal
residence or foreclosure on the mortgage of the Participant’s principal
residence.

 

A
distribution shall be considered as necessary to satisfy an immediate and heavy
financial need of the Participant only if:

 

(e)
The Participant has obtained all distributions, other than Hardship
Distributions, and all nontaxable loans under all plans maintained by the
Employer;

 

(f)
All plans maintained by the Employer provide that the Participant’s Elective
Deferrals and Employee Contributions shall be suspended for twelve (12) months
after the receipt of the Hardship Distribution;

 

(g)
The distribution is not in excess of the amount of an immediate and heavy
financial need (including amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); and

 

(h)
All plans maintained by the Employer provide that the Participant may not make
Elective Deferrals for the Participant’s taxable year immediately following the
taxable year of the Hardship Distribution in excess of the applicable limit
under section 402(g) of the Code for such taxable year less the amount of such
Participant’s Elective Deferrals for the taxable year of the Hardship
Distribution.

 

2.5.6 In Service
Distributions.

 

(a)
Cash or Deferred Profit Sharing Plans. If the Plan is designated in the
Adoption Agreement as a Cash or Deferred Profit Sharing Plan and if the
Employer elects in the Adoption Agreement to permit distributions to a
Participant after attaining age 59-1/2 but prior to his termination of
employment, a Participant shall be entitled to receive a distribution of all or
a part of his Accounts upon filing a written request with the Plan Administrator;
provided, that no distribution shall be made unless the interest of the
Participant in the Account from which the distribution is to be made is vested
and nonforfeitable and the balance in the Account to be distributed has
accumulated for at least two (2) years or the individual has been a Participant
for five (5) or more Plan Years; and, the distribution of Elective Deferrals
and Qualified Non-Elective Contributions(to the extent used in ADP or ACP
test), Matching Contributions (to the extent used in ADP or ACP Test) or
Qualified Matching Contributions(to the extent used in ADP or ACP Test) must
satisfy the limitations imposed by Part II, Article VII. In Service
distributions on account of Hardship must meet the Hardship requirements of
Section 2.5.5.

 

In
Service Distributions are subject to the spousal consent requirements contained
in sections 401(a)(11) and 417 of the Code unless the Plan is a Safe Harbor
Profit Sharing Plan as defined by Section 1.2.77.

 

The
Adoption Agreement may provide that In Service Distributions are available
before age 59-1/2 for Accounts other than Elective Deferrals or Matching
Contributions, Qualified Matching Contributions and Qualified Non-Elective
Contributions that are used to pass the ADP test or ACP test.

 

(b)
Profit Sharing Plans. If the Plan is designated in the Adoption Agreement as a
Profit Sharing Plan and if the Employer elects in the Adoption Agreement to
permit distributions to a Participant prior to his termination of employment, a
Participant shall be entitled to receive a distribution of all or part of his
interest in the Plan upon filing a written request with the Plan

 

46

 

Administrator;
provided, that no distribution shall be made unless the interest of the
Participant in the Account from which the distribution is to be made is fully
vested and nonforfeitable and the balance in the Account to be distributed has
accumulated for at least two (2) years or the individual has been a Participant
for five (5) or more Plan Years, or on account of Hardship; provided, further
that In Service Distributions on account of Hardship shall be subject to the
restrictions of Section 2.5.5. In Service Distributions are subject to the
spousal consent requirements contained in sections 401(a)(11) and 417 of the
Code unless the Plan is a Safe Harbor Profit Sharing Plan as defined by Section
1.2.77.

 

(c)
Money Purchase and Target Benefit Plans. The Employer may elect in the Adoption
Agreement to permit In Service withdrawals upon a Participant reaching his
Normal Retirement Date.

 

(d)
All Plans. If so elected in the Adoption Agreement, In Service Distributions
are permitted at the election of the Participant for amounts held in a
Segregated Account attributable to a rollover from another plan or Voluntary
Account regardless of age or periods of participation. In Service Distributions
are subject to the spousal consent requirements contained in sections
401(a)(11) and 417 of the Code unless the Plan is a Safe Harbor Profit Sharing
Plan as defined by Section 1.2.77.

 

47

 

ARTICLE 6

 

CONTINGENT TOP HEAVY PROVISIONS

 

2.6.1 Top Heavy Requirements.
If the Plan becomes a Top Heavy Plan during any Plan Year, the following
provisions shall supersede any conflicting provisions in the Plan or Adoption
Agreement and apply for such Plan Year:

 

(a)
Except as otherwise provided below, the Employer contributions and Forfeitures
allocated on behalf of any Participant who is not a Key Employee shall not be less
than the lesser of three percent of such Participant’s Compensation as defined
in Part II.C. of the Adoption Agreement or in the case where the Employer has
no defined benefit plan which designates this Plan to satisfy section 401 of
the Code, the largest percentage of Employer contributions and Forfeitures, as
a percentage of the Key Employee’s Compensation as defined in Part II.C. of the
Adoption Agreement and limited by section 401(a)(17) of the Code, allocated on
behalf of any Key Employee for that year. The Minimum Top-Heavy Allocation is
determined without regard to any Social Security contribution. This Minimum
Top-Heavy Allocation shall be made even though, under other Plan provisions,
the Participant would not otherwise be entitled to receive an allocation, or
would have received a lesser allocation for the year because of (i) the
Participant’s failure to complete 1,000 Hours of Service (or any equivalent
provided in the Plan), or (ii) the Participant’s failure to make mandatory
Employee contributions to the Plan, or (iii) compensation less than a stated
amount. The Employer may elect in the Adoption Agreement to have this provision
provide Key Employees with the Top-Heavy minimum benefit.

 

Neither
Elective Deferrals nor Matching Contributions may be taken into account for the
purpose of satisfying the Minimum Top-Heavy Allocation.

 

For
purposes of computing the Minimum Top-Heavy Allocation, Compensation shall mean
a Participant’s Compensation as defined in Part II.C. Compensation in the
Adoption Agreement.

 

The
Minimum Top-Heavy Allocation provided above shall not apply to any Participant
who was not employed by the Employer on the last day of the Plan Year.

 

If
so elected in the Adoption Agreement, the Minimum Top-Heavy Allocation provided
above shall not apply to any Participant who is in a unit of Employees covered
by a collective bargaining agreement between the Employer and Employee
representatives, provided benefits were the subject of good faith bargaining
and two percent or less of the Employees of the Employer who are covered
pursuant to that agreement are professionals as defined in section
1.410(b)-9(g) of the Income Tax regulations.

 

The
Minimum Top-Heavy Allocation provided above shall not apply to any Participant
to the extent the Participant is covered under any other plan or plans of the
Employer and the Employer has provided in the Adoption Agreement that the
Minimum Top-Heavy Allocation or benefit requirement applicable to Top-Heavy
plans will be met in the other plan or plans.

 

(b)
The vested and nonforfeitable interest of each Participant shall be equal to
the percentage determined under the vesting schedule specified in the Adoption
Agreement if the Plan becomes a Top Heavy Plan, or if no vesting schedule is
specified, the percentage determined under the following schedule:

 

	
  Years of Service

  	
   

  	
  Percentage

  
	
   

  	
   

  	
   

  
	
  Less
  than 2

  	
   

  	
  0%

  
	
  2

  	
   

  	
  20%

  
	
  3

  	
   

  	
  40%

  
	
  4

  	
   

  	
  60%

  
	
  5

  	
   

  	
  80%

  
	
  6

  	
   

  	
  or
  more 100%

  

 

48

 

The
Top-Heavy minimum vesting schedule applies to all benefits within the meaning
of section 411(a)(7) of the Code, except those attributable to Employee
contributions, including benefits accrued before the effective date of section
416 of the Code and benefits accrued before the Plan becomes Top-Heavy.

 

No
decrease in a Participant’s nonforfeitable percentage may occur in the event
the Plan’s status as Top-Heavy changes for any Plan Year. Any Minimum Top-Heavy
Allocation required (to the extent required to be nonforfeitable under section
416(b)) may not be forfeited under section 411(a)(3)(B) or (D) of the Code.

 

2.6.2 Top Heavy Definitions.
The following terms, as used in this Plan, shall have the following
meaning:

 

(a)
“Key Employee”: An Employee or former Employee who, at any time during the
Determination Period is either:

 

(i)
an officer of the Employer having an Annual Compensation greater than fifty
(50%) percent of the amount in effect under section 415(b)(l)(A) of the Code;

 

(ii)
an owner (or a person considered an owner under section 318 of the Code) of one
of the ten largest interests in the Employer if such individual’s Annual
Compensation from the Employer is more than the limitation in effect under
section 415(c)(l)(A) of the Code;

 

(iii)
any person who owns directly or indirectly more than five (5%) percent of the
outstanding stock of the Employer or stock possessing more than five (5%)
percent of the total combined voting power of all stock of the Employer or, in
the case of an unincorporated Employer, the capital or profits interest in the
Employer;

 

(iv)
any person who owns directly or indirectly more than one (1%) percent of the
outstanding stock of the Employer or stock possessing more than one (1%)
percent of the total combined voting power of all stock of the Employer or, in
the case of an unincorporated Employer, the capital or profits interest in the
Employer and having an Annual Compensation from the Employer of more than
$150,000; or

 

(v)
any beneficiary of a Key Employee. The determination of who is a Key Employee
shall be made in accordance with section 416(i)(1) of the Code and the
regulations thereunder.

 

(b)
“Aggregation Group”: Each qualified retirement plan of the Employer in which a
Key Employee is a participant and each other qualified retirement plan of the
Employer which enables any plan in which a Key Employee is a participant to
meet the requirements of section 401(a)(4) or section 410 of the Code.

 

(c)
“Annual Compensation”: Compensation as defined in section 415(c)(3) of the
Code, but including amounts contributed by the Employer pursuant to a salary
reduction agreement which are excludable from the Employee’s gross income under
section 125, section 132(f)(4), section 402(e)(3), section 402(h) or section
403(b) of the Code.

 

(d)
“Top-Heavy Plan”: For any Plan Year beginning after December 31, 1983, the Plan
is Top-Heavy if any of the following conditions exists:

 

(i)
If the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan is not part
of any Required Aggregation Group or Permissive Aggregation Group of plans.

 

(ii)
If the Plan is a part of a Required Aggregation Group of plans but not part of
a Permissive Aggregation Group and the Top-Heavy Ratio for the group of plans
exceeds 60 percent.

 

49

 

(iii)
If the Plan is a part of a Required Aggregation Group and part of a Permissive
Aggregation Group of plans and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds 60 percent.

 

(e)
“Top-Heavy Ratio”:

 

(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 Required or Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the account balances of all Key
Employees as of the Determination Date(s) (including any part of any account
balance distributed in the 5-year period ending on the Determination Date(s)),
and the denominator of which is the sum of all account balances (including any
part of any account balance distributed in the 5-year period ending on the
Determination Date(s)), 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 Required 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
five-year period ending on the Determination Date.

 

(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 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 5-year period ending on the Determination Date
will be disregarded. The calculation of the Top-Heavy Ratio, and the extent to
which distributions, rollovers, and transfers are taken into account will be
made in accordance with 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.

 

(f)
“Permissive Aggregation Group”: The Required Aggregation Group of plans plus
any other

 

50

 

plan
or plans of the Employer which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of sections
401(a)(4) and 410 of the Code.

 

(g)
“Required Aggregation Group”:

 

(i)
Each qualified plan of the Employer in which at least one Key Employee
participates or participated at any time during the Determination Period (regardless
of whether the plan has terminated).

 

(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.

 

(h)
“Determination Date”: For any Plan Year subsequent to the first Plan Year, the
last day of the preceding Plan Year. For the first Plan Year of the Plan, the
last day of that year.

 

(i)
“Valuation Date”: The date elected by the Employer in the Adoption Agreement as
of which account balances or accrued benefits are valued for purposes of
calculating the Top-Heavy Ratio.

 

(j)
“Present Value”: Present value shall be based only on the interest and
mortality rates specified in the Adoption Agreement.

 

(k)
“Determination Period”: The Plan Year containing the Determination Date and the
four (4) preceding Plan Years.

 

(l)
“Non-Key Employee”: An Employee who is not a Key Employee.

 

2.6.3 Pairing Requirements.
If an Employer adopts either a combination of two defined contribution
standardized form plans or a combination of one or two defined contribution
standardized form plans and one defined benefit standardized form plan by
executing Adoption Agreements pursuant to this Plan or another prototype plan
for which the Mass Submitter is the same, the provisions of Sections 2.6.1 and
2.6.2 shall apply as well as the following:

 

(a)
Only one of the Adoption Agreements may provide for permitted disparity and if
one of the paired plans is a defined benefit plan that includes a final pay
limitation as described in section 401(a)(5)(D) of the Code, then the paired
defined contribution plans may not provide for disparity in contributions.

 

(b)
In any Plan Year in which the paired plans are Top-Heavy the Employer may
choose to provide the Top-Heavy minimum in each of the paired plans (Option A),
or in one of the paired plans if the paired plans benefit the same participants
(Option B). For Limitation Years beginning before January 1, 2000, the Employer
can choose between two methods when implementing Option A or Option B described
in the following paragraphs.

 

(c)
Option A - All plans paired with this Plan shall receive the Top-Heavy Minimum.

 

(i)
Method 1 - When the paired plans are Top-Heavy, the Top-Heavy requirements set
forth in Sections 2.6.1 and 2.6.2 shall apply.

 

(ii)
Method 1 - For Limitation Years beginning before January 1, 2000, in any Plan
Year in which the Top-Heavy Ratio of the paired plans exceeds ninety (90)
percent (i.e., becomes Super Top-Heavy the denominators of the defined benefit
fraction and the defined contribution fraction defined in Section 3.2.1(d)
shall be computed by using 100 percent of the dollar limitation instead of 125
percent.

 

(iii)
Method 2 - For Limitation Years beginning before January 1, 2000, when the
paired plans are Top-Heavy but not Super Top-Heavy, the Employer shall provide
each Non-key Employee who participates in this Plan a minimum contribution of
four (4) percent of Compensation and the defined contribution fraction defined
in Section 3.2.1(d) shall be computed using 125 percent of the dollar
limitation.

 

51

 

(iv)
Method 2 - When the paired plans are Super Top-Heavy, the Top-Heavy
requirements set forth in Section 2.6.1 and 2.6.2 shall apply and the defined
benefit fraction and the defined contribution fraction defined in Section
3.2.1(d) shall be computed by using 100 percent of the dollar limitation
instead of 125 percent.

 

(d)
Option B - Only one of paired plans receives the Top-Heavy minimum
contribution. In the event Option B is selected in the Adoption Agreement and
the paired plans do not cover the same Participants, Option A, Method 1 will
apply.

 

(i)
Method 1 - When the paired plans are Top-Heavy, the Top-Heavy requirements set
forth in Section 2.6.1 and 2.6.2 shall apply, except that each Non-key Employee
shall receive a minimum contribution of five (5) percent of such Employee’s
Compensation and the defined contribution fraction defined in Section 3.2.1(d)
shall be computed by using 100 percent of the dollar limitation instead of 125
percent.

 

(ii)
Method 1 - For Limitation Years beginning before January 1, 2000, in any Plan
Year in which the Top-Heavy Ratio exceeds ninety (90) percent (i.e., becomes
Super Top-Heavy) the denominators of the defined benefit fraction and the
defined contribution fraction defined in Section 3.2.1(d) shall be computed by
using 100 percent of the dollar limitation instead of 125 percent.

 

(iii)
Method 2 - For Limitation Years beginning before January 1, 2000, when the
paired plans are Top-Heavy but not Super Top-Heavy, the Employer shall provide
each Non-key Employee a minimum Contribution of seven and one half (7-1/2)
percent of each Employee’s Compensation and the defined contribution fraction
defined in Section 3.2.1(d) shall be computed by using 125 percent of the
dollar limitation.

 

(iv)
Method 2 - When the paired plans are Super Top-Heavy, the Top-Heavy
requirements set forth in Sections 2.6.1 and 2.6.2 shall apply, except that
each Non-key Employee shall receive a minimum contribution of five (5) percent
of each Employee’s Compensation and the defined contribution fraction defined
in Section 3.2.1(d) shall be computed by using 100 percent of the dollar
limitation instead of 125 percent.

 

52

 

ARTICLE 7

 

SPECIAL CODA LIMITATIONS

 

2.7.1  Limitation on Deferral
Percentage for Highly Compensated Employees. Notwithstanding
any provision herein to the contrary, the Actual Deferral Percentage for all
Highly Compensated Employees for the current Plan Year must not exceed the
Actual Deferral Percentage, for the preceding Plan Year, for all Non-highly
Compensated Employees eligible to participate by more than the greater of:

 

(a)
the Actual Deferral Percentage of such Non-highly Compensated Employees
multiplied by 1.25; or

 

(b)
the Actual Deferral Percentage of such Non-highly Compensated Employees
multiplied by 2.0, but in no event more than two (2) percentage points greater
than the Actual Deferral Percentage of such Non-highly Compensated Employees;

 

(c)
the Employer may elect in the Adoption Agreement to use the Actual Deferral
Percentage for Participants who are Non-highly Compensated Employees for the
current Plan Year rather than the preceding Plan Year. If such election is
made, it may not be changed except as provided by Notice 98-1 (or superseding
guidance). The testing method selected must be used for both the Actual
Deferral Percentage Test and the Actual Contribution Percentage Test;

 

(d)
in the case of the first Plan Year the Plan permits any Participant to make
Elective Deferrals and this is not a successor plan, the amount taken into
account as the Actual Deferral Percentage of Nonhighly Compensated Employees
for the preceding Plan Year shall be 3 percent or, at the Employer’s election,
the Actual Deferral Percentage for the first Plan Year;

 

(e)
A Participant is a Highly Compensated Employee for a particular Plan Year if he
or she meets the definition of a Highly Compensated Employee in effect for that
Plan Year. Similarly, a Participant is a Non-highly Compensated Employee for a
particular Plan Year if he or she does not meet the definition of a Highly
Compensated Employee in effect for that Plan Year.

 

For
purposes hereof, the Actual Deferral Percentages for a Plan Year for all Highly
Compensated Employees and for all Non-highly Compensated Employees respectively
are the averages of the ratios, calculated separately for each Employee in the
respective group, of the amount of Elective Contributions, Qualified
Non-Elective Contributions and those applicable Qualified Matching
Contributions paid under the Plan on behalf of each such Employee for such Plan
Year including Excess Elective Deferrals, to the Employee’s compensation for
such Plan Year whether or not the Employee was a Participant for the entire Plan
Year but excluding Elective Deferrals that are taken into account in the Actual
Contribution Percentage test (provided the ADP test is satisfied both with and
without exclusion of those Elective Deferrals). The Actual Deferral Percentages
shall be rounded to the nearest hundredth of a percentage point. An Employee
who would be a Participant but for the failure to have Elective Contributions
made on his behalf shall be treated as a Participant on whose behalf no
Elective Contributions are made.

 

For
purposes of determining the Actual Deferral Percentage test, Elective
Contributions, Qualified Non-Elective Contributions and Qualified Matching
Contributions must be made before the last day of the twelve month period
immediately following the Plan Year to which the contributions relate. In order
to be taken into account in the calculation of the Actual Deferral Percentage
for a year under prior year testing, a Qualified Non-Elective Contribution or
Qualified Matching Contribution must be allocated as of a date within the year
using current data and must actually be paid to the Trust no later than the end
of the 12-month period following the end of the year to which the contribution
relates.

 

Pursuant
to section 410(b)(4)(B) of the Code the Employer may elect to treat that
portion of the Plan that benefits only Employees who satisfy age and service
conditions under the Plan that are lower than the greatest minimum age and
service conditions permitted under section 410(a) of the

 

53

 

Code
(“Otherwise Excludable Employees”) and that portion of the Plan that benefits
Employees that meet the greatest minimum age and service conditions permitted
under section 410(a) of the Code (“Not Otherwise Excludable Employees”) as two
separate plans for purposes of section 401(k) of the Code, and the ADP test
safe harbor need not be satisfied with respect to both plans in order for one
of the plans to take advantage of the ADP test safe harbor.

 

The
Employer shall maintain records sufficient to demonstrate satisfaction of the
Actual Deferral Percentage test and the amount of Qualified Matching
Contributions and Qualified Non-Elective Contributions used in such test.

 

The
determination and treatment of the Actual Deferral Percentage amounts of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.

 

2.7.2 Multiple Plan
Limitations.

 

(a)
The Actual Deferral Percentage for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective Contributions
(Qualified Matching Contributions and Qualified Non-Elective Contributions if
treated as Elective Deferrals for purposes of the Actual Deferral Percentage
test) allocated to his or her Accounts under two or more arrangements described
in Section 401(k) of the Code, that are maintained by the Employer, shall be
determined as if such Elective Deferrals (and, if applicable, such Qualified
Matching Contributions and Qualified Non-Elective Contributions) were made
under a single arrangement. If a Highly Compensated Employee participates in
two or more cash or deferred arrangements that have different Plan Years, all
cash or deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if mandatorily disaggregated under
regulations under section 401(k) of the Code.

 

(b)
In the event that this Plan satisfies the requirements of section 401(k),
401(a)(4) or 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such sections
of the Code only if aggregated with this Plan, then this Section shall be
applied by determining the Actual Deferral Percentage of Employees as if all
such plans were a single plan. Any adjustments to the Non-highly Compensated
Employee ADP for the prior year will be made in accordance with Notice 98-1 and
any superseding guidance, unless the Employer has elected in the Adoption
Agreement to use the Current Year Testing Method. Plans may be aggregated in
order to satisfy section 401(k) of the Code only if they have the same Plan
Year and use the same ADP testing method.

 

2.7.3 Limitation
on Matching Contributions.  Notwithstanding any provision herein to the
contrary, the Actual Contribution Percentage for all Highly Compensated
Employees for the current Plan Year must not exceed the Actual Contribution
Percentage for the preceding Plan Year for all Non-highly Compensated Employees
eligible to participate by more than the greater of:

 

(a)
the Actual Contribution Percentage of such Non-highly Compensated Employees
multiplied by 1.25; or

 

(b)
the Actual Contribution Percentage of such Non-highly Compensated Employees
multiplied by 2.0, but in no event more than two (2) percentage points greater
than the Actual Contribution Percentage of such Non-highly Compensated
Employees;

 

(c)
the Employer may elect in the Adoption Agreement to use the Actual Contribution
Percentage for Participants who are Non-highly Compensated Employees for the
current Plan Year rather than the preceding Plan Year. If such election is
made, it may not be changed except as provided by Notice 98-1 (or superseding
guidance). The testing method selected must be used for both the Actual
Deferral Percentage Test and the Actual Contribution Percentage Test.

 

(d)
if in the case of the first Plan Year the Plan permits any Participant to make
Elective Deferrals and this is not a successor plan, the amount taken into
account as the Actual Contribution Percentage of Non-highly Compensated
Employees for the preceding Plan Year shall

 

54

 

be
3 percent or, at the Employer’s election, the Actual Contribution Percentage
for that Plan Year.

 

For purposes hereof, the Actual Contribution
Percentages for a Plan Year for all Highly Compensated Employees and for all
other Employees respectively are the averages of the ratios, calculated
separately for each Employee in the respective group, of the amount of Matching
Contributions paid under the Plan on behalf of each such Employee for such Plan
Year, to the Employee’s compensation for such Plan Year whether or not the
Employee was a Participant for the entire Plan Year. Such contribution
percentage amounts shall include Forfeitures of Excess Aggregate Contributions
or Matching Contributions allocated to the Participant’s Accounts that shall be
taken into account in the Plan Year in which such Forfeiture is allocated. Forfeitures
of Matching Contributions shall be included as contribution percentage amounts
only to the extent such Forfeitures are used to reduce or supplement the
Matching Contributions, as specified in the Adoption Agreement. If so elected
in the Adoption Agreement, the Employer may include Qualified Non-Elective
Contributions in the contribution percentage amounts. In order to be taken into
account in the calculation of the Actual Contribution Percentage for a year
under preceding year testing, a Qualified Non-Elective Contribution or
Qualified Matching Contribution must be allocated as of a date within the year
using current data and must actually be paid to the Trust no later than the end
of the 12-month period following the end of the year to which the contribution
relates. The Employer may also elect to use Elective Deferrals in the
contribution percentage amounts so long as the ADP test is met before the
Elective Deferrals are used in the ACP test and continues to be met following
the exclusion of those Elective Deferrals that are used to meet the ACP test.
The Actual Contribution Percentages shall be rounded to the nearest hundredth
of a percentage point. If an Elective Contribution or other contribution by an
Employee is required as a condition of participation in the Plan, any Employee
who would be a Participant if such Employee made such a contribution shall be
treated as an eligible Participant on behalf of whom no such contributions are
made.

 

If the deferral election is made on an
annual basis, but deferrals are taken from Compensation on some other basis,
the Employer must adjust (“True-Up”) Matching Contributions at the end of the
Plan Year to an annual basis unless elected otherwise in the Adoption
Agreement.

 

The Employer shall maintain records sufficient
to demonstrate satisfaction of the Actual Contribution Percentage test and the
amount of Qualified Non-Elective Contributions and Qualified Matching
Contributions used in such test.

 

The determination and treatment of the
contribution percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.

 

2.7.4 Special Rules.

 

(a)
Multiple Use: If one or more Highly Compensated Employees participate in both a
CODA and a plan subject to the ACP test maintained by the Employer and the sum
of the ADP and ACP of those Highly Compensated Employees subject to either or
both tests exceeds the aggregate limit, then the Employer may use one of the
following correction methods, or a combination of both, to correct the
violation of the aggregate limit:

 

(1)
the ACP of those Highly Compensated Employees who also participate in a CODA
shall be corrected by distributing or forfeiting as the case may be, the
Matching Contributions or Employee contributions necessary so that the limit is
not exceeded. Any distribution or Forfeiture of such contributions shall begin
with the Highly Compensated Employee with the greatest contribution.

 

The
amount by which each Highly Compensated Employee’s contribution percentage amount
is reduced shall be treated as an Excess Aggregate Contribution. The ADP and
ACP of the Highly Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests and are deemed to be the maximum
permitted under such tests for the Plan Year or,

 

(2)
the Employer may make a Qualified Non-Elective Contribution or Qualified
Matching Contribution on behalf of Non-highly Compensated Employees.

 

55

 

Multiple
Use does not occur if either the ADP or ACP (respectively) of the Highly
Compensated Employees does not exceed 1.25 multiplied by the ADP and ACP of the
Employees who are not Highly Compensated Employees.

 

(b)
Participation in More Than One Plan: The contribution percentage for any
Participant who is a Highly Compensated Employee and who is eligible to have
contribution percentage amounts allocated to his or her Accounts under two or
more plans described in section 401(a) of the Code, or arrangements described
in section 401(k) of the Code that are maintained by the Employer, shall be
determined as if the total of such contribution percentage amounts was made
under each plan.

 

If
a Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under regulations under section 401(m) of
the Code.

 

(c)
Plan Aggregation: In the event that this Plan satisfies the requirements of
sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans satisfy the requirements of
such sections of the Code only if aggregated with this Plan, then this Section
shall be applied by determining the contribution percentages of Employees as if
all such plans were a single plan. Any adjustments to the Non-highly Compensated
Employee ACP for the prior year will be made in accordance with Notice 98-1 and
any superseding guidance, unless the Employer has elected in the Adoption
Agreement to use the Current Year Testing method. Plans may be aggregated in
order to satisfy section 401(m) of the Code only if they have the same Plan
Year and use the same ACP testing Method.

 

(d)
Contribution Timing: For purposes of determining the contribution percentage
test, Employee contributions are considered to have been made in the Plan Year
in which contributed to the Trust. Matching Contributions, Qualified
Non-Elective Contributions and Qualified Matching Contributions shall be
considered made for a Plan Year if made no later than the end of the twelve
month period beginning on the day after the close of the Plan Year.

 

2.7.5 Distribution
of Excess Elective Deferrals.  A Participant may assign to the Plan any
Excess Elective Deferrals made during a taxable year of the Participant by
notifying the Plan Administrator on or before March 15 of each calendar year of
the amount of the Excess Elective Deferrals to be assigned to the Plan. A
Participant is deemed to notify the Plan Administrator of any Excess Elective
Deferrals that arise by taking into account only those Elective Deferrals made
to this Plan and any other plans of the Employer.

 

Notwithstanding any other provision of the
Plan, Excess Elective Deferrals, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any Participant to
whose account Excess Elective Deferrals were assigned for the preceding year
and who claims Excess Elective Deferrals for such taxable year.

 

Excess Elective Deferrals distributed under
this Section shall be adjusted for any income or loss based on a reasonable
method of computing the allocable income or loss. The method selected must be
applied consistently to all Participants and used for all corrective
distributions under the Plan for the Plan Year, and must be the same method
that is used by the Plan for allocating income or loss to Participants’
Accounts. Income or loss allocable to the period between the end of the taxable
year and the date of distribution may be disregarded in determining income or
loss.

 

2.7.6 Distribution
of Excess Contributions.  Notwithstanding
any other provision of this Plan, Excess Contributions, plus any income and
minus any loss allocable thereto, shall be distributed no later than the last
day of each Plan Year to Participants who are Highly Compensated Employees on
the basis of the amount of contributions by, or on behalf of, each of such
Employees beginning with such Highly Compensated Employee with the greatest
contribution. If such excess amounts are distributed more than 2-1/2 months
after the last day of the Plan Year in which such excess amounts arose, a ten
(10) percent

 

56

 

excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts.

 

Excess Contributions distributed under this
Section shall be adjusted for any income or loss based on a reasonable method
of computing the allocable income or loss. The method selected must be applied
consistently to all Participants and used for all corrective distributions
under the Plan for the Plan Year, and must be the same method that is used by
the Plan for allocating income or loss to Participants’ Accounts. Income or
loss allocable to the period between the end of the taxable year and the date
of distribution may be disregarded in determining income or loss.

 

Matching Contributions attributable to
Excess Contributions that have been returned shall be forfeited and allocated
in the same manner as Employer Matching Contributions.

 

Excess Contributions attributable to
Qualified Non-Elective Contributions shall be distributed from the
Participant’s Qualified Non-Elective Contribution Account or Qualified Matching
Contribution Account only to the extent that such Excess Contributions exceed
the balance in the Participant’s Elective Contribution Account.

 

2.7.7 Distribution
of Excess Aggregate Contributions.  Notwithstanding
any other provision of this Plan, Excess Aggregate Contributions, plus any
income and minus any loss allocable thereto, shall be forfeited, if
forfeitable, or if not forfeitable, distributed no later than the last day of
each Plan Year.

 

Any distribution of the Excess Contributions
for any Plan Year shall be made to Highly Compensated Employees on the basis of
the amount of contributions by, or on behalf of, each of such Employees
beginning with such Highly Compensated Employee with the greatest contribution.
If such Excess Aggregate Contributions are distributed more than 2-1/2 months
after the last day of the Plan Year in which such excess amounts arose, a ten
(10) percent excise tax will be imposed on the Employer maintaining the Plan
with respect to those amounts.

 

Excess Aggregate Contributions distributed
under this Section shall be adjusted for any income or loss based on a
reasonable method of computing the allocable income or loss. The method selected
must be applied consistently to all Participants and used for all corrective
distributions under the Plan for the Plan Year, and must be the same method
that is used by the Plan for allocating income or loss to Participants’
Accounts. Income or loss allocable to the period between the end of the taxable
year and the date of distribution may be disregarded in determining income or
loss.

 

Forfeitures of Excess Aggregate
Contributions may either be reallocated to the accounts of Employees who are
not Highly Compensated Employees or applied to reduce Employer Contributions,
as elected by the Employer in the Adoption Agreement.

 

Excess Aggregate Contributions shall be
forfeited, if forfeitable or distributed on a pro-rata basis from the
Participant’s Matching Account and Voluntary Account (and, if applicable, the
Participant’s Qualified Non-Elective Contribution Account, Elective
Contribution Account or Qualified Matching Contribution Account).

 

2.7.8 Limitation on
Distributions.  Except as otherwise provided in this
Article, Elective Deferrals, Qualified Non-Elective Contributions, Qualified
Non-Elective Contributions and income allocable thereto are not distributable
to a Participant or his or her Beneficiary in accordance with such
Participant’s or Beneficiary’s election prior to separation from service, death
or disability. Such amounts may, however, be distributed upon:

 

(a)
Termination of the Plan without the establishment of another defined
contribution plan, other than an employee stock ownership plan (as defined in
section 4975(e) or section 409 of the Code) or a simplified employee pension
plan as defined in section 408(k) of the Code.

 

(b)
The disposition by a corporation to an unrelated corporation of substantially
all of the assets (within the meaning of section 409(d)(2) of the Code) used in
a trade or business of such corporation if such corporation continues to
maintain this Plan after the disposition, but only with respect to Employees
who continue employment with the corporation acquiring such assets.

 

(c)
The disposition by a corporation to an unrelated entity of such corporation’s
interest in a

 

57

 

subsidiary
(within the meaning of section 409(d)(3) of the Code) if such corporation
continues to maintain this Plan, but only with respect to Employees who
continue employment with such subsidiary.

 

(d)
The attainment of age 59-1/2.

 

(e)
The Hardship of a Participant in accordance with Section 2.5.5.

 

All such distributions are subject to the
spousal and Participant consent requirements, if applicable, contained in
sections 401(a)(11) and 417 of the Code. In addition, distributions after March
31, 1988, that are triggered by any of the first three events enumerated above
must be made in a lump sum.

 

2.7.9  Limitation on
Elective Deferrals.  No Participant shall be permitted to have
Elective Deferrals made under this Plan, or any other qualified plan maintained
by the Employer, during any taxable year, in excess of the dollar limitation
contained in section 402(g)(1) of the Code in effect at the beginning of such
taxable year.

 

2.7.10 Forfeiture
of Matching Contributions.  Matching Contributions may be forfeited
when:

 

(a)
The Elective Deferral to which the Matching Contribution relates is returned
because it was determined to be an Excess Deferral, Excess Contribution or
Excess Annual Addition;

 

(b)
The Employee Contribution to which the Matching Contribution relates is
returned because it was determined to be either an Excess Aggregate
Contribution or Excess Annual Addition.

 

The requirements of this Section shall be
met in whole or in part if the Matching Contribution in question is returned to
the Participant as an Excess Aggregate Contribution.

 

Following the forfeiture of Matching
Contributions pursuant to this Section, the highest rate of Matching
Contribution allocated to any Highly Compensated Employee may not exceed the
lowest rate of Matching Contribution allocated to any non-Highly Compensated
Employee eligible to receive an allocation of Matching Contributions under this
Plan or under all plans in a mandatory or permissive aggregation group. This
provision shall not apply in the case of a non-Highly Compensated Employee
whose allocation of Matching Contributions is limited by the application of
section 415 of the Code. Allocation of Forfeitures under this Section shall be
governed by elections regarding the allocation of the forfeiture of Matching
Contributions in the Adoption Agreement.

 

58

 

ARTICLE 8

 

SIMPLE 401(k) LIMITATIONS

 

Notwithstanding any provision in the Plan or
Adoption Agreement to the contrary, during any year for which the Employer has
elected to treat this Plan as a Simple 401(k) plan under section 401(k)(11) and
401(m)(10) of the Code, this Article VIII and the attendant election of the
Adoption Agreement or any amendment thereof shall prevail.

 

2.8.1 Establishing a
Simple 401(k).  If the Employer has elected in the Adoption
Agreement to have the Simple 401(k) provisions apply, then the provisions of
this Article shall apply for a Year only if (a) the Employer is an Eligible
Employer and (b) no contributions are made, or benefits accrued for services
during the Year, on behalf of any Eligible Employee under any other plan,
contract, pension, or trust described in section 219(g)(5)(A) or (B) of the
Code, maintained by the Employer. To the extent that any other provision of the
Plan is inconsistent with the provisions of this Article, the provisions of
this Article govern.

 

2.8.2 Definitions.

 

(a)
“Compensation” means, for purposes of Sections 2.8.2(b), 2.8.3 and 2.8.4 of
this Article, the sum of the wages, tips, and other compensation from the
Employer subject to federal income tax withholding (as described in section
6051(a)(3)) of the Code and the Employee’s salary reduction contributions made
under this or any other section 401(k) plan, and, if applicable, Elective
Deferrals under a section 408(p) SIMPLE IRA Plan, a SARSEP, or a section 403(b)
annuity contract and compensation deferred under a section 457 plan, required
to be reported by the Employer on Form W-2 (as described in section 6051(a)(8)
of the Code). For Self-Employed Individuals, Compensation means net earnings
from self-employment determined under section 1402(a) of the Code prior to
subtracting any contributions made under this Plan on behalf of the individual.
The provisions of the Plan implementing the limit on Compensation under section
401(a)(17) of the Code apply to the Compensation under Sections 2.8.3 and 2.8.4
of this Article.

 

(b)
“Eligible Employer”, with respect to any Year, an employer that had no more
than 100 employees who received at least $5,000 of Compensation from the
Employer for the preceding Year. In applying the preceding sentence, all
employees of controlled groups of corporations under section 414(b) of the
Code, all employees of trades or businesses (whether incorporated or not) under
common control under section 414(c) of the Code, all employees of affiliated
service groups under section 414(m) of the Code, and leased employees required
to be treated as the Employer’s employees under section 414(n) of the Code, are
taken into account.

 

An
Eligible Employer that elects to have the Simple 401(k) provisions apply to the
Plan and that fails to be an Eligible Employer for any subsequent Year, is
treated as an Eligible Employer for the 2 Years following the last Year the
Employer was an Eligible Employer. If the failure is due to any acquisition,
disposition, or similar transaction involving an Eligible Employer, the
preceding sentence applies only if the provisions of section 410(b)(6)(C)(i) of
the Code are satisfied.

 

(c)
“Eligible Employee”, for purposes of the Simple 401(k) provisions, any Employee
who is entitled to make Elective Deferrals under the terms of the Plan.

 

(d)
“Year” the calendar year.

 

2.8.3 Salary
Reduction Contributions.

 

(a)
Each Eligible Employee may make a salary reduction election to have his or her
Compensation reduced for the Year in any amount selected by the Employee
subject to the limitation in Section 2.8.3(b) of this Article. The Employer
will make a Salary Reduction Contribution to the Plan, as an Elective Deferral,
in the amount by which the Employee’s Compensation has been reduced.

 

59

 

(b)
The total Salary Reduction Contribution for the Year cannot exceed $6,000 for
any Employee. To the extent permitted by law, this amount will be adjusted to
reflect any annual cost-of-living increases announced by the IRS.

 

2.8.4  Other Contributions.

 

(a)
Matching Contributions - Each Year, the Employer will contribute a Matching
Contribution to the Plan on behalf of each Employee who makes a salary
reduction election under Section 2.8.3. The amount of the Matching Contribution
will be equal to the Employee’s Salary Reduction Contribution up to a limit of
3 percent of the Employee’s Compensation for the full Year.

 

(b)
Non-Elective Contribution - For any Year, instead of a Matching Contribution,
the Employer may elect to contribute a Non-Elective Contribution of 2 percent
of Compensation for the full Year for each Eligible Employee who received at
least $5,000 of Compensation (or such lesser amount as elected by the Employer
in the Adoption Agreement) for the Year.

 

2.8.5 Limitation on
Other Contributions.  No Employer or Employee contributions may be
made to this Plan for the Year other than salary reduction contributions
described in Section 2.8.3, Matching or Non-Elective Contributions described in
Section 2.8.4 and rollover contributions described in regulations section
1.402(c)-2, Q&A-1(a).

 

2.8.6 Section 415
Limitations.  The provisions of the Plan implementing the
limitations of section 415 of the Code apply to contributions made pursuant to
Sections 2.8.3 and 2.8.4.

 

2.8.7 Election
and Notice Requirements.

 

(a)
Election Period

 

(i)
In addition to any other election periods provided under the Plan, each
Eligible Employee may make or modify a salary reduction election during the
60-day period immediately preceding each January 1.

 

(ii)
For the Year an Employee becomes eligible to make Salary Reduction
Contributions under the Simple 401(k) provisions, the 60-day election period
requirement of Section 2.8.7(a)(i) is deemed satisfied if the Employee may make
or modify a salary reduction election during a 60-day period that includes
either the date the Employee becomes eligible or the day before.

 

(iii)
Each Employee may terminate a salary reduction election at any time during the
Year.

 

(b)
Notice Requirements

 

(i)
The Employer will notify each Eligible Employee prior to the 60-day election
period described in Section 2.8.7(a) that he can make a salary reduction
election or modify a prior election during that period.

 

(ii)
The notification described in Section 2.8.7(b)(i) will indicate whether the
Employer will provide a 3-percent Matching Contribution described in Section
2.8.4(a) or a 2-percent Non-Elective Contribution described in Section
2.8.4(b).

 

2.8.8 Vesting Requirements.
All benefits
attributable to contributions described in Section 2.8.3 and 2.8.4 are
nonforfeitable at all times, and all previous contributions made under the Plan
are nonforfeitable as of the beginning of the Year the Simple 401(k) provisions
apply.

 

2.8.9 Top-Heavy Rules.
The Plan is not treated as a Top-Heavy plan under section 416 of the
Code for any Year for which this Article applies.

 

2.8.10 Nondiscrimination
Tests.  The ADP and ACP tests described in Sections 2.7.1
and 2.7.3

 

60

 

of the Plan are treated as satisfied for any
Year for which this Article applies.

 

2.8.11 Revocation.  An amendment to
have the 401(k) SIMPLE Provisions no longer apply is effective the next January
1..

 

61

 

ARTICLE 9

 

ALTERNATIVE METHODS
OF MEETING NONDISCRIMINATION REQUIREMENTS

 

2.9.1 Safe Harbor CODA
Rules.      

 

(a)
If the Employer has elected the Safe Harbor CODA option in the Adoption
Agreement, and the Notice Requirement of Section 2.9.3(b) below has been
satisfied, the provisions of this Article shall apply for the Plan Year and any
provisions relating to the ADP test described in section 401(k)(3) of the Code
or the ACP test described in section 401(m)(2) of the Code shall not apply.

 

(b)
If the Employer elects to satisfy the current year ADP (and, if applicable,
ACP) testing method for a Plan Year and the Employer has not elected the Safe
Harbor CODA option in the Adoption Agreement, the Employer may amend the Plan
not later than 30 days before the last day of the Plan Year to specify that the
401(k) Safe Harbor Non-Elective Contribution method will be used for the Plan
Year (including that the Safe Harbor Non-Elective Contribution will be made),
provided that the Plan otherwise satisfies the ADP (and, if applicable, ACP
test safe harbor for the Plan Year(including the Notice Requirement of Section
2.9.3(b) below).

 

(c)
If the Employer has elected the Safe Harbor CODA option in the Adoption
Agreement, and has specified that the Safe Harbor Matching Contribution will be
used for the Plan Year, the Employer may amend the Plan during the Plan Year to
reduce or eliminate Matching Contributions under this Article IX provided:

 

(1)
A supplemental notice is given to all Eligible Employees explaining the
consequences of the amendment and informing them of the effective date of the
reduction or elimination of Matching Contributions and that they have a
reasonable opportunity (including a reasonable period) to change their cash or
deferred elections and, if applicable, their Employee contribution elections;

 

(2)
The reduction or elimination of Matching Contributions is effective no earlier
than the later of (i) 30 days after eligible Employees are given the
supplemental notice and (ii) the date the amendment is adopted;

 

(3)
Eligible Employees are given a reasonable opportunity (including a reasonable
period) prior to the reduction or elimination of Matching Contributions to
change their cash or deferred elections and, if applicable, their Employee
contribution elections;

 

(4)
The Plan is amended to provide that the ADP test and, if applicable, the ACP
test will be performed and satisfied for the entire Plan Year using the Current
Year Testing Method; and

 

(5)
All other safe harbor requirements including but not limited to the matching
contribution requirements, are satisfied through the effective date of the
amendment.

 

(d)
If the Employer has elected the Safe Harbor CODA option in the Adoption
Agreement, and the Notice Requirement of Section 2.9.3(b) below has been
satisfied, then if the Employer so elected in the Adoption Agreement, all
Eligible Participants will be required to make any deferral elections in whole
percentages of pay or whole dollars amounts.

 

(e)
If the Employer has elected the Safe Harbor CODA option in the Adoption
Agreement, and the Notice Requirement of Section 2.9.3(b) below has been
satisfied, then the Employer may also elect in the Adoption Agreement to meet
the matching contribution requirements of this Article IX either (i) with
respect to the Plan Year as a whole, or (ii) separately with respect to each
payroll period (or with respect to all payroll periods ending with or within
each month or plan-year quarter) taken into account under the Plan for the Plan
Year (the “payroll period method”). The payroll period method applies only for
purposes of satisfying the ADP Safe Harbor Matching Contribution requirements
of Section 2.9.3 of the Plan and the ACP Safe Harbor Matching Contribution

 

62

 

requirements of Section 2.9.4 of the Plan,
if applicable.

 

(f)
If the Employer has elected the Safe Harbor CODA option in the Adoption
Agreement, and the Notice Requirement of Section 2.9.3(b) below has been
satisfied, then if the Employer has so elected, the Safe Harbor Non-Elective
contribution requirement may be satisfied by allocating such contribution in
another plan of the Employer.

 

(g)
To the extent that any other provision of the Plan is inconsistent with the
provisions of this Article, the provisions of this Article shall govern.

 

2.9.2 Definitions.

 

(a)
“ACP Test Safe Harbor” is the method described in Section 2.9.4 of this Article
for satisfying the ACP test of section 401(m)(2) of the Code.

 

(b)
“ACP Test Safe Harbor Matching Contributions” are Matching Contributions
described in Section 2.9.4(b) of this Article.

 

(c)
“ADP Test Safe Harbor” is the method described in Section 2.9.3 of this Article
for satisfying the ADP test of section 401(k)(3) of the Code.

 

(d)
“ADP Test Safe Harbor Contributions” are Matching Contributions and
Non-Elective Contributions described in Section 2.9.3(a) of this Article.

 

(e)
“Compensation” is defined in Section 1.2.14, except, for purposes of this
Article, no dollar limit, other than the limit imposed by section 401(a)(17) of
the Code, applies to the Compensation of a Non-highly Compensated Employee.
However, solely for purposes of determining the Compensation subject to a
Participant’s deferral election, the Employer may use an alternative definition
to the one described in the preceding sentence, provided such alternative definition
is a reasonable definition within the meaning of section 1.414(s)-1(d)(2) of
the regulations and permits each Participant to elect sufficient Elective
Deferrals to receive the maximum amount of Matching Contributions (determined
using the definition of Compensation described in the preceding sentence)
available to the Participant under the Plan.

 

(f)
“Eligible Employee” means an Employee eligible to make Elective Deferrals under
the Plan for any part of the Plan Year or who would be eligible to make
Elective Deferrals but for a suspension due to a Hardship Distribution
described in Section 2.5.5(h) of the Plan or to statutory limitations,
such as sections 402(g) and 415 of the Code.

 

(g)
“Matching Contributions” are contributions made by the Employer on account of
an Eligible Employee’s Elective Deferrals.

 

(h)
“True-Up” To “True-Up” a contribution is to adjust a contribution made on other
than an annual basis to an annual basis.

 

2.9.3 ADP Test
Safe Harbor Contributions.

 

(a)
ADP Test Safe Harbor Contributions

 

(1)
Unless the Employer elects in the Adoption Agreement to make Enhanced Matching
Contributions or Safe Harbor Non-Elective Contributions, the Employer will
contribute for the Plan Year a Safe Harbor Matching Contribution to the Plan on
behalf of each Eligible Employee equal to (i) 100 percent of the amount of the
Employee’s Elective Deferrals that do not exceed 3 percent of the Employee’s
Compensation for the Plan Year, plus (ii) 50 percent of the amount of the
Employee’s Elective Deferrals that exceed 3 percent of the Employee’s
Compensation but that do not exceed 5 percent of the Employee’s Compensation
(“Basic Matching Contributions”).

 

(2)
Notwithstanding the requirement in (a) above that the Employer make the ADP

 

63

 

Test
Safe Harbor Contributions to this Plan, if the Employer so provides in the
Adoption Agreement, the ADP Test Safe Harbor Contributions will be made to the
defined contribution plan indicated in the Adoption Agreement. However, such
contributions will be made to this Plan unless (i) each Employee eligible under
this Plan is also eligible under the other plan and (ii) the other plan has the
same plan year as this Plan.

 

(3)
The Participant’s accrued benefit derived from ADP Test Safe Harbor
Contributions is nonforfeitable and may not be distributed earlier than
separation from service, death, Disability, an event described in section
401(k)(10) of the Code, or, in the case of a profit sharing plan, the
attainment of age 59-1/2. In addition, such contributions must satisfy the ADP
Test Safe Harbor without regard to permitted disparity under section 401(l) of
the Code.

 

(b)
Notice Requirement. At least 30 days, but not more than 90 days, before the
beginning of the Plan Year, the Employer will provide each Eligible Employee a
comprehensive notice of the Employee’s rights and obligations under the Plan,
written in a manner calculated to be understood by the average Eligible
Employee. If an Employee becomes eligible after the 90th day before the
beginning of the Plan Year and does not receive the notice for that reason, the
notice must be provided no more than 90 days before the Employee becomes
eligible but not later than the date the Employee becomes eligible.

 

The Employer reserves the right to amend the
Plan to make a 401(k) Non-Elective Safe Harbor Contribution under Section
2.9.1(b) above. If the Employer wishes to exercise that right, the notice given
to Eligible Employees before the beginning of the Plan Year must provide that:
(i) the Plan may be amended during the Plan Year to provide that the Employer
will make a Safe Harbor Non-Elective Contribution of at least 3 percent to the
Plan for the Plan Year, and (ii) if the Plan is so amended, a supplemental
notice will be given to Eligible Employees 30 days prior to the last day of the
Plan Year informing them of such an amendment.

 

(c)
If the Plan is using the 401(k) Safe Harbor Matching Contributions, the Plan
may be amended to reduce or eliminate Matching Contributions provided:

 

(1)
A supplemental notice is given to all Eligible Employees explaining the
consequences of the amendment and informing them of the effective date of the
reduction or elimination of Matching Contributions and that they have a
reasonable opportunity (including a reasonable period) to change their cash or
deferred elections and, if applicable, their Employee contribution elections;

 

(2)
The reduction or elimination of Matching Contributions is effective no earlier
than the later of (i) 30 days after Eligible Employees are given the
supplemental notice and (ii) the date the amendment is adopted;

 

(3)
Eligible Employees are given a reasonable opportunity (including a reasonable
period) prior to the reduction or elimination of Matching Contributions to
change their cash or deferred elections and, if applicable, their Employee
Contribution elections;

 

(4)
The Plan is amended to provide that the ADP test and, if applicable, the ACP
test will be performed and satisfied for the entire Plan Year using the Current
Year Testing Method; and

 

(5)
All other safe harbor requirements are satisfied through the effective date of
the amendment.

 

(d)
Election Periods. In addition to any other election periods provided under the
Plan, each Eligible Employee may make or modify a deferral election during the
30-day period immediately following receipt of the notice described in Section
2.9.3(b) above.

 

64

 

2.9.4 ACP Test
Safe Harbor Matching Contributions.

 

(a)
In addition to the ADP Test Safe Harbor Contributions described in Section
2.9.3(a) of this Article, the Employer will make the ACP Test Safe Harbor
Matching Contributions, if any, indicated in the Adoption Agreement for the
Plan Year.

 

(b)
ACP Test Safe Harbor Matching Contributions will be vested as indicated in the
Adoption Agreement, but, in any event, such contributions shall be fully vested
at normal Retirement Age, upon the complete or partial termination of the Plan,
or upon the complete discontinuance of Employer Contributions. Forfeitures of
nonvested ACP Test Safe Harbor Matching Contributions will be used to reduce
the Employer’s contribution.

 

65

 

PART 3

 

ARTICLE 1

 

ACCOUNTING

 

3.1.1 Accounts.  All income, profits, recoveries,
contributions and any and all moneys, securities and properties of any kind at
any time received or held by the Trustee shall be held as a commingled Trust
Fund, except to the extent such assets are transferred to a Segregated Fund or
Controlled Fund. For accounting purposes, the Plan Administrator shall
establish and maintain certain Accounts for each Participant. The Plan
Administrator may establish a written policy with respect to allocating
earnings to the accounts of Participants that recognizes the time value of
money so long as this written policy is administered in uniform
nondiscriminatory manner. An Employer Account shall be established and
maintained for each Participant to which shall be added the Participant’s share
of Employer or Non-Elective Contributions and Forfeitures. A Matching Account
shall be established and maintained for each Participant to which shall be
added the Participant’s share of Matching Contributions and Forfeitures. A
Qualified Non-Elective Contribution Account shall be established and maintained
for each Participant to which shall be added the Participant’s share of
Qualified Non-Elective Contributions. A Qualified Matching Contribution Account
shall be established and maintained for each Participant to which shall be
added the Participant’s share of Qualified Matching Contributions. If a
Participant has previously made voluntary nondeductible Employee contributions,
the Plan Administrator shall establish and maintain a Voluntary Account for the
Participant. If, in accordance with any of the provisions of the Plan, assets
are either deposited initially or transferred to a Segregated Fund for the
benefit of a Participant, the Plan Administrator shall establish and maintain a
Segregated Account for the Participant. If a Participant elects to exercise
investment control over all or a portion of his Accounts, the Plan
Administrator shall establish and maintain a Controlled Account for the
Participant.

 

3.1.2 Adjustments.  As of each Valuation Date, each Participant’s
Accounts shall be adjusted in the following order and manner.

 

While it is contemplated that the Trust Fund will be valued by the
Trustee and allocations made only on the Valuation Date, at any time that the
Plan’s valuations are not performed on a daily basis, should it be necessary to
make distributions under the provisions hereof and the Plan Administrator, in
good faith determines that, because of (i) an extraordinary change in general
economic conditions, (ii) the occurrence of some casualty materially affecting
the value of the Trust Fund or a substantial part thereof, or (iii) a
significant fluctuation in the value of the Trust Fund has occurred since the
immediately preceding Valuation Date, the Plan Administrator may, in his sole
discretion, to prevent the payee from receiving a substantially greater or
lesser amount than what he would be entitled to, based on current values, cause
a re-valuation of the Trust Fund to be made and a reallocation of the interests
therein as of the date the payee’s right of distribution becomes fixed. The
Plan Administrator’s determination to make such special valuation and the
valuation of the Trust Fund as determined by the Trustee shall be conclusive
and binding on all persons ever interested hereunder.

 

(a) Distributions. Any
distribution made to or on behalf of a Participant since the last preceding
Valuation Date shall be deducted from the Participant’s Account from which the
distribution was made.

 

(b) Insurance Premiums.
Payments made since the last preceding Valuation Date for Life Insurance
Policies on the life of a Participant or someone in whom the Participant has an
insurable interest (including without limitation payments of premiums and
interest on policy loans) shall be deducted from the Account of the Participant
from which the payment was made.

 

(c) Adjustment to Fair
Market Value. The value of all moneys, securities and other property in the
Trust Fund, excluding Life Insurance Policies, shall be appraised by the
Trustee at the then fair market value. In determining such value, all income
and contributions, if any, received by the

 

66

 

Trustee from the Employer or
Participants on account of such year calculated under the method of accounting
of the Trust shall be included and there shall be deducted all expenses
determined in accordance with the method of accounting adopted by the Plan
Administrator.

 

If the total net value of
the Trust Fund so determined exceeds (or is less than) the total amount in the
affected Accounts of all Participants, the excess (or deficiency) shall be
added to (or deducted from) the respective Accounts of all Participants in the
ratio that each such Participant’s Account bears to the total amount in all
such Accounts.

 

(d) Adjustment of Segregated
and Controlled Accounts. The value of all moneys, securities and other property
in each Participant’s Segregated Account or Controlled Account, if any, but
exclusive of Life Insurance Policies, shall be appraised by the Trustee at the
then fair market value. In determining such value, all income calculated under
the method of accounting of the Trust shall be included and all expenses shall
be deducted.

 

If the total net value of a
Participant’s Segregated Account or Controlled Account, as the case may be, so
determined exceeds (or is less than) the previous balance in such Account, the
excess (or deficiency) shall be added to (or deducted from) the Participant’s
respective Account.

 

(e) Insurance Contracts. No
contract will be purchased under the Plan unless such contract or a separate
definite written agreement between the Employer and the insurer provides that:
(1) no value under contracts providing benefits under the Plan or credits
determined by the insurer (on account of dividends, earnings, or other
experience rating credits, or surrender or cancellation credits) with respect
to such contracts may be paid or returned to the Employer or diverted to or
used for other than the exclusive benefit of the Participants or their
Beneficiaries. However, any contribution made by the Employer because of a
mistake of fact must be returned to the Employer within one year of the
contribution.

 

If this Plan is funded by
individual contracts that provide a Participant’s benefit under the Plan, such
individual contracts shall constitute the Participant’s Account balance. If
this Plan is funded by group contracts, under the group annuity or group
insurance contract, premiums or other consideration received by the insurance
company must be allocated to Participants’ Accounts under the Plan.

 

(f) Insurance Dividends.
Dividends or credits received since the last preceding Valuation Date on any
Life Insurance Policy on the life of a Participant or someone in whom the
Participant has an insurable interest shall be added to the Account of the
Participant from which the premiums for such Life Insurance Policy have been
paid.

 

(g) Contributions and
Forfeitures. Each Participant’s Account shall be increased by that portion of
the contribution and Forfeitures which is allocated to him.

 

(h) Transfers to Segregated
Funds. To the extent that funds in the Trust Fund attributable to a
Participant’s Accounts were transferred since the last preceding Valuation Date
or are to be transferred to a Segregated Fund pursuant to any of the provisions
of the Plan, the Account from which the funds were transferred shall be
decreased and the Account to which the funds were transferred shall be
increased.

 

(i) Transfers From
Segregated Funds. To the extent that funds are transferred from a Segregated
Fund of a Participant to the Trust Fund pursuant to any of the provisions of
the Plan, the Account from which the funds were transferred shall be decreased
and the Account to which the funds were transferred shall be increased.

 

(j) Time of Adjustments.
Every adjustment to be made pursuant to this Section shall be considered as
having been made as of the applicable Valuation Date regardless of the actual
dates of entries, receipt by the Trustee of contributions by the Participant or
the Employer for such Year, or the transfers of funds to or from Segregated
Funds. The Trustee’s determination as to valuation of trust assets and charges
or credits to the individual Accounts of the respective Participants shall be
conclusive and binding on all persons.

 

67

 

If funds are transferred
from the Trust Fund to a Segregated Fund as of any date other than a Valuation
Date pursuant to the terms of the Plan, the adjustment to be made pursuant to
this Section shall be made as of the date as of which such transfer is made, as
if such date is a Valuation Date.

 

If any Participant receives
a distribution pursuant to the terms of the Plan as of any date other than a
Valuation Date, then the adjustments to be made pursuant to this Section shall
be made in the manner specified in the Adoption Agreement.

 

68

 

ARTICLE 2

 

LIMITATIONS

 

3.2.1 Limitations on Annual Additions.
If the Participant
participates in another qualified defined contribution 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 which provides an
Annual Addition during any Limitation Year, or a simplified employee pension,
as defined in section 408(k) of the Code, maintained by the Employer, which
provides an Annual Addition, then subject to the adjustments hereinafter set
forth, the amount of Annual Additions which may be credited to a Participant’s
Accounts during any Limitation Year shall not exceed the maximum permissible
amount, which shall equal the lesser of: (a) thirty thousand dollars
($30,000.00) as adjusted under section 415(d) of the Code or, (b) twenty-five
percent (25%) of the Participant’s Compensation for the Plan Year reduced by
the Annual Additions credited to a Participant’s Account under the other plans
and welfare benefit funds for the same Limitation Year. The compensation
limitation referred to in (b) shall not apply to any contribution for medical
benefits (within the meaning of section 401(h) or section 419A(f)(2) of the
Code) which is otherwise treated as an Annual Addition under sections 415(l)(1)
or 419A(d)(2) of the Code.

 

If the Employer contribution that would otherwise be contributed or
allocated to the Participant’s Account would cause the Annual Additions for the
Limitation Year to exceed the maximum permissible amount, the amount
contributed or allocated shall be reduced so that the Annual Additions for the
Limitation Year shall equal the maximum permissible amount.

 

(a) Annual Additions. The
term “Annual Additions” shall mean the sum of the following amounts credited to
a Participant’s Accounts for the Limitation Year:

 

(i) Employer contributions;

 

(ii) Employee contributions;

 

(iii) Forfeitures;

 

(iv) Excess Elective
Deferrals, Excess Contributions and Excess Aggregate Contributions; and

 

(v) Payments allocated after
March 31, 1984, 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 and amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits, allocated to the separate
account of a Key Employee, as defined in section 419A(d)(3) of the Code, under
a welfare benefit fund as defined in section 419(e) of the Code, maintained by
the Employer.

 

(vi) Allocations under a
simplified employee pension as defined in section 408(k) of the Code.

 

Any excess amounts applied
under Subsections (b) and (c) below to reduce Employer contributions are
considered Annual Additions for such Limitation Year.

 

(b) Excess Annual Additions.
Prior to determining a Participant’s actual Compensation for a Limitation Year,
the Employer may determine the maximum permissible Annual Addition for the
Participant on the basis of a reasonable estimation of the Participant’s Compensation
for the Limitation Year, uniformly determined for all Participants similarly
situated. As soon as is administratively feasible after the end of the
Limitation Year, the maximum permissible amount for the Limitation Year shall
be determined on the basis of the Participant’s actual Compensation for the
Limitation Year.

 

69

 

Any Excess Annual Addition
attributable to nondeductible voluntary Employee contributions (plus
attributable earnings) made by a Participant to the extent they reduce the
excess amount shall be returned to the Participant before any other adjustments
are made. Any Excess Annual Addition attributable to a reasonable error in
determining the amount of Elective Deferrals that may be made on behalf of a
Participant under the limits of section 415 of the Code shall next be returned
to the Participant.

 

If after the application of
the above provisions of this Paragraph an excess amount still exists, any
Elective Deferrals (plus attributable earnings), to the extent they would
reduce the excess amount, will be distributed to the Participant. Matching
Contributions attributable to those deferrals shall be forfeited in accordance
with Section 2.7.10.

 

If an excess amount still
exists, and the Participant is covered by the Plan at the end of the Limitation
Year, the excess amount in the Participant’s Account shall be used to reduce
Employer contributions (including any allocation of Forfeitures) for such
Participant in the next Limitation Year, and each succeeding Limitation Year,
if necessary. If an excess amount still exists, and the Participant is not
covered by the Plan at the end of a Limitation Year, the excess amount shall be
held unallocated in a suspense account. The suspense account shall be applied
to reduce future Employer contributions for all remaining Participants in the
next Limitation Year, and each succeeding Limitation Year, if necessary.

 

If a suspense account is in
existence at any time during a particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to Participants’ Accounts
before any Employer or any Employee contributions may be made to the Plan for
that Limitation Year. Excess amounts may not be distributed to Participants or
former Participants. If a suspense account is in existence at any time during a
Limitation Year, it shall not participate in the allocation of the Trust’s
investment gains and losses.

 

(c) Participation in Certain
Other Plans. If in addition to this Plan, the Participant is covered under
another qualified master or prototype defined contribution plan maintained by
the Employer, simplified employee pension as defined under section 408(k) of
the Code maintained by the Employer, 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, which provides an Annual Addition during any Limitation Year, the
Annual Additions which may be credited to a Participant’s Account under this
Plan for any such Limitation Year shall not exceed the maximum permissible
amount reduced by the Annual Additions credited to a Participant’s Account
under another qualified master or prototype defined contribution plan
maintained by the Employer, simplified employee pension as defined under
section 408(k) of the Code maintained by the Employer, 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 for the same Limitation Year.

 

If the Annual Additions with
respect to the Participant under another qualified prototype defined
contribution plan maintained by the Employer, simplified employee pension as
defined under section 408(k) of the Code maintained by the Employer, 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 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 shall be reduced so that the Annual Additions under
all such plans and funds for the Limitation Year shall equal the maximum
permissible amount. If the Annual Additions with respect to the Participant
under such other defined contribution plans and welfare benefit funds 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 actual Compensation for the Limitation Year, the Employer may
determine the maximum permissible amount for a Participant in the manner
described in Subsection (b) above. As soon as is administratively feasible
after the end of the Limitation Year,

 

70

 

the maximum permissible
amount for the Limitation Year shall be determined on the basis of the
Participant’s actual Compensation for the Limitation Year.

 

If 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 shall 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
regardless of the actual allocation dates.

 

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

 

(i) the total excess amount
allocated as of such date, times

 

(ii) the ratio of (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 prototype defined contribution plans. Any excess amount
attributed to this Plan will be disposed in the manner described in Subsection
(b), above.

 

If the Participant is
covered under another qualified defined contribution plan maintained by the
Employer which is not a prototype plan, Annual Additions which may be credited
to the Participant’s Account under this Plan for any Limitation Year shall be
limited as provided above as though the other plan were a prototype plan unless
the Employer specifies other limitations in the Adoption Agreement.

 

For purposes hereof, the
excess amount is the excess of the Participant’s Annual Additions for the
Limitation Year over the maximum permissible amount and a prototype plan is a
plan the form of which is the subject of a favorable opinion letter from the
Internal Revenue Service.

 

If the Employer maintains,
or at any time maintained, a qualified defined benefit plan (Other than paired
plan #02-003/02-004) covering any Participant in this Plan, the sum of the
Participant’s defined benefit plan fraction and defined contribution plan
fraction will not exceed 1.0 in any Limitation Year. The Annual Additions which
may be credited to the Participant’s Account under this Plan for any Limitation
Year shall be limited in the manner specified in the Adoption Agreement.

 

(d) Combined Plan
Limitation. This Paragraph (d) and Paragraphs (e) and (f) are only effective
for Limitation Years commencing on or before December 31, 1999. In the event
that a Participant in this Plan participates in a defined benefit plan (as
defined in the applicable sections of the Code) maintained by the Employer, the
sum of the “defined benefit plan fraction” plus the “defined contribution plan
fraction” shall at no time exceed 1.0.

 

The “defined benefit plan
fraction” for any year is a fraction (i) the numerator of which is the sum of
the projected annual benefits of the Participant under all the defined benefit
plans (whether or not terminated) maintained by the Employer (determined as of
the close of the year), and (ii) the denominator of which is the lesser of (A)
the product of 1.25 multiplied by the dollar limitation determined for the
Limitation Year under sections 415(b) and (d) of the Code, or (B) the product
of 1.4 multiplied by one hundred (100%) percent of the Participant’s average
compensation for the three (3) consecutive Years of Service with the Employer
that produces the highest average, including any adjustments under section
415(b) of the Code. Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of this
fraction shall not be less than 125 percent of the sum of the annual benefits
under such plans which the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the Plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of section 415 for

 

71

 

all Limitation Years
beginning before January 1, 1987. The “defined contribution fraction” for any
year is a fraction (i) the numerator of which is the sum of the Annual
Additions to the Participant’s accounts under all defined contribution plans
(whether or not terminated) maintained by the Employer for the current and all
prior Limitation Years, including the Annual Additions attributable to the
Participant’s nondeductible Employee contributions to all defined benefit
plans, whether or not terminated, maintained by the Employer, and the Annual
Additions attributable to all welfare benefit funds, and individual medical
accounts (as defined in sections 419(e) and 415(l)(2) of the Code) and
simplified employee pensions maintained by the Employer, and (ii) the
denominator of which is the sum of the lesser of the following amounts
determined for the current year and for all prior Limitation Years of Service
with the Employer, regardless of whether a defined contribution plan was
maintained by the Employer: (A) the product of 1.25 multiplied by the dollar
limitation determined under sections 415(b) and (d) of the Code in effect under
section 415(c)(1)(A) of the Code, or (B) thirty-five (35%) percent of the
Participant’s Compensation from the Employer for such Plan Year. If the
Employee was a Participant as of the end of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, shall be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987.

 

The Annual Addition for any
Limitation Year beginning before January 1, 1987, shall not be recomputed to
treat all Employee contributions as Annual Additions.

 

The projected annual
benefits under a defined benefit plan is the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity) or Qualified Joint and
Survivor Annuity) to which the Participant would be entitled under the terms of
the Plan assuming the Participant continues employment until Normal Retirement
Age under the Plan (or current age, if later), and the Participant’s
Compensation for the current Limitation Year and all other relevant factors
used to determine benefits under the Plan remain constant for all future
Limitation Years.

 

(e) Special Transition Rule
for Defined Contribution Fraction. At the election of the Plan Administrator,
in applying the provisions of Subsection (d) above with respect to the defined
contribution plan fraction for any year ending after December 31, 1982, the
amount taken into account for the denominator for each Participant for all
years ending before January 1, 1983, shall be an amount equal to the product of
the amount of the denominator determined under Subsection (d) above for the
year ending in 1982, multiplied by the “transition fraction”.

 

The “transition fraction” is
a fraction (i) the numerator of which is the lesser of (A) $51,875 or (B) 1.4
multiplied by twenty-five (25%) percent of the Participant’s Compensation for
the year ending in 1981, and (ii) the denominator of which is the lesser of (A)
$41,500 or (B) twenty-five (25%) percent of the Participant’s Compensation for
the year ending in 1981.

 

(f) Special Transition Rule
for Excess Benefits. Provided that the Plan satisfied the requirements of
section 415 of the Code for the last Plan Year beginning before January 1,
1983, an amount shall be subtracted from the numerator of the defined
contribution plan fraction (not exceeding such numerator) so that the sum of
the defined benefit plan fraction and the defined contribution fraction
computed in accordance with section 415(e)(l) of the Code (as amended by the
Tax Equity and Fiscal Responsibility Act of 1982)does not exceed 1.0 for such
year, in accordance with regulations issued by the Secretary of the Treasury
pursuant to the applicable provisions of the Code.

 

(g) Employer. For purposes
of this Section, employer shall mean the Employer that adopts this Plan and all
members of a group of employers which constitutes a controlled group of

 

72

 

corporations or trades or
businesses under common control (as defined in sections 414(b) and (c) of the
Code, as modified by section 415(h) of the Code), or an affiliated service
group (as defined in section 414(m) of the Code) of which the adopting employer
is part and any other entity required to be aggregated with the Employer under
section 414(o) of the Code and the regulations issued thereunder.

 

(h) Compensation. For
purposes of this Section as elected in Part II.C. of the Adoption Agreement by
the Employer, Compensation shall mean all of a Participant’s:

 

(i) Wages, Tips and Other
Compensation Box on Form W-2. Wages as defined in section 3401(a) of the Code
and all other payments of Compensation to an Employee by the Employer (in the
course of the Employer’s trade or business) for which the Employer is required
to furnish the Employee a written statement under sections 6041(d), 6051(a)(3)
and 6052 of the Code.

 

Compensation must be
determined without regard to any rules under section 3401(a) of the Code that
limit the remuneration included in wages based on the nature or location of the
employment or the services rendered (such as the exception for agricultural
labor in section 3401(a)(2) of the Code).

 

(ii) Section 3401(a) Wages.
Wages as defined in section 3401(a) of the Code for the purposes of income tax
withholding at the source but determined without regard to any rules that limit
the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in section 3401(a)(2) of the Code).

 

(iii) Section 415
Safe-Harbor Compensation. 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
for the Employer maintaining the Plan to the extent that the amounts are
includible in gross income (including but not limited to commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan (as
described in section 1.62-2(c) of the regulations), but excluding:

 

(I) Amounts realized from
the exercise of a non-qualified stock option or when restricted stock or
property held by the Employee is no longer subject to a substantial risk of
forfeiture or becomes freely transferable.

 

(II) For Limitation Years
beginning before January 1, 1997, Amounts realized from the sale, exchange or
other disposition of stock acquired under an incentive stock option; and

 

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

 

For any Self-Employed
Individual, Compensation shall mean Earned Income. For Limitation Years beginning
after December 31, 1991, for purposes of applying the limitations of this
Article, Compensation for a Limitation Year is the Compensation actually paid
or made available during such Limitation Year.

 

Notwithstanding the
preceding sentence, Compensation for a Participant who is permanently and
totally Disabled (as defined in section 22(e)(3) of the Code) is the
Compensation such Participant would have received for the Limitation Year if
the Participant had been paid at the rate of Compensation paid immediately
before becoming permanently and totally Disabled. For Limitation Years
beginning before January 1, 1997, such imputed Compensation for the Disabled
Participant may be taken into account only if the Participant is not a Highly
Compensated Employee (as defined in Section 1.2.49) and contributions made on
behalf of such Participant are

 

73

 

nonforfeitable when made.

 

For Limitation Years
beginning after December 31, 1997, for purposes of applying the limitations of
this Section, Compensation paid or made available during such Limitation Year
shall include any elective deferral (as defined in section 402(g)(3) of the
Code), and any amount which is contributed or deferred by the Employer at the
election of the Employee and which is not includible in the gross income of the
Employee by reason of section 125, 132(f)(4) or 457 of the Code.

 

(i) Short Limitation Year.
If the Limitation Year is amended to a different twelve (12) consecutive month
period, the new Limitation Year must begin within the Limitation Year in which
the amendment is made.

 

If a short Limitation Year
is created because of an amendment changing the Limitation Year to a different
twelve (12) consecutive month period, the maximum Annual Addition shall not
exceed the defined contribution dollar limitation determined in accordance with
section 415(c)(1)(A) of the Code then in effect multiplied by a fraction, the
numerator of which is the number of months in the short Limitation Year and the
denominator of which is twelve (12).

 

3.2.2 Controlled Businesses.  If this Plan provides contributions or
benefits for one or more Owner-Employees who control both the business for
which this Plan is established and one or more other trades or businesses, this
Plan must, when looked at as a single plan, satisfy section 401(a) of the Code,
and contributions on behalf of any Owner-Employee may be made only with respect
to the Earned Income of such Owner-Employee which is derived from the trade or
business with respect to which this Plan is established.

 

74

 

ARTICLE 3

 

FIDUCIARIES

 

3.3.1 Standard of Conduct.  The duties and responsibilities of the Plan
Administrator with respect to the Plan shall be discharged (a) in a
non-discriminatory manner; (b) for the exclusive benefit of Participants and
their Beneficiaries; (c) by defraying the reasonable expenses of administering
the Plan; (d) with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man 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; (e) by diversifying 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; and (f) in accordance with the documents and
instruments governing the Plan insofar as such documents and instruments are
consistent with the provisions of the Act.

 

3.3.2 Individual Fiduciaries.  At any time that a group of individuals is
acting as Plan Administrator, the number of such persons who shall act in such
capacity from time to time shall be determined by the Employer. Such persons
shall be appointed by the Employer and may or may not be Participants or
Employees of the Employer. Any action taken by a group of individuals acting as
Plan Administrator shall be taken at the direction of a majority of such
persons, or, if the number of such persons is two (2), by unanimous consent.

 

3.3.3 Disqualification from Service.  No person shall be permitted to serve as a
Fiduciary, custodian, counsel, agent or employee of the Plan or as a consultant
to the Plan who has been convicted of any of the criminal offenses specified in
the Act.

 

3.3.4 Bonding.  Except as otherwise permitted by law, each Fiduciary or person who
handles funds or other property or assets of the Plan shall be bonded in
accordance with the requirements of the Act.

 

3.3.5 Prior Acts.  No Fiduciary shall be liable for any acts
occurring prior to the period of time during which the Fiduciary was actually
serving in such capacity with respect to the Plan.

 

3.3.6 Insurance and Indemnity.  The Employer may purchase or cause the
Trustee to purchase and keep current as an authorized expense liability
insurance for the Plan, its Fiduciaries, and any other person to whom any
financial or other administrative responsibility with respect to the Plan and
the Trust is allocated or delegated, from and against any and all liabilities,
costs and expenses incurred by such persons as a result of any act or omission
to act in connection with the performance of the duties, responsibilities and
obligations under the Plan and under the Act; provided that any such insurance
policy purchased with Plan assets permits subrogation by the Insurer against
the Fiduciary in the case of breach by such Fiduciary.

 

Unless otherwise determined and communicated to affected parties by the
Employer, the Employer shall indemnify and hold harmless each such person,
other than a corporate trustee, for and from any such liabilities, costs and
expenses which are not covered by any such insurance, except to the extent that
any such liabilities, costs or expenses are judicially determined to be due to
the gross negligence or willful misconduct of such person. No Plan assets may
be used for any such indemnification.

 

3.3.7 Expenses.  Expenses incurred by the Plan Administrator or the Trustee in the
administration of the Plan and the Trust, including fees for legal services
rendered, such compensation to the Trustee as may be agreed upon in writing
from time to time between the Employer and the Trustee, and all other proper
charges and expenses of the Plan Administrator or the Trustee and of their
agents and counsel shall be paid by the Employer, or at its election at any
time or from time to time, may be charged against the assets of the Trust, but
until so paid shall constitute a charge upon the assets of the Trust.

 

The Trustee shall have the authority to charge the Trust Fund for its
compensation and reasonable expenses unless paid or contested by written notice
by the Employer within sixty (60) days after mailing of the written billing by
the Trustee. All taxes of any and all kinds whatsoever which may be levied or
assessed under existing or future laws upon the assets of the Trust or the
income thereof shall be paid

 

75

 

from such assets. Notwithstanding the foregoing, no compensation shall
be paid to any Employee for services rendered under the Plan and Trust as a
Trustee.

 

3.3.8 Agents,
Accountants and Legal Counsel.  The Plan Administrator shall have authority
to employ suitable agents, custodians, investment counsel, accountants and
legal counsel who may, but need not be, legal counsel for the Employer. The
Plan Administrator and the Trustee shall be fully protected in acting upon the
advice of such persons. The Trustee shall at no time be obliged to institute
any legal action or to become a party to any legal action unless the Trustee
has been indemnified to the Trustee’s satisfaction for any fees, costs and
expenses to be incurred in connection therewith.

 

3.3.9 Investment Manager.  The Employer may employ as an investment
manager or managers to manage all or any part of the Trust Fund any (i)
investment advisor registered under the Investment Advisors Act of 1940; (ii)
bank as defined in said Act; or (iii) insurance company qualified to perform
investment management services in more than one state. Any investment manager
shall have all powers of the Trustee in the management of such part of the
Trust Fund, including the power to acquire or dispose of assets.

 

In the event an investment manager is so appointed, the Trustee shall
not be liable for the acts or omissions of such investment manager or be under
any obligation to invest or otherwise manage that part of the Trust Fund which
is subject to the management of the investment manager. The Employer shall
notify the Trustee in writing of any appointment of an investment manager, and
shall provide the Trustee with the investment manager’s written acknowledgment
that it is a fiduciary with respect to the Plan.

 

3.3.10 Finality of Decisions or Acts.  Except for the right of a Participant or Beneficiary to appeal the
denial of a claim, any decision or action of the Plan Administrator or the
Trustee made or done in good faith upon any matter within the scope of
authority and discretion of the Plan Administrator or the Trustee shall be
final and binding upon all persons. In the event of judicial review of actions
taken by any Fiduciary within the scope of his duties in accordance with the
terms of the Plan and the Trust, such actions shall be upheld unless determined
to have been arbitrary and capricious.

 

3.3.11 Certain Custodial Accounts and Contracts.
The term “Trustee” as
used herein will also include a person holding the assets of a custodial
account, an annuity contract or other contract which is treated as a qualified
trust pursuant to section 401(f) of the Code and references to the Trust Fund
shall be construed to apply to such custodial account, annuity contract or
other contract.

 

3.3.12 404(c)
Election.  The Employer may designate in the Adoption Agreement that this Plan is
intended to be administered pursuant to section 2550.404c-1 of the Labor
regulations as an ERISA section 404(c) Plan.

 

76

 

ARTICLE
4

 

PLAN
ADMINISTRATOR

 

3.4.1 Administration of Plan.  The Plan Administrator shall be designated by
the Employer from time to time. The primary responsibility of the Plan
Administrator is to administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries, subject to the specific terms of the
Plan. The Plan Administrator shall administer the Plan and shall construe and
determine all questions of interpretation or policy in his sole discretion. The
Plan Administrator may correct any defect, supply any omission, or reconcile
any inconsistency in such manner and to such extent as he shall deem necessary
or advisable to carry out the purpose of the Plan; provided, however, that any
interpretation or construction shall be done in a nondiscriminatory manner and
shall be consistent with the intent that the Plan shall continue to be a
qualified Plan pursuant to the Code, and shall comply with the terms of the
Act. The Plan Administrator shall have all powers necessary or appropriate to
accomplish his duties under the Plan.

 

(a) The Plan Administrator
shall be charged with the duties of the general administration of the Plan, including
but not limited to the following:

 

(1) To determine all
questions relating to the eligibility of an Employee to participate in the Plan
or to remain a Participant hereunder.

 

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

 

(3) To authorize and direct
the Trustee with respect to all disbursements from the Trust Fund.

 

(4) To maintain all the
necessary records for the administration of the Plan.

 

(5) To interpret the
provisions of the Plan and to make and publish rules and regulations for the
Plan as the Plan Administrator may deem reasonably necessary for the proper and
efficient administration of the Plan and consistent with its terms.

 

(6) To select the Insurer to
provide any Life Insurance Policy to be purchased for any Participant
hereunder.

 

(7) To advise the Fiduciary
with investment authority regarding the short and long-term liquidity needs of
the Plan in order that the Fiduciary might direct its investment accordingly.

 

(8) To advise, counsel and
assist any Participant regarding any rights, benefits or elections available
under the Plan.

 

(9) To instruct the Trustee
as to the management, investment and reinvestment of the Trust Fund unless the
investment authority has been delegated to the Trustee or an Investment
Manager.

 

(b) The Plan Administrator
shall also be responsible for preparing and filing such annual disclosure
reports and tax forms as may be required from time to time by the Secretary of
Labor, the Secretary of the Treasury or other governmental authorities.

 

(c) Whenever it is
determined by the Plan Administrator to be in the best interest of the Plan and
its Participants or Beneficiaries, the Plan Administrator may request such variances,
deferrals, extensions, or exemptions or make such elections for the Plan as may
be available under the law.

 

(d) The Plan Administrator
shall be responsible for procuring bonding for all persons dealing with the
Plan or its assets as may be required by law.

 

3.4.2 Disclosure Requirements.  Every Participant covered under the Plan and every Beneficiary

 

77

 

receiving benefits under the Plan shall receive from the Plan
Administrator a summary plan description, and such other information as may be
required by law or by the terms of the Plan.

 

3.4.3 Information Generally Available.  The Plan Administrator shall make copies of
this Plan and the Trust, the Adoption Agreement, the summary plan description,
latest annual report, Life Insurance Policies, or other instruments under which
the Plan was established or is operated available for examination by any
Participant or Beneficiary in the principal office of the Plan Administrator
and such other locations as may be necessary to make such information
reasonably accessible to all interested parties. Subject to a reasonable charge
to defray the cost of furnishing such copies, the Plan Administrator shall,
upon written request of any Participant or Beneficiary, furnish a copy of any
of the above documents to the respective party.

 

3.4.4 Statement of Accrued Benefit.  Upon written request to the Plan
Administrator once during any twelve (12) month period, a Participant or
Beneficiary shall be furnished with a written statement, based on the latest
available information, of his then vested accrued benefit and the earliest date
upon which the same will become fully vested and nonforfeitable. The statement
shall also include a notice to the Participant of any benefits which are
forfeitable if the Participant dies before a certain date.

 

3.4.5 Explanation of Rollover Treatment.
The Plan Administrator shall, when making a
distribution eligible for rollover treatment, provide a written explanation to
the recipient of the provisions under which such distribution will not be
subject to tax if transferred to an Eligible Retirement Plan within sixty (60)
days after the date on which the recipient received the distribution and, if
applicable, the provisions of law pertaining to the tax treatment of lump sum
distributions.

 

3.4.6 Electromechanical Communications.
If so elected by the Employer in the Adoption
Agreement, the Trustee (or other agent appointed for this purpose) may act upon
receipt of directions (including, without limitation, directions pursuant to
voice response systems, facsimile, or other electromechanical means) certifying
that an amount is payable to or for the benefit of a Participant under the
Plan, whether as a distribution, a Direct Rollover, a transfer, withdrawal, or
the disbursement of a loan, the Trustee shall pay such amount (or cause such
amount to be paid) in accordance with such directions, and the Trustee shall be
fully protected in, and will incur no liability, for doing so. If the Employer
designates an agent hereunder, to make such payment, and the giving of such
directions to the agent constitutes a certification from the Plan Administrator
to the Trustee (through the agent) then such payment is in accordance with the
terms of the Plan.

 

78

 

ARTICLE 5

 

LOANS

 

3.5.1 Authorization.  If the Employer elects in the Adoption
Agreement to permit loans to Participants or Beneficiaries, the Plan
Administrator shall establish a Participant loan program in compliance with
Treasury regulations and Labor regulation section 2550.408b. The terms of such
Participant loan program shall be in writing and shall constitute part of the
Plan. Such terms shall include:

 

(a) The identity of the
person or positions authorized to administer the Participant loan program;

 

(b) A procedure for applying
for loans;

 

(c) The basis on which loans
will be approved or denied;

 

(d) Limitations (if any) on
the types and amount of loans offered;

 

(e) The procedure under the
program for determining a reasonable rate of interest;

 

(f) The types of collateral
which may secure a Participant loan; and

 

(g) The events constituting
default and the steps that will be taken to preserve Plan assets in the event
of default.

 

3.5.2 Spousal Consent.  Except in the case of a Safe Harbor Profit
Sharing Plan, a Participant must obtain the written consent of his spouse, if
any, to the use of the Participant’s interest in the Plan as security for a
Participant Loan within ninety (90) days before the date on which the loan is
to be so secured. A new consent must be obtained whenever the amount of the
loan is increased or if the loan is renegotiated, extended, renewed or
otherwise revised. The form of the consent must acknowledge the effect of such
consent and be witnessed by a Plan representative or a notary public but shall
be deemed to meet any such requirements relating to the consent of any
subsequent spouse. Such consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to that loan.

 

If a valid spousal consent has been obtained, then notwithstanding any
other provision of the Plan, the portion of the Participant’s vested Account
balance used as a security interest held by the Plan by reason of a loan
outstanding to the Participant shall be taken into account for purposes of
determining the amount of the Account balance payable at the time of death or
distribution but only if the reduction is used as repayment of the loan. If
less than the entire amount of the Participant’s vested Account balance
(determined without regard to the preceding sentence) is payable to the
surviving spouse, the Account balance shall be adjusted by first reducing the
vested Account balance by the amount of the security used as repayment of the
loan before determining the benefit payable to the surviving spouse.

 

3.5.3 Limitations.  Except to the extent provided in the
Participant loan program, in no event shall the amount loaned to any
Participant or Beneficiary exceed the lesser of (a) fifty thousand dollars
($50,000.00) (reduced by the excess, if any, of the highest outstanding balance
of loans from the Plan during the one year period ending on the day before the
date on which the loan was made over the outstanding balance of loans from the
Plan on the date on which such loan was made) or (b) one-half of the sum of the
vested and nonforfeitable interest in his Accounts, determined as of the
Valuation Date coinciding with or immediately preceding such loan.

 

For the purposes hereof, all loans from all plans of the Employer and
other members of a group of employers described in sections 414(b), (c), (m)
and (o) of the Code shall be aggregated. All loans must be adequately secured
and bear a reasonable interest rate. No Participant loan shall exceed the
present value of the Participant’s vested Account balance. In the event of a
default, foreclosure on the note evidencing the loan and attachment of the
security shall not occur until a distributable event occurs. Loan repayments
will be suspended under this Plan as permitted under section 414(u)(4) of the
Code.

 

79

 

3.5.4 Availability.  Loans, if any, must be available to all
Participants and Beneficiaries without regard to any individual’s race, color,
religion, sex, age or national origin. Loans shall be made available to all
Participants and Beneficiaries and loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other Employees.

 

3.5.5 Prohibitions.  No Loans will be made to any
shareholder-employee or Owner-Employee. For purposes of this requirement, a
shareholder-employee means an employee or officer of an electing small business
(Subchapter S) corporation who owns (or is considered as owning within the
meaning of section 318(a)(1) of the Code), on any day during the taxable year
of such corporation, more than 5% of the outstanding stock of the corporation.

 

3.5.6 Default.  In the event of default, foreclosure on the note and attachment of
security will not occur until a distributable event occurs in the Plan.

 

3.5.7 Rollovers of Participant Loans.  If elected by the Employer in the Adoption
Agreement, the Plan shall accept the in-kind rollover of Participant loans. The
right to make such a rollover shall be governed by Article IX Portability of
the Plan.

 

80

 

ARTICLE
6

 

BENEFICIARIES

 

3.6.1 Designation of Beneficiaries.  Each Participant shall have the right to
designate a Beneficiary or Beneficiaries and contingent or successive
Beneficiaries to receive any benefits provided by this Plan which become
payable upon the Participant’s death. The Beneficiaries may be changed at any
time or times by the filing of a new designation with the Plan Administrator,
and the most recent designation shall govern. Notwithstanding the foregoing,
and subject to the provisions of Section 2.5.2(f)(3), the Designated
Beneficiary shall be the surviving spouse of the Participant, unless such
surviving spouse consents in writing to an alternate designation and the terms
of such consent acknowledge the effect of such alternate designation and the
consent is witnessed by a representative of the Plan or by a notary public. The
designation of a Beneficiary other than the spouse of the Participant or a form
of benefit with the consent of such spouse may not be changed without the
consent of such spouse and any consent must acknowledge the specific non-spouse
Beneficiary, including any class of Beneficiaries or any contingent
Beneficiaries (or the spouse expressly permits designations by the Participant
without any further spousal consent).

 

Any consent by a spouse obtained under this provision (or establishment
that the consent of a spouse may not be obtained) shall be effective only with
respect to such spouse. A consent that permits designations by the Participant
without any requirement of further consent by such spouse must acknowledge that
the spouse has the right to limit consent to a specific beneficiary, and a specific
form of benefit where applicable, and that the spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a prior waiver may be
made by a Participant without the consent of the spouse at any time prior to
the commencement of benefits. The number of revocations shall not be limited.
No consent obtained under this provision shall be valid unless the Participant
has received notice as provided in Section 2.5.2(f)(4).

 

3.6.2 Absence or Death of Beneficiaries.
Except with respect
to the process of life insurance payable upon the death of the Participant, if
a Participant dies without having a Beneficiary designation then in force, or
if all of the Beneficiaries designated by a Participant predecease him, his
Beneficiary shall be his surviving spouse, or if none, his surviving children,
equally, or if none, such other heirs or the executor or administrator of his
estate as the Plan Administrator shall select.

 

If a Participant dies survived by Beneficiaries designated by him and
if all such surviving Beneficiaries thereafter die before complete distribution
of such deceased Participant’s interest, the estate of such Designated
Beneficiaries shall be deemed to be the Beneficiary of the undistributed
portion of such interest.

 

3.6.3 Surviving Spouse Election.  If the Plan is designated in the Adoption
Agreement as a Cash or Deferred Profit Sharing Plan or a Profit Sharing Plan
and the Employer does not elect a life annuity form of distribution in the
Adoption Agreement, a surviving spouse, who has not consented to an alternate
designation under Section 3.6.1, above, may elect to have distribution of the
Participant’s vested Account balance commence within the 90-day period
following the date of the Participant’s death. The Account balance shall be
adjusted for gains or losses occurring after the Participant’s death in
accordance with the provisions of the Plan governing the adjustment of Account
balances for other types of distributions.

 

81

 

ARTICLE 7

 

CLAIMS

 

3.7.1 Claim Procedure.  Any Participant or Beneficiary who is
entitled to a payment of a benefit for which provision is made in this Plan
shall file a written claim with the Plan Administrator on such forms as shall
be furnished to him by the Plan Administrator and shall furnish such evidence
of entitlement to benefits as the Plan Administrator may require. The Plan
Administrator shall notify the Participant or Beneficiary in writing as to the
amount of benefit to which he is entitled, the duration of such benefit, the
time the benefit is to commence and other pertinent information concerning his
benefit. If a claim for benefit is denied by the Plan Administrator, in whole
or in part, the Plan Administrator shall provide adequate notice in writing to
the Participant or Beneficiary whose claim for benefit has been denied within
ninety (90) days after receipt of the claim unless special circumstances
require an extension of time for processing the claim. If such an extension of
time for processing is required, written notice indicating the special
circumstances and the date by which a final decision is expected to be rendered
shall be furnished to the Participant or Beneficiary. In no event shall the
period of extension exceed one hundred eighty (180) days after receipt of the
claim. The notice of denial of the claim shall set forth (a) the specific
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; and (d) a
statement that any appeal of the denial must be made by giving to the Plan
Administrator, within sixty (60) days after receipt of the notice of the
denial, written notice of such appeal, such notice to include a full
description of the pertinent issues and basis of the claim. The Participant or
Beneficiary (or his duly authorized representative) may review pertinent
documents and submit issues and comments in writing to the Plan Administrator.
If the Participant or Beneficiary fails to appeal such action to the Plan
Administrator in writing within the prescribed period of time, the Plan
Administrator’s adverse determination shall be final, binding and conclusive.
Benefits under this Plan will be paid only if the Plan Administrator decides in
his discretion that the applicant is entitled to them.

 

3.7.2 Appeal.  If the Plan Administrator receives from a Participant or a Beneficiary,
within the prescribed period of time, a notice of an appeal of the denial of a
claim for benefit, such notice and all relevant materials shall immediately be
submitted to the Employer. The Employer may hold a hearing or otherwise
ascertain such facts as it deems necessary and shall render a decision which
shall be binding upon both parties.

 

The decision of the Employer shall be made within sixty (60) days after
the receipt by the Plan Administrator of the notice of appeal, unless special
circumstances require an extension of time for processing, in which case a
decision of the Employer shall be rendered as soon as possible but not later
than one hundred twenty (120) days after receipt of the request for review. If
such an extension of time is required, written notice of the extension shall be
furnished to the claimant prior to the commencement of the extension. The
decision of the Employer shall be in writing, shall include specific reasons
for the decision, written in a manner calculated to be understood by the
claimant, as well as specific references to the pertinent Plan provisions on
which the decision is based and shall be promptly furnished to the claimant.
Benefits under this plan will be paid only if the plan administrator decides in
his discretion that the applicant is entitled to them.

 

82

 

ARTICLE
8

 

AMENDMENT
AND TERMINATION

 

3.8.1 Right to Amend.

 

(a) The Employer may at any
time or times amend the Plan, Trust, and the provisions of the Adoption
Agreement, in whole or in part. Subject to subsection (b), an Employer that
amends the Plan shall no longer participate in this Prototype Plan and shall be
considered to have an individually designed plan.

 

(b) The Employer may change
the choice of options in the Adoption Agreement, add overriding language in the
Adoption Agreement when such language is necessary to satisfy section 415 or
416 of the Code because of the required aggregation of multiple plans and add
certain model amendments published by the Internal Revenue Service which
specifically provide that their adoption shall not cause the Plan to be treated
as individually designed. An Employer that amends the Plan for any other
reason, including a waiver of the minimum funding requirements under section
412(d) of the Code, shall no longer participate in this Prototype Plan and
shall be considered to have an individually designed plan.

 

An Employer that has adopted a standardized prototype plan may amend
the Trust or custodial account document provided such amendment merely involves
the specifications of the names of the Plan, Employer, Trustee or custodian,
Plan Administrator or other Fiduciaries, the Trust Year, or the name of any
pooled trust in which the Plan’s Trust will participate.

 

An Employer that has adopted a non-standardized prototype plan will not
be considered to have an individually designed plan merely because the Employer
either substitutes a separate trust agreement or amends administrative
provisions of the Trust or custodial account document (such as provisions
relating to investments and duties of Trustees) so long as the amended
provisions are not in conflict with any other provision of the Plan and do not
cause the Plan to fail to qualify under section 401(a) of the Code.

 

3.8.2 Manner of Amending.  Each amendment of this Plan shall be made by
delivery to the Trustee of a copy of the resolution of the Employer which sets
forth such amendment.

 

3.8.3 Limitations On Amendments.  No amendment shall be made to this Plan which
shall:

 

(a) Directly or indirectly
operate to give the Employer any interest whatsoever in the assets of the Trust
or to deprive any Participant or Beneficiary of his vested and nonforfeitable
interest in the assets of the Trust as then constituted, or cause any part of
the income or corpus of the Trust to be used for, or diverted to purposes other
than the exclusive benefit of Employees or their Beneficiaries;

 

(b) Increase the duties or
liabilities of the Trustee without the Trustee’s prior written consent;

 

(c) Change the vesting
schedule under the Plan if the nonforfeitable percentage of the accrued benefit
derived from Employer contributions (determined as of the later of the date
such amendment is adopted or the date such amendment becomes effective) of any
Participant is less than such nonforfeitable percentage computed without regard
to such amendment; or

 

(d) Reduce the accrued
benefit of a Participant within the meaning of section 411(d)(6) of the Code,
except to the extent permitted under section 412(c)(8) of the Code. An
amendment which has the effect of decreasing a Participant’s Account balance
with respect to benefits attributable to service before the amendment shall be
treated as reducing an accrued benefit.

 

If a Plan amendment changes
the vesting schedule or the Plan is amended in any way that directly or
indirectly affects the computation of the Participant’s nonforfeitable
percentage or if the Plan is deemed amended by an automatic change to or from a
Top-Heavy vesting schedule, each Participant who has completed three (3) or, in
the case of Participants who do not have at least

 

83

 

one (1) Hour of Service in
any Plan Year beginning after 1988, five (5) or more Years of Service may elect
within a reasonable period after the adoption of such amendment to have his
nonforfeitable percentage computed without regard to such amendment or change.
The period during which the election may be made shall commence with the date
the amendment is adopted or deemed to be made and shall end on the latest of
sixty (60) days after:

 

(i) the amendment is
adopted;

 

(ii) the amendment becomes
effective; or

 

(iii) the Participant is
issued written notice of the amendment by the Employer or Plan Administrator.

 

(e) No amendment to the Plan
shall be effective to eliminate or restrict an optional form of benefit. The
preceding sentence shall not apply to a plan amendment that eliminates or
restricts the ability of a Participant to receive payment of his or her Account
balance under a particular optional form of benefit if the amendment satisfies
the conditions in (i) and (ii) below:

 

(i) The amendment provides a
single-sum distribution form that is otherwise identical to the optional form
of benefit eliminated or restricted. For purposes of this condition (i), a
single-sum distribution form is otherwise identical only if it is identical in
all respects to the eliminated or restricted optional form of benefit (or would
be identical except that it provided greater rights to the Participant) except
with respect to the timing of payments after commencement.

 

(ii) The amendment is not
effective unless the amendment provides that the amendment shall not apply to
any distribution with an Annuity Starting Date earlier than the earlier of (1)
the 90th day after the date the Participant receiving the distribution has been
furnished a summary that reflects the amendment and that satisfies the ERISA
requirements at 29 CFR 2520.104b-3 relating to a summary of material modifications
or (2) the first day of the second Plan Year following the Plan Year in which
the amendment is adopted.

 

3.8.4 Voluntary Termination.  The Employer may terminate the Plan at any time by delivering to the
Trustee an instrument in writing which designates such termination. Following
termination of the Plan, the Trust will continue until the Distributable
Benefit of each Participant has been distributed.

 

3.8.5 Involuntary Termination.  The Plan shall terminate if: (a) the Employer
is dissolved or adjudicated bankrupt or insolvent in appropriate proceedings,
or if a general assignment is made by the Employer for the benefit of
creditors, or (b) the Employer loses its identity by consolidation or merger
into one or more corporations or organizations, unless within ninety (90) days
after such consolidation or merger, such corporations or organizations elect to
continue the Plan.

 

3.8.6 Withdrawal By Employer.  The Employer may withdraw from participation
under the Plan without terminating the Trust upon making a transfer of the
Trust assets to another Plan that shall be deemed to constitute an amendment in
its entirety of the Trust.

 

3.8.7 Powers Pending Final Distribution.
Until final
distribution of the assets of the Trust, the Plan Administrator and Trustee
shall continue to have all the powers provided under this Plan as are necessary
for the orderly administration, liquidation and distribution of the assets of
the Trust.

 

3.8.8 Delegation to Sponsor.  The Employer expressly delegates authority to
the Plan Sponsor the right to amend any part of the Plan on its behalf to the
extent necessary to preserve the qualified status of the Plan. For purposes of
amendments by the Plan Sponsor, the Mass Submitter shall be recognized as the
agent of the Plan Sponsor. If the Plan Sponsor does not adopt the amendments
made by the Mass Submitter, the Plan shall no longer be identical to or a minor
modifier of the Mass Submitter plan. The Plan Sponsor shall submit a copy of
the amendment to each Employer who has adopted the Plan after first having
received a ruling or favorable determination from the Internal Revenue Service
that the Plan as amended satisfies the applicable requirements of the Code. The
Employer may revoke the authority of the Plan Sponsor to amend the Plan on its
behalf by written notice to the Plan Sponsor of such revocation.

 

84

 

ARTICLE 9

 

PORTABILITY

 

3.9.1 Continuance by Successor.  In the event of the dissolution,
consolidation or merger of the Employer, or the sale by the Employer of its
assets, the resulting successor person or persons, firm or corporations may
continue this Plan by (a) adopting the Plan by appropriate resolution; (b)
appointing a new Trustee as though the Trustee (including all members of a
group of individuals acting as Trustee) had resigned; and (c) executing a
proper agreement with the new Trustee. In such event, each Participant in this
Plan shall have an interest in the Plan after the dissolution, consolidation,
merger, or sale of assets, at least equal to the interest which he had in the
Plan immediately before the dissolution, consolidation, merger or sale of
assets. Any Participants who do not accept a position with such successor
within a reasonable time shall be deemed to be terminated. If, within ninety
(90) days from the effective date of such dissolution, consolidation, merger,
or sale of assets, such successor does not adopt this Plan, as provided herein,
the Plan shall automatically be terminated and deemed to be an involuntary
termination.

 

3.9.2 Merger With Other Plan.  In the event of the merger or consolidation
with, or transfer of assets or liabilities to, any other deferred compensation
plan and trust, each Participant shall have an interest in such other plan
which is equal to or greater than the interest which he had in this Plan
immediately before such merger, consolidation or transfer, and if such other
plan thereafter terminates, each Participant shall be entitled to a
Distributable Benefit which is equal to or greater than the Distributable
Benefit to which he would have been entitled immediately before such merger,
consolidation or transfer if this Plan had then been terminated.

 

3.9.3 Transfer From Other Plans.

 

(a) The Employer may cause
all or any of the assets held in connection with any other plan or trust which
is maintained by the Employer for the benefit of its Employees and satisfies
the applicable requirements of the Code relating to qualified plans and trusts
to be transferred to the Trustee, whether such transfer is made pursuant to a
merger or consolidation of this Plan with such other plan or trust or for any
other allowable purpose.

 

In addition, the Employer,
by appropriate election in the Adoption Agreement, may permit rollover to the
Trustee of assets held for the benefit of an Employee in a conduit Individual
Retirement Account, a terminated plan of the Employer, or any other plan or
trust which is maintained by some other employer for the benefit of its
Employees and satisfies the applicable requirements of the Code relating to
qualified plans and trusts. Any such assets so transferred to the Trustee shall
be accompanied by written instructions from the employer, or the trustee,
custodian or individual holding such assets, setting forth the name of each
Employee for whose benefit such assets have been transferred and showing
separately the respective contributions by the employer and by the Employee and
the current value of the assets attributable thereto. Upon receipt by the
Trustee of such assets, the Trustee shall place such assets in a Segregated
Fund for the Participant. In the event the plan transferring the assets
maintains a vesting schedule that differs from the schedule maintained under
this Plan, not withstanding Section 3.8.3(c) & (d), the vesting schedule of
the transferor plan shall be maintained for the transferred assets.
Notwithstanding any provisions herein to the contrary, regardless of whether
the Plan provides a life annuity distribution option, if the Plan is a direct
or indirect transferee of a defined benefit pension plan, money purchase
pension plan, target benefit pension plan, stock bonus or profit sharing plan
which is subject to the survivor annuity requirements of section 401(a)(11) and
section 417 of the Code, such transferred balances shall remain subject to the
survivor annuity requirements of section 401(a)(11) and section 417 of the Code
and shall provide a life annuity distribution option for such balances as
provided for under the transferor plan.

 

(b) On and after the transfer
of the account balances of a Participant that are attributable to Participation
in a Money Purchase Pension Plan of the Employer or predecessor employer, the
account balances including the post-transfer earnings thereon will be
distributable only on or after events that are permissible under qualified
pension plans.

 

85

 

Furthermore, in order to
implement the restrictions on distributions this section imposes the pension
plan distribution restrictions on transferred account balances there must be a
separate accounting between the accrued benefits attributable to the
transferred account balances and all other Account balances of each Participant
with account balances attributable to transfers described in the preceding
paragraph.

 

A separate accounting under
the preceding paragraph would be acceptable if gains, losses, withdrawals,
contributions, forfeitures, and other credits or charges are allocated on a
reasonable and consistent basis between the account balances subject to the
survivor annuity requirements and other account balances. If there is an
acceptable separate accounting between transferred account balances and any
other Account balances under the Plan, only the transferred account balances shall
be subject to the survivor annuity requirements and restrictions on
distributions.

 

(c) The Trustee of this
Plan, at the direction of the sponsoring Employer, shall accept the transfer of
account balances of Employees that have become Employees of the sponsoring
Employer on account of the spin-off of the business unit to which they belong.

 

(d) The Trustee of this Plan
at the direction of the Employer, shall spin-off a portion of the Plan assets
to the Plan of the buyer of a portion of the assets of the Employer. The amount
of the spin-off shall be the portion of the assets representing the Account
balances of Participants that are terminated on account of the sale. In order
to be a part of the spin-off, a Participant must become employed by the buyer within
on year of the date of sale.

 

3.9.4 Transfer to Other Plans.  The Trustee, upon written direction by the
Employer, shall transfer some or all of the assets held under the Trust to
another plan or trust of the Employer or any other employer meeting the requirements
of the Code relating to qualified plans and trusts, whether such transfer is
made pursuant to a merger or consolidation of this Plan with such other plan or
trust or for any other allowable purpose.

 

In addition, upon the termination of employment of any Participant and
receipt by the Plan Administrator of a request in writing, the Participant may
request that any distribution from the Trust to which he is entitled shall be
transferred to an individual retirement account, an individual retirement
annuity, or any other plan or trust which is maintained by some other employer
for the benefit of its employees and satisfies the applicable requirements of
the Code relating to qualified plans and trusts. Upon receipt of any such
written request, the Plan Administrator shall cause the Trustee to transfer the
assets so directed and, as appropriate, shall direct the Insurer to transfer to
the new trustee any applicable insurance policies issued by it.

 

86

 

ARTICLE 10

 

INSURANCE

 

3.10.1 Participants Insurable at Standard
Rates.  The
Trustee, when directed by the Plan Administrator, and in accordance with the
provisions specified in the Adoption Agreement, shall provide incidental
insurance benefits by purchasing for each Participant insurable at standard
rates, either term insurance, universal life insurance or ordinary life
insurance. Said Contract shall provide a death benefit, prior to Normal
Retirement Date, equal to the proceeds of such insurance contracts, subject to
the following provisions:

 

(a) The Trustee may invest
any portion or all of the assets of the Trust Fund which are attributable to a
Participant in the purchase of group or individual Life Insurance Policies
issued on the life of the Participant or in the case of a profit sharing plan
(including a 401(k) plan), someone in whom the Participant has an insurable
interest and for the benefit of the Participant with the consent of the
Participant, subject to the following conditions, as they are represented by
the Plan Administrator:

 

(1) If “Ordinary Life
Insurance Policies” are purchased, the aggregate life insurance premiums must
be less than one-half (1/2) of the aggregate Employer contributions and
Forfeitures allocated to the Participant’s Account at any particular time,
without regard to Trust earnings, capital gains, or losses. For purposes of
this Plan, the term “Ordinary Life Insurance Policies” shall mean Policies with
both nondecreasing death benefits and nonincreasing premiums.

 

(2) The aggregate Premiums
paid for Life Insurance Policies which are either term, universal or any other
contracts which are not ordinary whole life Policies shall not at any time
exceed twenty-five percent (25%) of the aggregate amount of Employer
contributions and Forfeitures which have been allocated to the Accounts of such
Participant.

 

(3) The sum of one-half
(1/2) of the aggregate premiums for ordinary whole Life Insurance Policies and
all premiums for other Life Insurance Policies shall not at any time exceed
twenty-five percent (25%) of the aggregate amount of Employer Contributions and
forfeitures which have been allocated to the Accounts of such Participant.

 

(4) For purposes of this
Section, a Participant’s Elective Deferrals are considered Employer contributions.

 

(5) The Employer may elect
in the Adoption agreement to set minimum amounts for the initial amount of
insurance purchased as well as for the purchase of additional amounts. The
minimum amount shall be expressed in terms of the face amount of the insurance
and may not be greater than $1,000. The Adoption Agreement may require that
insurance must be purchased in multiples not to exceed $1,000.

 

(b) If the case of a profit
sharing plan (including a 401(k) plan) that permits in-service distributions to
a Participant prior to his Normal Retirement Date in accordance with Section
2.5.6(a) or (b), the amount which may be distributed to the Participant may be
applied to the purchase of Life Insurance Policies without limitation unless
otherwise specified in the Adoption Agreement. Employee after tax deferrals and
rollovers from other plans may also be used to purchase Life Insurance Policies
without limitation.

 

3.10.2 Uninsurable Participants.  For each Participant found by an Insurer to be uninsurable, the
Trustee, when requested by the Plan Administrator, shall purchase a retirement
annuity Contract on the life of such Participant with a death benefit before
Normal Retirement Date in an amount equal to the cash surrender value of such
Contract. The Participant must consent to the purchase of such a retirement
annuity contract.

 

3.10.3 Participants Insurable at Above
Standard Rates.  If
a Participant is found by an Insurer

 

87

 

to be uninsurable, except at above standard rates, the Trustee, when
requested by the Plan Administrator, shall pay premiums that do not exceed the
percent of standard rates specified in the Adoption Agreement. The face value
of any insurance policy shall be limited by the percentage of the aggregate
Employer contributions and Forfeitures allocated to the Participant’s Account
Employer dedicated to purchase insurance. The Participant must consent to the
purchase of any insurance contract above standard rates.

 

3.10.4 Purchase of Contracts.  If, at any time, a Contract described herein shall not be available
from or shall be determined to be invalid or unenforceable by an Insurer, the
Trustee, when directed by the Plan Administrator, shall purchase a Contract or
make such other alternative arrangements which, in the opinion of the Plan
Administrator, conforms most closely to the descriptions herein.

 

3.10.5 Applications for Contracts.  The Trustee shall be the applicant, owner and
beneficiary for all Contracts required under the terms of the Plan. Any
Contract distributed from the Plan must be nontransferable. The terms of any
Contract purchased and distributed by the Plan to a Participant or spouse shall
comply with the requirements of the Plan. The Trustee shall not be responsible
for the validity or execution of Contracts, failure of an Insurer to pay
proceeds when due or failure of any policy to meet requirements or conform to
the provisions of the Plan.

 

3.10.6 Incidents of Ownership.  The Trustee shall have the right to receive all sums payable under the
terms of all Contracts issued hereunder. The Trustee shall be the complete and
absolute owner of the Contracts held in the Trust and of each and every
incident of ownership therein and shall have the power to exercise the rights,
options and privileges of an absolute owner with respect to the Contracts
subject to the provisions of the Plan. The Plan Administrator shall have the
power to deal with and settle all claims.

 

3.10.7 Payment of Premiums.  In a Plan Year in which the Employer contributions are less than the
amount required to sustain insurance premiums, the Plan Administrator shall
direct the Trustee to take one of the following steps with respect to payment
of insurance premiums:

 

(a) Pay premiums due on
insurance policies from the Participant’s Account, within the limits of 3.10.1
above,

 

(b) Pay premiums due on
insurance policies from the Participant’s Account using the balance described
in 3.10.1(b) above,

 

(c) Surrender any insurance
policies for their cash surrender values and add such amount to the
Participant’s Account,

 

(d) Convert the cash
surrender value of any insurance policies to paid up insurance for which there
will be no further premiums, or

 

(e) Offer to sell any
insurance policies to the Participant for their cash surrender value.

 

3.10.8 Discontinuance of Insurance
Contracts.  The
Trustee or other Fiduciary responsible for making investment decisions may
discontinue the investment in life insurance policies at any time. If the Plan
provides for Participant directed investments, life insurance, as an investment
option, may be eliminated at any time by the Plan Administrator. Where life
insurance investment options are being discontinued, the Plan Administrator, in
its sole discretion, may offer to sell the insurance policies to the
Participant, or to another person, provided the prohibited transaction
exemption requirements of the Department of Labor are satisfied.

 

88

 

ARTICLE
11

 

MISCELLANEOUS

 

3.11.1 No Reversion to Employer.  Except as specifically provided in the Plan,
no part of the corpus or income of the Trust shall revert to the Employer or be
used for, or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries.

 

3.11.2 Employer Actions.  Any action by the Employer pursuant to the
provisions of the Plan shall be evidenced by appropriate resolution or by
written instrument executed by any person authorized by the Employer to take
such action.

 

3.11.3 Execution of Receipts and Releases.
Any payment to any
person eligible to receive benefits under this Plan, in accordance with the
provision of the Plan or the Trust, shall, to the extent thereof, be in full
satisfaction of all claims hereunder. The Plan Administrator may require such person,
as a condition precedent to such payment, execute a receipt and release
therefore in such form as he shall determine.

 

3.11.4 Rights of Participants Limited.  Neither the creation of this Plan and the
Trust nor anything contained in this Plan or the Adoption Agreement shall be
construed as giving any Participant, Beneficiary or Employee any equity or
other interest in the assets, business or affairs of the Employer, or the right
to complain about any action taken by or about any policy adopted or pursued
by, the Employer, or as giving any Employee the right to be retained in the
service of the Employer; and all Employees shall remain subject to discharge to
the same extent as if the Plan had never been executed. Prior to the time that
distributions are made in conformity with the provisions of the Plan, neither
the Participants, nor their spouses, Beneficiaries, heirs-at-law, or legal
representatives shall receive or be entitled to receive cash or any other thing
of current exchangeable value, from either the Employer or the Trustee as a
result of the Plan or the Trust.

 

3.11.5 Protection of the Insurer.  An Insurer shall not be responsible for the
validity of the Plan or the Trust and shall have no responsibility for action
taken or not taken by the Trustee, for determining the propriety of accepting
premium payments or other contributions, for making payments in accordance with
the direction of the Trustee, or for the application of such payments. The
Insurer shall be fully protected in dealing with any representative of the
Employer or any one of a group of individuals acting as Trustee. Until written
notice of a change of Trustee has been received by an Insurer at its home
office, the Insurer shall be fully protected in dealing with any party acting as
Trustee according to the latest information received by the Insurer at its home
office.

 

3.11.6 No Responsibility for Act of
Insurer.  Neither
the Employer, the Plan Administrator nor the Trustee shall be responsible for
any of the following, nor shall they be liable for instituting action in
connection with:

 

(a) The validity of policies
or policy provisions;

 

(b) Failure or refusal by
the Insurer to provide benefits under a policy;

 

(c) An act by a person which
may render a policy invalid or unenforceable; or

 

(d) Inability to perform or
delay in performing an act, which inability or delay is occasioned by a
provision of a policy or a restriction imposed by the Insurer.

 

3.11.7 Inalienability.  The right of any Participant or his Beneficiary in any distribution
hereunder or to any separate Account shall not be subject to alienation,
assignment or transfer, voluntarily or involuntarily, by operation of law or
otherwise, except as may be expressly permitted herein. No Participant shall
assign, transfer, or dispose of such right nor shall any such right be
subjected to attachment, execution, garnishment, sequestration, or other legal,
equitable, or other process.

 

(a) The preceding shall also
apply to the creation, assignment, or recognition of a right to any

 

89

 

benefit payable with respect
to a Participant pursuant to a domestic relations order, unless such order is
determined to be a qualified domestic relations order, as defined in section
414(p) of the Code, or any domestic relations order entered before January 1,
1985.

 

(b) Special Rule For Certain
Judgments And Settlements - Effective for judgments, orders and decrees issued,
and settlement agreements entered into, on or after August 5, 1997. The flush
language of this Section 3.10.7 shall not apply to any offset of a
Participant’s benefits provided under a plan against an amount that the
Participant is ordered or required to pay to the Plan if:

 

(i) the order or requirement
to pay arises:

 

(I) under a judgment of
conviction for a crime involving such plan,

 

(II) under a civil judgment
(including a consent order or decree) entered by a court in an action brought
in connection with a violation (or alleged violation) of part 4 of subtitle B
of title I of the Employee Retirement Income Security Act of 1974, or

 

(III) pursuant to a
settlement agreement between the Secretary of Labor and the Participant, or a
settlement agreement between the Pension Benefit Guaranty Corporation and the
Participant, in connection with a violation (or alleged violation) of part 4 of
such subtitle by a Fiduciary or any other person,

 

(ii) the judgment, order,
decree, or settlement agreement expressly provides for the offset of all or
part of the amount ordered or required to be paid to the Plan against the
Participant’s benefits provided under the Plan, and

 

(iii) in a case in which the
survivor annuity requirements of section 401(a)(11) apply with respect to
distributions from the Plan to the Participant, if the Participant has a spouse
at the time at which the offset is to be made:

 

(I) either such spouse has
consented in writing to such offset and such consent is witnessed by a notary
public or representative of the Plan (or it is established to the satisfaction
of a Plan representative that such consent may not be obtained by reason of
circumstances described in section 417(a)(2)(B) of the Code), or an election to
waive the right of the spouse to either a Qualified joint and survivor annuity
or a qualified preretirement survivor annuity is in effect in accordance with
the requirements of section 417(a) of the Code,

 

(II) such spouse is ordered
or required in such judgment, order, decree, or settlement to pay an amount to
the Plan in connection with a violation of part 4 of such subtitle, or

 

(III) in such judgment,
order, decree, or settlement, such spouse retains the right to receive the
survivor annuity under a Qualified Joint and Survivor Annuity provided pursuant
to section 401(a)(11)(A)(i) of the Code and under a Qualified Preretirement
Survivor Annuity provided pursuant to section 401(a)(11)(A)(ii) of the Code,
determined in accordance with 401(a)(13)(D)of the Code. A plan shall not be
treated as failing to meet the requirements of this Subsection, Subsection (k),
section 403(b), or section 409(d) of the Code solely by reason of an offset
described in this Subparagraph.

 

In the event a Participant’s benefits are attached by order of any
court, the Plan Administrator may bring an action for a declaratory judgment in
a court of competent jurisdiction to determine the proper recipient of the
benefits to be paid by the Plan. During the pendency of the action, the Plan
Administrator shall cause any benefits payable to be paid to the court for
distribution by the court as it considers appropriate.

 

3.11.8 Domestic Relations Orders.  The Plan Administrator shall adhere to the
terms of any judgment, decree or order (including approval of a property
settlement agreement) which relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse, child

 

90

 

or other dependent of a Participant and is made pursuant to a state
domestic relations law (including a community property law) and which creates
or recognizes the existence of an Alternate Payee’s right to, or assigns to an
Alternate Payee the right to, receive all or a portion of the benefits payable
with respect to a Participant.

 

Any such domestic relations order must clearly specify the name and last
known mailing address of the Participant and the name and mailing address of
each Alternate Payee covered by the order, the amount or percentage of the
Participant’s benefit to be paid by the Plan to each such Alternate Payee, or
the manner in which such amount or percentage is to be determined, the number
of payments or period to which such order applies, and each plan to which such
order applies.

 

Any such domestic relations order shall not require the Plan to provide
any type or form of benefit, or any option not otherwise provided under the
Plan, to provide increased benefits (determined on the basis of actuarial
value) or the payment of benefits to an Alternate Payee which are required to
be paid to another Alternate Payee under another order previously determined to
be a qualified domestic relations order. Notwithstanding the foregoing
sentence, a domestic relations order may require the payment of benefits to an
Alternate Payee before the Participant has separated from service, on or after
the date on which the Participant attains or would have attained the earliest
retirement age under the Plan, as if the Participant had retired on the date on
which such payment is to begin under such order (but taking into account only
the present value of the benefits actually accrued and not taking into account
the present value of any Employer subsidy for early retirement) and in any form
in which such benefits may be paid under the Plan to the Participant (other
than the form of a joint and survivor annuity with respect to the Alternate
Payee and his or her subsequent spouse). The interest rate assumption used in
determining the present value shall be five (5%) percent. For these purposes,
the earliest retirement age under the Plan means the earlier of: (a) the date
on which the Participant is entitled to a distribution under the Plan, or (b)
the later of the date the Participant attains age 50, or the earliest date on
which the Participant could begin receiving benefits under the Plan if the
Participant separated from service.

 

If the Employer so elects in the Adoption Agreement, distributions may
be made to an Alternate Payee even though the Participant may not receive a
distribution because he continues to be employed by the Employer.

 

To the extent provided in the qualified domestic relations order, the
former spouse of a Participant shall be treated as a surviving spouse of such
Participant for purposes of sections 401(a)(11) and 417 of the Code (and any
spouse of the Participant shall not be treated as a spouse of the Participant
for such purposes) and if married for at least one (1) year, the surviving
former spouse shall be treated as meeting the requirements of section 417(d) of
the Code.

 

The Plan Administrator shall promptly notify the Participant and each
Alternate Payee of the receipt of a domestic relations order by the Plan and
the Plan’s procedures for determining the qualified status of domestic
relations orders. Within a reasonable period after receipt of a domestic
relations order, the Plan Administrator shall determine whether such order is a
qualified domestic relations order and shall notify the Participant and each
Alternate Payee of such determination. If the Participant or any affected
Alternate Payee disagrees with the determinations of the Plan Administrator,
the disagreeing party shall be treated as a claimant and the claims procedure
of the Plan shall be followed. The Plan Administrator may bring an action for a
declaratory judgment in a court of competent jurisdiction to determine the proper
recipient of the benefits to be paid by the Plan.

 

During any period in which the issue of whether a domestic relations
order is a qualified domestic relations order is being determined (by the Plan
Administrator, by a court of competent jurisdiction or otherwise), the Plan
Administrator shall separately account for the amounts which would have been
payable to the Alternate Payee during such period if the order had been
determined to be a qualified domestic relations order. If, within the eighteen
(18) month period beginning on the date on which the first payment would be
required to be made under the domestic relations order, the order (or
modification thereof) is determined to be a qualified domestic relations order,
the Plan Administrator shall pay the segregated amounts, including any interest
thereon, to the person or persons entitled thereto. If within such eighteen
(18) month period it is determined that the order is not a qualified domestic
relations order or the issue as to whether such order is a qualified domestic
relations order is not resolved, then the Plan Administrator shall pay the
segregated amounts, including any interest thereon, to the person or persons
who would have been

 

91

 

entitled to such amounts if there had been no order. Any determination
that an order is a qualified domestic relations order which is made after the
close of the eighteen (18) month period shall be applied prospectively only.

 

3.11.9 Missing Persons.  If the Trustee mails by registered or
certified mail, postage prepaid, to the last known address of a Participant or
Beneficiary, a notification that the Participant or Beneficiary is entitled to
a distribution and if (a) the notification is returned by the post office because
the addressee cannot be located at such address and if neither the Employer,
the Plan Administrator nor the Trustee shall have any knowledge of the
whereabouts of such Participant or Beneficiary within three (3) years from the
date such notification was mailed, or (b) within three (3) years after such
notification was mailed to such Participant or Beneficiary, he does not respond
thereto by informing the Trustee of his whereabouts, the ultimate disposition
of the then undistributed balance of the Distributable Benefit of such
Participant or Beneficiary shall be determined in accordance with the then
applicable Federal laws, rules and regulations.

 

If any portion of the Distributable Benefit is forfeited because the
Participant or Beneficiary cannot be found, such portion shall be reinstated if
a claim is made by the Participant or Beneficiary.

 

3.11.10 Notices.  Any notice or direction to be given in accordance with the Plan shall
be deemed to have been effectively given if hand delivered to the recipient or
sent by certified mail, return receipt requested, to the recipient at the
recipient’s last known address. At any time that a group of individuals is
acting as Trustee, notice to the Trustee may be given by giving notice to any
one or more of such individuals.

 

3.11.11 Governing Law.  The
provisions of this Plan shall be construed, administered and enforced in
accordance with the provisions of the Act and, to the extent applicable, the
laws of the state in which the Employer has its principal place of business.
All contributions to the Trust shall be deemed to take place in such state.

 

3.11.12 Severability of Provisions.  In the event that any provision of this Plan
shall be held to be illegal, invalid or unenforceable for any reason, said
illegality, invalidity or unenforceability shall not affect the remaining
provisions, but shall be fully severable and the Plan shall be construed and
enforced as if said illegal, invalid or unenforceable provisions had never been
inserted herein.

 

3.11.13 Gender and Number.  Whenever appropriate, words used in the
singular shall include the plural, and the masculine gender shall include the
feminine gender.

 

3.11.14 Binding Effect.  The Plan and Adoption Agreement, and all
actions and decisions hereunder, shall be binding upon the heirs, executors,
administrators, successors and assigns of any and all parties hereto and
Participants, present and future.

 

92

 

Effective
Date Supplement

Pensionalysis,
Incorporated Defined Contribution Prototype

Basic
Document #01

 

Section 1.2.14 of the Plan “Compensation”

The definition of Compensation contained in Section 1.2.14 of this Plan
shall be effective for the later of the Plan Year indicated in the Appendix or
for years beginning after December 31, 1996. This reflects the removal of
“family aggregation” that was contained in section 414(q)(6) of the Code, prior
to its amendment by section 1431(b)(1) of the Small Business Job Protection
Act.

 

Section 1.2.49 of the Plan “Highly Compensated
Employee”

Effective for the later of the Plan Year indicated in the Appendix or
for Plan Years beginning after December 31, 1996, the definition of “Highly
Compensated Employee” contained is section 1.2.49 of the Plan reflects the
removal of “family aggregation” that was contained in section 414(q)(6) of the
Code, prior to its amendment by section 1431(b)(1) of the Small Business Job
Protection Act.

 

Section 1.2.53 of the Plan “Leased Employee”

The definition of “Leased Employee” contained in Section 1.2.53 of this
Plan shall be effective for years beginning after December 31, 1996.

 

Section 2.7.6 Distribution of Excess Elective
Deferrals

The method of distributing Excess Elective Deferrals contained in
Section 2.7.6 of this Plan as modified by section 1433(e)(1) of the Small
Business Job Protection Act, shall be effective for Plan Years beginning after
December 31, 1996

 

Section 2.7.7 Distribution of Excess Contributions

The method of distributing Excess Contributions contained in Section
2.7.7 of this Plan as modified by section 1433(e)(2) of the Small Business Job
Protection Act, shall be effective for Plan Years beginning after December 31,
1996.

 

93

 

PENSIONALYSIS,
INCORPORATED

PROTOTYPE

DEFINED
CONTRIBUTION TRUST

Plan #01

 

 

PENSIONALYSIS,
INCORPORATED

PROTOTYPE

DEFINED
CONTRIBUTION TRUST

 

TABLE OF
CONTENTS

 

	
  ARTICLE 1

  	
   

  
	
  1.1

  	
  Creation
  and Title.

  
	
  1.2

  	
  Effective
  Date.

  
	
  1.3

  	
  Purpose.

  
	
  1.4

  	
  Plan Administration.

  
	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  2.1

  	
  Acceptance
  of Trust.

  
	
  2.2

  	
  Trustee Capacity -
  Co-Trustees.

  
	
  2.3

  	
  Resignation,
  Removal, and Successors.

  
	
  2.4

  	
  Consultations.

  
	
  2.5

  	
  Rights, Powers and
  Duties.

  
	
  2.6

  	
  Trustee Indemnification.

  
	
  2.7

  	
  Changes in Trustee
  Authority.

  
	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  3.1

  	
  Standard
  of Conduct.

  
	
  3.2

  	
  Individual Fiduciaries.

  
	
  3.3

  	
  Disqualification from
  Service.

  
	
  3.4

  	
  Bonding.

  
	
  3.5

  	
  Prior Acts.

  
	
  3.6

  	
  Insurance and Indemnity.

  
	
  3.7

  	
  Expenses.

  
	
  3.8

  	
  Agents, Accountants
  and Legal Counsel.

  
	
  3.9

  	
  Investment
  Manager.

  
	
  3.10

  	
  Finality of Decisions or
  Acts.

  
	
  3.11

  	
  Certain
  Custodial Accounts and Contracts.

  
	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  4.1

  	
  Trustee Exclusive Owner.

  
	
  4.2

  	
  Investments.

  
	
  4.3

  	
  Administration of Trust
  Assets.

  
	
  4.4

  	
  Segregated
  Funds.

  
	
  4.5

  	
  Investment Control Option.

  
	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  5.1

  	
  Right to
  Amend.

  
	
  5.2

  	
  Manner
  of Amending.

  
	
  5.3

  	
  Limitations On Amendments.

  
	
  5.4

  	
  Voluntary Termination.

  
	
  5.5

  	
  Involuntary Termination.

  
	
  5.6

  	
  Withdrawal By Employer.

  
	
  5.7

  	
  Powers Pending Final
  Distribution.

  
	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
  6.1

  	
  Continuance by Successor.

  
	
  6.2

  	
  Merger With Other Plan.

  
	
  6.3

  	
  Transfer From Other Plans.

  
	
  6.4

  	
  Transfer to Other Plans.

  

 

 

	
  ARTICLE 7

  	
   

  
	
  7.1

  	
  No Reversion to Employer.

  
	
  7.2

  	
  Employer
  Actions.

  
	
  7.3

  	
  Persons Dealing
  With Trustee Protected.

  
	
  7.4

  	
  Protection of the Insurer.

  
	
  7.5

  	
  No Responsibility
  for Act of Insurer.

  
	
  7.6

  	
  Inalienability.

  
	
  7.7

  	
  Authorization to
  Withhold Taxes.

  
	
  7.8

  	
  Missing
  Persons.

  
	
  7.9

  	
  Notices.

  
	
  7.10

  	
  Governing
  Law.

  
	
  7.11

  	
  Severability of Provisions.

  
	
  7.12

  	
  Gender
  and Number.

  
	
  7.13

  	
  Qualification
  Under Internal Revenue Laws.

  

 

 

ARTICLE 1

 

INTRODUCTION

 

1.1 Creation and Title.  The Employer and the undersigned Trustee(s)
hereby create a Trust to be known by the name set forth in the Adoption
Agreement and shall be subject to the terms of the Plan as designated in such
agreement. All terms used herein have the same meaning as described in the
Pensionalysis, Incorporated Prototype Defined Contribution Plan.

 

1.2 Effective Date.  The provisions of this Trust shall be
effective as of the Effective Date set forth in the Adoption Agreement.

 

1.3 Purpose.  The Plan and this Trust are established for
the purpose of providing retirement benefits to Eligible Employees in
accordance with the Plan and the Adoption Agreement.

 

1.4 Plan Administration.  The Plan shall be administered by the
Administrative Committee (the “Committee”). The Committee and its
representatives act in accordance with the rights, powers, duties, and
discretion delegated to it by the Employer under the Plan.

 

1

 

ARTICLE 2

 

TRUSTEE

 

2.1 Acceptance of Trust.  The Trustee, by joining in the execution of
the Adoption Agreement to the Plan, and this Trust Agreement, agrees to act in
accordance with the express terms and conditions hereof.

 

2.2 Trustee Capacity - Co-Trustees.
The Trustee may be a
bank, trust company or other corporation possessing trust powers under
applicable state or federal law, or, one or more individuals or any combination
thereof. When there are two or more Trustees, they may allocate specific
responsibilities, obligations, or duties among themselves by their written
agreement. An executed copy of such written agreement shall be delivered to and
retained by the Plan Administrator. Unless otherwise elected by the Employer in
the Adoption Agreement, any action taken by the Trustees shall be taken at the
direction of a majority of such Trustees, or, if the number of such Trustees is
two (2), by unanimous consent.

 

2.3 Resignation, Removal, and Successors.  Any Trustee may resign at any time by
delivering to the Employer a written notice of resignation to take effect at a
date specified therein, which shall not be less than thirty (30) days after the
delivery thereof; the Employer may waive such notice. The Trustee may be
removed by the Employer with or without cause, by tendering to the Trustee a
written notice of removal to take effect at a date specified therein.

 

Upon such removal or resignation of a Trustee, the Employer shall
either appoint a successor Trustee who shall have the same powers and duties as
those conferred upon the resigning or discharged Trustee, or, if a group of
individuals is acting as Trustee, determine that a successor shall not be
appointed and the number of Trustees shall be reduced by one (1).

 

2.4 Consultations.  The Trustee shall be entitled to advice of
counsel, which may be counsel for the Plan or the Employer, in any case in
which the Trustee shall deem such advice necessary. The Trustee shall not be
liable for any action taken or omitted in good faith reliance upon the advice
of such counsel.

 

With the exception of those powers and duties specifically allocated to
the Trustee by the express terms of the Plan, it shall not be the
responsibility of the Trustee to interpret the terms of the Plan and the
Trustee may request, and is entitled to receive, guidance and written direction
from the Plan Administrator on any point requiring construction or interpretation
of the Plan documents.

 

2.5 Rights, Powers and Duties.  The rights, powers, and duties of the Trustee
shall be as follows:

 

(a) The Trustee shall have
exclusive authority, discretion and responsibility for the management and
control of the assets of the Trust Fund in accordance with the provisions of
the Plan and the Trust and any amendments hereto. The Employer may limit the
exclusive authority, discretion, and responsibility of the Trustee by written
direction. The duties of the Trustee under the Plan and the Trust shall be
determined solely by the express provisions hereof and no other further duties
or responsibilities shall be implied. Subject to the terms of the Plan and the
Trust, the Trustee shall be fully protected and shall incur no liability in
acting in reliance upon the written instructions or directions of the Employer,
the Plan Administrator, a duly designated investment manager, or any other
named Fiduciary.

 

(b) The Trustee shall have
all powers necessary or convenient for the orderly and efficient performance of
its duties hereunder, including but not limited to those specified in this
Section. The Trustee shall have the power generally to do all acts, whether or
not expressly authorized, which the Trustee in the exercise of its Fiduciary
responsibility may deem necessary or desirable for the protection of the Trust
Fund and the assets thereof.

 

(c) The Trustee shall have
the power to collect and receive any and all monies and other property due the
Plan and to give full discharge and release therefore; to settle, compromise or

 

2

 

submit to arbitration any
claims, debts or damages due to or owing to or from the Trust Fund; to commence
or defend suits or legal proceedings wherever, in the Trustee’s judgment, any
interest of the Trust Fund requires it; and to represent the Trust Fund in all
suits or legal proceedings in any court of law or equity or before any other
body or tribunal.

 

(d) The Trustee shall cause
any Life Insurance Policies or assets of the Trust Fund to be registered in its
name as Trustee and shall be authorized to exercise any and all ownership
rights regarding these assets, subject to the terms of the Plan.

 

(e) The Trustee may
temporarily hold cash balances and shall be entitled to deposit any funds
received in a bank account in the name of the Trust Fund in any bank selected
by the Trustee, including the banking department of a corporate Trustee, if
any, pending disposition of such funds in accordance with the Plan. Any such
deposit may be made with or without interest.

 

(f) The Trustee shall pay
the premiums and other charges due and payable at any time on any Life
Insurance Policies, as it may be directed by the Plan Administrator, provided
funds for such payments are then available in the Trust. The Trustee shall be
responsible only for such funds and Life Insurance Policies as shall actually
be received as Trustee, and shall have no obligation to make payments other
than from such funds and cash values of Life Insurance Policies.

 

(g) If the whole or any part
of the Trust Fund shall become liable for the payment of any estate,
inheritance, income or other tax which the Trustee shall be required to pay,
the Trustee shall have full power and authority to pay such tax out of any
monies or other property in its hands for the account of the person whose
interest hereunder is so liable. Prior to making any payment, the Trustee may
require such releases or other documents from any lawful taxing authority as it
shall deem necessary. The Trustee shall not be liable for any nonpayment of tax
when it distributes an interest hereunder on instructions from the Plan
Administrator.

 

(h) The Trustee shall keep a
full, accurate, and detailed record of all transactions of the Trust, which the
Employer and the Plan Administrator shall have the right to examine at any time
during the Trustee’s regular business hours. As of the close of each Plan Year,
the Trustee shall furnish the Plan Administrator with a statement of account
setting forth all receipts, disbursements, and other transactions effected by
the Trustee during the year. The Plan Administrator shall promptly notify the
Trustee in writing of his approval or disapproval of the account.

 

The Plan Administrator’s failure to disapprove the account within sixty
(60) days after receipt shall be considered an approval. Except as otherwise
required by law, the approval by the Plan Administrator shall be binding as to
all matters embraced in any statement to the same extent as if the account of
the Trustee had been settled by judgment or decree of a court of competent
jurisdiction under which the Trustee, Employer and all persons having or
claiming any interest in the Trust Fund were parties; provided, however, that
the Trustee may have its account judicially settled if it so desires.

 

(i) The Trustee is hereby
authorized to execute all necessary receipts and releases to any parties
concerned; and shall be under a duty, upon being advised by the Plan
Administrator that the proceeds of any Life Insurance Policies are payable, to
give reasonable assistance to the Beneficiary designated therein in collecting
such sums as may appear to be due.

 

(j) If, at any time, as the
result of the death of the Participant there shall be a dispute as to the person
to whom payment or delivery of monies or property should be made by the
Trustee, or regarding any action to be taken by the Trustee, the Trustee may
postpone such payment, delivery or action, retaining the funds or property
involved, until such dispute is resolved in a court of competent jurisdiction
or the Trustee is indemnified to its satisfaction or has received written
direction from the Plan Administrator.

 

(k) Anything in this
instrument to the contrary notwithstanding, the Trustee shall have no duty or
responsibility with respect to the determination of matters pertaining to the
eligibility of any Employee to become or remain a Participant hereunder, the
amount of benefit to which any Participant or Beneficiary shall be entitled
hereunder, or the size and type of any Life Insurance Policy to be purchased
from any Insurer for any Participant hereunder; all such responsibilities

 

3

 

being vested in the Plan
Administrator.

 

2.6 Trustee Indemnification.  The Employer shall indemnify and hold
harmless the Trustee for and from the assertion or occurrence of any liability
to a Participant or Beneficiary for any action taken or omitted by the Trustee
pursuant to any written direction to the Trustee from the Employer or the Plan
Administrator. Such indemnification obligation of the Employer shall not be
applicable to the extent that any such liability is covered by insurance.

 

2.7 Changes in Trustee Authority.  If a successor Trustee is appointed, neither
an Insurer nor any other person who has previously had dealings with the
Trustee shall be chargeable with knowledge of such appointment or such change
until furnished with written notice. Until such notice, the Insurer and any
other such party shall be fully protected in relying on any action taken or
signature presented which would have been proper in accordance with the
previous information.

 

4

 

ARTICLE 3

 

FIDUCIARIES

 

3.1 Standard of Conduct.  The duties and responsibilities of the
Trustee with respect to the Plan shall be discharged (a) in a
non-discriminatory manner; (b) for the exclusive benefit of Participants and
their Beneficiaries; (c) by defraying the reasonable expenses of administering
the Plan; (d) with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man 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; (e) by diversifying 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; and (f) in accordance with the documents and
instruments governing the Plan insofar as such documents and instruments are
consistent with the provisions of the Act.

 

3.2 Individual Fiduciaries.  At any time that a group of individuals is
acting as Trustee, the number of such persons who shall act in such capacity
from time to time shall be determined by the Employer. Such persons shall be
appointed by the Employer and may or may not be Participants, or Employees of
the Employer. Unless otherwise elected by the Employer in the Adoption
Agreement, any action taken by a group of individuals acting as Trustee shall
be taken at the direction of a majority of such persons, or, if the number of
such persons is two (2), by unanimous consent.

 

3.3 Disqualification from Service.
No person shall be
permitted to serve as a Fiduciary, custodian, counsel, agent or employee of the
Plan or as a consultant to the Plan who has been convicted of any of the
criminal offenses specified in the Act.

 

3.4 Bonding.  Except as otherwise permitted by law, each
Fiduciary or person who handles funds or other property or assets of the Plan
shall be bonded in accordance with the requirements of the Act.

 

3.5 Prior Acts.  No Fiduciary shall be liable for any acts
occurring prior to the period of time during which the Fiduciary was actually
serving in such capacity with respect to the Plan.

 

3.6 Insurance and Indemnity.  The Employer may purchase or cause the
Trustee to purchase and keep current as an authorized expense liability
insurance for the Plan, its Fiduciaries, and any other person to whom any
financial responsibility with respect to the Plan and Trust is allocated or
delegated, from and against any and all liabilities, costs and expenses
incurred by such persons as a result of any act or omission to act in
connection with the performance of the duties, responsibilities and obligations
under the Plan and under the Act; provided, that any such insurance policy
purchased with Plan assets permits subrogation by the Insurer against the
Fiduciary in the case of breach by such Fiduciary.

 

Unless otherwise determined and communicated to affected parties by the
Employer, the Employer shall indemnify and hold harmless each such person,
other than a corporate trustee, for and from any such liabilities, costs and
expenses which are not covered by any such insurance, except to the extent that
any such liabilities, costs or expenses are judicially determined to be due to
the gross negligence or willful misconduct of such person. No Plan assets may
be used for any such indemnification.

 

3.7 Expenses.  Expenses incurred by the Trustee in the
administration of the Trust, including fees for legal services rendered, such
compensation to the Trustee as may be agreed upon in writing from time to time
between the Employer and the Trustee, and all other proper charges and expenses
of the Trustee and of his agents and counsel shall be paid by the Employer, or
at its election at any time or from time to time, may be charged against the
assets of the Trust, but until so paid shall constitute a charge upon the
assets of the Trust.

 

The Trustee shall have the authority to charge the Trust Fund for its
compensation and reasonable expenses unless paid or contested by written notice
by the Employer within sixty (60) days after mailing of the written billing by
the Trustee. All taxes of any and all kinds whatsoever which may be levied or
assessed under existing or future laws upon the assets of the Trust or the
income thereof shall be paid from such assets. Notwithstanding the foregoing,
no compensation shall be paid to any Employee for services rendered under the
Plan and Trust as a Trustee.

 

5

 

3.8 Agents, Accountants and Legal Counsel.  The Trustee shall have authority to employ
suitable agents, custodians, investment counsel, accountants, and legal counsel
who may, but need not, be legal counsel for the Employer. The Trustee shall be
fully protected in acting upon the advice of such persons. The Trustee shall at
no time be obliged to institute any legal action or to become a party to any
legal action unless the Trustee has been indemnified to the Trustee’s
satisfaction for any fees, costs, and expenses to be incurred in connection
therewith.

 

3.9 Investment Manager.  The Employer may employ as an investment
manager or managers to manage all or any part of the Trust Fund any (a)
investment advisor registered under the Investment Advisors Act of 1940; (b)
bank as defined in said Act; or (c) insurance company qualified to perform
investment management services in more than one state. Any investment manager
shall have all powers of the Trustee in the management of such part of the
Trust Fund, including the power to acquire or dispose of assets.

 

In the event an investment manager is so appointed, the Trustee shall
not be liable for the acts or omissions of such investment manager or be under
any obligation to invest or otherwise manage that part of the Trust Fund that
is subject to the management of the investment manager. The Employer shall
notify the Trustee in writing of any appointment of an investment manager, and
shall provide the Trustee with the investment manager’s written acknowledgment
that it is a Fiduciary with respect to the Plan.

 

3.10 Finality of Decisions or Acts.
Except for the right
of a Participant or Beneficiary to appeal the denial of a claim, any decision
or action of the Trustee made or done in good faith upon any matter within the
scope of authority and discretion of the Trustee shall be final and binding
upon all persons. In the event of judicial review of actions taken by any
Fiduciary within the scope of his duties in accordance with the terms of the
Plan and Trust, such actions shall be upheld unless determined to have been
arbitrary and capricious.

 

3.11 Certain Custodial Accounts and
Contracts.  The term “Trustee” as used herein will also include a person holding
the assets of a custodial account, an annuity contract or other contract which
is treated as a qualified trust pursuant to section 401(f) of the Code and
references to the Trust Fund shall be construed to apply to such custodial
account, annuity contract or other contract.

 

6

 

ARTICLE 4

 

TRUST
ASSETS

 

4.1 Trustee Exclusive Owner.  All assets held by the Trustee, whether in
the Trust Fund or Segregated Funds, shall be owned exclusively by the Trustee
and no Participant or Beneficiary shall have any individual ownership.
Participants and their Beneficiaries shall share in the assets of the Trust,
its net earnings, profits, and losses, only as provided in this Plan.

 

4.2 Investments.  The Trustee shall invest and reinvest the
Trust Fund, without distinction between income or principal, in one or more of
the following ways as the Trustee shall from time to time determine:

 

(a) The Trustee may invest
the Trust Fund or any portion thereof in obligations issued or guaranteed by
the United States of America or of any instrumentalities thereof, or in other
bonds, notes, debentures, mortgages, preferred or common stocks, options to buy
or sell stocks or other securities, mutual fund shares, limited partnership
interests, commodities, real estate or any interest therein, or in such other
property, real or personal, as the Trustee shall determine.

 

(b) The Trustee may cause
the Trust Fund or any portion thereof to be invested in a common trust fund
established and maintained by a national or other bank regulated by the Federal
Deposit Insurance Corporation, for the collective investment of fiduciary funds
even though the bank is acting as the Trustee or investment manager; provided
such common trust fund is a qualified trust under the applicable section of the
Code, or corresponding provisions of future federal Internal Revenue laws and
is exempt from income tax under the applicable section of the Code. In the
event any assets of the Trust Fund are invested in such a common trust fund,
the Declaration of Trust creating such common trust fund, as it may be amended
from time to time, shall be incorporated into this Trust by reference and made
a part hereof.

 

Further, all or any portion of the assets subject to this Trust
Agreement may be invested in any collective investment fund maintained
exclusively for the investment of assets of (i) exempt, qualified employee
benefit trusts and (ii) collective investment funds consisting exclusively of
assets of such qualified trust. The assets so invested shall be subject to all
the provisions of the instrument establishing such collective investment fund,
as such instrument may be amended from time to time. Such instrument, as
amended from time to time is hereby incorporated and made a part of this Trust
Agreement and it shall control notwithstanding any contrary provision of this
Trust Agreement or the Plan.

 

(c) The Trustee may deposit
any portion of the Trust Fund in savings accounts in federally insured banks or
savings and loan associations or invest in certificates of deposit issued by
any such bank or savings and loan association. The Trustee may retain, without
liability for interest, any portion of the Trust Fund in cash balances pending
investment thereof or payment of expenses.

 

(d) The Trustee may buy and
sell put and call options, covered or uncovered, engage in spreads, straddles,
ratio writing and other forms of options trading, including sales of options
against convertible bonds, and sales of Standard & Poor futures contracts,
and trade in and maintain a brokerage account on a cash or margin basis.

 

(e) The Trustee may invest
any portion or all of the assets of the Trust Fund which are attributable to
the vested and non-forfeitable interest in the Accounts of a Participant in the
purchase of group or individual Life Insurance Policies issued on the life of
the Participant or someone in whom the Participant has an insurable interest
and for the benefit of the Participant with the consent of the Participant,
subject to the following conditions, as they are represented by the Plan
Administrator:

 

(i) If “Ordinary Life
Insurance Policies” are used, the aggregate life insurance premiums must be
less than one-half (1/2) of the aggregate Employer contributions and
Forfeitures allocated to the Participant’s Account at any particular time,
without regard to Trust

 

7

 

earnings, capital gains and
losses. For purposes of this Trust, the term “Ordinary Life Insurance Policies”
shall mean Life Insurance Policies with both non-decreasing death benefits and
non-increasing premiums.

 

(ii) The aggregate Premiums
paid for Life Insurance Policies on the life of any Participant or someone in
whom the Participant has an insurable interest which are either term, universal
or any other contracts which are not ordinary whole life policies shall not at
any time exceed twenty-five (25%) percent of the aggregate amount of Employer
contributions and Forfeitures which have been allocated to the Accounts of such
Participant.

 

(iii) The sum of one-half of
the aggregate premiums for ordinary whole Life Insurance Policies and all
premiums for other Life Insurance Policies shall not at any time exceed
twenty-five (25%) percent of the aggregate amount of Employer Contributions and
forfeitures which have been allocated to the Accounts of such Participant.

 

(iv) If the Plan permits
in-service distributions to a Participant prior to his Normal Retirement Date
in accordance with Section 2.5.6(a) or (b) the amount which may be distributed
to the Participant may be applied to the purchase of Life Insurance Policies.

 

(f) The Trustee may invest
the Trust Fund or any portion thereof to acquire or hold Qualifying Employer
Securities or Real Property; provided, the portion so invested shall not exceed
the amount allowed as an investment under the Act. There shall be no limit on
the acquisition of Qualifying Employer Securities in an individual account
balance plan in which Participants may direct the Trustee to buy Qualifying
Employer Securities on their behalf.

 

(g) If permitted, the
Participant may direct the purchase of life insurance on his life, on the joint
lives of the Participant and someone in whom the Participant has an insurable
interest, or on the life of someone in whom the Participant has an insurable
interest. The amount that can be used to pay life insurance premiums shall be
measured as set forth in this Section.

 

4.3 Administration of Trust Assets.
Subject to the
limitations expressly set forth in the Plan or elsewhere in this Trust, the
Trustee shall have the following powers and authority in connection with the
administration of the assets of the Trust:

 

(a) to hold and administer
all contributions made by the Employer to the Trust Fund and all income or
other property derived therefrom as a single Trust Fund;

 

(b) to manage, control,
sell, convey, exchange, petition, divide, subdivide, improve, repair, grant
options, sell upon deferred payments, lease without limit as determined for any
purpose, compromise, arbitrate or otherwise settle claims in favor of or
against the Trust Fund, institute, compromise and defend actions and
proceedings, and to take any other action necessary or desirable in connection
with the administration of the Trust Fund;

 

(c) to vote any stock,
bonds, or other securities of any corporation or other issuer; otherwise
consent to or request any action on the part of any such corporation or other
issuer; to give general or special proxies or powers of attorney, with or
without power of substitution; to participate in any reorganization,
recapitalization, consolidation, merger or similar transaction with respect to
such securities; to deposit such stocks or other securities in any voting
trusts, or with any protective or like committee, or with the Trustee, or with
the depositories designated thereby; to exercise any subscription rights and
conversion privileges or other options and to make any payments incidental
thereto; and generally to do all such acts, execute all such instruments, take
all such proceedings and exercise all such rights, powers and privileges with
respect to the stock or other securities or property constituting the Trust
Fund as if the Trustee were the absolute owner thereof;

 

(d) to apply for and
procure, at the election of any Participant, Life Insurance Policies on the
life of the Participant or someone in whom the Participant has an insurable
interest; to exercise whatever rights and privileges may be granted to the
Trustee under such policies, and to cash in, receive and collect such policies
or the proceeds therefrom as and when entitled to do so under

 

8

 

the provisions thereof;

 

(e) to make, execute,
acknowledge and deliver any and all documents of transfer and conveyance and
any and all other instruments that may be necessary or appropriate to carry out
the powers herein granted;

 

(f) to register any
investment held in the Trust in the Trustee’s own name or in the name of a
nominee and to hold any investment in bearer form, but the books and records of
the Trustee shall at all times show that all such investments are part of the
Trust;

 

(g) to borrow money for the
purposes of the Plan in such amounts and upon such terms and conditions as the
Trustee deems appropriate;

 

(h) to commingle the assets
of the Trust Fund with the assets of other similar trusts which are exempt from
income tax, whether sponsored by the Employer, an affiliate of the Employer or
an unrelated employer, provided that the books and records of the Trustee shall
at all times show the portion of the commingled assets which are part of the
Trust; and

 

(i) to do all acts whether
or not expressly authorized which the Trustee may deem necessary or proper for
the protection of the property held hereunder.

 

4.4 Segregated Funds.  Unless otherwise determined by the Trustee
not to be prudent, the Trustee shall invest and reinvest each Segregated Fund
without distinction between income or principal. Such accounts shall be held
for the benefit of the Participant for whom such Segregated Fund is established
in accordance with the terms of the Plan and the Segregated Account of the
Participant shall be credited with any interest earned in connection with such
accounts.

 

If the Trustee determines that an alternative investment is appropriate,
the Trustee may invest the Segregated Fund in any manner permitted with respect
to the Trust Fund and such Segregated Fund shall be credited with the net
income or loss or net appreciation or depreciation in value of such
investments. No Segregated Fund shall share in any Employer contributions or
Forfeitures, any net income or loss from, or net appreciation or depreciation
in value of, any investments of the Trust Fund, or any allocation for which
provision is made in the Plan that is not specifically attributable to the
Segregated Fund.

 

4.5 Investment Control Option.  If the Employer elects in the Adoption
Agreement to permit Participants to direct the investment of their Accounts,
each Participant may elect to have transferred to a Controlled Account and
exercise investment control by appropriate direction to the Trustee with
respect to funds in the Trust Fund that do not exceed the balances in his
Accounts.

 

To the extent that the balance in the Participant’s Account with
respect to which a transfer is to be made includes his share of an Employer
contribution that has not been received by the Trustee, such transfer shall not
be made until such contribution is received by the Trustee. Funds so
transferred to a Controlled Account on behalf of the Participant shall be
thereafter invested by the Trustee in such bonds, notes, debentures,
commodities, mortgages, equipment trust certificates, investment trust
certificates, preferred or common stocks, mutual funds, partnership interests,
Life Insurance Policies, including universal life insurance policies, or in
such other property, real or personal (other than collectibles), wherever
situated, as the Participant shall direct from time to time in writing;
provided, however, that the Participant may not direct the Trustee to make
loans to himself, nor to make loans to the Employer; and provided further that
the Trustee may limit the investment alternatives available to the Participant
in a uniform and nondiscriminatory manner.

 

If it is the intent of the Employer and the Trustee that these
investment alternatives meet the requirements of ERISA section 404(c), any
such election shall be made by the Participant giving notice thereof to the
Trustee as the Trustee deems necessary and such notice shall specify the amount
of such funds to be transferred and the Account from which the transfer is to
be made. Any such election shall be at the absolute discretion of the
individual Participant and shall be binding upon the Trustee. Upon any such
election being made, the amount of such funds to be transferred shall be
deducted from his Account as appropriate and added to a Controlled Account of
the Participant. All dividends and interest thereafter received with respect to
such transferred funds, as well as any appreciation or depreciation in his

 

9

 

investments, shall be added to or deducted from his Controlled Account.

 

If the Employer elects to follow ERISA section 404(c), the Plan
Administrator, Trustee, or other appropriate Fiduciary shall insure that the
Plan provides Participants with the minimum options and information required by
ERISA section 404(c) and the Regulations thereunder.

 

If a Participant wishes to make such an election to transfer funds from
the Trust Fund to a Controlled Account as of a date other than a Valuation
Date, the Trustee may defer such transfer until the next succeeding Valuation
Date, or, in the Trustee’s discretion, make such transfer; provided that the
Trustee determines that the nature of the assets in the Trust Fund is such that
it is feasible and practical to make, as of the date of such transfer, the
adjustments to the Participant’s Accounts, for which provision is made in the
Plan, as if such date is a Valuation Date.

 

The Trustee shall not have any investment responsibility with respect
to a Participant’s Controlled Account. In the event that a Participant elects
to have any such funds transferred to a Controlled Account and invested in
particular securities or assets pursuant to this Section, the Trustee shall not
be liable for any loss or damage resulting from the investment decision of the
Participant. As of any Valuation Date, the Participant may elect to have all or
any portion of any cash contained in his Controlled Account transferred back to
the Trust Fund, in which case such cash shall be invested by the Trustee
together with other assets held in the Trust Fund. Any such election shall be
made by giving notice thereof to the Trustee as the Trustee deems necessary,
and the notice shall specify the amount of cash to be transferred.

 

As of the said Valuation Date, the amount of such funds to be so
transferred from the Participant’s Controlled Account shall be deducted from
the Controlled Account and added to the appropriate Account of the Participant.

 

10

 

ARTICLE
5

 

AMENDMENT
AND TERMINATION

 

5.1 Right to Amend.

 

(a) The Employer may at any
time or times amend the Plan, Trust, or provisions of the Adoption Agreement,
in whole or in part.

 

(b) An Employer may amend
the trust or custodial account document provided such amendment merely involves
the specifications of the names of the Plan, Employer, trustee or custodian,
Plan Administrator or other fiduciaries, the trust year, or the name of any
pooled trust in which the Plan’s trust will participate.

 

An Employer that has adopted a non-standardized prototype plan will not
be considered to have an individually designed plan merely because the Employer
amends administrative provisions of the Trust or custodial account document
(such as provisions relating to investments and duties of Trustees) so long as
the amended provisions are not in conflict with any other provision of the Plan
and do not cause the Plan to fail to qualify under Section 401(a) of the Code.

 

5.2 Manner of Amending.  Each amendment to the Plan or Trust shall be
made by delivering to the Trustee a copy of the resolution of the Employer that
sets forth such amendment.

 

5.3 Limitations On Amendments.  No amendment shall be made to the Plan or the
Trust, which:

 

(a) directly or indirectly
operates to give the Employer any interest whatsoever in the assets of the
Trust or to deprive any Participant or Beneficiary of his vested and
non-forfeitable interest in the assets of the Trust as then constituted, or
cause any part of the income or corpus of the Trust to be used for, or diverted
to purposes other than the exclusive benefit of Employees or their
Beneficiaries; or

 

(b) increases the duties or
liabilities of the Trustee without the Trustee’s prior written consent;

 

5.4 Voluntary Termination.  The Employer may terminate the Plan at any
time by delivering to the Trustee an instrument in writing that designates such
termination. Following termination of the Plan, the Trust will continue until
the Distributable Benefit of each Participant has been distributed.

 

5.5 Involuntary Termination.  The Plan shall terminate if (a) the Employer
is dissolved or adjudicated bankrupt or insolvent in appropriate proceedings,
or if a general assignment is made by the Employer for the benefit of
creditors; or (b) the Employer loses its identity by consolidation or merger
into one or more corporations or organizations, unless within ninety (90) days
after such consolidation or merger, such corporations or organizations elect to
continue the Plan. Following termination of the Plan, the Trust will continue
until the Distributable Benefit of each Participant has been distributed.

 

5.6 Withdrawal By Employer.  The Employer may withdraw from participation
under the Plan without terminating the Trust upon making a transfer of the
Trust assets to another Plan, which shall be deemed to constitute an amendment
in its entirety of the Trust.

 

5.7 Powers Pending Final Distribution.
Until final
distribution of the assets of the Trust, the Plan Administrator and Trustee
shall continue to have all the powers provided under the Plan as are necessary
for the orderly administration, liquidation and distribution of the assets of
the Trust.

 

11

 

ARTICLE 6

 

PORTABILITY

 

6.1 Continuance by Successor.  In the event of the dissolution,
consolidation or merger of the Employer, or the sale by the Employer of its
assets, the resulting successor person or persons, firm or corporations may
continue the Plan and the Trust by (a) adopting the Plan and the Trust by
appropriate resolution; (b) appointing a new Trustee as though the Trustee
(including all members of a group of individuals acting as Trustee) had
resigned; and (c) executing a proper agreement with the new Trustee. In such
event, each Participant in the Plan shall have an interest in the Plan after
the dissolution, consolidation, merger, or sale of assets, at least equal to
the interest that he had in the Plan immediately before the dissolution,
consolidation, merger, or sale of assets. Any Participants who do not accept a
position with such successor within a reasonable time shall be deemed
terminated. If, within ninety (90) days from the effective date of such
dissolution, consolidation, merger, or sale of assets, such successor does not
adopt the Plan and the Trust, as provided herein, the Plan shall be deemed
involuntary terminated.

 

6.2 Merger With Other Plan.  In the event of the merger or consolidation
with, or transfer of assets or liabilities to, any other deferred compensation
plan and trust, each Participant shall have an interest in such other plan
which is equal to or greater than the interest which he had in the Plan
immediately before such merger, consolidation, or transfer, and, if such other
plan thereafter terminates, each Participant shall be entitled to a
Distributable Benefit which is equal to or greater than the Distributable
Benefit to which he would have been entitled immediately before such merger,
consolidation or transfer if the Plan had then been terminated.

 

6.3 Transfer From Other Plans.  The Employer may cause all or any of the
assets held in connection with any other plan or trust which is maintained by
the Employer for the benefit of its employees and satisfies the applicable
requirements of the Code relating to qualified plans and trusts to be
transferred to the Trustee, whether such transfer is made pursuant to a merger
or consolidation of this Plan with such other plan or trust or for any other
allowable purpose.

 

In addition, the Employer, by appropriate election in the Adoption
Agreement, may permit rollover to the Trustee of assets held for the benefit of
an Employee in a conduit Individual Retirement Account, a terminated plan of
the Employer, or any other plan or trust which is maintained by some other
employer for the benefit of its employees and satisfies the applicable
requirements of the Code relating to qualified plans and trusts.

 

Any such assets so transferred to the Trustee shall be accompanied by
written instructions from the employer, or the trustee, custodian or individual
holding such assets, setting forth the name of each Employee for whose benefit
such assets have been transferred and showing separately the respective
contributions by the employer and by the Employee and the current value of the
assets attributable thereto. Upon receipt by the Trustee of such assets, the
Trustee shall place such assets in a Segregated Fund for the Employee and the
Employee shall be one hundred percent (100%) vested and have a non-forfeitable
interest in any such assets.

 

6.4 Transfer to Other Plans.  The Trustee, upon written direction by the
Employer, shall transfer some or all of the assets held under the Trust to
another plan or trust of the Employer meeting the requirements of the Code
relating to qualified plans and trusts, whether such transfer is made pursuant
to a merger or consolidation of this Plan with such other plan or trust or for
any other allowable purpose.

 

In addition, upon the termination of employment of any Participant and
receipt by the Plan Administrator of a request in writing, the Participant may
request that any distribution from the Trust to which he is entitled shall be
transferred to an Individual Retirement Account, an Individual Retirement
Annuity, or any other plan or trust which is maintained by some other employer
for the benefit of its employees and satisfies the applicable requirements of
the Code relating to qualified plans and trusts. Upon receipt of any such
written request, the Plan Administrator shall cause the Trustee to transfer the
assets so directed and, as appropriate, shall direct the Insurer to transfer to
the new trustee any applicable insurance policies issued

by it.

 

12

 

ARTICLE
7

 

MISCELLANEOUS

 

7.1 No Reversion to Employer.  Except as specifically provided in the Plan,
no part of the corpus or income of the Trust shall revert to the Employer or be
used for, or diverted to purposes other than for the exclusive benefit of Participants
and their Beneficiaries.

 

7.2 Employer Actions.  Any action by the Employer pursuant to the
provisions of the Plan shall be evidenced by appropriate resolution or by
written instrument executed by any person authorized by the Employer to take
such action.

 

7.3 Persons Dealing With Trustee
Protected.  No person dealing with the Trustee shall be required or entitled to see
to the application of any money paid or property delivered to the Trustee, or
determine whether the Trustee is acting pursuant to the authorities granted to
the Trustee hereunder or to authorizations or directions herein required. The
certificate of the Trustee that the Trustee is acting in accordance with the
Plan shall protect any person relying thereon.

 

7.4 Protection of the Insurer.  An Insurer shall not be responsible for the
validity of the Plan or Trust and shall have no responsibility for action taken
or not taken by the Trustee, for determining the propriety of accepting premium
payments or other contributions, for making payments in accordance with the
direction of the Trustee, or for the application of such payments. The Insurer
shall be fully protected in dealing with any representative of the Employer or
any one of a group of individuals acting as Trustee. Until written notice of a
change of Trustee has been received by an Insurer at its home office, the
Insurer shall be fully protected in dealing with any party acting as Trustee
according to the latest information received by the Insurer at its home office.

 

7.5 No Responsibility for Act of Insurer.
The Trustee shall not
be responsible for, nor liable for instituting action in connection with any of
the following:

 

(c) the validity of policies
or policy provisions;

 

(d) the failure or refusal
by the Insurer to provide benefits under a policy;

 

(e) an act by a person which
may render a policy invalid or unenforceable; or

 

(f) the inability to perform
or a delay in performing an act, which inability or delay is occasioned by a
provision of a policy or a restriction imposed by the Insurer.

 

7.6 Inalienability.  The right of any Participant or his
Beneficiary in any distribution hereunder or to any separate Account shall not
be subject to alienation, assignment or transfer, voluntarily or involuntarily,
by operation of law or otherwise, except as may be expressly permitted herein.
No Participant shall assign, transfer, or dispose of such right; nor shall any
such right be subjected to attachment, execution, garnishment, sequestration,
or other legal, equitable, or other process.

 

In the event a Participant’s benefits are attached by order of any
court, the Plan Administrator may bring an action for a declaratory judgment in
a court of competent jurisdiction to determine the proper recipient of the
benefits to be paid by the Plan. During the pendency of the action, the Plan
Administrator shall cause any benefits payable to be paid to the court for
distribution as it considers appropriate.

 

7.7 Authorization to Withhold Taxes.
The Trustee is
authorized in accordance with applicable law to withhold from distribution to
any payee such sums as may be necessary to cover federal and state taxes which
may be due with respect to such distributions.

 

7.8 Missing Persons.  If the Trustee mails by registered or
certified mail, postage prepaid, to the last known address of a Participant or
Beneficiary, a notification that the Participant or Beneficiary is entitled to
a distribution, and if (a) the notification is returned by the post office
because the addressee cannot be located at such address and if neither the
Employer, the Plan Administrator nor the Trustee shall have any knowledge of
the whereabouts of such Participant or Beneficiary within three (3) years from

 

13

 

the date such notification was mailed, or (b) within three (3) years
after such notification was mailed to such Participant or Beneficiary, he does
not respond thereto by informing the Trustee of his whereabouts, the ultimate
disposition of the then undistributed balance of the Distributable Benefit of
such Participant or Beneficiary shall be determined in accordance with the then
applicable Federal laws, rules and regulations.

 

If any portion of the Distributable Benefit is forfeited because the
Participant or Beneficiary cannot be found, such portion shall be reinstated if
a claim is made by the Participant or Beneficiary.

 

7.9 Notices.  Any notice or direction to be given in
accordance with the Plan shall be deemed to have been effectively given if hand
delivered to the recipient or sent by certified mail, return receipt requested,
to the recipient at the recipient’s last known address. At any time that a
group of individuals is acting as Trustee, notice to the Trustee may be given
by giving notice to any one or more of such individuals.

 

7.10 Governing Law.  The provisions of this Trust shall be
construed, administered and enforced in accordance with the provisions of the
Act and, to the extent applicable, the laws of the state in which the Employer
has its principal place of business. All contributions to the Trust shall be
deemed to take place in such state.

 

7.11 Severability of Provisions.  In the event that any provision of this Trust
shall be held to be illegal, invalid or unenforceable for any reason, said
illegality, invalidity, or unenforceability shall not affect the remaining
provisions, but shall be fully severable and this Trust shall be construed and
enforced as if said illegal, invalid or unenforceable provisions had never been
inserted herein.

 

7.12 Gender and Number.  Whenever appropriate, words used in the
singular shall include the plural, and the masculine gender shall include the
feminine gender and vice versa.

 

7.13 Qualification Under Internal
Revenue Laws.  The Employer intends that the Trust qualify under the applicable
provisions of the Code. Until advised to the contrary, the Trustee may assume
that the Trust is so qualified and is entitled to tax exemption under the Code.
If the Plan of the Employer fails to attain or retain qualification, the Plan
of the Employer shall no longer participate in this prototype, and shall be
considered an individually designed plan.

 

The Employer and the Trustee(s) hereby adopt the foregoing Trust on
this 4th day of October, 2002.

 

	
    Employer:

  	
   

  	
  Trustee: 

  	
   

  
	
  Tamalpais Bank

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Kit M. Cole

  	
   

  	
  Kit M. Cole 

  	
   

  
	
  Officer

  	
   

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mark Garwood

  	
   

  	
  Mark Garwood 

  	
   

  
	
  Officer

  	
   

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Michael Moulton

  	
   

  	
  Michael Moulton 

  	
   

  
	
  Officer

  	
   

  	
  Trustee

  	
   

  

 

14

 

Tamalpais
Bank 401(k) Plan

 

EGTRRA
AMENDMENT FOR 401(k) PLANS

 

AMENDMENT
#1

 

This amendment of the Plan is adopted to reflect certain provisions of
the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). This
amendment is intended as good faith compliance with the requirements of EGTRRA
and is to be construed in accordance with EGTRRA and guidance issued
thereunder. Except as otherwise provided, this amendment shall be effective as
of the first day of the first Plan Year beginning after December 31, 2001.

 

This amendment shall supersede the provisions of the Plan to the extent
those provisions are inconsistent with the provisions of this amendment. Where
appropriate, the term “Plan” shall mean plan, trust, adoption agreement and
GUST Appendix or snap-off attachment.

 

1

 

SECTION 1.
LIMITATIONS ON CONTRIBUTIONS

 

This section shall be
effective for Limitation Years beginning after December 31, 2001.

 

Maximum Annual Additions

Except to the extent
permitted under section 414(v) of the Code, if applicable, the Annual Addition
that may be contributed or allocated to a Participant’s account under the plan
for any Limitation Year shall not exceed the lesser of:

 

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

 

(b) One hundred (100%)
percent of the Participant’s compensation, within the meaning of section
415(c)(3) of the Code, for the Limitation Year.

 

2

 

SECTION 2.
INCREASE IN COMPENSATION LIMIT

 

The “annual compensation” of
each Participant taken into account in determining allocations for any Plan
Year 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 consecutive 12-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.

 

ý  Effective for Plan Years beginning after
December 31, 2001

 

o  Effective for Plan Years beginning after
December 31, 2002

 

3

 

SECTION 3.
MODIFICATION OF TOP-HEAVY RULES

 

This section shall apply for
Plan Years beginning after December 31, 2001.

 

Definition of Key Employee.

 

“Key Employee” shall mean
any Employee or former Employee (including any deceased Employee) who at any
time during the Plan Year that includes the Determination Date was an officer
of the Employer having “annual compensation” greater than $130,000 (as adjusted
under section 416(i)(1) of the Code for Plan Years beginning after December 31,
2002), a 5-percent owner of the Employer, or a 1-percent owner of the Employer
having annual compensation of more than $150,000. For this purpose, “annual
compensation” means compensation within the meaning of section 415(c)(3) of the
Code. The determination of who is a Key Employee will be made in accordance
with section 416(i)(1) of the Code and the applicable regulations and other
guidance of general applicability issued thereunder.

 

Determination of Top-Heavy
Status.

 

The present values of
accrued benefits and the amounts of account balances of an Employee as of the
Determination Date shall be increased by the distributions made with respect to
the Employee under the Plan and any plan aggregated with the Plan under section
416(g)(2) of the Code during the 1-year period ending on the Determination
Date. The preceding sentence shall also apply to distributions under a
terminated plan which, had it not been terminated, would have been aggregated
with the Plan under section 416(g)(2)(A)(i) of the Code. In the case of a
distribution made for a reason other than separation from service, severance
from employment, death, or disability, this provision shall be applied by
substituting “5-year period” for “1-year period.”

 

The accrued benefits and
accounts of any individual who has not performed services for the Employer
during the 1-year period ending on the Determination Date shall not be taken
into account.

 

Minimum Contributions

 

ý  Employer matching contributions shall be
taken into account for purposes of satisfying the minimum contribution
requirements of section 416(c)(2) of the Code and the Plan. The preceding
sentence shall apply with respect to matching contributions under this Plan or,
if this Plan provides that the minimum contribution requirement shall be met in
another plan, such matching contributions shall apply towards the minimum in
such other plan. Employer matching contributions that are used to satisfy the
minimum contribution requirements shall be treated as matching contributions
for purposes of the actual contribution percentage test and other requirements
of section 401(m) of the Code.

 

o  Employer matching contributions shall not be
taken into account for purposes of satisfying the minimum contribution
requirements of section 416(c)(2) of the Code. Such minimum contribution
requirements shall be satisfied from other Employer contributions.

 

Contributions under Other
Plans.

 

The Employer may provide
that the minimum benefit requirement shall be met in another plan (including
another plan that consists solely of a cash or deferred arrangement which meets
the requirements of section 401(k)(12) of the Code and matching contributions
with respect to which the requirements of section 401(m)(11) of the Code are
met).

 

ý  Not Applicable - no other plan or Top-Heavy
minimum provided in this Plan.

 

4

 

o 
                                                                            

Name of other plan to which
Top-Heavy minimum shall be made

 

o  Other:                                                                             

(Must preclude Employer
discretion.)

 

The Top-Heavy requirements
of section 416 of the Code and of the Plan shall not apply in any year
beginning after December 31, 2001, in which the Plan consists solely of a cash
or deferred arrangement which meets the requirements of section 401(k)(12) of
the Code and matching contributions with respect to which the requirements of
section 401(m)(11) of the Code are met.

 

5

 

SECTION 4.
CONTRIBUTIONS

 

o  Not Applicable - The Plan does not provide
Employer matching contributions.

 

ý  This section shall apply to Participants with
account balances derived from Employer matching contributions and who complete
an hour of service under the plan in a plan year beginning after December 31,
2001.

 

o  This section shall apply to all Participants
with account balances derived from Employer matching contributions.

 

Vesting schedule.

 

A Participant’s account
balance derived from Employer matching contributions shall vest as provided
below. If the vesting schedule for Employer matching contributions in Option 3
or 4 below is elected, each Participant who has completed three or more years of
service may elect within a reasonable period after the adoption of this
amendment to have his nonforfeitable percentage computed without regard to such
change. The period during which the election may be made shall commence with
the date this amendment is adopted or deemed to be made and shall end on the
latest of sixty days after:

 

(i) the amendment is
adopted;

(ii) the amendment becomes
effective; or

(iii) the Participant is
issued written notice of the amendment by the Employer or plan administrator.

 

Vesting of Employer Matching
Contributions:

 

o  Option 1. A Participant’s account balance
derived from Employer matching contributions shall be fully and immediately
vested.

 

o  Option 2. A Participant’s account balance
derived from Employer matching contributions shall be nonforfeitable upon the
Participant’s completion of three years of vesting service.

 

o  Option 3. A Participant’s account balance
derived from Employer matching contributions shall vest according to the
following schedule:

 

	
  Years of vesting service

  	
   

  	
  Nonforfeitable
  percentage

  
	
  2

  	
   

  	
  20

  
	
  3

  	
   

  	
  40

  
	
  4

  	
   

  	
  60

  
	
  5

  	
   

  	
  80

  
	
  6

  	
   

  	
  100

  

 

o  Option 4. A Participant’s account balance
derived from Employer matching contributions shall vest according to the
following that must be at least as favorable as Option 3 above:

 

	
  Years of vesting service

  	
   

  	
  Nonforfeitable
  percentage

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

6

 

ý  Option 5. Not Applicable, use plan vesting
schedule which is at least as favorable as Option 3.

 

7

 

SECTION 5.
DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS

 

This section shall apply to
distributions made after December 31, 2001.

 

Modification of Definition
of Eligible Retirement Plan.

 

For purposes of the direct
rollover provisions of the plan, an Eligible Retirement Plan shall also mean an
annuity contract described in section 403(b) of the Code and 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 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 relation order, as defined in section 414(p) of the Code.

 

Modification of Definition
of Eligible Rollover Distribution.

 

ý  Not Applicable - Plan does not permit
after-tax employee contributions.

 

o  For purposes of the direct rollover
provisions of the Plan, a portion of a distribution shall not fail to be an
Eligible Rollover Distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income. However, such
portion may be transferred only to an individual retirement account or annuity
described in section 408(a) or (b) or the Code, or to a qualified defined
contribution plan account for amounts so transferred, including separately
accounting for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so includible.

 

For purposes of the direct
rollover provisions of the plan, any amount that is distributed on account of
hardship shall not be an Eligible Rollover Distribution and the Distributee may
not elect to have any portion of such a distribution paid directly to an
Eligible Retirement Plan.

 

8

 

SECTION 6.
REPEAL OF MULTIPLE USE TEST

 

The multiple use test
described in Treasury Regulation section 1.401(m)-2 shall not apply to the Plan
for Plan Years beginning after December 31, 2001.

 

9

 

SECTION 7.
ELECTIVE DEFERRALS - CONTRIBUTION LIMITATION

 

No Participant shall be
permitted to have elective deferrals made under this Plan, or any other
qualified plan maintained by the Employer during any taxable year, in excess of
the dollar limitation contained in section 402(g) of the Code in effect for
such taxable year, except to the extent permitted under section 414(v) of the
Code, if applicable.

 

The Employer hereby adopts
this as evidenced by the foregoing this 4th day of October, 2002.

 

	
  Employer:

  	
   

  
	
  Tamalpais Bank

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Kit M. Cole

  	
   

  
	
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Mark Garwood

  	
   

  
	
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Michael Moulton

  	
   

  
	
  Officer

  	
   

  

 

10

 

RESOLUTION
OF

THE BOARD
OF DIRECTORS

OF

Tamalpais
Bank

 

Whereas, the Employer has the power to amend the Plan pursuant to Plan section
3.8.1; and

 

On October 4, 2002  the
following resolutions to amend Tamalpais Bank 401(k) Plan were duly adopted by
a majority of the board of directors of the Tamalpais Bank, and that such
resolutions have not been modified or rescinded as of the date hereof:

 

RESOLVED, that the attached amendment to meet the requirements of the
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) presented to
this meeting is hereby approved for adoption;

 

RESOLVED, that the proper officers of the Employer shall take such
actions as are necessary to adopt the EGTRRA amendment.

 

The undersigned further certifies that attached hereto as Exhibit A is
a true copy of the EGTRRA Amendment to the Tamalpais Bank 401(k) Plan

 

 

	
   

  	
   

  
	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date

  	
   

  

 

11

 

PENSIONALYSIS,
INCORPORATED PROTOTYPE

 

DEFINED
CONTRIBUTION PLAN

 

Basic Plan
01

 

AMENDMENT

 

Article 1.

 

MINIMUM
DISTRIBUTION REQUIREMENTS.

 

Section 1. General Rules

 

1.1.
Adoption and Effective Date For purposes of determining required minimum distributions, Tamalpais
Bank, adopts the following amendment to its Pensionalysis, Incorporated
Prototype Defined Contribution Plan, Basic Plan 01 effective January 1, 2003,
for plan years beginning on or after January 1, 2003, unless an earlier
effective date is specified in the adoption agreement supplement attached to
this amendment.

 

1.2.
Coordination with Minimum Distribution Requirements Previously in Effect. If the adoption
agreement supplement specifies an effective date of this Article that is
earlier than calendar years beginning with the 2003 calendar year, required
minimum distributions for 2002 under this Article will be determined as
follows:

 

If the total amount of 2002
required minimum distributions under the Plan made to the distributee prior to
the effective date of this Article equals or exceeds the required minimum
distributions determined under this Article, then no additional distributions
will be required to be made for 2002 on or after such date to the distributee.

 

If the total amount of 2002
required minimum distributions under the Plan made to the distributee prior to
the effective date of this Article is less than the amount determined under
this Article, then required minimum distributions for 2002 on and after such
date will be determined so that the total amount of required minimum
distributions for 2002 made to the distributee will be the amount determined
under this Article.

 

1.3.
Precedence. The
requirements of this Article will take precedence over any inconsistent
provisions of the Plan.

 

1.4.
Requirements of Treasury Regulations Incorporated. All distributions required under this Article
will be determined and made in accordance with the Treasury Regulation under
section 401(a)(9) of the Internal Revenue Code.

 

1

 

1.5. TEFRA
Section 242(b)(2) Elections. Notwithstanding the other provisions of this Article, distributions may
be made under a designation made before January 1, 1984, in accordance with
section 242 b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and
the provisions of the Plan that relate to section 242(b)(2) of TEFRA.

 

Section 2. Time and Manner of Distribution.

 

2.1.
Required Beginning Date. The participant’s entire interest will be distributed, or begin to be
distributed, to the participant no later than the participant’s required
beginning date.

 

2.2. Death
of Participant Before Distributions Begin. If the participant dies before distributions
begin, the participant’s entire interest will be distributed, or begin to be
distributed, no later than as follows:

 

(a) If the participant’s
surviving spouse is the participant’s sole designated beneficiary, then, except
as provided in the adoption agreement supplement, 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 70 1/2, if
later.

 

(b) If the participant’s
surviving spouse is not the participant’s sole designated beneficiary, then,
except as provided in the adoption agreement, distributions to the designated
beneficiary will begin by December 31 of the calendar year immediately
following the calendar year in which the participant died.

 

(c) If there is no
designated beneficiary as of September 30 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.

 

(d) 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 2.2, other than Section 2.2(a), will apply
as if the surviving spouse were the participant.

 

For purposes of this Section
2.2 and Section 4 , unless Section 2.2(d) applies, distributions are considered
to begin on the participant’s required beginning date. If Section 2.2(d)
applies, distributions are considered to begin on the date distributions are
required to begin to the surviving spouse under Section 2.2(a). 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 2.2(a)), the date
distributions are considered to begin is the date distributions actually
commence.

 

2.3. 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 3 and 4 of this Article. 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.

 

Section 3. Required Minimum Distributions
During Participant’s Lifetime.

 

3.1. Amount
of Required Minimum Distribution For Each Distribution Calendar Year. During the participant’s lifetime, the
minimum amount that will be distributed for each distribution calendar year is
the lesser of:

 

(a) 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 of the Treasury
Regulations, using the participant’s age as of the participant’s birthday in
the distribution calendar year; or

 

(b) if the participant’s
sole designated beneficiary for the distribution calendar year is the

 

2

 

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 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.

 

3.2.
Lifetime Required Minimum Distributions Continue Through Year of Participant’s
Death.

 

Required minimum distributions will be determined under this Section 3
beginning with the first distribution calendar year and up to and including the
distribution calendar year that includes the participant’s date of death.

 

Section 4. Required Minimum Distributions
After Participant’s Death.

 

4.1. Death
On or After Date Distributions Begin.

 

(a) Participant Survived by
Designated Beneficiary. If the participant dies on or after the date
distributions begin and there is a designated beneficiary, the minimum amount
that will be distributed for each distribution calendar year after the year of
the 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:

 

(1) 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.

 

(2) 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.

 

(3) 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.

 

(b) No Designated
Beneficiary. If the participant dies on or after the date distributions begin
and there is no designated beneficiary as of September 30 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.

 

4.2. Death
Before Date Distributions Begin.

 

(a) Participant Survived by
Designated Beneficiary. Except as provided in the adoption agreement, 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 4.1.

 

(b) No Designated
Beneficiary. If the participant dies before the date distributions begin and
there is no designated beneficiary as of September 30 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.

 

(c) Death of Surviving
Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the
participant dies before the date distributions begin, the participant’s
surviving spouse is the participant’s sole designated beneficiary, and the
surviving spouse dies before distributions are required to begin to the
surviving spouse under Section 2.2(a), this Section 4.2 will apply as if the
surviving spouse

 

3

 

were the participant.

 

Section 5. Definitions.

 

5.1. Designated
beneficiary. The
individual who is designated as the beneficiary under Section 2.5.1(h)(2) of
the Plan and is the designated beneficiary under section 401(a)(9) of the
Internal Revenue Code and section 1.401(a)(9)-1, Q&A-4, of the Treasury
Regulations.

 

5.2.
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
2.2. 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.

 

5.3. Life
expectancy. Life
expectancy as computed by use of the Single Life Table in section 1.401(a)(9)-9
of the Treasury Regulations.

 

5.4.
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.

 

5.5.
Required beginning date. The date specified in Section 2.5.1(h)(5) of the Plan.

 

4

 

ADOPTION
AGREEMENT SUPPLEMENT

 

Tamalpais
Bank 401(k) Plan

 

PENSIONALYSIS,
INCORPORATED PROTOTYPE

DEFINED
CONTRIBUTION PLAN

 

Basic Plan
01

 

AMENDMENT

MINIMUM
DISTRIBUTION REQUIREMENTS.

 

(Check and complete Section
1 below if any required minimum distributions for the 2002 distribution
calendar year were made in accordance with the section 401(a)(9) Final and
Temporary Regulations.)

 

Section 1. Effective Date of Plan Amendment for
Section 401(a)(9) Final and Temporary Treasury Regulations.

 

o  Article
1, Minimum Distribution Requirements, applies for purposes of determining
required minimum distributions for distribution calendar years beginning with
the 2003 calendar year, as well as required minimum distributions for the 2002
distribution calendar year that are made on or after
     /     /     .

 

(Check and complete any of
the remaining sections if you wish to modify the rules in Sections 2.2 and 4.2
of Article 1 of this Amendment.)

 

Section 2. Election to Apply 5-Year Rule to
Distributions to Designated Beneficiaries.

 

o  If
the participant dies before distributions begin and there is a designated
beneficiary, distribution to the designated beneficiary is not required to
begin by the date specified in Section 2.2 of Article 1 of this Amendment, but
the participant’s entire interest will be distributed to the designated
beneficiary by December 31 of the calendar year containing the fifth
anniversary of the participant’s death. 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 either the participant or the
surviving spouse begin, this election will apply as if the surviving spouse
were the participant.

 

This election will apply to:

o          All distributions.

o          For distributions made on or after :
     /     /     ..
(01/01/02 or later)

 

Section 3. Election to Allow Participants or
Beneficiaries to Elect 5-Year Rule.

 

o  Participants
or beneficiaries may elect on an individual basis whether the 5-year rule or
the life expectancy rule in Sections 2.2 and 4.2 of Article 1 of this Amendment
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 2.2 of Article 1 of this Amendment, 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 Paragraph, distributions will be made
in accordance with Sections 2.2 and 4.2 of Article 1 of this Amendment and, if
applicable, the elections in Section 2 above.

 

1

 

Section 4. Election to Allow Designated Beneficiary
Receiving Distributions Under 5-Year Rule to Elect Life Expectancy
Distributions.

 

o  A
designated beneficiary who is receiving payments under the 5-year rule may make
a new election to receive payments under the life expectancy rule until
December 31, 2003, provided that all amounts that would have been required to
be distributed under the life expectancy rule for all distribution calendar
years before 2004 are distributed by the earlier of December 31, 2003 or the
end of the 5-year period.

 

	
  Employer:

  	
   

  
	
  Tamalpais Bank

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Kit M. Cole

  	
   

  
	
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Mark Garwood

  	
   

  
	
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Michael Moulton

  	
   

  
	
  Officer

  	
   

  

 

2

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