Document:

exv4w2

Exhibit 4.2

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY,
OR BY ANY SUCH NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO AN ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO.
OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE.

			
	 
	No. 1
	 	Principal Amount $250,000,000
	 	 	 
	 
	 	CUSIP No.: 88947EAJ9

6.750% Senior Notes due 2019

TOLL BROTHERS FINANCE CORP.,

a Delaware corporation,

promises to pay to CEDE & CO., or registered assigns, the principal sum of $250,000,000 (TWO
HUNDRED FIFTY MILLION DOLLARS) on November 1, 2019.

6.750% Senior Notes due 2019

Interest Payment Dates: May 1 and November 1, commencing May 1, 2010

Record Dates: April 15 and October 15

 

 

Authenticated:

	 	 	 	 	 
	 	Dated: September 22, 2009

	 	TOLL BROTHERS FINANCE CORP.

[Seal]

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

THE BANK OF NEW YORK MELLON, as Trustee, certifies that this is one of the Notes referred to in the
within mentioned Indenture.

	 	 	 	 	 
	 	 	 
	By:  	 	 	 
	 	Authorized Signatory 	 	 
	 	 	 	 

2

 

	 	 	 	 	 

TOLL BROTHERS FINANCE CORP.

6.750% Senior Notes due 2019

1. Interest.

     TOLL BROTHERS FINANCE CORP. (the “Issuer”), a Delaware corporation, promises to pay interest
on the principal amount of this Note at the rate per annum shown above. The Issuer will pay
interest semiannually on May 1 and November 1 of each year, commencing on May 1, 2010, until the
principal is paid or made available for payment. Interest on the Notes will accrue from the most
recent date to which interest has been paid or duly provided for or, if no interest has been paid,
from September 22, 2009, provided that, if there is no existing Default in the payment of interest
and if this Note is authenticated between a Record Date referred to on the face hereof and the next
succeeding interest payment date, interest shall accrue from such interest payment date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.

2. Method of Payment.

     The Issuer will pay interest on the Notes (except defaulted interest, if any, which will be
paid on such special payment date to Holders of record on such special Record Date as may be fixed
by the Issuer) to the Persons who are registered Holders of Notes at the close of business on the
April 15 or October 15 immediately preceding the interest payment date (capitalized terms not
defined herein have the meanings given to those terms in the Indenture). Payments of principal and
interest in respect of the Notes may be made, at the Issuer’s option, at the office or agency
maintained by the Issuer for such purpose in the Borough of Manhattan, The City of New York or by
wire transfer of immediately available funds to the accounts specified by The Depository Trust
Company or any successor depository; provided, however, that payments of interest
may be made at the Issuer’s option by check mailed at the address of the Holders or by transfer to
an account maintained by the payee with a bank located in the United States. Holders must
surrender Notes to a Paying Agent to collect principal payments. The Issuer will pay principal and
interest in money of the United States that at the time of payment is legal tender for payment of
public and private debts.

3. Paying Agent and Registrar.

     Initially, The Bank of New York Mellon (the “Trustee”) will act as Paying Agent and Registrar.
The Issuer may change or appoint any Paying Agent, Registrar or co-Registrar without notice. Toll
Brothers, Inc. (the “Company”) or any of its Subsidiaries or any of their Affiliates may act as
Paying Agent, Registrar or co-Registrar.

4. Indenture.

     The Issuer issued the Notes under an Indenture dated as of April 20, 2009, as amended and
supplemented (the “Indenture”), among the Issuer, the Company, the other Guarantors and the
Trustee. The terms of the Notes and the Guarantee include those stated in the Indenture and those
made part of the Indenture, including those terms set forth in the Authorizing Resolutions
pertaining to the Securities of the Series of which this Note is a part (the “Authorizing

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Resolutions”) and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (“TIA”) as in effect on the date of the Indenture. The Notes and the Guarantee are subject to
all such terms, and Holders are referred to the Indenture and the TIA for a statement of them.

     The Issuer will furnish to any Holder upon written request and without charge a copy of the
Indenture and the applicable Authorizing Resolutions. Requests may be made to: Toll Brothers
Finance Corp., c/o Toll Brothers, Inc., 250 Gibraltar Road, Horsham, Pennsylvania 19044, Attention:
Chief Financial Officer.

5. Optional Redemption.

     The Issuer may, at its option, redeem the Notes, in whole at any time or in part from time to
time, on at least 30 but not more than 60 days’ prior notice at a redemption price equal to the
greater of

	 	•	 	100% of the principal amount of the Notes to be redeemed; and
	 
	 	•	 	the sum of the present values of the Remaining Scheduled Payments on the Notes being
redeemed on the redemption date, discounted to the date of redemption, on a semiannual
basis, at the Treasury Rate plus 50 basis points (0.50%).

     The Issuer will also accrue interest on the Notes to the date of redemption. In determining
the redemption price and accrued interest, interest will be calculated on the basis of a 360-day
year consisting of twelve 30-day months.

     If money sufficient to pay the redemption price of and accrued interest on the Notes to be
redeemed is deposited with the Trustee on or before the redemption date, on and after the
redemption date interest will cease to accrue on the Notes (or such portions thereof) called for
redemption and such Notes (or such portions thereof) will cease to be outstanding.

6. Change of Control Repurchase Event

     If a Change of Control Repurchase Event occurs, unless the Issuer has previously exercised its
right to redeem the Notes as described above, the Issuer will make an offer to each Holder of Notes
to repurchase all or any part (in amounts of $2,000 or in integral multiples of $1,000 in excess
thereof) of that Holder’s Notes at a repurchase price in cash equal to 101% of the aggregate
principal amount of Notes repurchased plus any accrued and unpaid interest on the Notes repurchased
to the date of purchase. Within 30 days following any Change of Control Repurchase Event or, at the
Issuer’s option, prior to any Change of Control, but after the public announcement of the Change of
Control, the Issuer will mail a notice to each Holder, with a copy to the Trustee, describing the
transaction or transactions that constitute or may constitute the Change of Control Repurchase
Event and offering to repurchase Notes on the payment date specified in the notice, which date will
be no earlier than 30 days and no later than 60 days from the date such notice is mailed. The
notice shall, if mailed prior to the date of consummation of the Change of Control, state that the
offer to purchase is conditioned on the Change of Control Repurchase Event occurring on or prior to
the payment date specified in the notice. The Issuer will comply with the requirements of Rule
14e-1 under the Exchange Act and any other

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securities laws and regulations under the Exchange Act to the extent those laws and
regulations are applicable in connection with the repurchase of the Notes as a result of a Change
of Control Repurchase Event. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control Repurchase Event provisions herein, the Issuer will
comply with the applicable securities laws and regulations and will not be deemed to have breached
its obligations under the Change of Control Repurchase Event provisions herein by virtue of such
conflict.

     On the Change of Control Repurchase Event payment date, the Issuer will, to the extent lawful:

	 	•	 	accept for payment all Notes or portions of Notes properly tendered pursuant to the
Issuer’s offer;
	 
	 	•	 	deposit with the Paying Agent an amount equal to the aggregate purchase price in respect
of all Notes or portions of Notes properly tendered; and
	 
	 	•	 	deliver or cause to be delivered to the Trustee the Notes properly accepted, together
with an Officers’ Certificate stating the aggregate principal amount of Notes being
purchased by the Issuer.

     The Paying Agent will promptly mail to each Holder of Notes properly tendered the purchase
price for the Notes, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book-entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of any Notes surrendered; provided that each new Note will be in a principal amount of
$2,000 or an integral multiple of $1,000 in excess thereof.

     The Issuer will not be required to make an offer to repurchase the Notes upon a Change of
Control Repurchase Event if a third party makes such an offer in the manner, at the times and
otherwise in compliance with the requirements for an offer made by the Issuer and such third party
purchases all Notes properly tendered and not withdrawn under its offer.

For purposes of the change of control repurchase event, the following terms shall have the
respective meanings set forth below:

“Below Investment Grade Rating Event” means the Notes are rated below Investment Grade
(defined below) by all three Rating Agencies on any date from the date of the public notice of an
arrangement that could result in a Change of Control until the end of the 60-day period following
public notice of the occurrence of a Change of Control (which period shall be extended so long as
the rating of the Notes is under publicly announced consideration for possible downgrade by either
of the Rating Agencies); provided that a Below Investment Grade Rating Event otherwise arising by
virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a
particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event
for purposes of the definition of Change of Control Repurchase Event) if the Rating Agencies making
the reduction in rating to which this definition would otherwise apply do not announce or publicly
confirm or inform the Trustee in writing at the Company’s request

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that the reduction was the result, in whole or in part, of any event or circumstance comprised of
or arising as a result of, or in respect of, the applicable Change of Control (whether or not the
applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating
Event).

“Change of Control” means the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any “person” (as that term is
used in Section 13(d)(3) of the Exchange Act) becomes the beneficial owner, directly or indirectly,
of more than 50% of the Company’s Voting Stock (defined below), measured by voting power rather
than number of shares. Notwithstanding the foregoing, a transaction will not be deemed to involve
a Change of Control if (1) the Company becomes a wholly owned subsidiary of a holding company and
(2) the holders of the Voting Stock of such holding company immediately following that transaction
are substantially the same as the holders of the Company’s Voting Stock immediately prior to that
transaction.

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a
Below Investment Grade Rating Event.

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent
under any successor rating categories of Moody’s); a rating of BBB- or better by Fitch (or its
equivalent under any successor rating categories of Fitch); a rating of BBB- or better by S&P (or
its equivalent under any successor rating categories of S&P); and the equivalent Investment Grade
credit rating from any additional Rating Agency or Rating Agencies selected by the Company.

     If less than all the Notes are to be redeemed, the Trustee shall select the Notes to be
redeemed, if the Notes are listed on a national securities exchange, in accordance with the rules
of such exchange, or if the Notes are not so listed, on either a pro rata basis or by lot or by
such method as the Trustee shall deem fair and appropriate. The Trustee shall make the selection
from Notes outstanding and not previously called for redemption. Notes in denominations of $2,000
may only be redeemed in whole. The Trustee may select for redemption portions (equal to $2,000 or
any integral multiple of $1,000 in excess thereof) of the principal of Notes that have
denominations larger than $2,000. Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at the
registered address of such Holder. On and after the redemption dates interest ceases to accrue on
the Notes or portions thereof called for redemption, provided that if the Issuer shall default in
the payment of such Notes at the redemption price together with accrued interest, interest shall
continue to accrue at the rate borne by the Notes.

7. Denominations, Transfer, Exchange.

     The Notes are in registered form only without coupons in denominations of $2,000 and integral
multiples of $1,000 in excess thereof. A Holder may transfer or exchange Notes by presentation of
such Notes to the Registrar or a co-Registrar with a request to register the transfer or to
exchange them for an equal principal amount of Notes of other denominations. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not
transfer or exchange any Note selected for redemption, except the

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unredeemed part thereof if the Note is redeemed in part, or transfer or exchange any Notes for
a period of 15 days before a selection of Notes to be redeemed.

8. Persons Deemed Owners.

     The registered Holder of this Note shall be treated as the owner of it for all purposes.

9. Unclaimed Money.

     If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent will pay the money back to the Issuer at its request. After that, Holders entitled
to the money must look to the Issuer for payment unless an abandoned property law designates
another Person.

10. Amendment, Supplement, Waiver.

     Subject to certain exceptions, the Indenture, the Guarantee or the Notes may be amended or
supplemented by the Issuer with the consent of the Holders of at least a majority in principal
amount of the outstanding Notes and any past default or compliance with any provision relating to
the Notes may be waived in a particular instance with the consent of the Holders of a majority in
principal amount of the outstanding Notes. Without the consent of any Holder, the Issuer may amend
or supplement the Indenture, the Guarantee or the Notes to cure any ambiguity, omission, defect or
inconsistency (provided such action does not adversely affect the rights of the Holders), to
evidence the succession of another Person to the Issuer or any Guarantor, to add covenants of the
Issuer or of the Guarantors under Article Four of the Indenture for the benefit of the Holders or
to surrender rights or powers conferred upon the Issuer or the Guarantors by the Indenture, to add
Events of Default for the benefit of the Holders, to change or eliminate any provisions of the
Indenture (provided such change or elimination shall become effective only when none of the Notes
are outstanding), to add Guarantors, to provide for the acceptance of appointment by a successor
Trustee or facilitate the administration of the trusts under the Indenture by more than one
Trustee, to close the Indenture as to authentication and delivery of additional Notes, to
supplement Indenture provisions to permit or facilitate defeasance and discharge of the Notes
(provided such action does not adversely affect the rights of the Holders), to provide that
specific Indenture provisions shall not apply to an unissued Series of Notes, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to create a Series and
establish its terms, to secure any senior notes or Guarantees under the Indenture, to remove a
Guarantor, other than the Company, which, in accordance with the terms of the Indenture, ceases to
be liable in respect of the Guarantee, or to make any other change, (provided such action does not
adversely affect the rights of any Holder).

11. Trustee Dealings with Company.

     The Bank of New York Mellon, the Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee.

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12. No Recourse Against Others.

     A director, officer, employee or stockholder, as such, of the Issuer shall not have any
liability for any obligations of the Issuer under the Notes or the Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of the consideration
for the issue of the Notes.

13. Discharge of Indenture.

     The Indenture contains certain provisions pertaining to defeasance, which provisions shall for
all purposes have the same effect as if set forth herein.

14. Authentication.

     This Note shall not be valid until the Trustee signs the certificate of authentication on the
other side of this Note.

15. Abbreviations.

     Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).

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ASSIGNMENT FORM

     If you the Holder want to assign this Note, fill in the form below: I or we assign and
transfer this Note to
 

 
(Insert assignee’s social security or tax ID number)

 

 
(Print or type assignee’s name, address, and zip code)

and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may
substitute another to act for him.

	 	 	 	 	 	 	 
	 
	Date:	 	 	 	 
	 	Your signature: (Sign exactly as your name
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	appears on the other side of this Note)

SIGNATURE GUARANTEE

     Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

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GUARANTEE

     The Guarantors listed on Schedule I attached hereto (the “Guarantors”), have unconditionally
guaranteed, on a senior basis jointly and severally (such guarantee by each Guarantor being
referred to herein as the “Guarantee”) (i) the due and punctual payment of the principal of and
interest on the Notes, whether at maturity, by acceleration or otherwise, the due and punctual
payment of interest on the overdue principal and interest, if any, on the Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the Issuer to the Holders
or the Trustee all in accordance with the terms set forth in Article Nine of the Indenture and (ii)
in case of any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. No
past, present or future stockholder, partner, member, officer, director, manager, general partner,
employee or incorporator, as such, of any of the Guarantors shall have any liability under the
Guarantee by reason of such Person’s status as stockholder, partner, member, officer, director,
manager, general partner, employee or incorporator. Each Holder of a Note by accepting a Note
waives and releases all such liability. This waiver and release are part of the consideration for
the issuance of the Guarantee. Each Holder of a Note by accepting a Note agrees that any Guarantor
other than Toll Brothers, Inc. (the “Company”) shall have no further liability with respect to its
Guarantee if such Guarantor otherwise ceases to be liable in respect of its Guarantee in accordance
with the terms of the Indenture.

 

 

     The Guarantee shall not be valid or obligatory for any purpose until the certificate of
authentication on the Notes upon which the Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized officers.

	 	 	 	 	 
	 	TOLL BROTHERS, INC.

 	 
	 	By:  	 	 
	 	 	Title:	 	 
	 	 	 	 	 
	 
	 	THE GUARANTORS LISTED ON SCHEDULE I, ATTACHED
HERETO

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	 	 	 

 

 

	 	 	 	 	 

Schedule I

Toll Brothers, Inc. (DE)

110-112 Third Ave. Realty Corp. (NY)

Amwell Chase, Inc. (DE)

ESE Consultants, Inc. (DE)

Fairway Valley, Inc. (DE)

First Brandywine Investment Corp. II (DE)

First Brandywine Investment Corp. IV (DE)

First Huntingdon Finance Corp. (DE)

Franklin Farms G.P., Inc. (DE)

HQZ Acquisitions, Inc. (MI)

MA Limited Land Corporation (DE)

SH Homes Corporation (MI)

SI Investment Corporation (MI)

TB Proprietary Corp. (DE)

Tenby Hunt, Inc. (DE)

The Silverman Building Companies, Inc. (MI)

Toll Architecture I, P.A. (DE)

Toll Architecture, Inc. (DE)

Toll AZ GP Corp. (DE)

Toll Bay Corp. (DE)

Toll Bros. of Arizona, Inc. (AZ)

Toll Bros. of North Carolina II, Inc. (NC)

Toll Bros. of North Carolina III, Inc. (NC)

Toll Bros. of North Carolina, Inc. (NC)

Toll Bros., Inc. (DE)

Toll Bros., Inc. (PA)

Toll Bros., Inc. (TX)

Toll Brothers AZ Construction Company (AZ)

Toll Brothers Canada USA, Inc. (DE)

Toll Brothers Real Estate, Inc. (PA)

Toll Buckeye Corp. (DE)

Toll CA GP Corp. (CA)

Toll Centennial Corp. (DE)

Toll CO GP Corp. (CO)

Toll Copper Corp. (DE)

Toll Corp. (DE)

Toll Development Company, Inc. (MI)

Toll Diamond Corp. (DE)

Toll Dominion Corp. (DE)

Toll Empire Corp. (DE)

Toll FL GP Corp. (FL)

Toll GA GP Corp. (GA)

Toll Garden Corp. (DE)

Toll Golden Corp. (DE)

Toll Granite Corp. (DE)

Toll Great Lakes Corp. (DE)

Toll Holdings, Inc. (DE)

Toll IL GP Corp. (IL)

Toll Keystone Corp. (DE)

Silverman—Toll Limited Partnership (MI)

Somers Chase, L.P. (NY)

Sorrento at Dublin Ranch I LP (CA)

Sorrento at Dublin Ranch III LP (CA)

South Riding, L.P. (VA)

South Riding Amberlea LP (VA)

South Riding Partners Amberlea LP (VA)

South Riding Partners, L.P. (VA)

Southport Landing Limited Partnership (CT)

Springton Pointe, L.P. (PA)

Stone Mill Estates, L.P. (PA)

Swedesford Chase, L.P. (PA)

TBI/Naples Limited Partnership (FL)

TBI/Palm Beach Limited Partnership (FL)

The Bird Estate Limited Partnership (MA)

The Estates at Brooke Manor Limited Partnership (MD)

The Estates at Summit Chase, L.P. (CA)

Toll at Brier Creek Limited Partnership (NC)

Toll at Honey Creek Limited Partnership (MI)

Toll at Westlake, L.P. (NJ)

Toll at Whippoorwill, L.P. (NY)

Toll Brooklyn L.P. (NY)

Toll Bros. of Tennessee, L.P. (TN)

Toll Brothers AZ Limited Partnership (AZ)

Toll CA II, L.P. (CA)

Toll CA III, L.P. (CA)

Toll CA IV, L.P. (CA)

Toll Land Corp. No. 10 (DE)

Toll Land Corp. No. 20 (DE)

Toll Land Corp. No. 43 (DE)

Toll Land Corp. No. 50 (DE)

Toll Land Corp. No. 6 (PA)

Toll Lone Star Corp. (DE)

Toll LTC Successor Corp. (NV)

Toll Manhattan I, Inc. (NY)

Toll MD Builder Corp. (MD)

Toll MI GP Corp. (MI)

Toll Mid-Atlantic LP Company, Inc. (DE)

Toll Mid-Atlantic Note Company, Inc. (DE)

Toll Midwest LP Company, Inc. (DE)

Toll Midwest Note Company, Inc.(DE)

Toll MN GP Corp. (MN)

Toll NC GP Corp. (NC)

Toll NH GP Corp. (NH)

Toll NJ Builder Corp. (NJ)

Toll NJX III Corp. (DE)

Toll NJX IV Corp. (DE)

Toll NJX-I Corp. (DE)

Toll NJX-II Corp. (DE)

Toll Northeast LP Company, Inc. (DE)

Toll Northeast Note Company, Inc. (DE)

Toll Northeast Services, Inc. (DE)

Toll Nutmeg Corp. (DE)

Toll NV GP Corp. (NV)

Toll OH GP Corp. (OH)

Toll Old Line Corp. (DE)

Toll PA Builder Corp. (PA)

Toll PA GP Corp. (PA)

Toll PA II GP Corp. (PA)

Toll PA III GP Corp. (PA)

Toll Palmetto Corp. (DE)

Toll Peppertree, Inc. (NY)

Toll Philmont Corporation (DE)

Toll Plantation Corp. (DE)

Toll Prairie Corp. (DE)

Toll Realty Holdings Corp. I (DE)

Toll Realty Holdings Corp. II (DE)

Toll RI GP Corp. (RI)

Toll Sagebrush Corp. (DE)

Toll SC GP Corp. (SC)

Toll Southeast LP Company, Inc. (DE)

Toll Southeast Note Company, Inc. (DE)

Toll Southwest LP Company, Inc. (DE)

Toll Southwest Note Company, Inc. (DE)

Toll Sunshine Corp. (DE)

Toll Tar Heel Corp. (DE)

Toll TN GP Corp. (TN)

Toll TX GP Corp. (DE)

Toll East Naples Limited Partnership (FL)

Toll Estero Limited Partnership (FL)

Toll FL II Limited Partnership (FL)

Toll FL III Limited Partnership (FL)

Toll FL IV Limited Partnership (FL)

Toll FL Limited Partnership (FL)

Toll FL V Limited Partnership (FL)

Toll FL VI Limited Partnership (FL)

Toll FL VII Limited Partnership (FL)

Toll FL VIII Limited Partnership (FL

Toll Ft. Myers Limited Partnership (FL)

Toll GA LP (GA)

Toll Grove LP (NJ)

Toll Hudson LP (NJ)

Toll IL HWCC, L.P. (IL)

Toll IL II, L.P. (IL)

Toll IL III, L.P. (IL)

Toll IL IV, L.P. (IL)

Toll IL WSB, L.P. (IL)

Toll IL, L.P. (IL)

Toll Jacksonville Limited Partnership (FL)

Toll Land IV Limited Partnership (NJ)

Toll Land IX Limited Partnership (VA)

Toll Land Limited Partnership (CT)

Toll Land V Limited Partnership (NY)

Toll VA GP Corp. (DE)

Toll VA Member Two, Inc. (DE)

Toll WestCoast LP Company, Inc. (DE)

Toll WestCoast Note Company, Inc. (DE)

Toll WV GP Corp. (WV)

Toll YL, Inc. (CA)

Warren Chase, Inc. (DE)

51 N. 8th Street L.P. (NY)

Audubon Ridge, L.P. (PA)

Belmont Land, L.P. (VA)

Binks Estates Limited Partnership (FL)

Blue Bell Country Club, L.P. (PA)

Broad Run Associates, L.P. (PA)

Buckingham Woods, L.P. (PA)

CC Estates Limited Partnership (MA)

Cold Spring Hunt, L.P. (PA)

Dominion Country Club, L.P. (VA)

Eagle Farm Limited Partnership (MA)

Estates at Princeton Junction, L.P. (NJ)

Estates at Rivers Edge, L.P. (NJ)

Fairfax Investment, L.P. (VA)

Fairfax Station Hunt, L.P. (VA)

Farmwell Hunt, L.P. (VA)

First Brandywine Partners, L.P. (DE)

Great Falls Hunt, L.P. (VA)

Greenwich Chase, L.P. (NJ)

Hoboken Land LP (NJ)

Hockessin Chase, L.P. (DE)

Huckins Farm Limited Partnership (MA)

Kensington Woods Limited Partnership (MA)

Laurel Creek, L.P. (NJ)

Loudoun Valley Associates, L.P. (VA)

NC Country Club Estates Limited Partnership (NC)

Toll NJ, L.P. (NJ)

Toll Northville Limited Partnership (MI)

Toll NV Limited Partnership (NV)

Toll NY LP (NY)

Toll Orlando Limited Partnership (FL)

Toll PA II, L.P. (PA)

Toll PA III, L.P. (PA)

Toll PA IV, L.P. (PA)

Toll PA IX, L.P. (PA)

Toll PA V, L.P. (PA)

Toll PA VI, L.P. (PA)

Toll PA VIII, L.P. (PA)

Toll PA X, L.P. (PA)

Toll PA XI, L.P. (PA)

Toll PA XII, L.P. (PA)

Toll PA XIII, L.P. (PA)

Toll PA, L.P. (PA)

Toll Realty Holdings LP (DE)

Toll RI II, L.P. (RI)

Toll RI, L.P. (RI)

Toll SC II, L.P. (SC)

Toll SC III, L.P. (SC)

Toll SC, L.P. (SC)

Toll Stonebrae LP (CA)

Toll VA II, L.P. (VA)

Toll VA III, L.P. (VA)

Toll VA IV, L.P. (VA)

Toll VA V, L.P. (VA)

Toll VA VI, L.P. (VA)

Toll VA VII, L.P. (VA)

Toll VA, L.P. (VA)

Toll WV LP (WV)

Toll YL II, L.P. (CA)

Toll YL, L.P. (CA)

Toll-Dublin, L.P. (CA)

Village Partners, L.P. (PA)

West Amwell Limited Partnership (NJ)

Wilson Concord, L.P. (TN)

110-112 Third Ave. GC II LLC (NY)

110-112 Third Ave. GC LLC (NY)

1500 Garden St. LLC (NJ)

2301 Fallston Road LLC (MD)

5-01 — 5-17 48th Avenue GC II LLC (NY)

 

 

Toll CA V, L.P. (CA)

Toll CA VI, L.P. (CA)

Toll CA VII, L.P. (CA)

Toll CA VIII, L.P. (CA)

Toll CA IX, L.P. (CA)

Toll CA X, L.P. (CA)

Toll CA XI, L.P. (CA)

Toll CA XII, L.P. (CA)

Toll CA XIX, L.P. (CA)

Toll CA, L.P. (CA)

Toll CO, L.P. (CO)

Toll CT II Limited Partnership (CT)

Toll CT Limited Partnership (CT)

Toll DE LP (DE)

C.B.A.Z. Holding Company LLC (DE)

Component Systems I LLC (DE)

Component Systems II LLC (DE)

CWG Construction Company LLC (NJ)

Dominion Valley Country Club I LLC (VA)

Dominion Valley Country Club II LLC (VA)

First Brandywine LLC I (DE)

First Brandywine LLC II (DE)

First Brandywine LLC III (DE)

First Brandywine LLC IV (DE)

Frenchman’s Reserve Realty, LLC (FL)

Hawthorn Woods Country Club II LLC (IL)

Hoboken Cove LLC (NJ)

Hoboken Land I LLC (DE)

Jacksonville TBI Realty LLC (FL)

Lighthouse Point Land Company, LLC (FL)

Long Meadows TBI, LLC (MD)

Longmeadow Properties LLC (MD)

Martinsburg Ventures, L.L.C. (VA)

Mizner Realty, L.L.C. (FL)

Naples TBI Realty, LLC (FL)

Orlando TBI Realty LLC (FL)

Phillips Drive LLC (MD)

Prince William Land I LLC (VA)

Prince William Land II LLC (VA)

Regency at Denville LLC (NJ)

Regency at Dominion Valley LLC (VA)

Regency at Long Valley I LLC (NJ)

Regency at Long Valley II LLC (NJ)

Regency at Mansfield I LLC (NJ)

Regency at Mansfield II LLC (NJ)

Regency at Washington I LLC (NJ)

Regency at Washington II LLC (NJ)

South Riding Realty LLC (VA)

SR Amberlea LLC (VA)

SRLP II LLC (VA)

Tampa TBI Realty LLC (FL)

TB Kent Partners LLC (DE)

The Regency Golf Club I LLC (VA)

The Regency Golf Club II LLC (VA)

The Ridges at Belmont Country Club I LLC (VA)

The Ridges at Belmont Country Club II LLC (VA)

Toll Austin TX LLC (TX)

Toll Cedar Hunt LLC (VA)

Toll CO I LLC (CO)

Toll Corners LLC (DE)

Toll Dallas TX LLC (TX)

Toll DE X II, LLC (DE)

Toll DE X, LLC (DE)

Toll EB, LLC (DE)

Toll Equipment, L.L.C. (DE)

Toll FL I, LLC (FL)

Toll Glastonbury LLC (CT)

Toll Henderson LLC (NV)

Toll Hoboken LLC (DE)

Toll Land VI Limited Partnership (NY)

Toll Land VII Limited Partnership (NY)

Toll Land X Limited Partnership (VA)

Toll Land XI Limited Partnership (NJ)

Toll Land XIV Limited Partnership (NY)

Toll Land XIX Limited Partnership (CA)

Toll Land XV Limited Partnership (VA)

Toll Land XVI Limited Partnership (NJ)

Toll Land XVIII Limited Partnership (CT)

Toll Land XX Limited Partnership (CA)

Toll Land XXI Limited Partnership (VA)

Toll Land XXII Limited Partnership (CA)

Toll Land XXIII Limited Partnership (CA)

Toll Land XXV Limited Partnership (NJ)

Toll Land XXVI Limited Partnership (OH)

Toll Livingston at Naples Limited Partnership (FL)

Toll MA Land Limited Partnership (MA)

Toll MD Builder I, L.P. (MD)

Toll MD Limited Partnership (MD)

Toll MD V Limited Partnership (MD)

Toll MD VI Limited Partnership (MD)

Toll MD VII Limited Partnership (MD)

Toll MD II Limited Partnership (MD)

Toll MD III Limited Partnership (MD)

Toll MD IV Limited Partnership (MD)

Toll MD IX Limited Partnership (MD)

Toll MD VIII Limited Partnership (MD)

Toll MD X Limited Partnership (MD)

Toll MI II Limited Partnership (MI)

Toll MI III Limited Partnership (MI)

Toll MI IV Limited Partnership (MI)

Toll MI Limited Partnership (MI)

Toll MI V Limited Partnership (MI)

Toll MN II, L.P. (MN)

Toll MN, L.P. (MN)

Toll Naval Associates (PA)

Toll NC II LP (NC)

Toll NC, L.P. (NC)

Toll NH Limited Partnership (NH)

Toll NJ Builder I, L.P. (NJ)

Toll NJ II, L.P. (NJ)

Toll NJ III, L.P. (NJ)

Toll NJ IV, L.P. (NJ)

Toll NJ V, L.P. (NJ)

Toll NJ VI, L.P. (NJ)

Toll NJ VII, L.P. (NJ)

Toll NJ VIII, L.P. (NJ)

Toll NJ XI, L.P. (NJ)

Toll IN LLC (IN)

Toll Jupiter LLC (FL)

Toll MD I, L.L.C. (MD)

Toll MD II LLC (MD)

Toll Morgan Street LLC (DE)

Toll NJ I, L.L.C. (NJ)

Toll NJ II, L.L.C. (NJ)

Toll NJ III, LLC (NJ)

Toll North LV LLC (NV)

Toll North Reno LLC (NV)

Toll NV Holdings LLC (NV)

Toll San Antonio TX LLC (TX)

Toll South LV LLC (NV)

Toll South Reno LLC (NV)

Toll Stratford LLC (VA)

Toll VA III L.L.C. (VA)

Toll VA L.L.C. (DE)

Toll Van Wyck, LLC (NY)

Toll Vanderbilt I LLC (RI)

Toll Vanderbilt II LLC (RI)

Toll-Dublin, LLC (CA)

Vanderbilt Capital LLC (RI)

Virginia Construction Co. I, LLC (VA)

5-01 — 5-17 48th Avenue GC LLC (NY)

5-01 — 5-17 48th Avenue II LLC (NY)

5-01 — 5-17 48th Avenue LLC (NY)

51 N. 8th Street GC II LLC (NY)

51 N. 8th Street GC LLC (NY)

51 N. 8th Street I LLC (NY)

700 Grove Street Urban Renewal, LLC (NJ)

Arbor Hills Development LLC (MI)

Arthur’s Woods, LLC (MD)

Arundel Preserve #10a, LLC (MD)

Arundel Preserve #6, LLC (MD)

Belmont Country Club I LLC (VA)

Belmont Country Club II LLC (VA)

Block 255 LLC (NJ)

Brier Creek Country Club I LLC (NC)

Brier Creek Country Club II LLC (NC)

C.B.A.Z. Construction Company LLC (AZ)

Virginia Construction Co. II, LLC (VA)

2exv4wa

Exhibit 4(a)

UBS Financial Services Incorporated of Puerto Rico

Master Retirement Plan Cash or Deferred Profit Sharing Plan

/ Profit Sharing Plan 
Adoption Agreement No. 1

Diebold, Incorporated

Rev. 7/18/2008; 11:55 AM

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Page 1 of 25

 

Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

By executing this Adoption Agreement the Employer is adopting or amending a cash or deferred profit
sharing plan or profit sharing plan for the benefit of the Employees. The Employer’s Plan is
comprised of the UBS Financial Services Incorporated of Puerto Rico Master Retirement Plan (the
“Plan”), the Trust Agreement and this Adoption Agreement. The terms used in this Adoption
Agreement, as well as the rules to be complied with in connection with the Plan, are fully
explained in the Plan. When signing this Adoption Agreement, the Employer has received copy of the
Plan and the Summary Plan Description. The Employer shall be responsible for distributing copies of
the Summary Plan Description to all Eligible Employees and Beneficiaries within the time prescribed
by ERISA.

Section 1. Employer Information

Employer Name:

Diebold, Incorporated

Address:

5995 Mayfair Road North Canton Ohio, 44720

Telephone:

Fax:

Employer Tax Identification Number:

34-0183970

(A) Type of Business Entity:

     o Sole Proprietorship. (Notice: This Plan cannot be combined with the Keogh type plan).

     o
Partnership.

     o
Special Partnership. (Notice: This Plan cannot be combined with the Keogh type plan).

     þ Corporation.

     o
Corporation of Individuals. (Notice: This Plan cannot be combined with the Keogh type plan).

     o Other.

(B) Employer’s Taxable Year:

     þ Calendar year.

     o Fiscal year ending on:

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

Rev. 18/07/2008; 11:55 AM

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

Section 2. General Plan Information

Plan Name:

Diebold, Incorporated 401(k) Savings Plan for Puerto Rico Associates

Plan Number:

001

þ Adopts a Cash or Deferred Profit Sharing Plan.

o Adopts a Profit Sharing Plan.

(A) Adoption or Amendment of Plan:

By signing this Adoption Agreement the Employer:

þ Adopts a new plan.

o Amends certain options of an earlier Adoption Agreement for this plan.

o Amends and restates the following plan:

Name of plan:

Plan’s original effective date:

(B) Effective Date:

The effective date of this Plan or amendment is:

September 1, 2008

(Cannot be earlier than the first day of the Plan Year in which the Employer signs this
Adoption Agreement).

(C) Plan Year:

The Plan
Year will mean:

þ The calendar year.

o
The period of 12 consecutive months beginning on                      and ending on                     .

o The Employer’s taxable year. If the Employer’s taxable year changes, the Plan Year will
change accordingly.

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

(D) Short Plan Year

o Not applicable. The first Plan Year is not a short Plan Year.

þ The first Plan Year is a short Plan Year beginning on September 1, 2008 and ending on
December 31,2008.

Section 3. Eligibility Requirements for Plan Participation

(A) Exclusion of Certain Employees:

The Plan will cover ail Employees of the Employer who have met the age and service requirements, if
any, specified below with the following exclusions:

o No exclusions. All Employees of the Employer will be eligible to participate in the Plan.

þ Employees in a unit of Employees covered by a collective bargaining agreement with
respect to which retirement benefits were the subject of good faith bargaining.

þ Leased Employees.

o Employees paid by commissions only.

o Employees hourly paid.

o Employees paid by salary.

o Employees in the following other classes (specify):

Associates living outside Puerto Rico, manufacturers representatives, independent contractors,
individuals whose wages are not reported on W-2 by Diebold or whose employment is
temporary and subject to contract between Diebold and third party regardless of later
reclassification as a common law employee.

(B) Age
Requirement:

An Eligible Employee must fulfill the following age requirement to become a Participant:

þ
No age requirement.

o
Minimum age
                     (not greater than 21; 20 1/2 in case of Plan with annual entry dates).

(C) Service Requirement:

An Eligible Employee must fulfill the following service requirement to become a Participant:

o
No service requirement.

þ 3 months of service (not more than 12; 6 in case of Plan with annual entry dates).

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

o 24 months of service (18 months in case of Plan with annual entry dates; if you choose this
option, you must choose full vesting in Section 7 below).

If periods of less than 12 months are selected, Eligible Employees will not be required to complete
any specified number of hours of service to receive credit for any fractional year.

D) Method for Calculating Year of Service:

þ Hours of Service Method. An Employee’s service will be determined by using the hours of
service method as described in Section 3.1 of the Plan.

o Hours of Service. An Employee’s Hours of Service will be determined by
counting:

	 	 	 	o Actual hours worked.
	 
	 	 	 	o 10 hours per day.
	 
	 	 	 	o 45 hours per week.
	 
	 	 	 	o 95 hours per half
month.
	 
	 	 	 	o 190 hours per month.

o
Elapsed Time Method. An Employee’s service will be determined using the elapsed time
method, as described in Section 3.2 of the Plan.

(E) Service with Predecessor Employer(s)

Service with the following predecessor Employers will be treated as service with the Employer:

Section 4. Entry Dates

o Daily Entry Dates.

þ Monthly Entry Dates. The first day of each month of the Plan Year.

o Quarterly Entry Dates. The first day of each of the first, fourth, seventh and tenth months of
the Plan Year.

o Semi-Annual Entry Dates. The first day of each of the first and seventh months of the Plan Year.

o Annual Entry Dates. The first day of each Plan Year.

Section 5. Compensation

(A) Compensation:

Rev. 10/09/2008; 2:33 PM

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

Except as modified below, Compensation shall mean Compensation as defined in Section 2.9 of the
Plan. However, for a Sole Proprietorship, Special Partnership or Corporation of Individuals
adopting the Cash or Deferred Profit Sharing Plan Adoption Agreement, Compensation shall not
include Earned Income as defined in Section 2.13 of the Plan. Compensation shall include pre-tax
contributions for welfare benefits.

(B) Exclusions:

Compensation
will exclude the following items:

o No exclusions.

o Bonuses.

o Overtime.

o Commissions.

o Compensation in excess of:

o Compensation under:

þ Other items (specify):

Stock options, distributions from deferred compensation plan, other amounts which
receive special tax benefits

(C) Pre-Tax Contributions:

þ Compensation will include Pre-Tax Contributions.

o
Compensation will not include Pre-Tax Contributions.

(D) Measuring Period

Compensation
will be based on the Plan Year. However, for an Eligible Employee’s initial year of
participation in the Plan. Compensation will be recognized as of:

o The first day of the Plan Year.

þ
The date the Eligible Employee becomes a Participant in the Plan.

Section 6. Contributions

A Sole Proprietorship, Special Partnership or Corporation of Individuals adopting the Cash or
Deferred Profit Sharing Plan Adoption Agreement is not allowed to make Pre-Tax Contributions,
Profit Sharing Contributions, After-Tax Contributions, and Matching Contributions, on account of
Earned Income as defined in Section 2.13 of the Plan.

(A) Pre-Tax Contributions

þ Pre-Tax Contributions will be permitted.

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

o Automatic enrollment will be permitted.

o Initial Participant Contribution Rate will be:

                                                            %.

o
Plan will provide for automatic increases as specified below:

 

 

 

o Automatic enrollment will be effective for the following employees:

o Employees who become eligible to participate in the Plan after the
effective date of the automatic enrollment.

o Employees who are eligible to participate in the Plan before the
effective date of the automatic enrollment without an election for Pre-Tax
Contributions.

o
Automatic enrollment will not be permitted.

o Pre-Tax Contributions will not be permitted.

(B) Limitation on Pre-Tax Contributions

þ
Pre-Tax Contributions may not be less than 1% nor exceed
10% of
Compensation.

o Not applicable. The Plan does not provide for Pre-Tax Contributions.

In no event may Pre-Tax Contributions exceed the lesser of 10% or $8,000 of the Participant’s
Compensation, or any other limitations prescribed by law. The Catch-Up contributions are not
subject to such limitation.

(C) Changes in Pre-Tax Contributions

The amount or percentage of Pre-Tax Contributions may be changed by Participants:

þ The first day of any payroll period.

o The first day of any month.

o The first day of each of the first and seventh months of the Plan Year.

o The first day of each of the first, fourth, seventh and tenth months of the Plan Year.

o The first day of the Plan Year.

o
Not applicable. The Plan does not provide for Pre-Tax Contributions.

(D) Matching of Pre-Tax Contributions

o
The Employer will make no matching of Pre-Tax Contributions.

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

o The Employer will make discretionary matching of Pre-Tax Contributions

o The Employer will make matching of Pre-Tax Contributions equal to $                      for each dollar of
Participant’s Pre-Tax Contributions.

o
The Employer will make matching of Pre-Tax Contributions equal to $                      for each dollar of a
Participant’s Pre-Tax Contributions. However, the Employer will not make matching of Pre-Tax
Contributions above
                    % of the Participants Compensation.

o The Employer will make matching of Pre-Tax Contributions equal to $                     for each dollar of a
Participant’s Pre-Tax Contributions up to                     % of the Participant’s Compensation and
matching of Pre-Tax Contributions equal to $                     for each dollar of a Participant’s Pre-Tax
Contributions over
                    % of the Participant’s Compensation. However, the Employer will not
make matching of Pre-Tax Contributions on a Participant’s
Pre-Tax Contributions above                     %
of the Participant’s Compensation.

Rev. 18/07/2008; 11:55 AM

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Page 9 of 25

 

Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

þ The Employer will make matching of Pre-tax Contributions for each Participant’s Pre-Tax
Contributions as follows:

For Employees if hired before July 1, 2003

þ 60 matching on the first 3% of Participant’s
Compensation;

þ 40 matching on the second 3% of
Participant’s Compensation;

For Employees if hired on and after July 1, 2003

þ 100 matching on the first 3% of Participant’s
Compensation; and

þ 60 matching on the second 3% of
Participant’s Compensation.

However, the Employer will not make matching of Pre-Tax Contributions on a Participant’s Pre-Tax
Contributions above 6% of the Participant’s Compensation.

o The Employer will make matching on Catch-Up contributions.

þ The Employer will make no matching on Catch-Up contributions.

o Other:    
                   
                   
               
                     
                  
     .

(E) Matching Periods

The Employer will make matching of Pre-Tax Contributions for each matching period. The matching
period will be the following:

o Not applicable. The Plan does not provide for matching of Pre-Tax Contributions.

þ Each payroll period.

o Monthly.

o Quarterly.

o Semi-Annually.

o The Plan Year.

(F) Profit Sharing Contributions

þ The Employer will make no Profit Sharing Contributions.

o For each Plan Year in which this Plan is in effect the Employer may make contributions in one or
more installments for the Plan Year, in such amounts as the Employer
may determine, if any.

o
For each Plan Year the Employer will contribute                     % of an eligible Participant’s
Compensation.

o For each plan year the Employer will contribute                     % of an eligible Participant’s
Compensation up to $                     and                     % of an eligible Participant’s Compensation above $                    .

o For each Plan Year the Employer will contribute $                     for each eligible Participant per                    
(enter time period, e.g. Payroll period, Plan Year).

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

o Other:   
                 
                 
                  
               
                 
              .

Profit Sharing Contributions must be made out of the Employer’s current or accumulated profits.

(G) Allocation of Profit Sharing Contributions

þ Not applicable. The Plan does not provide for Profit Sharing Contributions.

o Pro rata (% based on Compensation).

o Percentage of Participant’s Compensation.

o
Uniform dollar amount.

o Integrated with social security.

o Other:   
                   
                  
                 
                
                
            .

(H) After-Tax
Contributions

þ After-Tax Contributions will not be permitted.

o
After-Tax Contributions will be permitted.

After-Tax Contributions may not commence prior to the date the Adoption Agreement is executed.

(I) Limitations on After-Tax Contributions

þ Not applicable. The Plan does not provide for After-Tax Contributions.

o After-Tax Contributions may not be less than                     % nor exceed                     % of Compensation.

In no event may After-Tax Contributions exceed 10% of the Participant’s Compensation.

(J) Changes in After-Tax Contributions

The amount or percentage of After-Tax Contributions may be changed by Participants:

þ Not applicable. The Plan does not provide for After-Tax Contributions.

o The first day of any payroll period.

o The first day of any month.

o The first day of each of the first and seventh months of the Plan Year.

o
The first day of each of the first, fourth, seventh and tenth months of the Plan Year.

o The first day of the Plan Year.

(K) Matching of After-Tax Contributions

þ The Employer will make no matching of After-Tax Contributions.

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Page 11 of 25

 

Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

o
The Employer will make discretionary matching of After-Tax Contributions.

o
The Employer will make matching of After-Tax Contributions equal to
$              for each dollar of
Participant’s After-Tax Contributions.

o
The Employer will make matching of After-Tax Contributions equal to $                     for each dollar of
a Participant’s After-Tax Contributions, However, the Employer will not make matching of After-
Tax Contributions above                     % of the Participant’s Compensation.

o The Employer will make matching of After-Tax Contributions equal to $                      for each dollar of
a Participant’s After-Tax Contributions up to          
           % of the Participant’s Compensation and
matching of After-Tax Contributions equal to $          
           for each dollar of a Participant’s After-Tax
Contributions over                 
    % of the Participant’s Compensation. However, the Employer will not
make matching of After-Tax Contributions on a Participant’s After-Tax Contributions above
                
    % of the Participant’s Compensation.

o Other:   
                   
                  
                 
               
                
             .

(L) Matching Periods

The Employer will make matching of After-Tax Contributions for each matching period. The matching
period will be the following:

þ Not applicable. The Plan does not provide for matching of After-Tax Contributions.

o Each payroll period.

o Monthly.

o Quarterly.

o Semi-annually.

o The Plan Year.

(M) Rollover Contributions

o Rollover Contributions will not be permitted.

þ Rollover Contributions will be permitted.

(N) Forfeitures

Forfeitures of Profit Sharing Contributions and/or Matching Contributions will be:

þ Applied to reduce Profit Sharing Contributions and/or Matching Contributions required of
the Employer.

o Re-allocated as additional Profit Sharing Contributions.

o First applied to reduce the Plan’s administrative expenses and then:

     o to reduce Employer Profit Sharing Contributions and/or Matching Contributions.

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

     o
re-allocated as Profit Sharing Contributions.

þ Any of the above as determined by the Employer for any Plan Year.

o Not applicable. The Plan provides for immediate vesting on Profit Sharing Contributions and/or
Matching Contributions.

o Other:  
                 
                  
                  
                 
                 
            .

(O) Qualified Non-Elective Contributions

o The Employer may make Qualified Non-Elective Contributions in accordance with Section 5.6 of the
Plan.

þ The Employer will not make Qualified Non-Elective Contributions.

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

(P) Qualified Matching Contributions

o The Employer may make Qualified Matching Contributions in accordance with Section 5.7
of the Plan.

þ The Employer will not make Qualified Matching Contributions.

Section 7. Vesting

(A) Profit Sharing Contributions

Profit Sharing Contributions and earnings thereon will vest in accordance with the following
vesting schedule:

þ Not applicable. The Plan does not provide for Profit Sharing Contributions.

o Full Vesting. Participants are 100% vested at all times.

o Cliff Vesting. Participants are 100% vested after completing            years of service (insert
number; cannot be greater than 3). The Participant will be 0% vested until completing the years of
service specified above.

o Graded Vesting. Participants are vested in accordance with the following vesting
schedule. A Participant’s vested percentage is the percentage in column (2) or the percentage in
column (3), whichever is greater. Spaces left blank are treated as zeros.

	 	 	 	 	 
	(1)	 	(2)	 	(3)
	Years of Service	 	Vested Percentage	 	Minimum Required Percentage
	Less than 1	 	 	 	0
	1	 	 	 	0
	2	 	 	 	20
	3	 	 	 	40
	4	 	 	 	60
	5	 	 	 	80
	6 or more	 	 	 	100  

Notwithstanding the above, a Participant will become fully vested in his Profit Sharing
Contributions, and earnings thereon, upon the earlier of (i) reaching Normal Retirement Age while
still employed by the Employer, (ii) retirement at Normal or Early Retirement Age, (iii)
disability, (iv) death while employed by the Employer, (v) termination of the Plan, or (vi)
complete discontinuance of contributions by the Employer,

(B) Matching Contributions

Matching Contributions and earnings thereon will vest in accordance with the following vesting
schedule:

o Not applicable. The Plan does not provide for Matching Contributions.

þ Full Vesting. Participants are 100% vested at all times. If hired before July 1, 2003

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Master Retirement Plan
Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

þ
Cliff Vesting. Participants are 100% vested after completing 3 years of service (insert
number; cannot be greater than 3). The Participant will be 0% vested until completing the years of
service specified above. If hire on and after July 1, 2003

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

o Graded Vesting. Participants are vested in accordance with the following vesting
schedule. A Participant’s vested percentage is the percentage in column (2) or the percentage in
column (3), whichever is greater. Spaces left blank are treated as zeros.

	 	 	 	 	 
	(1)	 	(2)	 	(3)
	Years of Service	 	Vested Percentage	 	Minimum Required Percentage
	Less than 1	 	 	 	0
	1	 	 	 	0
	2	 	 	 	20
	3	 	 	 	40
	4	 	 	 	60
	5	 	 	 	80
	6 or more	 	 	 	100  

Notwithstanding the above, a Participant will become fully vested in his Matching Contributions,
and earnings thereon, upon the earlier of (i) reaching Normal Retirement Age while still employed
by the Employer, (ii) retirement at Normal or Early Retirement Age, (iii) disability, (iv) death
while employed by the Employer, (v) termination of the Plan, or (vi) complete discontinuance of
contributions by the Employer.

(C) Years of Service excluded in determining vested percentages.

þ Not applicable. The Plan provides for immediate vesting or no Years of Service are
excluded.

o Years of Service completed before the Effective Date of this Plan.

o Years of Service completed before the Effective Date of a predecessor plan.

o Years of Service completed before the Participant’s 18th birthday.

Section 8. Loans

(A) Loans to Participants from the Plan:

o Are not permitted.

þ Are permitted, subject to the Plan’s loan rules.

(B) Loans to Employees who have made Rollover Contributions but are not yet eligible to
participate in the Plan:

o Not applicable. The Plan does not allow Rollover
Contributions.

o Are not permitted.

þ Are permitted.

Section 9. In-Service Withdrawals

The following provisions will govern the availability of in-service withdrawals from a
Participant’s accounts. See Article X of the Plan for additional details, including definitions and
limitations. Notwithstanding the above, or any other provisions of this Adoption Agreement or the
Plan, no in-service withdrawals or distributions from the Plan in excess of the Contributions made
by an

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

Owner-Employee (as defined in Section 2.33 of the Plan) will be made to such Owner-Employee before he reaches age 59 1/2 or becomes disabled.

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

(A) Pre-Tax Contributions

In-service withdrawals from Pre-Tax Contributions and earning thereon are subject to the
limitations of Section 10.1 of the Plan. These types of withdrawals:

o Not applicable. The Plan does not provide for Pre-Tax Contributions.

o Will not be allowed.

þ Will be allowed for financial hardship and after attaining age 59 1/2.

o Will only be allowed in case of a financial hardship.

o Will only be allowed after attaining age 59 1/2.

(B) Profit Sharing Contributions

In-service withdrawals from Profit Sharing Contributions and earning thereon are subject to the
limitations of Section 10.4 of the Plan. These types of withdrawals:

þ Not applicable. The Plan does not provide for Profit Sharing Contributions.

o Will not be allowed.

o Will be allowed for any reason.

o Will only be allowed in case of a financial hardship.

(C) After-Tax Contributions

In-service withdrawals from After-Tax Contributions and earning thereon are subject to the
limitations of Section 10.2 of the Plan. These types of withdrawals are:

þ Not applicable. The Plan does not provide for After-Tax Contributions.

o Will not be allowed.

o Will be allowed for any reason.

o Will only be allowed in case of a financial hardship.

(D) Matching Contributions

In-service withdrawals from Matching Contributions and earnings thereon are subject to the
limitations of Section 10.3 of the Plan, These types of withdrawals:

o Not applicable. The Plan does not provide for Matching Contributions.

þ Will not be allowed.

o Will be allowed for any reason.

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

þ Will only be allowed in case of a financial hardship.

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

(E) Rollover Contributions

In-service withdrawals from Rollover Contributions and earning thereon are subject to the
limitations of Section 10.5 of the Plan. These types of withdrawals:

o Not applicable. The Plan does not provide for Rollover Contributions.

o Will not be allowed.

þ Will be allowed for the reasons specified in Section 10.5 of the Plan. (upon age 591/2)

(F) Suspension on future Pre-Tax Contributions and After-Tax Contributions

If a Participant makes an in-service withdrawal of Pre-Tax Contributions, such Participant cannot
make future Pre-Tax Contributions and After-Tax Contributions for a period of 6 months
following the in-service withdrawal.

Application of the limitation in future contributions to in-service withdrawals after attainment
of age 59 1/2:

þ In-service withdrawals after the Participant has attained age 59 1/2 will not be
subject to the limitation on future contributions.

o In-service withdrawals after the Participant has attained age 59 1/2 will be subject to
the limitation on future contributions.

(G) Limitations on future After-Tax Contributions

	If a Participant makes an in-service withdrawal
of:

o Profit Sharing Contributions

o Matching Contributions

o Rollover Contributions

o After-Tax Contributions

Then, the Participant’s future After-Tax Contributions to the Plan will be limited as follows:

þ Not applicable. The Plan does not provide for in-service withdrawals or
After-Tax Contributions or there will be no limitations on future After-Tax
Contributions.

o Participant may not make future After-Tax Contributions for a period of         months (not
more than 12) following the in-service withdrawal.

Application of the limitation in future contributions to in-service withdrawals after attainment of
age 59 1/2:

o In-service withdrawals after the Participant has attained age 59 1/2 will not be
subject to the limitation on future contributions.

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

o In-service withdrawals after the Participant has attained age 59 1/2 will be subject to
the limitation on future
contributions.

Section 10. Retirement Dates

(A) Normal Retirement Date

A Participant will be fully vested and may retire upon reaching age 65 (not before age 60
and not later than age 65) or, if later, after completing 0 years of participation (not more than
5) in the Plan.

(B) Early Retirement Date

þ Not applicable. The Plan does not provide for early retirement.

o A Participant will be fully vested and may retire prior to normal retirement upon reaching age
(not less than age 55)                      or, if later, completing                      Years of Service.

(C) Methods of Distribution for Annuity Exempt Plan

Unless otherwise provided below, an annuity form of payment will not be available for the
payment of a benefit from the Plan.

A Participant will receive the benefit from the Plan in the form of a lump-sum payment, unless the
Participant elects another method of distribution also available under Section 11.1 of the Plan.
However, the method of distribution will be a lump-sum payment if the lump-sum payment is the only
method of distribution available under the Plan as provided below.

A Beneficiary will receive the benefit from the Plan in the form of a lump-sum payment, unless an
annuity form of payment is also available for the payment of a benefit from the Plan as provided
below.

o An annuity form of payment under Section 11.1(b) of the Plan will be available to a
Participant in the Plan. In such case, the Plan must satisfy the applicable requirements of the
qualified joint and survivor annuity of Section 11.4 of the Plan or the qualified preretirement
survivor annuity of Section 12.3 of the Plan.

þ A lump-sum payment is the only method of distribution available under the Plan.

Section 11. Investments

(A) Investments Directions

o The Employer will provide investment directions for all the assets in the Plan.

þ The Participants will provide investment directions with respect to all assets in the
Plan.

o The Participants will provide investment directions with respect to the following
accounts:

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

o Pre-Tax Contributions Account.

o Employer Contributions Account (Profit Sharing Contributions).

o Matching Contributions Account.

o After-Tax Contributions Account.

o Rollover Contributions Account.

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

(B) Changes in Participant’s Investment Directions

Investment directions may be provided or changed by Participants:

o Not applicable. Participants will not provide investments directions.

o The first day of any payroll period.

o The first day of any month.

o The first day of each of the first, fourth, seventh and tenth months of the Plan Year.

o The first day of each of the first and seventh months of the Plan Year.

o The first day of the Plan Year.

þ Daily

(C) Employer Securities

o The Plan will not invest in qualifying Employer
securities.

þ The Plan will invest in qualifying
Employer securities.

(D) Eligible Investment Advice Arrangement

An Eligible investment Advice Arrangement may be allowed under the Plan, unless provided below:

o Not Applicable. An Eligible Investment Advice Arrangement will not be allowed.

Section 12. Valuation of Plan Assets

The Plan assets will be valued:

o Annually. The last day of the Plan Year.

o Semi-Annually. The last day of the first and seventh months of the Plan Year.

o Quarterly. The last day of the first, fourth, seventh and tenth months of the Plan Year.

o Monthly. The last day of each month.

þ Daily. Every business day.

Section 13. Plan Administration

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

The Employer may appoint a person or a committee to serve as Plan Administrator. If the Employer
does not appoint a Plan Administrator, the Employer will be the Plan’s Plan Administrator under
ERISA.

The initial Plan Administrator will be this person:

A Committee composed of these persons:

Benefit Committee

Section 14. Responsibilities of the Employer

The Employer understands and agrees that, by establishing this Plan it will be assuming certain
legal responsibilities for which neither the Trustee nor UBS Financial Services Incorporated of
Puerto Rico will be responsible. The Employer also understands that it will be solely responsible
for any taxes, costs or expenses arising from the administration, qualification, amendment and
disqualification of the Employer’s Plan. The Employer warrants that it has obtained legal and tax
advice to the extent the Employer deems necessary before signing this Adoption Agreement.

(A) Employer Name:

Diebold, Incorporated.

Signed:

/s/ Sheila M. Rutt

Print name and title:

Sheila M. Rutt Ph.D. Vice President and Chief HR Officer

Date: July 10, 2008

(B) Other adopting Employer(s)

Name of adopting Employer:

Signed:

Print name and title:

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Master Retirement Plan

Cash or Deferred Profit Sharing Plan / Profit Sharing Plan Adoption Agreement

Date:

The Employer should insure that this Adoption Agreement has been filled out completely and
properly. Failure to do so may result in Plan disqualification.

Rev. 11/2007

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UBS FINANCIAL SERVICES

INCORPORATED OF PUERTO RICO

MASTER RETIREMENT PLAN

January 1, 2008

 

 

TABLE
OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I — INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II — DEFINITIONS
	 	 	2	 
	Section 2.1 “Accrued Benefit”
	 	 	2	 
	Section 2.2 “Actual Deferral Percentage”
	 	 	2	 
	Section 2.3 “Adoption Agreement”
	 	 	2	 
	Section 2.4 “After-Tax Contributions”
	 	 	2	 
	Section 2.5 “After-Tax Contributions Account”
	 	 	2	 
	Section 2.6 “Annuity Starting Date”
	 	 	2	 
	Section 2.7 “Average Actual Deferral Percentage”
	 	 	3	 
	Section 2.8 “Beneficiary”
	 	 	3	 
	Section 2.9 “Compensation”
	 	 	3	 
	Section 2.10 “Disability”
	 	 	3	 
	Section 2.11 “Early Retirement Age”
	 	 	3	 
	Section 2.12 “Early Retirement Date”
	 	 	3	 
	Section 2.13 “Earned Income”
	 	 	3	 
	Section 2.14 “Effective Date”
	 	 	4	 
	Section 2.15 “Eligible Employee”
	 	 	4	 
	Section 2.16 “Employee”
	 	 	4	 
	Section 2.17 “Employer”
	 	 	4	 
	Section 2.18 “Employer Contributions”
	 	 	4	 
	Section 2.19 “Employer Contributions Account”
	 	 	4	 
	Section 2.20 “Entry Date”
	 	 	4	 
	Section 2.21 “ERISA”
	 	 	4	 
	Section 2.22 “Excess Contributions”
	 	 	4	 
	Section 2.23 “Excess Deferrals”
	 	 	5	 
	Section 2.24 “Fiduciary”
	 	 	5	 
	Section 2.25 “Highly Compensated Employee”
	 	 	5	 
	Section 2.26 “Investment Manager”
	 	 	5	 
	Section 2.27 “Matching Contributions”
	 	 	5	 
	Section 2.28 “Matching Contributions Account”
	 	 	5	 
	Section 2.29 “Money Purchase Contributions”
	 	 	5	 
	Section 2.30 “Non-Highly Compensated Employee”
	 	 	5	 
	Section 2.31 “Normal Retirement Age”
	 	 	5	 
	Section 2.32 “Normal Retirement Date”
	 	 	6	 
	Section 2.33 “Owner-Employee”
	 	 	6	 
	Section 2.34 Intentionally Omitted
	 	 	6	 
	Section 2.35 “Paired Plan”
	 	 	6	 
	Section 2.36 “Participant”
	 	 	6	 
	Section 2.37 “Plan”
	 	 	6	 
	Section 2.38 “Plan Administrator”
	 	 	6	 

 

 

	 	 	 	 	 
	 	 	Page	 
	Section 2.39 “Plan Year”
	 	 	6	 
	Section 2.40 “PR-Code”
	 	 	6	 
	Section 2.41 “Pre-Tax Contributions”
	 	 	6	 
	Section 2.42 “Pre-Tax Contributions Account”
	 	 	7	 
	Section 2.43 “Profit Sharing
Contributions”
	 	 	7	 
	Section 2.44 “Qualified Employer Deferral Contributions”
	 	 	7	 
	Section 2.45 “Qualified Matching Contributions”
	 	 	7	 
	Section 2.46 “Qualified Matching Contributions Account”
	 	 	7	 
	Section 2.47 “Qualified Non-Elective Contributions”
	 	 	7	 
	Section 2.48 “Qualified Non-Elective Contributions
Account”
	 	 	7	 
	Section 2.49 “Rollover Contributions”
	 	 	8	 
	Section 2.50 “Rollover Contributions Account”
	 	 	8	 
	Section 2.51 “Self-Employed Individual”
	 	 	8	 
	Section 2.52 “Target Benefit Contributions”
	 	 	8	 
	Section 2.53 “Trust”
	 	 	8	 
	Section 2.54 “Trust Agreement”
	 	 	8	 
	Section 2.55 “Trust Fund”
	 	 	8	 
	Section 2.56 “Trustee”
	 	 	8	 
	Section 2.57 “UBS”
	 	 	8	 
	Section 2.58 “Valuation Date”
	 	 	8	 
	Section 2.59 “1165(e) Plan”
	 	 	8	 
	 
	 	 	 	 
	ARTICLE III — RULES RELATING TO SERVICE
	 	 	9	 
	Section 3.1 Hours of Service Method
	 	 	9	 
	Section 3.2 Elapsed Time Method
	 	 	12	 
	 
	 	 	 	 
	ARTICLE IV — PARTICIPATION
	 	 	14	 
	Section 4.1 Initial Participation
	 	 	14	 
	Section 4.2 Termination of
Participation
	 	 	15	 
	Section 4.3 Transfer of or from Ineligible Class
	 	 	15	 
	Section 4.4 Return as Participant After a Break in
Service
	 	 	16	 
	Section 4.5 Omission of Eligible Employee
	 	 	16	 
	Section 4.6 Inclusion of Ineligible Employee
	 	 	16	 
	Section 4.7 Election Not to Participate
	 	 	17	 
	Section 4.8 Control of Entities by Owner-Employee
	 	 	17	 
	 
	 	 	 	 
	ARTICLE V — PRE-TAX CONTRIBUTIONS
	 	 	17	 
	Section 5.1 Eligibility
	 	 	17	 
	Section 5.2 Pre-Tax Contribution
Election
	 	 	17	 
	Section 5.3 Collection of Pre-Tax Contributions
	 	 	18	 
	Section 5.4 Limitations on Pre-Tax Contributions
	 	 	18	 

-ii-

 

	 	 	 	 	 
	 	 	Page	 
	Section 5.5 Actual Deferral Percentage Test
	 	 	20	 
	Section 5.6 Qualified Non-Elective Contributions
	 	 	21	 
	Section 5.7 Qualified Matching Contributions
	 	 	22	 
	Section 5.8 Correction of Excess Contributions
	 	 	22	 
	Section 5.9 Excess Deferrals
	 	 	24	 
	Section 5.10 Automatic Contribution Arrangement
	 	 	24	 
	Section 5.11 Uniform Percentage
	 	 	25	 
	Section 5.12 Qualified Default Investment Alternative “QDIA”
	 	 	26	 
	Section 5.13 Eligible Investment Advice Arrangement
	 	 	26	 
	 
	 	 	 	 
	ARTICLE VI — AFTER-TAX CONTRIBUTIONS
	 	 	27	 
	Section 6.1 Eligibility
	 	 	27	 
	Section 6.2 Limits on Amount
	 	 	27	 
	Section 6.3 After-Tax Contribution Election
	 	 	27	 
	Section 6.4 Collection of After-Tax Contributions
	 	 	27	 
	 
	 	 	 	 
	ARTICLE VII — EMPLOYER AND MATCHING CONTRIBUTIONS
	 	 	27	 
	Section 7.1 Eligibility
	 	 	27	 
	Section 7.2 Employer Contributions
	 	 	27	 
	Section 7.3 Persons Entitled Allocation of Employer Contributions
	 	 	29	 
	Section 7.4 Matching Contributions
	 	 	30	 
	 
	 	 	 	 
	ARTICLE VIII — ROLLOVER CONTRIBUTIONS
	 	 	30	 
	Section 8.1 Rollover Contributions
	 	 	30	 
	 
	 	 	 	 
	ARTICLE IX — VESTING
	 	 	31	 
	Section 9.1 Vesting
	 	 	31	 
	Section 9.2 Full Vesting
	 	 	31	 
	Section 9.3 Forfeiture of Non-Vested Interest
	 	 	32	 
	Section 9.4 Resumption of Employment
	 	 	32	 
	Section 9.5 Changes in Vesting Schedule
	 	 	32	 
	Section 9.6 Faster Vesting of Employer Contributions
	 	 	32	 
	 
	 	 	 	 
	ARTICLE X — IN-SERVICE WITHDRAWALS
	 	 	33	 
	Section 10.1 Withdrawal of Pre-Tax Contributions, Qualified Matching
and/or Qualified Non-Elective Contributions
	 	 	33	 
	Section 10.2 Withdrawal of After-Tax Contributions
	 	 	35	 
	Section 10.3 Withdrawal of Matching Contributions
	 	 	36	 
	Section 10.4 Withdrawals of Profit Sharing Contributions
	 	 	36	 
	Section 10.5 Withdrawals of Rollover Contributions
	 	 	38	 
	Section 10.6 Withdrawals of Money Purchase Contributions
	 	 	38	 

-iii-

 

	 	 	 	 	 
	 	 	Page	 
	Section 10.7 Withdrawals of Target Benefit Contributions
	 	 	38	 
	Section 10.8 Withdrawals of Owner-Employee
	 	 	38	 
	Section 10.9 Special 5% Tax
	 	 	38	 
	 
	 	 	 	 
	ARTICLE XI — BENEFITS IN CASE OF RETIREMENT, DISABILITY
OR TERMINATION OF EMPLOYMENT
	 	 	39	 
	Section 11.1 Methods of Distribution
	 	 	39	 
	Section 11.2 Retirement Dates
	 	 	39	 
	Section 11.3 Retirement Benefits
	 	 	40	 
	Section 11.4 Married Participants
	 	 	41	 
	Section 11.5 Unmarried Participants
	 	 	43	 
	Section 11.6 Date Benefit Payments Begin
	 	 	43	 
	Section 11.7 Annuities Nontransferable
	 	 	44	 
	Section 11.8 Payment of Vested Interest in Case of Termination of Employment
	 	 	44	 
	 
	 	 	 	 
	ARTICLE XII — DEATH BENEFITS
	 	 	44	 
	Section 12.1 Benefits Upon Death
	 	 	44	 
	Section 12.2 Method of Payment
	 	 	45	 
	Section 12.3 Qualified Preretirement Survivor Annuity
	 	 	45	 
	Section 12.4 Beneficiary
	 	 	47	 
	 
	 	 	 	 
	ARTICLE XIII — LOANS
	 	 	47	 
	Section 13.1 In General
	 	 	47	 
	 
	 	 	 	 
	ARTICLE XIV — INVESTMENT
	 	 	50	 
	Section 14.1 Election of Investment Options
	 	 	50	 
	Section 14.2 Plan Administrator Investment Directions
	 	 	50	 
	Section 14.3 Participant Investment Directions
	 	 	50	 
	Section 14.4 Rules of Exercise of Investment Options
	 	 	50	 
	 
	 	 	 	 
	ARTICLE XV — ACCOUNTS
	 	 	51	 
	Section 15.1 Separate Accounts
	 	 	51	 
	Section 15.2 Valuation and Allocation of Earnings and Losses to Participants
	 	 	51	 
	Section 15.3 Allocation of Expenses
	 	 	51	 
	Section 15.4 Correction of Error
	 	 	52	 
	 
	 	 	 	 
	ARTICLE XVI — PLAN ADMINISTRATION
	 	 	52	 
	Section 16.1 Plan Administrator
	 	 	52	 
	Section 16.2 Plan Administration
	 	 	52	 
	Section 16.3 Records
	 	 	53	 
	Section 16.4 Compensation and Expenses
	 	 	53	 

-iv-

 

	 	 	 	 	 
	 	 	Page	 
	Section 16.5 Claims Procedures
	 	 	53	 
	Section 16.6 Agent for Legal Process
	 	 	55	 
	Section 16.7 More than One Employer
	 	 	55	 
	 
	 	 	 	 
	ARTICLE XVII — AMENDMENT, TERMINATION OR MERGER OF PLAN
	 	 	55	 
	Section 17.1 Amendment by UBS
	 	 	55	 
	Section 17.2 Amendment by Employer
	 	 	55	 
	Section 17.3 Restrictions on Amendments
	 	 	55	 
	Section 17.4 Termination of Plan
	 	 	56	 
	Section 17.5 Disposition and Termination of the Trust
	 	 	57	 
	Section 17.6 Merger of Plans
	 	 	57	 
	 
	 	 	 	 
	ARTICLE XVIII — TRANSFERS FROM OR TO OTHER QUALIFIED PLANS
	 	 	58	 
	Section 18.1 Transfers from Another Plan of the Employer
	 	 	58	 
	Section 18.2 Transfers to Other Plans
	 	 	58	 
	 
	 	 	 	 
	ARTICLE XIX — MISCELLANEOUS
	 	 	58	 
	Section 19.1 Nonreversion
	 	 	58	 
	Section 19.2 Alienation
	 	 	59	 
	Section 19.3 Limitation on Rights Created by Plan
	 	 	59	 
	Section 19.4 Allocation of Responsibilities
	 	 	60	 
	Section 19.5 Current Address of Payee
	 	 	60	 
	Section 19.6 Application of Plan’s Terms
	 	 	60	 
	Section 19.7 Payment for Minor or Incompetent
	 	 	60	 
	Section 19.8 Qualified Military Service
	 	 	61	 
	Section 19.9 Construction
	 	 	61	 
	Section 19.10 Governing Law
	 	 	61	 
	Section 19.11 Uniformity
	 	 	61	 
	 
	 	 	 	 
	ADDENDUM A
	 	 	62	 
	 
	 	 	 	 
	ADDENDUM B
	 	 	63	 

-v-

 

UBS FINANCIAL SERVICES INCORPORATED OF PUERTO RICO

MASTER RETIREMENT PLAN

ARTICLE I

INTRODUCTION

     The UBS Financial Services Incorporated of Puerto Rico Master Retirement Plan (the “Plan”)
effective as of January 1, 2008, formerly known as the PaineWebber Puerto Rico Master Retirement
Plan and the UBS PaineWebber Puerto Rico Master Retirement Plan, originates from the consolidation,
amendment and restatement of the PaineWebber Incorporated of Puerto Rico Standard Prototype Defined
Contribution Plan and the PaineWebber Incorporated of Puerto Rico Standard Prototype Cash or
Deferred Income Plan (collectively, the “Consolidated Plans”) all formerly sponsored by UBS
Financial Services Incorporated of Puerto Rico.

     The Plan may be adopted through the execution of an Adoption Agreement as either a money
purchase plan, a target benefit plan, a profit sharing plan, a cash or deferred arrangement profit
sharing plan, a keogh plan, or as a paired plan. The Plan is intended to qualify under all
applicable provisions of Section 1165 of the PR-Code and to comply with all applicable requirements
of ERISA.

     By executing the Adoption Agreement, the Employer establishes a retirement plan governed by
the provisions of the Adoption Agreement, the Plan and the Trust Agreement. Each Employer’s
participation in the Plan shall be separate and distinct from that of any other Employer, unless it
is stated otherwise in the Adoption Agreement. The purpose of the Plan is to create a retirement
fund intended to help provide for the future security of the Participants and their Beneficiaries.
In no event shall any portion of the principal or income of the Plan be used for, or diverted to,
any purpose other than the exclusive benefit of the Participants and their Beneficiaries, except as
otherwise permitted under ERISA and the PR-Code.

     In the case of any individual employee plan that had adopted any of the Consolidated Plans,
the consolidation with, and transfer of assets and liabilities to the Plan shall make all such
plans subject to the Plan, subject to the respective terms and conditions specified in their
individual adoption agreements, and each participant in such plans shall continue to be entitled,
immediately after the consolidation, to retirement benefits that are equal to the benefits he or
she would have been entitled to receive immediately prior to the consolidation with the Plan. This
consolidation, amendment and restatement shall not decrease a participant’s account balance or
eliminate an optional form of distribution pursuant to the Consolidated Plans, unless required
under applicable law. Furthermore, the consolidation, amendment and restatement shall not have the
effect of decreasing a participant’s vested interest determined without regard to such amendment as
of the effective date of such consolidation, amendment and restatement.

 

 

-2-

ARTICLE II

DEFINITIONS

     Whenever used in the Plan, unless the context clearly indicates otherwise, the following terms
shall have the following meanings:

     Section 2.1 “Accrued Benefit” means the amount credited to the After-Tax Contributions
Account, Employer Contributions Account, Matching Contributions Account, Pre-Tax Contributions
Account, Qualified Matching Contributions Account, Qualified Non-Elective Contributions Account,
and/or Rollover Contributions Account of a Participant or Beneficiary.

     Section 2.2 “Actual Deferral Percentage” means the ratio of (i) the sum of Pre-Tax
Contributions and Qualified Employer Deferral Contributions actually paid over to the Trust on
behalf of each Participant for the Plan Year to (ii) the Participant’s Compensation for the portion
of such Plan Year in which the Participant was an Eligible Employee (unless otherwise provided in
the Adoption Agreement). For these purposes, an Eligible Employee who would be a Participant but
for the failure to make Pre-Tax Contributions and/or receive Qualified Employer Deferral
Contributions shall be treated as a Participant on whose behalf zero Pre-Tax Contributions and/or
Qualified Employer Deferral Contributions are made.

     Section 2.3 “Adoption Agreement” means the Adoption Agreement executed by the Employer to
establish or amend the Employer’s Plan and to specify optional provisions as part of the Employer’s
Plan. The terms of the Plan, as modified by the terms of an Employer’s Adoption Agreement,
constitute a separate plan to be construed as a single and separate plan.

     Section 2.4 “After-Tax Contributions” means contributions made by or on behalf of a
Participant to the Plan during the Plan Year, pursuant to the provisions of Article VI, which are
included in the Participant’s gross income in the taxable year in which made.

     Section 2.5 “After-Tax Contributions Account” means, with respect to a Participant, the
account established under the Plan for such Participant representing the After-Tax Contributions
plus any gains or losses allocated to such account in accordance with the provisions of the Plan,
as adjusted to reflect distributions therefrom. Such account will be fully vested and
nonforfeitable at all times.

     Section 2.6 “Annuity Starting Date” means the first day of the first period for which an
amount is payable as an annuity or, in the case of a benefit not payable in the form of an annuity,
the first day in which all events have occurred which entitle the Participant to such benefit.

 

 

-3-

     Section 2.7 “Average Actual Deferral Percentage” means for a specific group of Eligible
Employees for a Plan Year, the average of the Actual Deferral Percentages (calculated separately
for each Participant in such group). The Average Actual Deferral Percentage of the Eligible
Employees shall be rounded to the nearest one-hundred of one percent.

     Section 2.8 “Beneficiary” means any person, estate or trust designated by a Participant or by
the terms of the Plan, or who by operation of law or otherwise, is entitled to receive any Accrued
Benefit of a Participant under the Plan. A Beneficiary’s right to information or data concerning
the Plan does not arise until he first becomes entitled to receive a benefit under the Plan.

     Section 2.9 “Compensation” means total compensation paid by the Employer during the Plan Year
that is includable in income for income tax purposes (unless elected otherwise in the Adoption
Agreement). However, compensation shall not include, whether or not includable in the gross income
of the Employee, reimbursements or other expense allowances, fringe benefits (cash and non-cash),
moving expenses, and deferred compensation and welfare benefits, except Pre-Tax Contributions if so
provided in the Adoption Agreement. For a Self-Employed Individual or Owner-Employee, compensation
means his Earned Income.

     Section 2.10 “Disability” shall refer to the Participant suffering from a physical or mental
condition as determined by the Plan Administrator in a non discriminatory manner, based upon
appropriate medical reports and examinations, which may be expected to result in death or be of a
long and indefinite duration and which renders the Participant incapable of performing his
customary duties for the Employer (or the duties of such other position or job which Employer makes
available to the Participant for which such Employee is qualified by reason of training, education,
or experience.)

     Section 2.11 “Early Retirement Age” means the early retirement date selected by the Employer
in the Adoption Agreement. The Plan will not have an Early Retirement Age if such date is not
specified in the Adoption Agreement.

     Section 2.12 “Early Retirement Date” means the earliest practicable date after the Valuation
Date coinciding with or following a Participant’s attainment of Early Retirement Age.

     Section 2.13 “Earned Income” means the net earnings from self employment in the trade or
business with respect to which the Plan is established, for which the personal services of the
individual are a material income producing factor. Net earnings will be determined without regard
to items not included in gross income and the deductions allocable to such items. Net earnings are
reduced by contributions made by the Employer to a qualified plan to the extent deductible under
Section 1023(n) of the PR-Code.

 

 

-4-

     Section 2.14 “Effective Date” means the date elected in the Adoption Agreement as the date on
which the Plan, or restatement and/or amendment to the Plan, becomes effective. However, if the
Adoption Agreement indicates that the Employer is adopting the Plan as an amendment and restatement
of an existing plan, the provisions of the existing plan will apply to all events preceding the
Effective Date.

     Section 2.15 “Eligible Employee” means any Employee specified in the Adoption Agreement.

     Section 2.16 “Employee” means any person employed by the Employer who is a bona fide resident
of Puerto Rico or who performs services primarily in Puerto Rico within the meaning of Section
1022(i) of ERISA, but excludes any person who is employed as an independent contractor. Employee
includes a Self-Employed Individual and an Owner-Employee.

     Section 2.17 “Employer” means (i) the business entity named in the Adoption Agreement, (ii) a
successor entity of the Employer who by merger, consolidation, purchase, or otherwise assumes the
obligations of the Plan, and (iii) any other business entity that, with the consent of the Employer
named in the Adoption Agreement adopts the Plan. The term Employer will refer to the Employer named
in the Adoption Agreement, to each adopting Employer individually, or to all Employers in the
aggregate, as the context may require.

     Section 2.18 “Employer Contributions” means Profit Sharing Contributions, Money Purchase
Contributions, and/or Target Benefit Contributions made by the Employer to the Plan pursuant to the
provisions of Article VII.

     Section 2.19 “Employer Contributions Account” means, with respect to a Participant, the
account established under the Plan for such Participant representing the Employer Contributions
(and any forfeitures) plus any gains or losses allocated to such account in accordance with the
provisions of the Plan, as adjusted to reflect distributions therefrom.

     Section 2.20 “Entry Date” means the date(s) specified in the Adoption Agreement provided that
the first day of the Plan Year will always be an Entry Date.

     Section 2.21 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

     Section 2.22 “Excess Contributions” means, with respect to a Plan Year, the excess of (i) the
aggregate amount of Pre-Tax Contributions and Qualified Employer Deferral Contributions taken into
account in computing the Actual Deferral Percentage of Highly Compensated Employees for such Plan
Year, over (ii) the maximum amount of such contributions permitted by the actual deferral
percentage test.

 

 

-5-

     Section 2.23 “Excess Deferrals” means those Pre-Tax Contributions that are includable in a
Participant’s gross income pursuant to Section 1165(e)(7) of the PR-Code to the extent such
Participant’s Pre-Tax Contributions for a taxable year exceed the lesser of 10% of the
Participant’s Compensation or $8,000 (or any other limit imposed under Section 1165(e)(7) of the
PR-Code or any successor thereof).

     Section 2.24 “Fiduciary” means any person who (i) exercises any discretionary authority or
discretionary control with respect to the management of the Plan, or exercises any authority or
control with respect to the management or disposition of its assets, (ii) renders investment
advice, direct or indirect, for a fee or other compensation with respect to any monies or other
property of the Plan or has any authority or responsibility to do so, or (iii) has any
discretionary authority or responsibility in the administration of the Plan.

     Section 2.25 “Highly Compensated Employee” means, with respect to a Plan Year, any Eligible
Employee who, determined on the basis of Compensation for such Plan Year, has Compensation greater
than 2/3 of all other Eligible Employees.

     Section 2.26 “Investment Manager” means any entity who is a registered investment adviser
under the Investment Advisor Act of 1940, a bank as defined in such Act, or an insurance company
who (i) has the power to manage, acquire or dispose of Plan assets, and (ii) acknowledges in
writing it fiduciary responsibilities with respect to the Plan.

     Section 2.27 “Matching Contributions” means contributions made by the Employer to the Plan on
behalf of a Participant on account of a Participant’s After-Tax or Pre-Tax Contributions, pursuant
to the provisions of Section 7.4.

     Section 2.28 “Matching Contributions Account” means, with respect to a Participant, the
account established under the Plan for such Participant representing the Matching Contributions
(and any forfeitures) plus any gains or losses allocated to such account in accordance with the
provisions of the Plan, as adjusted to reflect distributions therefrom.

     Section 2.29 “Money Purchase Contributions” means contributions made by the Employer pursuant
to a money purchase plan using the formula established by the Employer in the Adoption Agreement.

     Section 2.30 “Non-Highly Compensated Employee” means those Eligible Employees that are not
Highly Compensated Employees.

     Section 2.31 “Normal Retirement Age” means the latter of (i) age 65, or (ii) the age specified
in the Adoption Agreement.

 

 

-6-

     Section 2.32 “Normal Retirement Date” means the earliest practicable date after the Valuation
Date coinciding with or following a Participant’s attainment of Normal Retirement Age.

     Section 2.33 “Owner-Employee” means an individual who is the sole proprietor in the case of a
sole proprietorship. If the Employer is a special partnership or a corporation of individuals,
Owner-Employee shall mean an individual who is a partner or shareholder and who owns more than 10%
of the capital or profits interest of the special partnership or the corporation of individuals.

     Section 2.34 Intentionally Omitted.

     Section 2.35 “Paired Plan” means a Plan adopted through an Adoption Agreement that is a
combination of either a profit sharing plan and a money purchase plan or a profit sharing plan and
a target benefit plan.

     Section 2.36 “Participant” means any Eligible Employee who participates in the Plan and has
not for any reason become ineligible to participate in the Plan.

     Section 2.37 “Plan” means the form of defined contribution retirement plan adopted by the
Employer, under the name specified in the Adoption Agreement, consisting of the Adoption Agreement,
this document and the Trust Agreement, together with any and all amendments and supplements
thereto. Except as otherwise provided in the Adoption Agreement, the Plan created by each Employer
is a separate Plan independent from the plan of any other Employer.

     Section 2.38 “Plan Administrator” means the Employer, unless the Employer designates another
person(s) or committee of persons to hold the position of Plan Administrator. The Plan
Administrator shall be a Fiduciary of the Plan and shall have authority as set forth herein to
control and manage the operation and administration of the Plan. In addition to its other duties,
the Plan Administrator has full responsibility for compliance with the reporting and disclosure
requirements of ERISA and the PR-Code.

     Section 2.39 “Plan Year” means the calendar year, unless another Plan Year is specified in the
Adoption Agreement.

     Section 2.40 “PR-Code” means the Puerto Rico Internal Revenue Code of 1994, as amended from
time to time, or any other act that may supersede it. Where the context so requires, a reference to
a particular Section of the PR-Code shall also refer to its counterpart under any successor act.

     Section 2.41 “Pre-Tax Contributions” means any Employer contributions made pursuant to the
provisions of Article V of the Plan at the election of the Participant in lieu of cash
compensation, pursuant to a salary reduction agreement or other deferral mechanism.

 

 

-7-

     Section 2.42 “Pre-Tax Contributions Account” means, with respect to a Participant, the account
established under the Plan for such Participant representing the Pre-Tax Contributions plus any
gains or losses allocated to such account in accordance with the provisions of the Plan, as
adjusted to reflect distributions therefrom. Such account will be fully vested and nonforfeitable
at all times.

     Section 2.43 “Profit Sharing Contributions” means contributions made by the Employer pursuant
to a profit sharing plan using the formula established by the Employer in the Adoption Agreement.

     Section 2.44 “Qualified Employer Deferral Contributions” means Qualified Non-Elective
Contributions and Qualified Matching Contributions which are taken into account under this Plan,
and any other qualified plans that are maintained by the Employer which are aggregated with this
Plan under Sections 5.5(b) and 5.5(c), in determining a Participant’s Actual Deferral Percentage.

     Section 2.45 “Qualified Matching Contributions” means Matching Contributions which are taken
into account under the Plan in determining a Participant’s Actual Deferral Percentage. In order for
Matching Contributions to be considered as Qualified Matching Contributions, the Matching
Contributions must be 100% vested and nonforfeitable when made and must not be distributable under
the Plan to Participants or their Beneficiaries earlier than provided in Section 5.4(c).

     Section 2.46 “Qualified Matching Contributions Account” means, with respect to a Participant,
the account established under the Plan for such Participant representing the Qualified Matching
Contributions plus any gains or losses allocated to such account in accordance with the provisions
of the Plan, as adjusted to reflect distributions therefrom. Such account will be fully vested and
nonforfeitable at all times.

     Section 2.47 “Qualified Non-Elective Contributions” means contributions made by the Employer
to this Plan (other than Pre-Tax Contributions and Qualified Matching Contributions) which are
taken into account in determining a Participant’s Actual Deferral Percentage and which the
Participant may not elect to receive in cash until distributed from the Plan. In order for such
contributions to be considered as Qualified Non-Elective Contributions, they must be fully vested
and nonforfeitable when made and must not be distributable under the Plan to Participants or their
Beneficiaries earlier than provided in Section 5.4(c).

     Section 2.48 “Qualified Non-Elective Contributions Account” means, with respect to a
Participant, the account established under the Plan for such Participant representing the Qualified
Non-Elective Contributions plus any gains or losses allocated to such account in accordance with
the provisions of the Plan, as adjusted to reflect distributions therefrom. Such account will be
fully vested and nonforfeitable at all times.

 

 

-8-

     Section 2.49 “Rollover Contributions” means contributions made to the Plan pursuant to the
provisions of Article VIII.

     Section 2.50 “Rollover Contributions Account” means, with respect to a Participant, the
account established under the Plan for such Participant representing the Rollover Contributions
plus any gains or losses allocated to such account in accordance with the provisions of the Plan,
as adjusted to reflect distributions therefrom. Such account will be fully vested and
nonforfeitable at all times.

     Section 2.51 “Self-Employed Individual” means (i) an individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established, (ii) an individual who
would have had Earned Income but for the fact that the trade or business carried on by such
individual had no net profits for the taxable year, or (iii) an individual who has been a
self-employed individual within the meaning of subsection (i) for any prior taxable year.

     Section 2.52 “Target Benefit Contributions” means contributions made by the Employer pursuant
to a target benefit plan using the formula established by the Employer in the Adoption Agreement.

     Section 2.53
“Trust” means the trust established through the execution of the Trust Agreement
established in connection with the Plan.

     Section 2.54 “Trust Agreement” means the UBS Financial Services Incorporated of Puerto Rico
Master Retirement Trust executed in connection with the Plan.

     Section 2.55 “Trust Fund” means the aggregate assets of the Plan, as the same shall exist from
time to time, held by the Trustee(s) under the Trust.

     Section 2.56 “Trustee” means UBS Trust Company of Puerto Rico and any duly appointed successor
thereof.

     Section 2.57 “UBS” means UBS Financial Services Incorporated of Puerto Rico or any corporation
or entity which may succeed to all or substantially all of its business.

     Section 2.58 “Valuation Date” means the last business day of the Plan Year, unless otherwise
specified in the Adoption Agreement. The Plan Administrator or the Employer may designate other
valuation dates.

     Section 2.59 “1165(e) Plan” means a profit sharing plan containing a cash or deferred
arrangement under Section 1165(e) of the PR-Code.

 

 

-9-

ARTICLE III

RULES RELATING TO SERVICE

     Section 3.1 Hours of Service Method. The definitions and rules in this section will apply to
Employers who in the Adoption Agreement elected to have Employee’s service determined under the
hours of service method. For those Employers, the computation of years of service for determining
eligibility to participate and vesting will be as follows:

     (a) Year of Service. A year of service of an Employee is a 12-consecutive-month computation
period in which he completes at least 1,000 hours of service.

     (b) Hour of Service.

          (1) Except as provided in subsection (b)(2) below, an Employee’s hours of service will be
counted by giving the Employee credit for:

	 	(A)	 	Each hour for which he is paid, or entitled to payment, for the
performance of duties for the Employer. These hours will be credited to
him for the computation period in which the duties are performed.
	 
	 	(B)	 	Each hour for which he is paid, or entitled to payment, by the Employer
on account of a period of time during which no duties are performed
(regardless of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including Disability), layoff, jury
duty, military duty or leave of absence. No more than 501 hours of service
will be credited under this subsection (b)(1)(B) for any single continuous
period (whether or not such period occurs within a single computation
period). Hours under this subsection (b)(1)(B) calculated and credited
according to the United States Department of Labor Regulations Sections
2530.200b-2(b) and (c), which are incorporated herein by reference.
	 
	 	(C)	 	Each hour for which back pay, regardless of mitigation of damages, is
either awarded or agreed to by the Employer. The same hours of service
will not be credited both under subsection (b)(1)(A) or subsection
(b)(1)(B), as the case may be, and under this subsection (b)(1)(C). These
hours will be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.

 

 

-10-

	 	(D)	 	In addition to hours credited to an Employee under subsections (b)(1)(A)
through (b)(1)(C) above, he will be credited with the number of hours (not
exceeding 40 hours for a full week or a pro rata portion of 40 hours for a partial
week) he normally would have worked except for the fact that he was absent on one
of the following types of unpaid absence: (i) leave of absence for a period
authorized by the Employer under a leave policy applied uniformly to all
Employees, provided he returns to service with the Employer at or before the
expiration of such period; or (ii) leave of absence for service in the Armed
Forces of the United States, provided he returns to service with the Employer
within the period during which his reemployment rights are protected by law.
	 
	 	(E)	 	Solely for purposes of determining whether a one-year break in service has
occurred in a computation period, an Employee who is absent from work for
maternity or paternity will receive credit for the hours of service which would
otherwise have been credited to such Employee but for such absence (or in any case
in which such hours cannot be determined, 8 hours of service per day of such
absence). For purposes of this subsection (E), an absence from work for maternity
or paternity means an absence (i) by reason of the pregnancy of the Employee, (ii)
by reason of birth of a child of the Employee, (iii) by reason of the placement of
a child with the Employee in connection with the Employee’s adoption of such
child, or (iv) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The hours of service credited
under this subsection (b)(1)(E) will be credited (i) in the computation period in
which the absence begins if the crediting is necessary to prevent a one-year break
in service in that period, or (ii) in all other cases, in the following
computation period if necessary to prevent a one-year break in service in that
computation period.

          (2) If the Employer so elects in the Adoption Agreement, an Employee will be credited with the
number of hours of service specified in this subsection (ii) for a period if the Employee would
have been credited with at least one hour of service during such period under subsection (b)(i)(A)
above:

	 	(A)	 	10 hours of service per day;
	 
	 	(B)	 	45 hours of service per week;

 

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	 	(C)	 	95 hours of service per semi-monthly payroll period; or
	 
	 	(D)	 	190 hours of service per month.

          Only one such method may be elected and it must apply to all Employees.

     (c) Break in Service or One-Year Break in Service. A break in service or a one-year break in
service of an Employee or Participant is a 12-consecutive-month computation period during which he
fails to complete more than 500 hours of service. The 12 month computation period will be the same
period used to determine a year of service under Section 3.1(e) or (f) below.

     (d) Employment Years Defined. Employment years of an Employee are 12-consecutive-month
periods beginning on the date he first completes an hour of service and on subsequent anniversaries
of such date.

     (e) Eligibility Computation Period. For purposes of determining whether an Employee has
completed the years of service requirement (if any) for participation:

          (1) Initial computation period will be his first employment year.

          (2) Subsequent computation periods will be Plan Years beginning with the Plan Year that starts
during his first employment year regardless of whether the Employee is entitled to be credited with
1,000 hours of service during his first employment year. For purposes of the preceding sentence, an
Employee who is credited with 1,000 hours of service in both his first employment year and the Plan
Year that starts during his first employment year will (unless his employment year and the Plan
Year coincide) be credited with 2 years of service for purposes of eligibility to participate.

          (3) If an Employee has a one-year break in service, his 12-consecutive-month eligibility
computation periods will begin with his first employment year after such break. If necessary for
purposes of measuring years of service for participation, subsequent 12-consecutive-month
computation periods will be Plan Years beginning with the Plan Year which begins during his first
employment year after such break.

     (f) Vesting Computation Period. For purposes of computing an Employee’s nonforfeitable right
to his Employer Contributions Account, an Employee’s computation periods will be Plan Years.

     (g) Counting Years of Service for Participation. All of an Employee’s years of service with
the Employer are counted toward meeting the Plan’s participation eligibility requirement (if any),
however, if the Adoption Agreement provides for full vesting after 2 years or less of

 

-12-

service, service before a one-year break in service which occurs before the Employee satisfies the
Plan’s requirement for eligibility will be disregarded. The preceding sentence will not apply if
the Employer’s Plan is an 1165(e) Plan.

     If the service requirement to become a Participant as specified in the Adoption Agreement
includes a fractional year, an Employee will not be required to complete any minimum number of
hours of service to receive credit for such fractional year.

     (h) Counting Years of Service for Vesting. For purposes of determining a Participant’s vested
percentage, all of his years of service will be counted, however, if the
Adoption Agreement specifically so provides, the following years of service will not be
counted:

          (1) Years of service completed before age 18; and

          (2) years of service before the Employer maintained the Plan or a predecessor plan.

          A plan is a predecessor plan if it was terminated on or after the date it was required to
comply with ERISA and within 5 years or after the effective date of the Plan. A plan is not treated
as a predecessor plan with respect to an Employee unless he was a participant in such plan.

     (i) Service With Other Organizations.

          (1) If the Employer maintains a plan of a predecessor Employer, service with the predecessor
Employer will be treated as service with the Employer.

          (2) If not treated as service with the Employer under subsection (i)(1) above, service with
any entity specifically so designated in the Adoption Agreement will be treated as service with the
Employer.

     Section 3.2 Elapsed Time Method. The definitions and rules in this section will apply to
Employers who in the Adoption Agreement elected to have Employee’s service determined under the
elapsed time method. For those Employers, the computation of years of service for determining
eligibility to participate and vesting will be as follows:

     (a) Definitions applicable to the Elapsed Time Method.

          (1) “Hours of Service” means an hour of service for which the Employee is paid or entitled to
payment for the performance of duties for the Employer.

          (2) “Employee’s Commencement Date” means the date the Employee performs an hour of service.

 

-13-

          (3) “Periods of Severance” means the period of time commencing on the severance from service
date and ending on the date on which the Employee performs an hour of service for the Employer.

          (4) “Reemployment Commencement Date” means the first date following a period of severance from
service which is not required to be taken into account for participation or vesting purposes, on
which the Employee performs an hour of service.

          (5) “Severance from Service Date” means the earlier of (i) the date on which the Employee
resigns, retires, is discharged or die, or (ii) the first anniversary of the first date of a period
in which the Employee remains absent from service (with or without pay) with the Employer for any
reason other than resignation, retirement, discharge or death, such as vacation, holiday, sickness,
disability, leave of absent or lay off.

     (b) Years of Service. To determine an Employee’s years of service, all of his service will be
aggregate and each 12 months of such aggregate service will constitute one year of service (30 days
will be considered a month). If any provision of the Plan
calls for completion of a fractional year of service, such fraction of a year of the
Employee’s aggregate service will satisfy the provision. For example, if 6 years of service is
required, then such requirement will be met when the Employee’s aggregate service equals 180 days.

     Under this method of computing years of service, all days of service commencing on the
employee’s employment commencement date or reemployment commencement date, which ever is
applicable, and ending on the severance from service date will be taken into consideration.

     (c) Periods of Severance that must be considered for participation and vesting purposes. In
general, periods of severance will not be taken into account for computing years of service, except
that:

          (1) The Plan shall take into account a period of severance if an Employee severs from service
by reason of resignation, discharge, or retirement, and the Employee then performs an hour of
service within 12 months of the severance from service date.

          (2) The Plan shall take into account a period of severance if an Employee severs from service
by reason of resignation, discharge, or retirement during an absence from service of 12 months or
less for any reason other than resignation, discharge, retirement or death, and then performs an
hour of service within 12 months of the date on which the Employee was first absent from service.

     (d) “Break in Service” or “One-Year Break in Service.” A break in service or a one-year break
in service shall occurs if an Employee or Participant falls to complete one hour of service during
a period of 12 consecutive months commencing on the severance from service date

 

-14-

and ending on the first anniversary of such date. In the case of an individual who is absent
for maternity or paternity reasons, the 12 consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a break in service. An absence
from work for maternity or paternity reasons shall have the meaning described in Section
3.1(b)(1)(E).

     (e) Certain Service Before Eligibility Disregarded. If the Adoption Agreement provides for
full vesting after 2 years or less of service, service will be disregarded if it was completed
before a period of severance of 1 year or more which occurs before the Employee satisfied the
Plan’s service requirement for eligibility. However, this subsection does not apply if the
Employer’s Plan is an 1165(e) Plan.

     (f) Service for Vesting. For purposes of determining a Participant’s vested percentage, all of
his years of service will be counted, however, if the Adoption Agreement specifically so provides,
the following service will not be counted:

          (1) Years of service completed before age 18; and

          (2) years of service before the Employer maintained this Plan or a predecessor plan.

     A plan is a predecessor plan if it was terminated on or after the date it was required to
comply with ERISA and within 5 years before or after the Effective Date of the Plan. A plan is not
treated as a predecessor plan with respect to an Employee unless he was a participant in such plan.

     (g) Service with other Organizations.

          (1) If the Employer maintains a plan of a predecessor Employer, service with the predecessor
Employer will be treated as service with the Employer.

          (2) If not treated as service with the Employer under subsection (g)(1) above, service with
any entity specifically so designated in the Adoption Agreement will be treated as service with the
Employer.

ARTICLE IV

PARTICIPATION

     Section 4.1 Initial Participation. An Eligible Employee shall become a Participant in the Plan
in accordance with the following requirements:

 

-15-

     (a) Each Eligible Employee will become a Participant on the Entry Date immediately following
the date in which he complies with the minimum age and/or service requirements specified by the
Employer in the Adoption Agreement.

     (b) If the Plan is a restatement of another plan, each Eligible Employee who was a participant
in the previous plan on the day before the Effective Date shall be a Participant in the Plan on the
Effective Date.

     (c) If the Plan permits Pre-Tax Contributions or After-Tax Contributions, each Employee who
has become a Participant under the preceding subsections of this section may make Pre-Tax
Contributions and/or After-Tax Contributions subject to the applicable provisions of the Plan and
the Adoption Agreement. Such an Employee will be considered a Participant even if he elects not to
make Pre-Tax Contributions or After-Tax Contributions. However, an Employee may not make Pre-Tax
Contributions and/or After-Tax Contributions before the date the Employer signs the Adoption
Agreement.

     Section 4.2 Termination of Participation. An Employee will cease to be a Participant when he
is no longer eligible to participate in the Plan due to the termination of his service because of
Disability, death, retirement or any other reason. An Employee who ceases to be a Participant under
this Section 4.2 will not be permitted to make or receive contributions or to make in-service
withdrawals or loans under the Plan. A Participant who terminates service with the Employer under
this Section 4.2 will continue to share in the earnings of the Trust Fund until his accounts are
forfeited or fully distributed.

     Section 4.3 Transfer of or from Ineligible Class.

     (a) If an Employee who had been a Participant becomes ineligible to participate because he or
she is no longer a member of an eligible class of Employees, but has not incurred a break in
service, such Employee shall participate immediately upon his return to an eligible class of
Employees. If such Employee incurs a break in service, his eligibility to participate shall be
determine under Section 4.4.

     (b) An Employee who is not a member of the eligible class of Employees will become a
Participant immediately upon becoming a member of the eligible class provided such Employee has
satisfied the age and years of service requirements. If such Employee has not satisfied the age and
years of service requirements as of the date he becomes a member of the eligible class, such
Employee shall become a Participant on the first Entry Date following the date he satisfies those
requirements unless otherwise indicated in the Adoption Agreement.

 

-16-

     Section 4.4 Return as Participant After a Break in Service.

     (a) Employee not Participant Before Break. If an Employee incurs a break in service before
satisfying the Plan eligibility requirements, such employee’s years of service before such break in
service will not be taken into account.

     (b) Non Vested Participants. In the case of a Participant who does not have a vested interest
in his accounts (other than the Pre-Tax Contribution, After-Tax Contributions and/or Rollover
Contributions Accounts), years of service before a period of consecutive breaks in service will not
be taken into account for participation purposes if the number of consecutive breaks in service in
such period equals or exceeds the greater of (i) 5 years, or (ii) the aggregate number of years of
service before such break. Such aggregate number of years of service will not include any years of
service disregarded under the preceding sentence by reason of prior breaks.

     If a Participant years of service are disregarded pursuant to the preceding paragraph, such
participant will be treated as a new Employee for participation purposes. If a Participant years of
service may not be disregarded pursuant to the preceding paragraph, such Participant shall continue
to participate in the Plan, or, if terminated, shall participate immediately upon reemployment.

     (c) Vested Participant. A Participant who has sustained a break in service and who had vested
interest in all or a portion of his accounts (other than the Pre-Tax Contributions, After-Tax
Contributions and/or Rollover Contributions Accounts), shall continue to participate in the Plan,
or, if terminated, shall participate immediately upon reemployment.

     Section 4.5 Omission of Eligible Employee. If in any Plan Year an Employee who should be
included as a Participant in the Plan is erroneously omitted and discovery of such omission is not
made until after a contribution by his Employer for the year has been made, the Employer shall make
a subsequent contribution, if necessary, so that the omitted Employee receives the total amount
which such Employee would have received had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any taxable year under the
applicable provisions of the PR-Code.

     Section 4.6 Inclusion of Ineligible Employee. If in any Plan Year a person who should not have
been included as a Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the Employer shall not
be entitled to recover the contribution made with
respect to the ineligible person regardless of whether or not a deduction is allowable with
respect to such contribution. In such event, the amount contributed with respect to the ineligible
person shall constitute a forfeiture for the Plan Year in which the discovery is made.

 

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     Section 4.7 Election Not to Participate. An Employee may, subject to the approval of the
Employer, elect voluntarily not to participate in the Plan. The election not to participate must be
communicated to the Employer in writing before the beginning of the Plan Year.

     Section 4.8 Control of Entities by Owner-Employee. If the Plan provides contributions or
benefits for one or more Owner-Employees who control both the business for which the Plan is
established and one or more other trades or business, the Plan and the plan established for other
trades or businesses must, when looked at as a single plan, satisfy Sections 1165(a) and (g) of the
PR-Code for the Employees of those trades or business.

     If the Plan provides contributions or benefits for one or more Owner-Employees who control one
or more other trades or businesses, the employees of the other trades or businesses must be
included in a plan which satisfies Sections 1165(a) and (g) of the PR-Code and which provides
contributions and benefits not less favorable than those provided for Owner-Employees under the
Plan.

     If an individual is covered as an Owner-Employee under the plans of two or more trades or
businesses which are not controlled and the individual controls a trade or business, then the
benefits or contributions of the employees under the plan of the trades or businesses which are
controlled must be as favorable as those provided for him under the most favorable plan of the
trade or business which is not controlled.

     For purposes of the preceding paragraphs, an Owner-Employee, or two or more Owner-Employees,
will be considered to control an entity if the Owner-Employee, or two or more Owner-Employees
together (i) own the entire interest in an unincorporated entity, or (ii) in the case of a special
partnership or corporation of individuals own more than 50% of either the capital interest or the
profits interest in such partnership or corporation of individuals. For purposes of the preceding
sentence, an Owner-Employee, or two or more Owner-Employees, shall be treated as owning any
interest in a special partnership which is owned, directly or indirectly, by a partnership which
such Owner-Employee, or such two or more Owner-Employees, are considered to control within the
meaning of the preceding sentence.

ARTICLE V

PRE-TAX CONTRIBUTIONS

     Section 5.1 Eligibility. If the Employer’s Plan is a profit sharing plan and the Adoption
Agreement so provides, an Eligible Employee who meets the participation requirements of Section 4.1
may elect to make Pre-Tax Contributions in accordance with Section 1165(e) of the PR-Code.

     Section 5.2 Pre-Tax Contribution Election. The Participant must file a written election form
with the Plan Administrator indicating the amount of Pre-Tax Contributions he wishes to

 

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make and agreeing to reduce his Compensation by such amount. Subject to any rules established by
the Plan Administrator, a Participant may increase, decrease, discontinue or resume his Pre-Tax
Contributions during a Plan Year by filing an appropriate form with the Plan Administrator. A
discontinuance of Pre-Tax Contributions will be effective as soon as administratively possible
after the Plan Administrator’s receipt of the Participant’s election form. An increase or decrease
of Pre-Tax Contributions, or a resumption after a discontinuance, will be effective as of the Entry
Date following the Participant’s timely election, unless the Plan Administrator establishes other
date(s) on which such elections or changes shall be effective.

     No change under the preceding paragraph may cause a Participant’s Pre-Tax Contributions to
exceed the maximum provided for under Section 5.4.

     The Plan Administrator may establish reasonable rules of uniform application governing
Participants’ elections and changes. Such rules may include the number and frequency of elections
or changes during any Plan Year, effective dates for elections or changes, cut-off dates for timely
filing of elections or changes, and other rules to facilitate operation of this Article.

     Notwithstanding the preceding paragraph, a Participant will be permitted to change his
election at least once each Plan Year.

     Section 5.3 Collection of Pre-Tax Contributions. The Employer will collect Participants’
Pre-Tax Contributions using payroll procedures. The Employer will transfer the amounts collected to
the Trustee as of the earliest date when such contributions can reasonably be segregated from the
Employer’s general assets, but not later than (i) the 15th working day of the month immediately
following the date on which such amounts would otherwise have been payable to the Participant in
cash, or (ii) any other period permitted by Title I of ERISA, the PR-Code, or any other applicable
law, regulation or governmental agency.

     Section 5.4 Limitations on Pre-Tax Contributions.

     (a) Limits on Pre-Tax Contributions. Unless otherwise provided in the Adoption Agreement,
under the Plan the Pre-Tax Contributions that the Participants may elect are not subject to a
minimum amount or percentage of Compensation. Pre-Tax Contributions may not exceed the lesser of
(i) 10% of the Participant’s Compensation up to a maximum of $8,000 in any calendar year (or any
other applicable limitation provided under Section 1165(e)(7)(A) or any other section of the
PR-Code), (ii) the maximum amount permitted under Section 5.5 for Highly Compensated Employees for
any Plan Year, or (iii) any other limitation imposed by the Plan Administrator.

     If a Participant makes Pre-Tax Contributions in a calendar year equal to the lesser of 10% of
his compensation or $8,000 (or any other applicable limitation provided under

 

-19-

Section 1165(e)(7)(A) or any other section of the PR-Code), his Pre-Tax Contributions will
immediately cease.

     In addition to the above, Pre-Tax Contributions by a Participant who also makes contributions
to an individual retirement account described in Section 1169 of the PR-Code will be further
limited to the lesser of the difference between the Participant’s contribution to the individual
retirement account and $8,000 (or any other limit imposed under Section 1165(e)(7)(A) or any other
section of the PR-Code).

     (b) Limits on Withdrawals. Notwithstanding Sections 5.1 and 5.4(a), a Participant who makes a
withdrawal on account of a financial hardship under Section 10.1 may not make Pre-Tax Contributions
or After-Tax Contributions hereunder (or under any other plan maintained by the Employer) for a
period of 12 months following the date of the in-service withdrawal. Also, in the calendar year
following the date of the withdrawal, such Participant may not make Pre-Tax Contributions which,
when added to his Pre-Tax Contributions during the calendar year of the withdrawal, exceed the
10%/$8,000 limitation specified in Section 5.4(a).

     (c) Limits on Distributions. Pre-Tax Contributions may not be distributed to Participants or
their Beneficiaries earlier than:

          (1) separation from service, death or Disability;

          (2) termination of the Plan without the establishment of a successor plan;

          (3) the date of the sale by the Employer of substantially all of the assets used by the
Employer in its trade or business, provided the Employee continues in employment with the purchaser
of the assets;

          (4) the date of the sale by the Employer of its shares in a subsidiary of the Employer,
provided the Employee continues in employment with the subsidiary;

          (5) reaching the age of 59 1/2 years; or

          (6) a case of financial hardship, as defined in Section 10.1.

     (d) Catch-Up Contributions. In addition to the amount of Pre-Tax Contributions under Section
5.4(a), the Participants with fifty (50) years of age or older as of the last day of a Plan Year
may elect to make a “catch-up” contribution up to a maximum of $1,000 in any calendar year (or any
other applicable limitation provided under Section 1165(e)(7)(C) or any other section of the
PR-Code). The amount of the “catch-up” contribution shall not be considered for purposes of the
Actual Deferral Percentage Test under Section 5.5, nor for purposes of the limitation under

 

-20-

Section 5.4(a). Furthermore, the Adoption Agreement may provide for Matching Contributions as
result of the “catch-up” contribution.

     Section 5.5 Actual Deferral Percentage Test.

     (a) As of the last day of each Plan Year, the Average Actual Deferral Percentages of Highly
Compensated Employees (the “HCE-ADP”) may not exceed the Average Actual Deferral Percentages of
Non-Highly Compensated Employees (the “NHCE-ADP”) by more than the amount specified in the
following table:

	 	 	 
	If NHCE-ADP is:	 	HCE-ADP may not exceed:
	less than 2%

	 	two times NHCE-ADP
	 
	 	 
	2% but less than 8%

	 	two percentage points more than NHCE-ADP
	 
	 	 
	8% or higher

	 	1.25 times NHCE-ADP

     The determination and treatment of Participants’ Actual Deferral Percentages will be subject
to the requirements of any applicable regulations under the PR-Code.

     (b) The Actual Deferral Percentage for a Participant who is a Highly Compensated Employee for
the Plan Year and who is eligible to make Pre-Tax Contributions (and, if applicable, to receive
Qualified Employer Deferral Contributions) allocated to his accounts under two or more arrangements
described in Section 1165(e) of the PR-Code that are maintained by the Employer, shall be
determined as if such Pre-Tax Contributions (and, if applicable, such Qualified Employer Deferral
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.

     (c) In the event that the Plan satisfies the requirements of Section 1165(e), 1165(a)(3) or
1165(a)(4) of the PR-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 PR-Code only if aggregated with the Plan,
then this section shall be applied by determining the Actual Deferral Percentage of Eligible
Employees as if all such plans were a single plan.

     (d) For purposes of determining the Actual Deferral Percentage test, Pre-Tax Contributions and
Qualified Employer Deferral Contributions must be made before the last day of the 12 month period
immediately following the Plan Year to which contributions relate.

 

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     (e) The Employer shall maintain records sufficient to demonstrate satisfaction of the Actual
Deferral Percentage test and the amount of Qualified Employer Deferral Contributions used in such
test.

     Section 5.6 Qualified Non-Elective Contributions.

     (a) If the Employer’s Plan provides for Profit Sharing Contributions and such contributions
meet the requirements of this section, then, subject to the requirements of applicable PR-Code
regulations, the Plan Administrator may elect to treat all or part of such contributions as
Qualified Non-Elective Contributions which will be considered Qualified Employer Deferral
Contributions for purposes of the Actual Deferral Percentage test of Section 5.5.

     Profit Sharing Contributions meet the requirements of this section if they are fully vested
when made and they are subject to the limitations on distribution provided in
Section 5.4(c). Also, any Profit Sharing Contributions not treated as Qualified Employer
Deferral Contributions under the preceding paragraph must be nondiscriminatory under Section
1165(a)(4) of the PR-Code.

     (b) As of the last day of each Plan Year, the Plan Administrator shall allocate the Qualified
Non-Elective Contributions, if any, for such Plan Year. These amounts shall be allocated to the
Qualified Non-Elective Contributions Account of Non-Highly Compensated Employees as follows:

     (1) Qualified Non-Elective Contributions shall be allocated to the Qualified Non-Elective
Contributions Account of the Non-Highly Compensated Employee with the least Compensation, until
either the Qualified Non-Elective Contributions are exhausted or the applicable limitation for
contributions is reached for such Non-Highly Compensated Employee.

     (2) Any remaining Qualified Non-Elective Contributions shall be allocated to the Qualified
Non-Elective Contributions Account of the Non-Highly Compensated Employee with the next lowest
Compensation, until either the Qualified Non-Elective Contributions are exhausted or the applicable
limitation for contributions is reached for such Non-Highly Compensated Employee.

     (3) The procedure of paragraph (2) shall be repeated until all Qualified Non-Elective
Contributions have been allocated.

     (4) If two (2) or more Non-Highly Compensated Employees who become eligible for an allocation
of Qualified Non-Elective Contributions under paragraphs (1), (2) or (3) above have the same amount
of Compensation for the Plan Year, all such Non-Highly Compensated Employees shall receive an equal
allocation of Qualified Non-Elective Contributions.

 

-22-

     (c) Notwithstanding the above, the Employer may elect to instruct the Plan Administrator to
allocate the Qualified Non-Elective Contributions for a Plan Year to the Qualified Non-Elective
Contributions Accounts of the Non-Highly Compensated Employees based on the Compensation of the
Non-Highly Compensated Employees for such Plan Year.

     Section 5.7 Qualified Matching Contributions. If the Plan provides for Matching Contributions
and such contributions meet the requirements of this section and of any applicable PR-Code
regulations, the Plan Administrator may elect to treat all or part of such contributions as
Qualified Matching Contributions, which will be considered Qualified Employer Deferral
Contributions for purposes of the Actual Deferral Percentage tests of Section 5.5.

     Matching Contributions meet the requirements of this section if they are fully vested when
made and they are subject to the limitations on distribution provided in Section 5.4(c).

     Qualified Matching Contributions will be taken into account as Qualified Employer Deferral
Contributions for purposes of calculating the Actual Deferral Percentages, subject to such other
requirements as may be prescribed by the Puerto Rico Secretary of the Treasury and shall be made as
are needed to meet the Actual Deferral
Percentage test. The Employer will make Qualified Matching Contributions to the Plan on behalf
of Participants who are Non-Highly Compensated Employees who make either Pre-Tax Contributions
and/or After-Tax Contributions to the Plan.

     Section 5.8 Correction of Excess Contributions. Excess Contributions must be corrected by
using one or a combination of the following methods:

     (a) By making Qualified Non-Elective Contributions or Qualified Matching Contributions in
favor of Participants who are Non-Highly Compensated Employees. Qualified Non-Elective
Contributions shall be made to Participants that are Non-Highly Compensated Employees as provided
in the Adoption Agreement.

     (b) By designating all or a portion of the Profit Sharing Contributions and/or Matching
Contributions as Qualified Non-Elective Contributions and/or Qualified Matching Contributions,
respectively.

     (c) By distributing to the respective Participant the amount of his Excess Contribution plus
earnings (or losses) of such excess. The following rules will apply to such distributions:

          (1) The Employer must designate the distribution as a distribution of an Excess Contribution
(together with income or loss attributed to such excess). The amount so designated must be
distributed by the end of the succeeding Plan Year.

 

-23-

          (2) Income or loss attributable to the period between the end of the Plan Year and the date of
distribution will be disregarded in determining income or loss that will be distributed as an
Excess Contribution.

          (3) The amount to be distributed as an Excess Contribution will be reduced by any amounts
relating to such Plan Year previously withdrawn by the Participant.

          (4) The amount of Excess Contribution to be distributed may be made notwithstanding any
otherwise applicable restrictions or spousal consent requirements on in service withdrawals or
distributions.

          (5) Any distribution of Excess Contribution for any Plan Year shall be made to the Highly
Compensated Employees on the basis of their respective portion of Excess Contributions attributable
to each of such Employees.

          (6) The distribution of Excess Contribution shall be reported on Form 480.7C (Informative
Return — Retirement Plans and Annuities) for the calendar year of the distribution, or any other
equivalent form.

     (d) By recharacterizing the Excess Contribution of a Participant as an After-Tax Contribution.
The following rules will apply to such recharacterization:

          (1) A recharacterization will be permitted only if the Adoption Agreement permits After-Tax
Contributions.

          (2) The amount recharacterized will be nonforfeitable and subject to the same distribution
requirements as After-Tax Contributions.

          (3) The amount recharacterized cannot exceed, in combination with other After-Tax
Contributions, the amount provided in the Adoption Agreement or by the Puerto Rico Secretary of the
Treasury on After-Tax Contributions.

          (4) The amount recharacterized will be taxable to the Participant for the calendar year of the
recharacterization.

          (5) The recharacterization must occur by the end of the succeeding Plan Year after the last
day of the Plan Year in which such Excess Contributions arose.

          (6) The amount recharacterized will be reduced by any amounts relating to such Plan Year
previously withdrawn by the Participant.

 

-24-

          (7) The amount recharacterized shall be reported on Form 480.7C (Informative Return -
Retirement Plans and Annuities) for the calendar year of the recharacterization, or any other
equivalent form.

     Section 5.9 Excess Deferrals. Notwithstanding any other provision of the Plan, Excess
Deferrals shall be distributed to any Participant to whose account Excess Deferrals were made.
Excess Deferrals shall be adjusted for any income or loss for the taxable year in which such
contributions were made. Income or loss attributable to the period between the end of the taxable
year and the date of distribution will be disregarded in determining income or loss. A withdrawal
of an Excess Deferral under this section may be made notwithstanding any otherwise applicable
restrictions or spousal consent requirement on in-service withdrawals. The amount of any Excess
Deferrals to be withdrawn under this section will be reduced by any amounts previously distributed
or recharacterized under Section 5.8.

     Section 5.10 Automatic Contribution Arrangement.

     (a) Notwithstanding the provisions of the Plan, if the Employer’s Plan so provides in the
Adoption Agreement the Pre-Tax Contributions on behalf of a Participant shall be determined under
an Automatic Contribution Arrangement. For purposes of this Section 5.10, the term “Automatic
Contribution Arrangement” means an arrangement:

     (1) under which the Participant may elect to have the Plan Administrator make payments
as Pre-Tax Contributions under the Plan on behalf of the Participant, or to the Participant
directly in cash; and

     (2) under which the Participant is treated as having elected to have the Plan
Administrator make such Pre-Tax Contributions in an amount equal to a Uniform Percentage of
Compensation provided under the Plan until the Participant specifically elects not to have
such Pre-Tax Contributions made (or specifically elects to have such Pre-Tax Contributions
made at a different percentage); and

     (3) under which such Pre-Tax Contributions are invested in a Qualified Default
Investment Alternative (“QDIA”) in accordance with Section 404(c)(5) of ERISA.

     (b) The Plan Administrator shall, within a reasonable period in accordance with ERISA, provide
to each Participant to whom the arrangement applies for such Plan Year, notice of the Participant’s
rights and obligations under the arrangement which:

     (1) is sufficiently accurate and comprehensive to apprise the Participant of such rights and
obligations, and

 

 

-25- 

     (2) is written in a manner calculated to be understood by the average Participant to
whom the arrangement applies.

     (c) A notice shall not be treated as meeting the requirements of this Section 5.10 with
respect to a Participant unless:

     (1) the notice includes an explanation of the Participant’s right under the
arrangement not to have the Pre-Tax Contributions made on the Participant’s behalf (or to
elect to have such contributions made at a different percentage);

     (2) the Participant has a reasonable period of time, after receipt of the notice
described in clause (1) and before the first Pre-Tax Contributions are made, to make such
election; and

     (3) the notice explains how Pre-Tax Contributions made under the arrangement will be
invested in the absence of any investment election by the Participant.

     (d) The Automatic Contribution Arrangement may be applied without taking into consideration
any Employee who:

     (1) was eligible to participate in the arrangement (or a predecessor arrangement)
immediately before the date on which such arrangement becomes effective; and

     (2) had an election in effect on such date either to participate in the arrangement or
to not participate in the arrangement.

     (e) The Pre-Tax Contributions under the Automatic Contribution Arrangement shall be treated as
Pre-Tax Contributions under the Plan, including without limitations, the rules established by the
Plan Administrator under Section 5.2 of the Plan, the payroll procedures under Section 5.3 of the
Plan, the limitations under Section 5.4 of the Plan, and the tests under Section 5.5 of the Plan.

     Section 5.11 Uniform Percentage.

     (a) For purposes of Section 5.10 the term “Uniform Percentage” means, with respect to any
Employee, any percentage determined under the Automatic Contribution Arrangement if such percentage
is applied uniformly and does not exceed ten percent (10%) or any other applicable limitation
provided under the PR-Code, as provided in the Adoption Agreement.

 

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     Section 5.12
Qualified Default Investment Alternative “QDIA”.

     (a) For purposes of the Plan the term “Qualified Default Investment Alternative” means, with
respect to a participant directed individual account plan under Section 404(c) of ERISA, the
investment alternative or alternatives which are applicable under the Plan in the absence of
investment directions from the Participant or Beneficiary, in accordance with Section 404(c)(5) of
ERISA.

     (b) In accordance with ERISA, the Plan Administrator shall provide to the Participant or
Beneficiary any prior notice required before any portion of the Participant’s or Beneficiary’s
account balance is initially invested in a Qualified Default Investment Alternative, and any notice
required thereafter.

     (c) The Participant or Beneficiary in the participant directed individual account plan shall
be deemed to have exercised control over assets in his or her account if, in the absence of
investment directions from the Participant or Beneficiary, the Plan invest in a Qualified Default
Investment Alternative.

     (d) The Participant or Beneficiary shall have the right to direct the investment out of the
Qualified Default Investment Alternative with the same frequency available for other plan
investments, in accordance with ERISA.

     (e) Upon the investment in a Qualified Default Investment Alternative, any fiduciary of the
Plan shall not be liable for any loss or by reason of any breach that occurs as a result of such
investment.

     Section 5.13 Eligible Investment Advice Arrangement.

     (a) For purposes of the Plan the term “Eligible Investment Advice Arrangement” means, with
respect to a participant directed individual account plan under Section 404(c) of ERISA, an
arrangement providing for “investment advice” to a Participant or Beneficiary by a “fiduciary
adviser” (as such term is defined in Section 408(g) of ERISA) which either provides that any fees
received by the “fiduciary adviser” for “investment advice” or with respect to the sale, holding,
or acquisition of any security or other property for purposes of investment of plan assets do not
vary depending on the basis of any investment option selected, or uses a computer model under an
“investment advice program,” in accordance with Section 408(g) of ERISA.

     (b) Unless otherwise provided in the Adoption Agreement, an Eligible Investment Advice
Arrangement may be allowed under the Plan.

 

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ARTICLE VI

AFTER-TAX CONTRIBUTIONS

     Section 6.1 Eligibility. If the Adoption Agreement so provides, an Eligible Employee who meets
the participation requirements of Section 4.1 may elect to make After-Tax Contributions. After-Tax
Contributions Accounts are fully vested and nonforfeitable at all times.

     Section 6.2 Limits on Amount. Unless otherwise provided in the Adoption Agreement, under the
Plan the After-Tax Contributions that the Participants may elect are not subject to a minimum
amount or percentage of Compensation. After-Tax Contributions for a Plan Year may not exceed the
limitation imposed by the Plan Administrator, within the limits prescribed by the PR-Code and any
regulations thereunder. Additional restrictions on After-Tax Contributions may apply in certain
cases to Participants who make an in-service withdrawal on account of a financial hardship under
Section 10.1. (See Section 5.4(b)).

     Section 6.3 After-Tax Contribution Election. The procedures for electing and changing
After-Tax Contributions will be similar to those described in Section 5.2.

     Section 6.4 Collection of After-Tax Contributions. The Employer will collect Participants’
After-Tax Contributions using payroll or other procedures. The Employer will transfer the amounts
collected to the Trustee as of the earliest date on which such contributions can reasonably be
segregated from the Employer’s general assets, but not later than (i) the 15th working day of the
month immediately following the date on which such amounts are received by the Employer or the date
on which such amounts would otherwise have been payable to the Participant in cash, or (ii) any
other period permitted by Title I of ERISA, the PR-Code or any other applicable law, regulation or
governmental agency.

ARTICLE VII

EMPLOYER AND MATCHING CONTRIBUTIONS

     Section 7.1 Eligibility. If the Adoption Agreement so provides, the Employer will make
Employer Contributions (Money Purchase Contributions, Profit Sharing Contributions and/or Target
Benefit Contributions) and/or Matching Contributions pursuant to the provisions of this Article
VII. Participants will have a vested and nonforfeitable interest in their Employer Contributions
Account and Matching Contributions Account in accordance with the vesting schedule specified by the
Employer in the Adoption Agreement.

     Section 7.2 Employer Contributions.

     (a) In General. For each Plan Year that the Plan is in effect, the Employer will make Employer
Contributions (Money Purchase Contributions, Profit Sharing Contributions and/or Target Benefit
Contributions) in the amount (if any) determined according to the provisions of this

 

-28-

Article
and the Adoption Agreement. If, due to miscalculation or error, the Employer Contributions
exceed the amount prescribed or determined by the Employer, such excess may, at the election of the
Employer, be treated as a contribution for the succeeding Plan Year or years.

     The Employer Contributions may be paid in a single sum or installments, but the total amount
will be paid to the Trustee not later than the time (including extensions thereof) prescribed by
law for filing the Employer’s Puerto Rico income tax return for its taxable year ending with or
within the Plan Year.

     (b) Money
Purchase Plans. If the Plan is a money purchase plan, the following provisions will
apply:

          (1) Money Purchase Contributions. For each Plan Year the Employer will contribute an amount
which will equal the contribution required for all Participants entitled to receive an allocation
for such Plan Year under the contribution formula elected by the Employer in the Adoption
Agreement.

          (2) Maximum Contribution. Money Purchase Contributions to the Plan shall not exceed the
maximum amount which the Employer may deduct under Section 1023(n) of the PR-Code, or any successor
provision or similar statutory provisions hereafter enacted.

          (3) Forfeitures. Forfeitures will be allocated in accordance with the Employer’s election
under the Adoption Agreement. Subject to Section 9.3, forfeitures will be released as soon as
practicable following the Participant’s separation from service.

     (c) Profit Sharing Plans. If the Plan is a profit sharing plan, the following provisions will
apply:

          (1) Profit Sharing Contributions. If specified in the Adoption Agreement, the Employer shall
make contributions to the Trust in such amounts as it may determine for each Plan Year in which the
Plan is in effect. The Employer will not be obligated to contribute any particular amount in a Plan
Year or to make any contribution at all in any particular Plan Year. However, if in the Adoption
Agreement the Employer elected a formula for determining the contribution for a Plan Year, the
Employer will contribute the amount determined under such formula.

          (2) Maximum Contribution. All Profit Sharing Contributions to the Plan shall be made out of
the Employer’s current or accumulated profits and shall not exceed the lesser of:

               (A) The Employer’s current or accumulated profits; or

 

-29-

	 	(B)	 	the maximum amount permitted to be deducted by the Employer under
Section 1023(n) of the PR-Code, or any successor or similar statutory
provisions hereafter enacted.

          (3) Forfeitures. Forfeitures will be allocated in accordance with the Employer’s election
under the Adoption Agreement. Subject to Section 9.3, forfeitures will be released as soon as
practicable following a Participant’s separation from service.

     (d) Target Benefit Plans. If the Plan is a target benefit plan, the following provisions will
apply:

          (1) Target Benefit Contributions. For each Plan Year the Employer will contribute an amount
which will equal the contribution required for all Participants entitled to receive an allocation
for such Plan Year under the contribution formula elected by the Employer in the Adoption
Agreement.

          (2) Maximum Contribution. Target Benefit Contributions to the Plan shall not exceed the
maximum amount which the Employer may deduct under Section 1023(n)of the PR-Code, or any successor
provision or similar statutory provisions hereafter enacted.

          (3) Forfeitures. Forfeitures will be allocated in accordance with the Employer’s election
under the Adoption Agreement. Subject to Section 9.3, forfeitures will be released as soon as
practicable following the Participant’s separation from service.

     Section 7.3 Persons Entitled Allocation of Employer Contributions. Employer Contributions for
each Plan Year shall be allocated as of the last day of such Plan Year (even though receipt of the
Employer Contributions by the Trustee may take place after the close of such Plan Year) among the
Employer Contributions Accounts of those Participants who completed at least 1,000 hours of service
during such Plan Year and were actively employed by the Employer at the end of such Plan Year. In
the case of an Eligible Employee who first becomes a Participant during the Plan Year, the number
of hours of service required to share in the allocation of Employer Contributions for such Plan
Year shall be prorated based on the date on which the Eligible Employee becomes a Participant.

     Notwithstanding the above, a Participant whose employment with the Employer terminates because
of his retirement, Disability or death during the Plan Year is not required to fulfill the
foregoing employment requirement to share in the allocation of Employer Contributions for such Plan
Year.

     Employer Contributions will be allocated as specified by the Employer in the Adoption
Agreement.

 

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     Section 7.4 Matching Contributions.

     (a) Amount of Contribution. If elected in the Adoption Agreement, the Employer will make
Matching Contributions on behalf of the Participants who make Pre-Tax Contributions, After-Tax
Contributions, and/or “catch-up” contributions, for each matching period as defined in the Adoption
Agreement. A Participant will be required to be an Employee on the last day of a matching period
(or to have terminated employment during such period because of retirement, death or Disability) in
order to receive Matching Contributions for such matching period.

     The amount of such Matching Contributions will be as specified in the Adoption Agreement. The
Employer will not make a Matching Contributions with respect to any Excess Contributions that are
distributed to a Participant under Section 5.8 or with respect to any Pre-Tax Contributions that
are recharacterized as After-Tax Contributions under Section 5.8 (unless under the terms of the
Plan such After-Tax Contributions would also be matched).

     Matching contributions for a matching period will be transferred to the Trustee within a
reasonable time after the end of such period. However, the total amount of the Matching
Contributions for a Plan Year will be paid to the Trustee no later than the time (including
extensions thereof) prescribed by law for filing the Employer’s Puerto Rico income tax return for
its taxable year ending with or within the Plan Year.

     (b) Source of Contributions. The Employer will make the Matching Contributions required under
this section regardless of whether the Employer has current or accumulated profits.

     (c) Use of Forfeitures. Any forfeitures occurring during a matching period will be allocated
in accordance with the Employer’s election under the Adoption Agreement.

ARTICLE VIII

ROLLOVER CONTRIBUTIONS

     Section 8.1 Rollover Contributions.

     (a) With the approval of the Plan Administrator, an Employee may:

          (1) make a rollover to the Plan of all cash (or other property) received as distribution from
another qualified plan; or

          (2) cause any amount which could be rolled over to the Plan under subsection (a)(1) above to
be transferred directly to the Trustee of the Plan from the trustee or custodian of another
qualified plan. In the case of such transfers directly from another qualified plan funded through a
trust or annuity contract, amounts consisting of the following will be accounted for separately:
(i) employer contributions to a defined benefit, target benefit or money

 

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purchase plan, employer contributions to a profit sharing or 1165(e) Plan; (ii) employer matching
contributions; (iii) pre-tax contributions; and (iv) after-tax contributions. The Employee will be
responsible for providing the Plan Administrator with records that will reflect such amounts
separately.

     (b) The Employer, the Plan Administrator and the Trustee have no responsibility for
determining the propriety of, proper amount or time of, or status as a tax free transaction of any
transfer under subsection (a) above.

     (c) If an Employee who is not a Participant makes a transfer under subsection (a) above, he
will be considered to be a Participant with respect to administering such transferred amount only.
He will not be a Participant for any other purpose of the Plan until he completes the participation
requirements under Article IV. If elected in the Adoption Agreement, such an Employee may take
loans secured by his Rollover Contributions Account.

     (d) The Employer or Plan Administrator in its discretion may direct the refund to the Employee
(or the retransfer to another Trustee or custodian designated by the Employee) of any transfer to
the extent that such refund is deemed necessary to insure the continued qualification of this Plan
under Section 1165(a) of the PR-Code or that holding such contribution hereunder would be
administratively burdensome.

     (e) The Plan Administrator will credit any Rollover Contribution to the Participant’s Rollover
Contributions Account as soon as practicable after receipt thereof by the Trustee.

ARTICLE IX

VESTING

     Section 9.1 Vesting. A Participant will have a vested and nonforfeitable interest in that
percentage of his Employer Contributions Account and/or Matching Contributions Account determined
under the vesting schedule specified by the Employer in the Adoption Agreement.

     Section 9.2 Full Vesting. Notwithstanding Section 9.1, Participants will become fully vested
in their Employer Contributions Account and/or Matching Contributions Account upon the earlier of
(i) reaching Normal Retirement Age while still employed by the Employer, (ii) upon retirement at
Normal or Early Retirement Age, (iii) upon Disability as defined in Section 2.10, (iv) upon death
while still an Employee, (v) upon termination of the Plan, or (vi) upon complete discontinuance of
contributions by the Employer.

 

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     Section 9.3 Forfeiture of Non-Vested Interest.

     (a) A Participant will forfeit the non-vested portion of his accrued benefit on (i) the day
he, for any reason, separates from service, if he has no vested accrued benefit under the Plan,
(ii) the day after the entire portion of his vested accrued benefit is distributed, or (iii) the
day after he incurs a period of five consecutive one-year break in service (as described in Section
3.1 if the Plan determines years of service for vesting purposes using the hours of service method,
or as described in Section 3.2 if the Plan determines years of service for vesting purposes using
the elapsed time method).

     (b) Notwithstanding the provisions of subsection (a) above, if a Participant forfeits any
portion of the Employer and/or Matching Contributions Accounts as a result of the complete
distribution of his vested portion in such Accounts but thereafter resumes employment with the
Employer, the amount forfeited will be credited to the Participant’s Accounts if he repays to the
Plan the entire amount distributed, without interest, prior to incurring in five consecutive
one-year break in service. In the case of a Participant who had no vested balance in his Employer
and/or Matching Contributions Accounts, the amount forfeited under subsection (a) above will be
restated upon the Participant reemployment with the Employer prior to incurring in a five
consecutive one-year break in service.

     Section 9.4 Resumption of Employment. A former Participant who resumes employment with the
Employer after a period of less than five consecutive one-year break in service will receive credit
for all his prior years of service for vesting purposes. A former Participant who resumes
employment with the Employer after a period of 5 or more consecutive breaks in service will not
receive credit for his prior years of service for vesting purposes, subject to any limitations
provided in ERISA.

     Section 9.5 Changes in Vesting Schedule. After the adoption of any amendment that changes the
vesting schedule or that directly or indirectly affects the computation of a Participant’s vested
percentage, any Participant having 3 or more years of service will have his vested percentage
determined under whichever vesting schedule gives him the higher vested percentage.

     Section 9.6 Faster Vesting of Employer Contributions.

     (a) Notwithstanding the provisions of the Adoption Agreements, the Employer Contributions made
for Plan Years beginning after December 31, 2006 shall be required to become vested under a vesting
schedule that meets the 3-year cliff vesting or the 2 to 6 year graded vesting, in accordance with
ERISA.

     (b) The Adoption Agreements shall be required to meet the vesting requirements for Employer
Contributions under ERISA.

 

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ARTICLE X

IN-SERVICE WITHDRAWALS

     Section 10.1 Withdrawal of Pre-Tax Contributions, Qualified Matching and/or Qualified
Non-Elective Contributions.

     (a) Financial Hardship. If elected in the Adoption Agreement a Participant whose employment
has not terminated may, upon reasonable prior written notice to the Plan Administrator, make
withdrawals from his Pre-Tax Contributions Account, Qualified Matching Contributions Account and/or
Qualified Non-Elective Contributions Account in the event of financial hardship. The maximum
withdrawal from the Participant’s Pre-Tax Contributions Account, Qualified Matching Contributions
Account and/or Qualified Non-Elective Contributions Account is the lesser of (i) the amount of his
Pre-Tax Contributions, Qualified Matching Contributions and/or Qualified Non-Elective
Contributions, including earnings or investment gains (unless provided otherwise by the PR-Code or
regulations thereunder), or (ii) the amount needed to alleviate his financial hardship.

     An in-service withdrawal will be on account of financial hardship only if the Participant has
an immediate and heavy financial need and the withdrawal is necessary to meet such need.

     A withdrawal will be deemed to be on account of an immediate and heavy financial need if it is
occasioned by:

          (1) a deductible medical expense (within the meaning of Section 1023(aa)(2)(P) of the PR-Code)
incurred by the Participant or his spouse, children or dependent;

          (2) purchase of the Participant’s principal residence (not including mortgage payments);

          (3) tuition payments and related educational expenses for the next 12 months of post-secondary
education for the Participant or his spouse, child or dependent;

          (4) rent or mortgage payments to prevent the Participant’s eviction from or the foreclosure of
the mortgage on his principal residence; or

          (5) such other event or circumstance as the Puerto Rico Secretary of the Treasury through
regulations may permit and the Plan Administrator authorize.

          A withdrawal will be deemed necessary to satisfy the Participant’s financial needs if either:

 

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          (1) the Participant has made all non-financial hardship withdrawals and obtained all
nontaxable loans available, if any, under all of the Employer’s qualified retirement plans; and
each such other plan which provides for Pre-Tax Contributions contains restrictions similar to
those in Section 5.4(b); or

          (2) the Participant satisfies such other requirements as may be prescribed by the Puerto Rico
Secretary of the Treasury.

     A Participant must establish to the Plan Administrator’s satisfaction both that the
Participant has an immediate and heavy financial need and that the withdrawal is necessary to meet
the need, as provided in this subsection.

     A Participant’s application for a financial hardship withdrawal will be in writing, on such
form and containing such information (or other evidence or materials establishing the Participant’s
financial hardship) as the Plan Administrator may require. The Plan Administrator’s determination
of the existence of and the amount needed to meet a financial hardship will be binding on the
Participant.

     (b) Withdrawals After Age 591/2 and Other Reasons.

          (1) To the extent provided in the Adoption Agreement, a Participant may make in-service
withdrawals from his Pre-Tax Contributions Account, Qualified Matching, Contributions Account
and/or Qualified Non-Elective Contributions Account after he has reached age 59 1/2; and

          (2) a Participant may make in-service withdrawals from his Pre-Tax Contributions Account,
Qualified Matching Contributions Account and/or Qualified Non-Elective Contributions Account under
the following circumstances: (i) termination of the Plan without the establishment of a successor
Plan; (ii) the sale to an unrelated entity of substantially all of the assets used by the Employer
in its trade or business, provided the Employee continues in employment with the purchaser of the
assets; and (iii) the sale by the Employer of its shares in a subsidiary of the Employer, provided
the Employee continues in employment with the subsidiary.

     (c) Spousal Consent to In-Service Withdrawals. Unless the Plan is an Annuity Exempt Plan (as
described in Section 11.4(d)), the spouse of a married Participant’s must consent to an in-service
withdrawal under this section. Such consent must be in writing and witnessed by a notary public or
the Plan Administrator (or any Plan representative appointed by the Plan Administrator for such
purposes).

     (d) Payment. Any withdrawal under this section will be paid to the Participant as soon as
practicable after the next Valuation Date following the Plan Administrator’s receipt of the
Participant’s withdrawal form; however the Plan Administrator may approve an earlier payment

 

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of some or all of the amount to be withdrawn if such earlier payment would not be detrimental to
the interests of the other Participants.

     (e) Limitation on Future Contributions. A Participant who makes an in-service withdrawal
under this section may not make a Pre-Tax Contribution or After-Tax Contribution for a period of up
to 12 months following such in-service withdrawal.

     (f) Plan Administrator’s Rules. The Plan Administrator may establish reasonable minimum
withdrawal amounts and reasonable limitations on the frequency or number of withdrawals during a
Plan Year. No forfeitures will occur solely as a result of an Employee’s making an in-service
withdrawal.

     Section 10.2 Withdrawal of After-Tax Contributions.

     (a) Amount. If elected in the Adoption Agreement, a Participant whose employment has not
terminated may, upon reasonable prior written notice to the Plan Administrator, withdraw all or any
portion of his After-Tax Contributions Account to the extent not previously withdrawn. The Adoption
Agreement may limit such in-service withdrawals to financial hardship situations (as defined in
Section 10.1(a)), or may permit in-service withdrawals for reasons other than financial hardship.

     (b) Spousal Consent to In-Service Withdrawals. Unless the Plan is an Annuity Exempt Plan (as
described in Section 11.4(d)), the spouse of a Participant must consent to an in-service withdrawal
under this section. Such consent must be in writing and witnessed by a notary public or the Plan
Administrator (or any Plan representative appointed by the Plan Administrator for such purposes).

     (c) Payment. Any withdrawal under this section will be paid to the Participant as soon as
practicable after the Valuation Date next following the Plan Administrator’s receipt of the
Participant’s withdrawal form; however, the Plan Administrator may approve an earlier payment of
some or all of the amount to be withdrawn if such earlier payment would not be detrimental to the
interests of the other Participants.

     (d) Limitation on Future Withdrawals. If so provided in the Adoption Agreement, a Participant
who makes an in-service withdrawal under this section may not make a Pre-Tax Contribution and/or
After-Tax Contribution for a period of up to 12 months following the date of such in-service
withdrawal. The Adoption Agreement, however, may limit the suspension of Pre-Tax and/or After-Tax
Contributions to in-service withdrawals made prior to the date that the Participant attains age 59
1/2.

     (e) Plan Administrator’s Rules. The Plan Administrator may establish reasonable minimum
withdrawal amounts and reasonable limitations on the frequency or number of

 

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withdrawals during a Plan Year. No forfeitures will occur solely as a result of an Employee’s
making an in-service withdrawal.

     Section 10.3 Withdrawal of Matching Contributions.

     (a) Amount. If elected in the Adoption Agreement, a Participant whose employment has not
terminated may, upon reasonable prior written notice to the Plan Administrator, withdraw all or
part of the vested portion of his Matching Contributions Account to the extent not previously
withdrawn. The Adoption Agreement may limit such in-service withdrawals to financial hardship
situations (as defined in Section 10.1(a), or may permit in-service withdrawals for reasons other
than financial hardship.

     (b) Spousal Consent to In-Service Withdrawals. Unless the Plan is an Annuity Exempt Plan (as
described in Section 11.4(d)), the spouse of a married Participant must consent to an in-service
withdrawal under this section. Such consent must be in writing and witnessed by a notary public or
the Plan Administrator (or any Plan representative appointed by the Plan Administrator for such
purposes).

     (c) Payment. Any withdrawal under this section will be paid to the Participant as soon as
practicable after the next Valuation Date following the Plan Administrator’s receipt of the
Participant’s withdrawal form; however, the Plan Administrator may approve an earlier payment of
some or all of the amount to be withdrawn if such earlier payment would not be detrimental to the
interests of the other Participants.

     (d) Limitation on Future Withdrawals. If so provided in the Adoption Agreement, a Participant
who makes an in-service withdrawal under this section may not make a Pre-Tax Contribution and/or
After-Tax Contribution for a period of up to 12 months following the date of such in-service
withdrawal. The Adoption Agreement, however, may limit the suspension of Pre-Tax and/or After-Tax
Contributions to in-service withdrawals made prior to the date that the Participant attains age 59
1/2.

     (e) Plan Administrator’s Rules. The Plan Administrator may establish reasonable minimum
withdrawal amounts and reasonable limitations on the frequency or number of withdrawals during a
Plan Year. No forfeitures will occur solely as a result of an Employee’s making an in-service
withdrawal.

     Section 10.4 Withdrawals of Profit Sharing Contributions.

     (a) Amount. If elected in the Adoption Agreement, a Participant whose employment has not
terminated may, upon reasonable prior written notice to the Plan Administrator, make withdrawals
from all or part of the vested portion of his Profit Sharing Contributions Account to the extent
not previously withdrawn. The Adoption Agreement may limit such in-service

 

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withdrawals to financial hardship situations (as defined in Section 10.1(a)) or may permit
in-service withdrawals for reasons other than financial hardship.

     (b) Spousal Consent to In-Service Withdrawals. Unless the Plan is an Exempt Annuity Plan (as
described in Section 11.4(d)), the spouse of a married Participant must consent to an in-service
withdrawal under this section. Such consent must be in writing and witnessed by a notary public or
the Plan Administrator (or any Plan representative appointed by the Plan Administrator for such
purposes).

     (c) Payment. Any withdrawal under this section will be paid to the Participant as soon as
practicable after the next Valuation Date following the Plan Administrator’s receipt of the
Participant’s withdrawal form; however the Plan Administrator may approve an earlier payment of
some or all of the amount to be withdrawn if such earlier payment would not be detrimental to the
interests of the other Participants.

     (d) Withdrawal Limitations. A Participant may withdraw the amount from his vested Profit
Sharing Contributions Account he specifies, provided that an in-service withdrawal may not exceed
the smallest of whichever of the following limitations applies:

          (1) the Participant’s total vested Profit Sharing Contributions (and earnings thereon);

          (2) in the case of a hardship withdrawal, the amount determined by the Plan Administrator as
necessary to meet the Participant’s financial hardship; or

          (3) in the case of a non-hardship withdrawal, the amount attributable to vested Profit Sharing
Contributions (and earnings thereon) which have been on deposit in the Plan for at least 2 years;
provided, that this limitation will apply only to Employees who have been Participants in the Plan
for less than 5 years.

     (e) Limitation on Future Withdrawals. If so provided in the Adoption Agreement, a Participant
who makes an in-service withdrawal under this section may not make a Pre-Tax Contribution and/or
After-Tax Contribution for a period of up to 12 months following the date of such in-service
withdrawal. The Adoption Agreement, however, may limit the suspension of Pre-Tax and/or After-Tax
Contributions to in-service withdrawals made prior to the date that the Participant attains age 59
1/2.

     (f) Plan Administrator’s Rules. The Plan Administrator may establish reasonable minimum
withdrawal amounts and reasonable limitations on the frequency or number of withdrawals during a
Plan Year. No forfeitures will occur solely as a result of an
Employee’s making an
in-service
withdrawal.

 

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     Section 10.5 Withdrawals of Rollover Contributions.

     (a) Amount. If elected in the Adoption Agreement, a Participant whose employment has not
terminated may, upon reasonable prior written notice to the Plan Administrator, withdraw all or any
portion of his Rollover Contributions Account. The Plan Administrator may establish reasonable
minimum withdrawal amounts.

     Notwithstanding the preceding paragraph, amounts separately accounted for under Section
8.1(a)(2) will be subject to restrictions on withdrawal as follows: (i) employer contributions to a
defined benefit, target benefit or money purchase plan are not available for in-service withdrawal;
(ii) pre-tax contributions (including qualified non-elective and/or matching contributions) are
available for in-service withdrawal pursuant to the terms of Section 10.1; and (iv) after-tax,
matching and profit sharing contributions are available for in-service withdrawal pursuant to the
terms of Sections 10.1, 10.2 and 10.3, respectively.

     (b) Payment. Any withdrawal under this section will be paid to the Participant as soon as
practicable after the next Valuation Date following the Plan Administrator’s receipt of the
Participant’s withdrawal form; however, the Plan Administrator may approve an earlier payment of
all or some of the amount to be withdrawn if such earlier payment would not be detrimental to the
interests of the other Participants.

     Section 10.6 Withdrawals of Money Purchase Contributions. In-service withdrawals of Money
Purchase Contributions are not permitted.

     Section 10.7 Withdrawals of Target Benefit Contributions. In-service withdrawals of Target
Benefit Contributions are not permitted.

     Section 10.8 Withdrawals of Owner-Employee. Notwithstanding any other provisions of this Plan,
no distribution of benefits in excess of the contributions made by an Owner-Employee shall be made
to such Owner-Employee before he reaches age 59 1/2 or becomes disabled. For purposes exclusively of
this section, an Owner-Employee should be deemed disabled if he is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impediment
which can be expected to cause the death of the Owner-Employee or to last for an extended period of
time.

     Section 10.9 Special 5% Tax. Notwithstanding anything to the contrary in the Master Plan, up
to December 31, 2006 (or such other date as provided by law), a Participant may request, in the
manner provided by the Administrator, an in-service distribution from the Master Plan which shall
not exceed 5% of the vested accumulated and undistributed balance in the Participant’s accounts in
the Master Plan for which the Participant has elected to prepay the special 5% tax on said vested
accumulated and undistributed balance pursuant to the provisions of Act No. 87 of May 13, 2006 as
amended by Act No. 244 of November 10, 2006. The Trustee shall pay such in-service

 

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distribution in the form of a certified check, manager’s check or money order, payable to the order
of the Secretary of the Treasury. In addition, the in-service distribution shall be reported by the
Trustee as an exempt distribution in the form provided by the Secretary of the Treasury for such
purpose.

ARTICLE XI

BENEFITS IN CASE OF RETIREMENT, DISABILITY

OR TERMINATION OF EMPLOYMENT

     Section 11.1 Methods of Distribution. The distribution of benefits to which a Participant or
Beneficiary may become entitled to in case of retirement, Disability or termination of employment
shall be made in accordance with this Article XI. The vested benefits provided by the Plan shall be
distributed under whichever of the following methods the Participant or Beneficiary shall elect:

     (a) one or more payments within one taxable year of the Participant or Beneficiary;

     (b) the purchase of a fixed annuity contract with payments over a period of time not exceeding
the life expectancy of the Participant or the joint life and last survivor expectancy of the
Participant and his Beneficiary; or

     (c) payments in approximately equal monthly, quarterly, semiannual or annual installments over
a period of years certain not to exceed the lifetime of the Participant or the lifetimes of the
Participant and his Beneficiary.

     Section 11.2 Retirement Dates.

     (a) Normal Retirement Date. A Participant may retire on his Normal Retirement Date. If a
Participant’s Normal Retirement Date is the date he completes a specified number of years of
participation, years of participation in any predecessor plan will be counted toward meeting such
requirement.

     (b) Early Retirement Date. If the Employer selects an early retirement provision in the
Adoption Agreement a Participant may retire on any date on or after he meets the age and service
requirements for early retirement specified in the Adoption Agreement. A Participant who
terminates his employment after having satisfied the service but not the age requirement for early
retirement that is specified in the Adoption Agreement will become eligible to receive early
retirement benefits upon satisfaction of the age requirement.

     (c) Late Retirement Date. If a Participant continues in employment after his Normal Retirement
Age, he may continue to make Pre-Tax Contributions and/or After-Tax Contributions (if applicable)
until his later retirement date, and he will continue to share in Employer

 

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Contributions and forfeitures in accordance with the Plan’s allocation formula until his late
retirement date.

     (d) Disability Retirement Date. A Participant will be considered to have retired if he leaves
the Employer’s service because of Disability.

     Section 11.3 Retirement Benefits.

     (a) A Participant who retires or becomes disabled will be fully vested and will receive
benefit payments based upon his Accrued Benefit. The Participant will receive (i) in the case of a
single payment, the total amount credited to his accounts at the date the distribution is made,
(ii) in the case of an annuity contract, such total amount will be used to purchase such annuity
contract, or (iii) in the case of installment payments, the first of such installments will be
based on such total amount, and subsequent installments will be based on the total amount credited
to the Participant’s accounts at the date of each such installment.

     (b) The date of distribution to a retired Participant (or the date of the first installment
payment to the retired Participant) will be the earliest practicable date after the Valuation Date
that coincides with or follows (i) the Participant’s retirement date, or (ii) such later date as
the Participant designates, subject to the rules of Section 11.6. However, if the Participant’s
account balance(s) exceed $5,000 (or such other amount provided in Section 203(e) of ERISA),
distribution before Normal Retirement Date will not be made (or installment payments will not
commence) unless the Participant consents thereto in accordance with the provisions of ERISA and
the PR-Code, subject to the rules of Section 11.6.

     (c) The consent of the Participant and his spouse shall be obtained in writing within the
90-day period ending on the Annuity Starting Date. The Plan Administrator shall notify the
Participant and his spouse of the right to defer any distribution until the Participant’s account
balance 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 205(c)(3) of ERISA, and shall be provided no less than 30 days and no more than 90 days
prior to the Annuity Starting Date. However, distribution may commence earlier than 30 days after
the notice described in the preceding sentence if (i) the distribution is not subject to Section
205 of ERISA, (ii) the Plan Administrator informs the Participant that he 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), and (iii) the Participant
affirmatively elects a distribution after receiving such notice.

     Notwithstanding the foregoing, if the account balance is immediately distributable, only the
Participant need to consent to the commencement of a distribution in the form of a qualified joint
and survivor annuity. An account balance is immediately distributable if any part of the

 

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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 Normal Retirement Age or
age 62.

     Section 11.4 Married Participants.

     (a) Qualified Joint and Survivor Annuity. Except in the case of a Participant in an Annuity
Exempt Plan (as described in subsection (d) below) or in the case of a Participant with a small
account (as defined in subsection (e) below), retirement benefits to a married Participant will be
paid in the form of the purchase and delivery of a qualified joint and survivor annuity unless the
Participant elects otherwise in writing during the 90-day period ending on the date benefit
payments are to commence. The Participant may elect to have such annuity distributed upon
attainment of the earliest retirement age under the Plan. The earliest retirement age is the
earliest date on which, under the Plan, the Participant could elect to receive retirement benefits.
Such an election must be accompanied by his spouse’s qualified consent (other than the
Participant’s election of a joint and survivor annuity given the spouse a 50% or greater
survivorship interest). At any time before the commencement of benefits, the Participant may make
and revoke such an election without limit as to the number of elections. The making of such an
election requires his spouse’s qualified consent; revocation of such an election does not.

     A qualified joint and survivor annuity is an immediate annuity for the life of the Participant
with a survivor annuity for the life of the Participant’s spouse which is 50% of the amount of the
annuity payable during the joint lives of the Participant and the Participant’s spouse. The
qualified joint and survivor annuity is the amount of benefit that can be purchased with the
Participant’s vested interest in his accounts.

     (b) Joint and Survivor Notice. The Plan Administrator will provide each married Participant
no less than 30 days and no more than 90 days prior to the Annuity Starting Date with a written
explanation of (i) the Participant’s right to make and the effect of an election to waive the
qualified joint and survivor annuity form of benefit, (ii) the terms and conditions of a qualified
joint and survivor annuity, (iii) the rights of a Participant’s spouse, and (iv) the right to make,
and the effect of, a revocation of a previous election to waive the qualified joint and survivor
annuity.

     (c) Qualified Consent. Any waiver of a qualified joint and survivor annuity or a qualified
preretirement survivor annuity shall not be effective unless (i) the Participant’s spouse consents
in writing to the election, (ii) the election designates a specific beneficiary, including any
class of beneficiaries or any contingent beneficiaries, which may not be changed without special
consent (or the spouse expressly permits designations by the Participant without any further
special consent), (iii) the spouse’s consent acknowledges the effect of the election, and (iv) the
spouse’s consent is witnessed by a Plan representative or notary public. Additionally, a
Participant’s waiver of the qualified joint and survivor annuity shall not be effective unless the
election designates a form o benefit payment which may not be changed without special consent

 

-42-

(or the spouse expressly permits designations by the Participant without any further special
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 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 Section 11.4(b) with respect to a qualified
joint and survivor annuity or Section 12.3 with respect to a qualified pre-retirement survivor
annuity.

     The requirement for a qualified consent is waived if the Participant establishes to the Plan
Administrator’s satisfaction (i) that there is no spouse, (ii) that the spouse cannot be located,
or (iii) under other circumstances described in regulations under Section 205 of ERISA. The
requirement of a qualified consent is also waived for any election or revocation by a Participant
which has the effect of increasing the survivorship interest of the spouse.

     (d) Exempt Profit Sharing Plans. With respect to a profit sharing plan or 1165(e) Plan, the
sole beneficiary of a married Participant in the event of his death before retirement benefits
commence will be his spouse, unless the Participant’s spouse has agreed otherwise in a qualified
consent (as defined in subsection (c) above). Such plans will be exempted from the qualified joint
and survivor annuity requirement of subsection (a) above (herein referred to as an “Annuity Exempt
Plan”).

     However, a profit sharing plan or 1165(e) Plan will not be an Annuity Exempt Plan if the
Participant may elect an annuity form of payment under Section 11.1(b) to the extent that such form
of payment is provided in the Adoption Agreement under Section 11.4(f), and in fact elects an
annuity form of payment under Section 11.1(b). Furthermore, a profit sharing plan or 1165(e) Plan
will not be exempted from the qualified joint and survivor annuity requirement with respect to any
Participant for whom the Plan is a direct or indirect transferee of a defined benefit pension plan,
a money purchase pension plan (including a target benefit plan) or a stock bonus or profit sharing
plan which provides for a life annuity form of payment to the Participant; however, such Plan will
not be treated as a transferee plan solely by reason of a rollover from any such other plan.
Pursuant to Section 205(b) of ERISA, the Plan will be treated as a direct or indirect transferee
only with respect to the transferred assets (and income therefrom) if the Plan separately accounts
for such assets and any income therefrom. In addition, a profit sharing plan will not be considered
an Annuity Exempt Plan unless the Participant’s spouse is the beneficiary of any insurance on the
Participant’s life purchased by Employer Contributions of forfeitures allocated to the
Participant’s account, unless his spouse agrees otherwise in a qualified consent.

 

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     (e) Small Account Defined. A small account is an account with a vested balance that does not
exceed $5,000 (or any other amount provided in Section 203(e) of ERISA). In applying the $5,000
rule, all accounts or portions of accounts from which the Participant is entitled to receive
payments will be added together. If a Participant’s vested account balance is zero, such
Participant will be deemed to have received a distribution of such vested account balance. A small
account will be distributed as soon as practicable after termination of employment, Disability or
retirement in the form of a single lump sum payment.

     (f) Method of Distribution for Annuity Exempt Plan. Unless otherwise provided in the Adoption
Agreement, an annuity form of payment under Section 11.1(b) will not be available to a Participant
in an Annuity Exempt Plan. As such, unless otherwise provided in the Adoption Agreement a qualified
joint and survivor annuity will not be available for the retirement benefits of a Participant in an
Annuity Exempt Plan. Under an Annuity Exempt Plan a Participant will receive the benefit from the
Plan in the form of a lump-sum payment under Section 11.1(a) of the Plan, unless the Participant
elects another method of distribution available under Section 11.1 of the Plan. However, the method
of distribution will be a lump-sum payment if the lump-sum payment is the only method of
distribution available under the Plan as provided in the Adoption Agreement.

     (g) Qualified Optional Survivor Annuity. Notwithstanding anything to the contrary, for a Plan
Year beginning after December 31, 2007 a Plan will have to offer a Participant an election to have
the benefits paid in the form of a qualified optional survivor annuity if the Participant elects a
waiver of the qualified joint and survivor annuity or the qualified preretirement survivor annuity,
as provided in Section 205(d) of ERISA. The Plan Administrator will provide to each married
Participant a written explanation of the terms and conditions of the qualified optional survivor
annuity, as provided in ERISA.

     Section 11.5 Unmarried Participants. Unless the Participant elects otherwise, benefits payable
to an unmarried Participant of a Plan that is not an Annuity Exempt Plan will be paid in the form
of an annuity providing periodic payments for the lifetime of the Participant in an amount that can
be purchased with the Participant’s vested interest in his accounts.

     Section 11.6 Date Benefit Payments Begin. Unless the Participant elects otherwise,
distribution of benefits under the Plan will begin no later than the 60th day following the close
of the Plan Year in which the latest of the following events occurs:

     (a) the termination of the Participant’s employment with the Employer; or

     (b) the date on which Participant attains age 65 or the Participant’s Normal Retirement Date,
if earlier.

 

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     Section 11.7 Annuities Nontransferable. Any annuity contract distributed to a Participant’s
spouse or Beneficiary must be nontransferable. The terms of any annuity contract purchased or
distributed by the Plan to a Participant or spouse shall comply with the requirements of the Plan.

     Section 11.8 Payment of Vested Interest in Case of Termination of Employment. A Participant’s
vested interest in his Accrued Benefit (in case of termination of employment for reasons other than
retirement, death or, Disability) will be paid to him, or payments will begin, on a date elected by
the Participant, and will be paid to him in one or more of the methods described in Section 11.1 as
elected by the Participant. The Participant’s election as to either time or form of payment will be
subject to the rules of this Article XI.

ARTICLE XII

DEATH BENEFITS

     Section 12.1 Benefits Upon Death.

     (a) Death During Employment or After Retirement. If a Participant dies while employed by the
Employer or after retirement (including Disability), his Beneficiary will receive (i) in the case
of a single sum payment, the total amount credited to the Participant’s accounts at the date
distribution is made, (ii) in the case of an annuity contract such total amount will be used to
purchase such annuity contract, or (iii) in the case of installment payments, the first such
installment will be based on such total amount, and subsequent installments will be based on the
total amount credited to the Participant’s accounts at the date of each such installment.

     (b) Death After Other Termination of Employment. If a Participant dies after termination of
employment for any reason other than retirement (including Disability), his Beneficiary will
receive death benefits determined as follows:

          (1) If the Participant died before forfeiture of the nonvested portion of his accounts under
Section 9.3, the vested amount in the Participant’s accounts will be determined and the balance
will be forfeited immediately, death benefits will be based upon the vested amounts remaining after
such forfeiture, and such amount will be applied as provided in subsection (a) above.

          (2) If the Participant died after forfeiture of the nonvested portion of his accounts under
Section 9.3, death benefits will be based upon the vested amounts remaining after such forfeiture,
and such amount (reduced by any prior payments to the Participant before his death) will be applied
as provided in subsection (a) above.

     (c) Date of Distribution. The date of distribution to a Beneficiary (or the date of the first
installment payment to the Beneficiary) will be the earliest practicable date after the Valuation

 

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Date that coincides with or follows (i) the date when the Plan Administrator has received such
evidence of the Participant’s death and such evidence of the Beneficiary’s (or Beneficiaries) right
to receive such distribution as the Plan Administrator deems necessary, or (ii) such later date as
the Beneficiary designates, subject to the provisions of Section 11.6.

     Section 12.2 Method of Payment. Subject to the requirements of Section 12.3, death benefits
will be paid as follows:

     (a) one or more payments within one taxable year of the Beneficiary;

     (b) approximately equal monthly, quarterly, semi-annual or annual installments, over a period
of years certain not to exceed the lifetime of the Beneficiary; or

     (c) applied toward the purchase of a fixed annuity contract with payments over a period of
time not exceeding the life expectancy of the Beneficiary.

     The method of payment will be selected by the Beneficiary unless the Participant in his
Designation of Beneficiary Form designated the form of payment.

     Section 12.3 Qualified Preretirement Survivor Annuity.

     (a) Application. Unless an optional form of benefit has been selected within the election
period pursuant to a qualified consent as defined in Section 11.4(c), if a Participant dies before
the Annuity Starting Date, then the Participant’s vested account balance shall be applied toward
the purchase of an annuity for the life of the surviving spouse. The surviving spouse may elect to
have such annuity distributed within a reasonable period after the Participant’s death.

     (b) Notice. In case of a qualified preretirement survivor annuity described in Section
12.3(a), the Plan Administrator shall provide each Participant within the applicable period for
such Participant a written explanation of the qualified preretirement survivor annuity in such
terms and in such manner as would be comparable to the explanation provided for meeting the
requirements of Section 11.4(b) applicable to a qualified joint and survivor annuity.

     The applicable period for a Participant will be the last to end of the following periods (i)
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, (ii) a reasonable period after the individual becomes a Participant, (iii) a reasonable
period after Section 12.3 ceases to apply to the Participant, or (iv) a reasonable period after
this Article XII first applies to the Participant. Notwithstanding the foregoing, notice must be
provided within a reasonable period after separation from service in the case of a Participant who
separates from service before attaining age 35.

 

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     For purposes of applying the preceding paragraph, a reasonable period after the events
enumerated in (ii), (iii) and (iv) of such paragraph is the end of the two-year period beginning
one year prior to the date of the applicable event and ending one year after such 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 one year prior to separation and
ending one year after separation. If such a Participant thereafter resumes employment with the
Employer, the applicable period for such Participant shall be redetermined.

     (c) Definitions. For purposes of Section 12.3, the following, definitions shall apply:

          (1) Election Period. The period which begins on the first day of the Plan Year in which the
Participant attains age 35 and ends on the date of the Participant’s death. If a Participant
separates from service prior to the first day of the Plan Year in which age 35 is attained, with
respect to the account balance as of the date of separation, the election period shall begin on the
date of separation.

          Pre-age 35 Waiver. 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 qualified 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 qualified preretirement survivor annuity in such
terms as are comparable to the explanation required under Section 11.4(b). Qualified 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 Article XII.

          (2) Spouse (Surviving Spouse). The spouse or surviving spouse of the Participant, provided
that a former spouse will be treated as the spouse or surviving spouse and a current spouse will
not be treated as the spouse or surviving spouse to the extent provided under a qualified domestic
relations order as described in ERISA.

          (3) Vested Account Balance. The aggregate value of the Participant’s vested account balances,
whether vested before or upon death, including the proceeds of insurance contracts, if any, on the
Participant’s life. The provisions of this Article XII shall apply to a Participant who is vested
in amounts attributable to Employer Contributions or Employee contributions (or both) at the time
of death or distribution.

     (d) Method of Distribution for Annuity Exempt Plan. Unless otherwise provided in the Adoption
Agreement, an annuity form of payment under Section 12.3(a) will not be available to the
Beneficiary of a Participant in an Annuity Exempt Plan. As such, unless otherwise provided in the
Adoption Agreement a qualified preretirement survivor annuity will not be available to the
surviving spouse of a Participant in an Annuity Exempt Plan. Under an Annuity Exempt Plan a

 

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Beneficiary will receive the benefit from the Plan in the form of a lump-sum payment under Section
12.2(a) of the Plan, unless the Adoption Agreement allows the Beneficiary to elect another method
of distribution available under Section 12.2 of the Plan or the Participant to designate the form
of payment in the Designation of Beneficiary Form. However, the method of distribution will be a
lump-sum payment if the lump-sum payment is the only method of distribution available under the
Plan as provided in the Adoption Agreement.

     Section 12.4 Beneficiary.

     (a) Designation of Beneficiary and Method of Payment. A Participant may designate one or more
beneficiaries on a form or other instrument filed with, and acceptable to, the Plan Administrator,
and may revoke or change such designation in like manner at any time. The Beneficiary may elect
the form of payment under Section 12.2 (subject to the requirements of Section 12.3); however, the
Participant may in the Designation of Beneficiary Form or other instrument specify the form of
payment (subject to Section 12.3) and death benefits will be paid in such form. If a Beneficiary is
permitted to elect the method of payment of a benefit payable to him, he may designate one or more
beneficiaries to receive any amount remaining undistributed at his death.

     Notwithstanding the preceding paragraph, in a profit sharing or 1165(e) Plan, the sole
Beneficiary of a married Participant shall be the Participant’s spouse, unless the spouse consents
or has consented to the designation of another Beneficiary in a qualified consent (as defined in
Section 11.4(c)). Furthermore, the designation of any Beneficiary other than the spouse, will be
subject to the provisions and limitations of the Puerto Rico Civil Code concerning the rights of
legal heirs.

     (b) Payment in Absence of Designation of Beneficiary. Any portion of a Participant’s death
benefit which is not disposed of by a designation of Beneficiary, for any reason whatsoever, will
be paid to the Participant’s spouse if the spouse survives him, otherwise to the Participant’s
legal heirs in a lump sum.

     (c) Payment Under Prior Designation of Beneficiary. The Plan Administrator will be fully
protected in directing payment in accordance with a prior designation of Beneficiary if such
direction (i) is given before receipt by the Plan Administrator of a later designation or (ii) is
due to the inability of the Plan Administrator to verify the authenticity of a later designation.

ARTICLE XIII

LOANS

     Section 13.1 In General. If the Adoption Agreement so provides, loans will be available from
the Plan. If loans are available, the Plan Administrator will establish written guidelines and
procedures for loans from the Plan to Participants in specific instances, which guidelines may

 

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include limitations on the number of loans that may be outstanding to a Participant at any time or
on the frequency of loans. Each loan must be approved by the Plan Administrator and must conform to
such loan guidelines and procedures. The guidelines and procedures must be formulated and
administered so that they conform with the provisions of ERISA. In addition, the following
requirements must be satisfied:

     (a) Loans will be available to all Participants whose employment has not terminated and any
other person required by the United States Department of Labor on a reasonably equivalent basis.
However, loans will not be made to a Participant who is an Owner-Employee unless such person has at
his expense obtained an administrative exemption from ERISA’s prohibited transaction rules from the
United States Department of Labor with respect to such loan, or unless the United States Department
of Labor has issued a prohibited transaction class exemption covering such loans.

     (b) All loans will be evidence by a promissory note signed by the Participant.

     (c) Loans shall not be made available to Highly Compensated Employees in an amount greater
than the amount made available to Non-Highly Compensated Employees.

     (d) Loans will be e adequately secured and bear a reasonable rate of interest. However, no
more than 50% of a Participant’s nonforfeitable accrued benefit may be pledged as collateral.

     (e) Each loan hereunder will be a Participant directed investment for the benefit of the
Participant requesting such loan; accordingly, any default in the repayment of principal or
interest of any loan hereunder will reduce the amount available for distribution to such
Participant (or his Beneficiary). Thus, any loan hereunder will be effectively and adequately
secured by the Participant’s accounts.

     (f) No Participant’s loan(s) shall exceed the amount of 50% of the Participant’s vested
account balances.

     (g) Except as provided in the next sentence, the maximum term of a loan will be 5 years. If a
Participant requests a loan for the acquisition of his principal residence, the maximum repayment
period will be determined by reference to commercially available bank loans for the same purpose.

     (h) Except for an Annuity Exempt Plan, a Participant must obtain the consent of his spouse, if
any, within the 90 day period before the time the account balance is used as security for the loan.
A new consent is required if the account balance is used as security for any increase in the loan
balance, for renegotiation, extension, renewal, or other revision of the loan. However, spousal
consent is not necessary if the total amount of loans outstanding does not exceed $5,000. The
consent of any subsequent spouse will not be necessary in order to foreclose the Plan’s

 

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security interest in the Participant’s account balance if the Participant’s then spouse validly
consented to the original use of the account balance as security (or if the Participant was
unmarried at such time).

     If a valid spousal consent has been obtained in accordance with this Section, 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 100% of the Participant’s vested account balance (determined
without regard to the preceding sentence) is payable to the surviving spouse, then the account
balance shall be adjusted by first reducing the vested account balance by the amount of the
security used for repayment of the loan, and then determining the benefit payable to the surviving
spouse.

     (i) The Plan Administrator may require a Participant to agree to repay the principal and
interest of a loan through regular payroll deduction payments. The Plan Administrator may establish
back-up repayment procedures for Participants who do not make payroll deduction repayment; except
as may otherwise be permitted under ERISA or the PR-Code, any such back-up procedures will provide
for substantially level amortization payments made quarterly or more frequently. Any loan hereunder
may be prepaid, in whole or in part, at any time without penalty. If a Participant’s service as an
Employee is terminated for any reason, the entire unpaid principal and interest of any loan then
outstanding to such Participant will become immediately due and payable.

     If a Participant defaults on any payment of interest or principal of a loan hereunder or
defaults upon any other obligation relating to such loan, the Plan Administrator may take (or
direct the Trustee to take) such action or actions as it determines to be necessary to protect the
interest of the Plan. Such actions may include commencing legal proceedings against the
Participant, or foreclosing on any security interest in the Participant’s account or other security
given in connection with a loan hereunder. In the event of a default, foreclosure on the
Participant’s note and attachment of one or more of the Participant’s accounts given as security
will not occur until a distributable event occurs in the Plan.

     (j) Subject to the provisions of the Plan and ERISA, an assignment or pledge of any portion of
the Participant’s interest in the Plan and a loan, pledge, or assignment with respect to any
insurance contract purchased under the Plan, will be treated as a loan under this Section.

     (k) In the case of any Participant with one or more loans outstanding hereunder, the amount
available for distribution to such Participant (or his Beneficiary) will consist of the
Participant’s vested account balance(s) (not including the outstanding principal and accrued but
unpaid interest on such loans), plus the notes representing such loans.

 

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ARTICLE XIV

INVESTMENT

     Section 14.1 Election of Investment Options. The Plan Administrator shall choose the
investment options in which the Plan’s assets will be invested, unless the Plan Administrator
elects to delegate such responsibility to the Trustee, an Investment Manager or any other person.
The Plan Administrator shall have the discretion to make available, change or terminate any
investment option as the Plan Administrator shall deem appropriate.

     Section 14.2 Plan Administrator Investment Directions. Unless elected otherwise in the
Adoption Agreement, the Plan Administrator will provide investment directions for all assets in the
Plan.

     Section 14.3 Participant Investment Directions.

     (a) If elected in the Adoption Agreement the Plan Administrator may permit each Participant to
direct the investment of some or all of the contributions to his accounts. To the extent that
Participants do direct the investment of their accounts and the Plan Administrator so chooses in
the Adoption Agreement, Section 404(c) of ERISA will apply to the Plan, and neither the Employer,
the Plan Administrator, the Trustee, nor any other Fiduciary will have any responsibility or
liability for the Participant’s exercise of such investment control or for any loss or diminution
in value occasioned thereby. Such Participant’s investment control may be permitted with respect to
certain types of contributions but no others. Where allowed, a Participant’s investment directions
will govern the investment of contributions to his accounts and the transfer of amounts from one
investment option to another. Participants’ exercise of investment control over their accounts will
be subject to any rules of the Plan Administrator under Section 14.4.

     (b) The Plan Administrator will determine the investment of any account over which the
Participant does not exercise investment control. In making such investment determinations, the
Plan Administrator will establish investment policies or rules of general application which do not
discriminate among Participants.

     Section 14.4 Rules of Exercise of Investment Options. Any designation of investments by
Participants will be subject to nondiscriminatory general rules established by the Plan
Administrator; such rules may include (i) restrictions on the minimum amount or percentage of any
contribution which may be placed in any particular investment option, (ii) restrictions on the use
of different amounts or percentages for different types of contributions, (iii) minimums or
maximums (or both) on the amount which may be invested or transferred to or from any particular
investment option, and (iv) restrictions on the time and frequency of designations, changes in
designations and transfers from one investment option to another including the required advance
notice.

 

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     These rules may differ for different types of contributions. The effective date of any change
in a Participant’s election with respect to allocation of contributions among investment options or
any transfer from one investment option to another must coincide with a valuation date for each
investment option, unless the Employer or the Plan Administrator provides otherwise.

ARTICLE XV

ACCOUNTS

     Section 15.1 Separate Accounts.

     (a) The Plan Administrator shall establish and maintain, where appropriate, separate accounts
for each Participant, including a Pre-Tax Contributions Account, After-Tax Contributions Account,
Employer Contributions Account, Matching Contributions Account, Qualified Matching Contributions
Account, Qualified Non-Elective Contributions Account and a Rollover Contributions Account. A
Participant’s Rollover Contributions Account may contain subaccounts as provided in Section 8.1 and
a Paired Plan’s Participants Employer Contributions Account may be divided into profit sharing,
target benefit and/or money purchase subaccounts. Earnings will be credited to such accounts (and
subaccounts) in accordance with the provisions of this Article.

     Such accounts will be primarily for accounting uses and will not restrict the operation of the
Trust or require separate earmarked investments for any account; however, specific investments may
be earmarked to Participants’ accounts if a permitted investment option under Article XIV so
provides.

     (b) The Plan Administrator may maintain records of Participants’ accounts or may arrange for
such records to be maintained by an outside service provider. If the Plan Administrator arranges
with a service provider to maintain records of Participants’ accounts, the Plan Administrator will
provide such information as is necessary for the service provider to maintain such accounts as
required herein.

     Section 15.2 Valuation and Allocation of Earnings and Losses to Participants. As of each
Valuation Date, the assets of the Trust will be valued at their fair market value. The Plan
Administrator, with the assistance of the Trustee, shall allocate the net earnings and gains or
losses of each investment option of the Trust since the preceding Valuation Date to each account in
the same proportion that the market value of the Participant’s account in such investment option
bears to the total market value of all Participant’s accounts in such investment option; and, for
this purpose, the Plan Administrator shall adopt uniform rules which conform to applicable law and
generally accepted accounting practices.

     Section 15.3 Allocation of Expenses. Any fees and expenses in connection with the
administration of the Plan will be paid by the Plan unless the Employer elects to pay any or all
such fees and expenses.

 

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     Section 15.4 Correction of Error. Unless otherwise provided by uniform rules adopted by the
Plan Administrator, if an error is made in the adjustment of a Participant’s account, the error
shall be corrected and any gain or loss resulting from the correction shall be credited to the
income or charged against the expenses of the Trust for the Valuation Date on which the correction
is made. In no event shall the accounts of other Participants be adjusted on account of the error.

ARTICLE XVI

PLAN ADMINISTRATION

     Section 16.1 Plan Administrator. The Employer will be the Plan Administrator for purposes of
ERISA, and any reference in this document or the Adoption Agreement to the Plan Administrator means
the Employer. The Employer may designate an individual or a group of individuals acting as a
committee to act on the Employer’s behalf in carrying out its duties as Plan Administrator. Such
persons may, but need not, be Participants or Employees, partners, or officers of the Employer. The
Employer may remove any such individual or committee member at any time, with or without cause, by
filing written notice with such individual or committee member. Any such individual or committee
member may resign at any time by filing his written resignation with the Employer.

     If the Employer is a sole proprietorship, in the event of the sole proprietor’s death, his
executor or administrator will be the Plan Administrator. If the Employer is a special partnership,
in the event of the death of all the partners, the executor or administrator of the last to die
will be the Plan Administrator.

     Section 16.2 Plan Administration. The Plan Administrator is a named Fiduciary of the Plan. The
Plan Administrator will control and manage the operation and administration of the Plan and will
have all powers and authority necessary or appropriate to carry out its provisions. Among the
powers and responsibilities of the Plan Administrator are the following:

     (a) apply Plan rules for determining eligibility for participation, vesting, in-service
withdrawals, loans and distribution of benefits;

     (b) calculate service and compensation credits for benefits;

     (c) prepare
employee communication materials;

     (d) maintain service and employment records
of the Participants;

     (e) prepare, file, submit, distribute or make available any returns, documents, Plan
descriptions, reports, statements, forms or other information required by any government agency,
the law or the Plan;

 

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     (f) calculate benefits;

     (g) advise Participants regarding their rights and options under the Plan;

     (h) collect contributions and apply contributions as provided in the Plan;

     (i) prepare reports concerning Participants’ benefits; and

     (j) process claims.

     The Plan Administrator (and those to whom it has delegated its authority) shall have vested in
it under the terms of the Plan full discretionary and final authority when exercising its duties
hereunder. The Plan Administrator will exercise its powers in a nondiscriminatory manner and will
apply uniform administrative rules of general application so that persons in similar circumstances
are treated alike.

     Section 16.3 Records. The Plan Administrator will record its acts and decisions and will
prepare and maintain all data and records necessary or helpful to the Plan’s administration.

     Section 16.4 Compensation and Expenses. The Plan Administrator will serve without compensation
unless otherwise determined by the Employer, but no Employee of the Employer will be compensated
for his service as Plan Administrator. All reasonable expenses of operating and administering the
Plan will be paid by the Plan unless the Employer elects to pay any or all of such expenses. Such
expenses include the compensation of all persons employed or retained by the Plan Administrator
(such as attorneys, accountants, actuaries, trustees or other consultants or specialists), premiums
for insurance or bonds protecting the Plan and required by law or deemed advisable by the Plan
Administrator, and all other fees, expenses or costs of Plan administration.

     Section 16.5 Claims Procedures.

     (a) Filing of Claim. A Participant or Beneficiary who believes he is entitled to a benefit
which he has not received may file a claim in writing with the Plan Administrator. The Plan
Administrator may require a claimant to submit additional information, if necessary to process the
claim. The Plan Administrator shall review the claim and render its decision within 90 days from
the date the claim is filed (or from the date the requested additional information is submitted, if
later), unless special circumstances require an extension of time for processing the claim. If such
an extension is required, written notice of the extension shall be furnished to the claimant within
the initial 90 day period. The notice shall indicate the special circumstances requiring the
extension and the date by which the Plan Administrator expects to reach a decision on the claim. In
no event shall the extension exceed a period of 90 days from the end of the initial period.

 

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     (b) Notice of Claim Denied. If the Plan Administrator denies a claim, in whole or in part, it
shall provide the claimant with written notice of the denial within the period specified in
subsection (a) above. The notice shall be written in language calculated to be understood by the
claimant, and shall include the following information:

          (1) the specific reason for such denial;

          (2) specific reference to pertinent Plan provisions upon which the denial is based;

          (3) a description of any additional material or information which may be needed to clarify or
perfect the request, and an explanation of why such information is required; and

          (4) an explanation of the Plan’s review procedure with respect to the denial of benefits.

     (c) Review Procedure. Any claimant whose claim has been denied, in whole or in part, shall
follow those review procedures as set forth herein:

          (1) A claimant whose claim has been denied, in whole or in part, may request a full and fair
review of the claim by the Plan Administrator by making a written request therefor within 60 days
of receipt of the notification of denial. The Plan Administrator, for good cause shown, may extend
the period during which the request may be filed. The claimant shall be permitted to examine all
documents pertinent to the claim and shall be permitted to submit issues and comments regarding the
claim to the Plan Administrator in writing.

          (2) The Plan Administrator shall render its decision within 60 days after receipt of the
application for review, unless special circumstances (such as the need to hold a hearing) require
an extension of time for processing, in which case the decision shall be rendered as soon as
possible but not later than 120 days after receipt of a request for review. If an extension of time
is necessary, written notice shall be furnished to the claimant before the extension period
commences.

          (3) The Plan Administrator shall decide whether a hearing shall be held on the claim. If so,
it shall notify the claimant in writing of the time and place for the hearing. Unless the claimant
agrees to a shorter period, the hearing shall be scheduled at least 14 days after the date of the
notice of hearing. The claimant and/or his authorized representative may appear at any such
hearing.

          (4) The Plan Administrator shall send its decision on review to the claimant in writing within
the time specified in this Section. If the claim is denied, in whole or in part, the

 

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decision shall specify the reasons for the denial in a manner calculated to be understood by the
claimant, referring to the specific Plan provisions on which the decision is based. The Plan
Administrator shall not be restricted in its review to those provisions of the Plan cited in the
original denial of the claim.

          (5) If the Plan Administrator does not furnish its decision on review within the time
specified in this subsection (c), the claim shall be deemed denied on review.

     Section 16.6 Agent for Legal Process. The Employer shall be the agent for service of legal
process.

     Section 16.7 More than One Employer. If more than one Employer has adopted the Plan, the
Employer designated in the Adoption Agreement will be considered the Employer for purposes of
exercising certain powers and administrative duties. In joining the Plan, other Employers delegate
authority to such Employer to (i) complete and select options in the Adoption Agreement and to
select permissible investment options under Article XIV, (ii) designate the Plan Administrator and
any other Fiduciary, (iii) amend or terminate the Plan without a separate written instrument from
each joining Employer, provided that any such amendment or termination must apply equally to all
adopting Employers, (iv) determine the appropriate basis under which plan administrative expenses
will be shared or to redelegate that authority to the Plan Administrator, and (v) take or
redelegate authority to the Plan Administrator to take such other action as may be necessary for
the efficient and proper administration of the Plan. Each joining Employer will retain the
authority to amend or terminate the Plan for its own Employees.

ARTICLE XVII

AMENDMENT, TERMINATION OR MERGER OF PLAN

     Section 17.1 Amendment by UBS. UBS may amend any or all provisions of this Plan document and
the Adoption Agreement at any time without obtaining the consent of the Employer, and the Employer
hereby expressly delegates authority to amend this Plan to UBS.

     Section 17.2 Amendment by Employer. Except for (i) changes of design options selected in the
Adoption Agreement, and (ii) conforming the Plan with certain amendments made to ERISA or the
PR-Code that will not cause the Plan to be treated as an individually designed plan, if the
Employer amends the Plan or non-elective portions of the Adoption Agreement, for any other reason,
it will no longer participate in this Plan and will be considered to have an individually designed
Plan.

     Section 17.3 Restrictions on Amendments. No amendment under Section 17.1 or 17.2 will:

 

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     (a) Cause or permit any part of the assets of the Trust to be diverted to purposes other than
the exclusive benefit of Participants and their Beneficiaries, or cause or permit any portion of
such assets to revert to or become the property of the Employer.

     (b) Retroactively deprive any Participant of any benefit to which he was entitled hereunder by
reason of contributions made by the Employer or the Participant before the amendment, unless such
amendment is necessary to conform the Trust or Plan to, or satisfy the conditions of any law,
governmental regulation or ruling, or to permit the Plan and Trust to meet the requirements of
ERISA and the PR-Code.

     (c) Decrease a Participant’s account balance, except to the extent permitted under ERISA.

     (d) If the vesting schedule of a Plan is amended, for an Employee who is a Participant as of
the later of the date such amendment is adopted or the date it becomes effective, cause the
nonforfeitable percentage (determined as of such date) of such Employee’s right to his
Employer-derived accrued benefit to be less than his percentage computed under the Plan without
regard to such amendment. In the event of an amendment affecting the vesting schedule of the Plan,
any Participant with 3 or more years of service will have his vesting determined under the
pre-amendment vesting schedule if this would result in such Participant having a greater vested
interest than under the amended vesting schedule.

     (e) Eliminate an optional form of distribution in violation of Section 204(g) of ERISA.
Pursuant to Section 204(g)(5) of ERISA, except to the extent provided in regulations promulgated by
the U.S. Secretary of the Treasury a defined contribution plan shall not be treated as failing to
meet the requirements of Section 204(g) of ERISA merely because of the elimination of a form of
distribution previously available thereunder; provided, however, that this shall not apply to the
elimination of a form of distribution with respect to any participant unless:

     (1) a single sum payment is available to such participant at the same time or times as
the form of distribution being eliminated; and

     (2) such single sum payment is based on the same or greater portion of the
participant’s account as the form of distribution being eliminated.

     (f) Increase or otherwise affect the duties, liabilities or rights of the Trustee unless the
Trustee consents thereto in writing.

     Section 17.4 Termination of Plan. Although the Employer has established the Plan with the bona
fide intention and expectation that it will be able to make contributions indefinitely, the
Employer is not and shall not be under any obligation or liability whatsoever to continue its
contributions or to maintain the Plan for any given period of time. An Employer may, in its sole

 

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and absolute discretion, discontinue such contributions or terminate the Plan with respect to its
Employees, in accordance with the provisions of the Plan, at any time with no liability whatsoever
for such discontinuance or termination. If the Plan is terminated, or if contributions of an
Employer are completely discontinued, the rights of all affected Participants in their accounts
shall thereupon become nonforfeitable, notwithstanding any other provisions of the Plan. However,
the Trust shall continue until all Participants’ accounts have been completely distributed to or
for the benefit of the Participants, in accordance with the Plan.

     Section 17.5 Disposition and Termination of the Trust.

     (a) Upon termination of the Plan, the Plan Administrator will determine whether (i) to direct
the Trustee to continue to hold the accounts of Participants affected by the termination, (ii) to
disburse them as immediate benefit payments, (iii) to purchase immediate or deferred annuity
contracts, or (iv) to follow any other procedure it deems advisable. The Trustee will follow the
directions of the Plan Administrator.

     (b) For purposes of each Employer adopting the Plan, the Trust created hereunder will
terminate when all the assets in the Trust related to such Employer have been distributed.

     Section 17.6 Merger of Plans.

     (a) If the Employer merges or consolidates with or into a corporation, or if substantially all
of the assets of the Employer are transferred to another business, the Plan hereby created shall
terminate on the effective date of such merger, consolidation or transfer. However, if the
surviving corporation resulting from such merger or consolidation, or the business to which the
Employer’s assets have been transferred, adopts the Plan, it shall continue and such corporation or
business shall succeed to all rights, powers and duties of the Employer hereunder. The employment
of any Employee who continues in the employ of such successor corporation or business shall not be
deemed to have been terminated for any purpose hereunder.

     (b) In no event shall the Plan be merged or consolidated with any other plan, nor shall there
be any transfer of assets or liabilities from the Plan to any other plan, unless immediately after
such merger, consolidation or transfer, each Participant’s benefits, if such other plan were then
to terminate, are at least equal to or greater than the benefits to which the Participant would
have been entitled, had the Plan been terminated immediately before such merger, consolidation, or
transfer.

 

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ARTICLE XVIII

TRANSFERS FROM OR TO OTHER QUALIFIED PLANS

     Section 18.1 Transfers from Another Plan of the Employer.

     (a) Notwithstanding any other provision hereof, the Employer may cause to be transferred to
the Trustee all or any of the assets held (whether by a Trustee, custodian, or otherwise) under any
other defined contribution plan which satisfies the requirements of Section 1165(a) of the PR-IRC
and which is maintained by the Employer for the benefit of any of the Participants hereunder. If
the Trustee is keeping separate accounts for each Participant, any assets transferred will be
accompanied by written instructions from the Plan Administrator naming the Participants for whose
benefit such assets have been transferred and showing separately the respective contributions by
the Employer and by the Participants and the current value of the assets attributable thereto.

     (b) Upon receipt of any assets transferred to the Trustee under subsection (a) above, the
Trustee may sell any non-cash assets and invest the proceeds and any cash transferred to it. The
Trustee will make appropriate credits to the proper accounts in accordance with the Plan
Administrator’s instructions.

     Section 18.2 Transfers to Other Plans. Upon the written request of the Employer, the Trustee
will transfer an amount designated by the Employer to the trustee or custodian of any other
qualified Plan under which Participants are covered.

ARTICLE XIX

MISCELLANEOUS

     Section 19.1 Nonreversion. Except as provided in this Section, the assets of the Plan shall
never inure to the benefit of an Employer; such assets shall be held for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and for defraying the reasonable
administrative expenses of the Plan, except as and to the extent permitted under ERISA and the
PR-Code.

     (a) If Employer Contributions are made by virtue of a mistake of fact, this Section shall not
prohibit the return of such contributions to the Employer within one year after the payment of the
contributions to the Trust.

     (b) If a deduction for Employer Contributions is disallowed under Section 1023(n) of the
PR-IRC, or any successor provision thereto, the contributions shall be returned to the Employer (to
the extent disallowed) within 1 year after such disallowance.

 

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     (c) If Employer Contributions are subject to the Plan’s initial qualification under Section
1165 of the PR-IRC and initial qualification is for any reason denied by the Secretary of the
Puerto Rico Treasury Department, this Section shall not prohibit the return of such contributions
to the Employer within one year after the date initial qualification is denied.

     Section 19.2 Alienation.

     (a) Subject to the exceptions provided below, no benefit which shall be payable out of the
Trust Fund to any person (including a Participant or his Beneficiary) shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same
shall be void; and no such benefit shall in any manner be liable for, or subject to, the debts,
contracts, liabilities, engagements, or torts of any such person, nor shall it be subject to
attachment or legal process for or against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law.

     (b) This provision shall not apply to the extent a Participant or Beneficiary is indebted to
the Plan, for any reason, under any provision of the Plan. At the time a distribution is to be made
to a Participant or Beneficiary, the portion of the amount distributed that equals such
indebtedness shall be paid by the Trustee to the Trustee or the Plan Administrator, at the
direction of the Plan Administrator, to apply against or discharge such indebtedness. Prior to
making a payment, however, the Participant or Beneficiary must be given written notice by the Plan
Administrator that such indebtedness is to be so paid in whole or part from his Participant’s
Account. If the Participant or Beneficiary does not agree that the indebtedness is a valid claim
against the vested Participant’s accounts, he shall be entitled to a review of the validity of the
claim in accordance with procedures provided in Section 16.5.

     (c) This provision shall not apply to a “qualified domestic relations order” as defined in
Section 206 of ERISA. The Plan Administrator shall establish a written procedure to determine the
qualified status of domestic relations orders and to administer distributions under such qualified
orders. Furthermore, to the extent provided under a “qualified domestic relations order,” a former
spouse of a Participant shall be treated as the spouse or surviving spouse for all purposes under
the Plan.

     Section 19.3 Limitation on Rights Created by Plan.

     (a) The adoption and maintenance of the Plan and Trust will not be construed to give a
Participant the right to continue in the employ of the Employer or to interfere with the right of
the Employer to discharge, lay off or discipline a Participant at any time, or give the Employer
the right to require any Participant to remain in its employ or to interfere with the Participant’s
right to terminate his employment.

 

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     (b) The adoption and maintenance of the Plan and Trust, the creation of any account or the
payment of any benefit will not be construed as creating any legal or equitable right against the
Employer or the Trust except as the Plan specifically provides.

     (c) The Employer, the Trustee and the Plan Administrator do not guaranty the payment of
benefits hereunder and benefits will be paid only to the extent of the assets of the Trust. It is a
condition of participation in the Plan that each Participant (and his Beneficiary or anyone else
claiming through him) will look only to the assets of the Trust for the payment of any benefit to
which he or his Beneficiary or other person is entitled.

     Section 19.4 Allocation of Responsibilities. The Employer, the Trustee and the Plan
Administrator will each have only those duties and responsibilities specifically allocated to each
of them under the Plan. There will be no joint fiduciary responsibility between or among
fiduciaries unless specifically stated otherwise. Any person may serve in more than one fiduciary
capacity.

     Section 19.5 Current Address of Payee. The Plan Administrator has no obligation to locate any
person entitled to payments hereunder and will be fully protected if all payments, notices and
other papers are mailed to the last address of which such person has notified the Plan
Administrator in writing, or are withheld pending receipt of proof of his current address and proof
that he is alive.

     Section 19.6 Application of Plan’s Terms.

     (a) If an Employee retired, died or otherwise terminated his service before the Effective Date
of the Plan, the Employee and his beneficiaries will receive no benefits and will have no rights
under the Plan.

     (b) If an Employee retires, dies or otherwise terminates his service on or after the Effective
Date of the Plan, the benefits and rights of the Employee and his beneficiaries will be determined
in accordance with the terms of the Plan that are in effect on the date of such termination of
service.

     (c) The allocations to a Participant’s account for any year of reference will be determined in
accordance with the terms of the Plan that are in effect for such year.

     Section 19.7 Payment for Minor or Incompetent. In the event that any amount is payable under
the Plan to a minor or to any person deemed by the Plan Administrator or a court of competent
jurisdiction to be incompetent either mentally or physically, such payment shall be made for the
benefit of such minor or incompetent person by payment to a person who has been designated by a
court of competent jurisdiction to receive such amount.

 

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     Section 19.8 Qualified Military Service. Notwithstanding any provision of the Plan to the
contrary, contributions, benefits, Plan loan repayment suspensions and service credit with respect
to qualified military service will be provided in accordance with the Uniform Services Employment
and Reemployment Rights Act of 1994.

     Section 19.9 Construction. Whenever used in the Plan, unless the context clearly indicates
otherwise, the masculine pronoun shall include the feminine, the singular shall include the plural
and the plural the singular. The conjunction “or” shall include both the conjunctive and
disjunctive, and the adjective “any” shall mean one or more or all. Unless the context indicates
otherwise, the words “herein,” “hereof,” “hereunder” and words of similar import refer to the Plan
as a whole and not only to the section in which they appear. Article, section and subsection
headings have been inserted for convenience of reference only and are to be ignored in any
construction of the provisions hereof. If any provision of the Plan shall for any reason be invalid
or unenforceable, the remaining provisions shall nevertheless be valid, enforceable and fully
effective.

     Section 19.10 Governing Law. The Plan and all rights hereunder shall be governed by and
construed in accordance with the laws of the Commonwealth of Puerto Rico to the extent such laws
have not been preempted by ERISA, or other applicable federal law.

     Section 19.11 Uniformity. All provisions of the Plan shall be interpreted and applied in a
uniform nondiscriminatory manner.

     IN WITNESS WHEREOF, UBS Financial Services Incorporated of Puerto Rico hereby amends and
restates the UBS Financial Services Incorporated of Puerto Rico Master Retirement Plan effective as
of January 1, 2008 and has caused this Plan instrument to be signed by its authorized
representative.

	 	 	 	 	 	 	 
	 	 	UBS FINANCIAL SERVICES	 	 
	 	 	INCORPORATED OF PUERTO RICO	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

Fred O. Imbert Negroni
	 	 
	 

	 	Title:
	 	Authorized Representative	 	 

 

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ADDENDUM A

UBS FINANCIAL SERVICES INCORPORATED OF PUERTO RICO

MASTER RETIREMENT PLAN

     The provisions of Addendum A are incorporated in Section 10.9 of the UBS Financial Services
Incorporated of Puerto Rico Master Retirement Plan dated January 1, 2008.

 

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ADDENDUM B

UBS FINANCIAL SERVICES INCORPORATED OF PUERTO RICO

MASTER RETIREMENT PLAN

     The provisions of Addendum B are incorporated in the UBS Financial Services Incorporated of
Puerto Rico Master Retirement Plan dated January 1, 2008.

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