Document:

Exhibit

TERMS AND CONDITIONS OF
2016 EQUITY AWARDS
UNDER THE
NORTHERN TRUST CORPORATION 2012 STOCK PLAN 

 

		
	1.
	General.  

		
	(a)
	Governing Documents.  Each stock option, restricted stock unit, and performance stock unit award (the “Award”) granted in 2016 is subject to the provisions of the Northern Trust Corporation 2012 Stock Plan (the “Plan”), the applicable award notice (the “Award Notice”), and this Terms and Conditions document (the “Terms and Conditions”).  The Award Notice and these Terms and Conditions constitute the “Stock Option Agreement” or the “Stock Unit Agreement,” as applicable, as defined in the Plan (each, an “Award Agreement”).  If there is any conflict between the information in the Award Agreement and the Plan, the Plan will govern.  Capitalized terms not defined in the Award Agreement shall have the meanings assigned to them in the Plan.

		
	(b)
	 Definitions.  As provided above, capitalized terms not defined in the Award Agreement shall have the meanings assigned to them in the Plan.  For purposes of the Award Agreement:

		
	(i)
	“Actual Performance Level” shall refer to the average annual rate of return on equity attained during the Performance Period (or modified Performance Period, as applicable).  

		
	(ii)
	    “Acquirer Options” shall have the meaning described in Section 2(b)(vii)(A).

		
	(iii)
	    “Acquirer Units” shall have the meaning described in Section 3(d)(i).

		
	(iv)
	    “Award” shall have the meaning described in Section 1(a).

		
	(v)
	    “Award Agreement” shall have the meaning described in Section 1(a).

		
	(vi)
	    “Award Notice” shall have the meaning described in Section 1(a). 

		
	(vii)
	“Beneficiary” means the individual designated by the Participant in writing and delivered to the Corporation in such form and manner as the Committee shall require.  If the Participant does not name a Beneficiary (or the Participant’s Beneficiary predeceases the Participant), the Participant’s award will pass to the following persons in the order indicated:

(A)  the Participant’s spouse; if none, then,
(B)  the Participant’s children (in equal amounts); if none, then,
(C)  the Participant’s parents (in equal amounts); if none, then,
(D)  the Participant’s brothers and sisters (in equal amounts); if none, then,
(E)  the Participant’s estate.

		
	(viii)
	“Cause” means: (A) a Participant’s conviction of or no contest plea with respect to bribery, extortion, embezzlement, fraud, grand larceny, or any felony involving abuse or misuse of the Participant’s position to seek or obtain an illegal or personal gain at the expense of the Corporation, or similar crime, or conspiracy to commit any such crimes or attempt to commit any such crimes; or (B) misconduct that causes material harm to the Corporation. 

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	(ix)
	“Client” means any person or entity with which the Corporation, or any of its Subsidiaries, did business and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

		
	(x)
	“Common Stock” means the common stock of the Corporation.

		
	(xi)
	“Competitive Service or Product” means any service or product: (A) that is substantially similar to or competitive with any service or product that the Participant created or provided, or of which the Participant assisted in the creation or provision, during his or her employment by the Corporation or any of its Subsidiaries; or (B) about which the Participant had access to Confidential Information during his or her employment by the Corporation or any of its Subsidiaries.

		
	(xii)
	“Confidential Information” means any trade secrets or other significant proprietary information, including, but not limited to, any client information (for example, client lists, information about client accounts, borrowings, and current or proposed transactions), any internal analysis of clients, marketing strategies, financial reports or projections, business or other plans, data, procedures, methods, computer data or system program or design, devices, lists, tools, or compilation, which relate to the present or planned business of the Corporation or any of its Subsidiaries and which has not been made generally known to the public by authorized representatives of the Corporation.

		
	(xiii)
	“Disability” and “Disabled” means a disability that continues for a period of six (6) months in accordance with The Northern Trust Company’s Managed Disability Program.  For purposes of determining the date, if any, on which a Participant becomes vested under Sections 2(b)(iv), 3(c)(iii), 3(c)(iv) or 4(c)(ii) due to termination of employment on account of Disability, and for all other purposes under this Terms and Conditions document, the date of Disability and the date of termination of employment shall be deemed to be the last day of the six-month period described in the preceding sentence.

		
	(xiv)
	“Dividend Equivalents” shall have the meaning described in Section 5(b).

		
	(xv)
	“Enhanced Pro Rata PSU Fraction” shall have the meaning described in Section 4(c)(iv). 

		
	(xvi)
	“Enhanced Pro Rata RSU Fraction” shall have the meaning described in Section 3(c)(vi).    

		
	(xvii)
	“Enhanced Pro Rated PSUs” shall have the meaning described in Section 4(c)(iv).

		
	(xviii)
	“Enhanced Pro Rated RSUs” shall have the meaning described in Section 3(c)(vi).

		
	(xix)
	“Expiration Date” shall have the meaning described in Section 2(b).

		
	(xx)
	“Financial Downturn” shall have the meaning described in Section 6(a)(iii)(B)(III).

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	(xxi)
	“Good Cause” means: (A) a Participant’s conviction of any criminal violation involving dishonesty, fraud or breach of trust which involves the business of Northern Trust; (B) a Participant’s willful engagement in any misconduct in the performance of Participant’s duty that materially injures the Corporation; (C) a Participant’s performance of any act which, if known to the customers, clients, stockholders or regulators of Northern Trust, would materially and adversely impact the business of Northern Trust; (D) any act or omission by the Participant that causes a regulatory body with jurisdiction over Northern Trust to demand, request, or recommend that the Participant be suspended or terminated from any position in which the Participant serves with Northern Trust; or (E) a Participant’s willful and substantial nonperformance of assigned duties, provided that such nonperformance has continued more than ten days after Northern Trust has given written notice of such nonperformance and of its intention to terminate the Participant’s employment with Northern Trust because of such nonperformance.  For purposes of clauses (B) and (E) of this definition, no act, or failure to act, on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant’s act, or failure to act, was in the best interest of the Corporation.  In the event of a dispute concerning the application of this provision, no claim by the Corporation that Good Cause exists shall be given effect unless the Corporation establishes to the Board of Directors of the Corporation by clear and convincing evidence that Good Cause exists.

		
	(xxii)
	“Good Reason” shall exist if, without the Participant’s express written consent: (A) the Corporation (or an affiliate) shall materially diminish (I) the Participant’s authority, duties, or responsibilities; (II) the authority, duties, or responsibilities of the position or entity to which the Participant is required to report; or (III) the budget, if any, over which the Participant has authority, in each case described in (A)(I), (II) or (III) as compared to the Participant’s circumstances immediately prior to a Change in Control; (B) the Corporation (or an affiliate) shall materially diminish the Participant’s base compensation from that in effect as of the date of grant hereunder of the Stock Option or Stock Unit (or as of a Change in Control, if greater), including a diminution of the Participant’s salary or the material diminution in the aggregate value to the Participant of participation in cash or stock-based incentive or bonus plans, retirement plans, welfare benefit plans, or other benefit plans, programs or arrangements (as computed by an independent employee benefits consultant selected by the Corporation); (C) the Corporation (or an affiliate) shall materially change the geographic location at which the Participant must perform services from that in effect prior to a Change in Control (including by assigning to the Participant duties that would reasonably require such relocation or which would require the Participant to spend more than fifty normal working days away from the location in effect prior to a Change in Control); or (D) any other action or inaction by the Corporation (or an affiliate) that constitutes a material breach of the employment agreement, if any, under which the Participant provides services to the Corporation.

The Participant’s continued employment shall not constitute consent to, or a waiver of, rights with respect to, any act or failure to act constituting Good Reason hereunder, provided, however, that in order for Good Reason to exist hereunder, the Participant must provide notice to the Corporation of the existence of the condition described in clauses (A) through (D) above within 90 days of the initial existence of the condition (or, if later, within 90 days of the Participant’s becoming aware of such condition), and 

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the Corporation must have failed to cure such condition within 30 days of the receipt of such notice. 
		
	(xxiii)
	“MG Enhanced Pro Rated RSUs” shall have the meaning described in Section 3(c)(viii).

		
	(xxiv)
	“MG Pro Rated RSUs” shall have the meaning described in Section 3(c)(vii).    

		
	(xxv)
	“Misconduct” shall have the meaning described in Section 6(a)(ii)(B) or Section 6(a)(iii)(B), as the case may be.

		
	(xxvi)
	“Northern Trust” means the Corporation and its Subsidiaries, collectively.

		
	(xxvii)
	“Option Schedule” shall have the meaning described in Section 2(b).

		
	(xxviii)
	“Performance Period” has the meaning assigned to it in Section 4(b)(i).

		
	(xxix)
	“Plan” shall have the meaning described in Section 1(a).

		
	(xxx)
	“Pro Rata PSU Fraction” shall have the meaning described in Section 4(c)(iii).

		
	(xxxi)
	“Pro Rata RSU Fraction” shall have the meaning described in Section 3(c)(v).

		
	(xxxii)
	“Pro Rata Post-Change in Control PSU” shall have the meaning described in Section 4(d)(i)(B).

		
	(xxxiii)
	“Pro Rata Target Performance Level PSUs” shall have the meaning described in Section 4(d)(i)(A).

		
	(xxxiv)
	“Pro Rated PSUs” shall have the meaning described in Section 4(c)(iii).

		
	(xxxv)
	“Pro Rated RSUs” shall have the meaning described in Section 3(c)(v).

		
	(xxxvi)
	“Prospective Client” means any person or entity to which the Corporation, or any of its Subsidiaries, provided, or from which the Corporation, or any of its Subsidiaries received, a proposal, bid, or written inquiry (general advertising or promotional materials and mass mailings excepted) and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

		
	(xxxvii)
	“PSU” shall have the meaning described in Section 4(a).

		
	(xxxviii)
	“PSU Cash Account” shall have the meaning described in Section 5(b)(ii).

		
	(xxxix)
	“PSU Dividend Amount” shall have the meaning described in Section 5(b)(ii).

		
	(xl)
	“PSU Schedule” shall have the meaning described in Section 4(b)(i).

		
	(xli)
	“Qualifying Termination” means a termination of employment with Northern Trust or its successor after the date of the Change in Control and, at any time before the second anniversary of such Change in Control, that is either involuntary on the part of the 

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Participant and does not result from his or her death or Disability, and is not for Good Cause, or is voluntary and for Good Reason.
		
	(xlii)
	“Restatement” shall have the meaning described in Section 6(a)(ii)(A).

		
	(xliii)
	“Retire” and “Retirement” means the Participant’s termination of employment with Northern Trust, for any reason other than death occurring on or after the date that the Participant meets the conditions of Normal, Early, or Postponed Retirement under The Northern Trust Company Pension Plan.

		
	(xliv)
	“RSU” shall have the meaning described in Section 3(a).

		
	(xlv)
	“RSU Schedule” shall have the meaning described in Section 3(b).

		
	(xlvi)
	“RSU Vesting Period” shall have the meaning described in Section 3(b).

		
	(xlvii)
	“Severance Eligible Termination” means termination of employment under circumstances that entitle the Participant to severance benefits under the Northern Trust Corporation Severance Plan (the “Severance Plan”), and the Participant has executed and returned on or prior to his or her termination of employment, and not revoked, a settlement agreement, waiver and release under the Severance Plan.

		
	(xlviii)
	“Significant Risk Management Failure” shall have the meaning described in Section 6(a)(iii)(B)(II).

		
	(xlix)
	“Significant Risk Outcome” refers to: (a) a financial loss stemming from risk-related credit, operational, fiduciary or market events with an impact exceeding $5 million; or (b) conduct resulting in a fine in excess of $1 million, official censure, or criminal conviction of the Participant or the Corporation or one of its Subsidiaries.

		
	(l)
	“Solicit” and “Solicitation” (with respect to Clients or Prospective Clients) mean directly or indirectly, and without the Corporation’s written authorization, to invite, encourage, request, or induce (or to assist another to invite, encourage, request or induce) any Client or Prospective Client of the Corporation, or any of its Subsidiaries, to:  (A) surrender, redeem or terminate a product, service or relationship with the Corporation, or any of its Subsidiaries; (B) obtain any Competitive Service or Product from the Participant or any third party; or (C) transfer a product, service or relationship from the Corporation, or any of its Subsidiaries, to the Participant or any third party.

		
	(li)
	“Stock Option Agreement” shall have the meaning described in Section 1(a).

		
	(lii)
	“Stock Unit Account” shall have the meaning described in Section 5(a).    

		
	(liii)
	“Stock Unit Agreement” shall have the meaning described in Section 1(a). 

		
	(liv)
	“Stock Units” shall have the meaning described in Section 5.

		
	(lv)
	“Target Performance Level” shall refer to the attainment of an average annual rate of return on equity within the range set opposite 100% of PSUs vested in the PSU Schedule in Section 4(b)(i).

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	(lvi)
	“Terms and Conditions” shall have the meaning described in Section 1(a). 

		
	(lvii)
	“Years of Service” means the period of time elapsed from the Participant’s date of hire through the Participant’s date of termination of employment with Northern Trust.  If the Participant has terminated employment and been rehired, such Participant’s years of service shall be determined by aggregating periods of employment and taking into account whole years of service after such aggregation. 

		
	2.
	Stock Options. 

		
	(a)
	Grant.  A Stock Option is the right, subject to the terms and conditions of the Plan and Stock Option Agreement, to purchase a share of Common Stock at an exercise price not less than 100 percent of the Fair Market Value thereof on the date of grant, pursuant to Section 6 of the Plan and the Stock Option Agreement.  

		
	(b)
	Vesting and Exercise Limitations.  Subject to all of the provisions of the Stock Option Agreement, the Participant shall become vested in such number of Stock Options, if any, as determined under the schedule below (the “Option Schedule”), unless otherwise specified in the Award Notice.  The Stock Option is exercisable from and after the vesting date(s) set forth on the Option Schedule (or the Award Notice, if applicable) until and including the date that is the tenth (10th) anniversary of the date the Stock Option was granted (the “Expiration Date”), except as provided in subsections 2(b)(i) through 2(b)(vii).

	
		
	Vesting Date
	Percentage of Stock Options Vested

	First anniversary of the grant date as defined in the Award Notice
	25%

	Second anniversary of the grant date as defined in the Award Notice
	25%

	Third anniversary of the grant date as defined in the Award Notice
	25%

	Fourth anniversary of the grant date as defined in the Award Notice
	25%

		
	(i)
	Death.  If the Participant dies while employed by the Corporation or its Subsidiaries, the Participant’s Stock Option (whether vested or unvested) will become vested and exercisable as of the date of the Participant’s death and may be exercised by the Participant’s Beneficiary at any time until and including the date that is the earlier of: (A) the fifth (5th) anniversary of the date of the Participant’s death; and (B) the Expiration Date.  

		
	(ii)
	Retirement.  If the Participant terminates employment with Northern Trust prior to the fourth anniversary of the date of grant and on or after the date the Participant satisfies the 

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conditions for Retirement and other than for Cause, the Participant’s Stock Option continues to vest in accordance with its terms, and, once vested, may be exercised at any time until and including the date that is the earlier of: (A) the fifth (5th) anniversary of the effective date of the Participant’s Retirement; and (B) the Expiration Date.

		
	(iii)
	Special Circumstances.  If: (A) on the date of grant, the Participant is a Management Group member; and (B) on the date of the Participant’s termination of employment with Northern Trust, the Participant is age 55 or older and has a minimum of 10 Years of Service and the termination is not for Cause, then the Participant’s Stock Option will continue to vest in accordance with its terms, and, once vested, may be exercised at any time until and including the date that is the earlier of: (X) the fifth (5th) anniversary of the date of the Participant’s termination of employment with Northern Trust; and (Y) the Expiration Date.  

		
	(iv)
	Disability.  The Participant’s Stock Option (whether vested or unvested) will become vested and exercisable upon the date the Participant’s employment with Northern Trust is deemed terminated on account of Disability, and may be exercised at any time until and including the date that is the earlier of: (A) the fifth (5th) anniversary of the date the Participant is deemed Disabled; and (B) the Expiration Date.  

		
	(v)
	Severance.  If the Participant’s employment with Northern Trust is terminated in a Severance Eligible Termination, the Participant’s Stock Option (whether vested or unvested) will become vested and exercisable as of the date of the Participant’s termination of employment with Northern Trust and may be exercised at any time until and including the date that is the earlier of: (A) one-hundred and eighty (180) days following the date of the Participant’s termination of employment with Northern Trust; and (B) the Expiration Date.  If the Participant is eligible for Retirement when his or her employment with Northern Trust is terminated in a Severance Eligible Termination, the Participant’s Stock Option (whether vested or unvested) will become vested and exercisable as of the date of the Participant’s termination of employment with Northern Trust and may be exercised at any time until and including the date that is the earlier of: (X) the fifth (5th) anniversary of the effective date of the Participant’s termination of employment with Northern Trust; and (Y) the Expiration Date.

		
	(vi)
	Other Termination of Employment.  Except as set forth below, if: (A) the Participant’s employment with Northern Trust is terminated for any reason other than death, Retirement or a Severance Eligible Termination; (B) the Participant’s employment with Northern Trust is not deemed terminated on account of Disability; (C) the Participant was not both a Management Group member on the date of grant and age 55 with 10 Years of Service on his or her date of termination of employment with Northern Trust; and (D) the Participant’s employment with Northern Trust is not terminated in a Qualifying Termination or terminated for Cause, then the Participant’s Stock Option, if and to the extent vested as of the date of such Participant’s termination of employment, may be exercised at any time until and including the date that is the earlier of: (X) the three (3)-month anniversary of the date of the Participant’s termination of employment with Northern Trust; and (Y) the Expiration Date.  The Participant’s Stock Option, if and to the extent unvested as of the date of such Participant’s termination of employment, will expire as of the date of the Participant’s termination of employment with Northern Trust.  A termination of employment with Northern Trust shall not be deemed to occur by reason of the Participant’s transfer between the Corporation and a Subsidiary of the Corporation or 

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between two Subsidiaries of the Corporation.  If the Participant meets the criteria of each of clauses (A), (B), (C) and (D), above, the post-termination exercise provision of this section shall apply to the Participant even if he or she becomes a consultant to the Corporation or a Subsidiary of the Corporation upon termination of the Participant’s employment from Northern Trust.  If the Participant’s employment with Northern Trust is terminated by the Corporation or a Subsidiary for Cause, the Participant’s Stock Options (whether vested or unvested) shall immediately be cancelled upon such date of termination without any consideration therefor.

		
	(vii)
	Vesting Upon a Change in Control.

		
	(A)
	In the event of a Change in Control, the Participant’s then-outstanding Stock Options (i.e., those that have not previously expired or been forfeited or cancelled) shall be converted into options to purchase shares of the acquirer’s common stock (“Acquirer Options”), and, on the date of the Change in Control, (I) shall equal (II), where: 

		
	(I) 
	equals the excess of the aggregate fair market value of the shares subject to the Participant’s Acquirer Options over the aggregate exercise price of the Participant’s Acquirer Options, and 

		
	(II) 
	equals the excess of the aggregate fair market value of the shares of Common Stock subject to the Participant’s then-outstanding Stock Options granted over the aggregate exercise price of such Stock Options. 

In addition, the conversion shall meet all of the requirements of Treasury Regulation Section 1.409A-1(b)(5)(v)(D), and, if the Stock Option is an incentive stock option, shall meet all of the requirements of Treasury Regulation Section 1.424-1(a)(5).  The Acquirer Options shall continue to vest and be exercisable, or shall expire and be forfeited, in accordance with the provisions of these Terms and Conditions that would apply to the Participant’s Stock Options in the absence of a Change in Control; provided, however, that if the Participant incurs a Qualifying Termination, the Participant’s Acquirer Options (whether vested or unvested) shall become vested and exercisable upon the date of such Qualifying Termination and may be exercised at any time until and including the Expiration Date.    
		
	(B)
	Notwithstanding the foregoing, if for any reason the acquirer does not agree to the provisions of Section 2(b)(vii)(A), all of the Participant’s then-outstanding Stock Options shall be vested and cancelled, and in exchange therefor, upon the date of the Change in Control, the Participant shall be entitled to receive in cash a payment equal to the difference between (I) and (II), where:

		
	(I)
	equals the fair market value of the merger consideration to be paid by the acquirer for each share of Common Stock upon the date of the Change in Control multiplied by the number of shares of Common Stock subject to the Participant’s then-outstanding Stock Options; and 

		
	(II) 
	equals the aggregate exercise price of the shares of Common Stock subject to the Participant’s then-outstanding Stock Options.

If, pursuant to the terms of the documents governing the Change in Control,  subsequent to the date of the Change in Control additional consideration is payable to 

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the stockholders of the Corporation, the Participant shall be entitled to such additional consideration on the same terms and conditions as the other stockholders, based on the number of shares of Common Stock subject to the Participant’s then-outstanding Stock Options on the date of the Change in Control; provided that if on the date of the Change in Control the aggregate exercise price of the shares subject to a Stock Option exceeds the fair market value of the merger consideration to be paid by the acquirer for each share of Common Stock upon the date of the Change in Control multiplied by the number of shares subject to such Stock Option, then the preceding clause shall apply only to the extent that the sum of (X) and (Y) exceeds the aggregate exercise price of the shares subject to such Stock Option, where: 
		
	(X) 
	equals the amount payable subsequent to the Change in Control with respect to the shares subject to such Stock Option; and 

		
	(Y) 
	equals the fair market value of the merger consideration to be paid by the acquirer for each share of Common Stock upon the date of the Change in Control multiplied by the number of shares subject to such Stock Option.  

		
	3.
	    Restricted Stock Units.

		
	(a)
	Grant.  A Restricted Stock Unit (“RSU”) is the right, subject to the terms and conditions of the Plan and the Stock Unit Agreement, to receive a distribution of a share of Common Stock pursuant to Section 3(e) of these Terms and Conditions.

		
	(b)
	Vesting.  Subject to all of the provisions of the Stock Unit Agreement, the Participant shall become vested in such number of RSUs, if any, as determined under the schedule below (the “RSU Schedule”), unless otherwise specified in the Award Notice.  If the Participant’s employment with Northern Trust is terminated for any reason prior to the end of the period ending on the latest vesting date set forth in the RSU Schedule (or the Award Notice, if applicable) (“RSU Vesting Period”), the RSUs in the Participant’s Stock Unit Account that have not yet vested and do not become vested upon the Participant’s termination of employment with Northern Trust under Section 3(c) or Section 3(d), shall be forfeited and revert to the Corporation on such termination date.  Upon the forfeiture of any RSUs, the Corporation shall have no further obligation to the Participant with respect to such RSUs, including the obligation to pay Dividend Equivalents thereon.

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	Vesting Date
	Percentage of RSUs Vested

	First anniversary of the grant date as defined in the Award Notice
	0%

	Second anniversary of the grant date as defined in the Award Notice
	0%

	Third anniversary of the grant date as defined in the Award Notice
	50%

	Fourth anniversary of the grant date as defined in the Award Notice
	50%

		
	(c)
	Accelerated or Pro Rated Vesting. 

		
	(i)
	The Participant shall automatically forfeit all rights to any RSUs in the Participant’s Stock Unit Account as of the date of the Participant’s termination of employment with Northern Trust, subject to the following:  

		
	(ii)
	If the Participant’s termination of employment with Northern Trust occurs prior to the end of the RSU Vesting Period and is on account of death, then, on such date of death, the Participant shall have credited and become vested in 100 percent of the Participant’s unvested RSUs.

		
	(iii)
	If: (A) the Participant is not a Management Group member on the date of grant of the RSUs; and (B) prior to the end of the RSU Vesting Period, the Participant’s employment with Northern Trust is deemed terminated on account of Disability; then, upon such date of Disability, the Participant shall have credited and become vested in 100 percent of the Participant’s unvested RSUs.

		
	(iv)
	If: (A) the Participant is a Management Group member on the date of grant of the RSUs; (B) prior to the end of the RSU Vesting Period, the Participant’s employment with Northern Trust is deemed terminated on account of Disability; and (C) the Participant does not engage in conduct or activity described in Section 6(a) of these Terms and Conditions during the RSU Vesting Period; then, upon each remaining vesting date in the RSU Vesting Period set forth in the Award Notice, the Participant shall have credited and become vested in 100 percent of the number of unvested RSUs that would have become vested on such vesting date if the Participant’s employment with Northern Trust continued through such vesting date. 

		
	(v)
	If: (A) the Participant is not a Management Group member on the date of grant; (B) prior to the end of the RSU Vesting Period the Participant’s employment with Northern Trust is terminated; and (C) (1) the Participant’s termination of employment is on or after the date the Participant satisfies the conditions for Retirement and is other than for Cause; or (2) the Participant’s employment with Northern Trust is terminated under circumstances that qualify as a Severance Eligible Termination; then, subject to Section 3(c)(vi), on such date 

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of Retirement or termination of employment (“vesting event”), the Participant shall have credited and become vested in a pro rated number of unvested RSUs (the “Pro Rated RSUs”), determined by multiplying the number of the Participant’s RSUs that were unvested immediately prior to the date of the vesting event and that would have become vested and distributable to the Participant if the Participant had participated in the Plan for the full RSU Vesting Period, by a fraction (the “Pro Rata RSU Fraction”), the numerator of which shall be the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the RSU Vesting Period and the denominator of which shall be the number of full calendar months in the RSU Vesting Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.
		
	(vi)
	Notwithstanding the provisions of Section 3(c)(v), if: (A) the Participant is not a Management Group member on the date of grant; (B) prior to the end of the RSU Vesting Period, the Participant’s employment with Northern Trust is terminated under circumstances that qualify as a Severance Eligible Termination; and (C) the Participant is not a “Named Executive Officer” as defined pursuant to Item 402(a)(3) of Regulation S-K; then, in lieu of the Pro Rated RSUs described in Section 3(c)(v), the Participant shall become vested in a number of unvested RSUs (the “Enhanced Pro Rated RSUs”), determined by multiplying the number of the Participant’s RSUs that were unvested immediately prior to the date of the Participant’s termination by a fraction (the “Enhanced Pro Rata RSU Fraction”), the numerator of which shall be equal to the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the RSU Vesting Period plus 12 additional months (provided that the total number of months in the numerator shall in no event exceed the total number of months in the RSU Vesting Period and further provided that the Enhanced Pro Rata RSU Fraction shall in no event have a value greater than one), and the denominator of which shall be equal to the number of full calendar months in the RSU Vesting Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

		
	(vii)
	If: (A) the Participant is a Management Group member on the date of the grant of the RSUs; (B) prior to the end of the RSU Vesting Period, the Participant’s employment with Northern Trust is terminated (I) under circumstances that qualify as a Severance Eligible Termination, or (II) after the Participant attains age 55 years or older and the termination is other than for Cause; and (C) the Participant does not engage in conduct or activity described in Section 6(a) of these Terms and Conditions during the RSU Vesting Period; then, subject to Section 3(c)(viii), upon each remaining vesting date in the RSU Vesting Period, the Participant shall have credited and become vested in a pro rated number of unvested RSUs (the “MG Pro Rated RSUs”), determined by multiplying the number of RSUs that would have become vested and distributable to the Participant on such vesting date if the Participant had participated in the Plan up through that vesting date, by the Pro Rata RSU Fraction, which shall be calculated in the same manner as described in Section 3(c)(v). 

		
	(viii)
	Notwithstanding the provisions of Sections 3(c)(vii), if: (A) the Participant is a Management Group member on the date of the grant of the RSUs; (B) prior to the end of the RSU Vesting Period, the Participant’s employment with Northern Trust is terminated under circumstances that qualify as a Severance Eligible Termination; (C) the Participant is not a “Named Executive Officer” as defined pursuant to Item 402(a)(3) of Regulation S-K; 

11
 

and (D) the Participant does not engage in conduct or activity described in Section 6(a) of these Terms and Conditions during the RSU Vesting Period; then, upon each remaining vesting date in the RSU Vesting Period, in lieu of the MG Pro Rated RSUs described in Section 3(c)(vii), the Participant shall have credited and become vested in a pro rated number of unvested RSUs (the “MG Enhanced Pro Rated RSUs”), determined by multiplying the number of RSUs that would have become vested and distributable to the Participant on such vesting date if the Participant’s employment with Northern Trust continued through such vesting date by the Enhanced Pro Rata RSU Fraction, which shall be calculated in the same manner as described in Section 3(c)(vi).  
		
	(ix)
	For purposes of calculating the number of full calendar months in the denominator of the Pro Rata RSU Fraction and the Enhanced Pro Rata RSU Fraction, the RSU Vesting Period shall, consistent with Section 3(b), refer to the period commencing on the date of grant and ending on the latest vesting date set forth in these Terms and Conditions or the Award Notice, as applicable, without regard to any interim vesting dates, and without regard to whether the date of the distribution event falls on an interim vesting date.

		
	(d)
	Vesting Upon a Change in Control.  

		
	(i)
	In the event of a Change in Control, the Participant’s unvested RSUs shall be converted to units with respect to common equity of the acquirer (“Acquirer Units”) with a fair market value equal to the Fair Market Value of the Common Stock subject to such RSUs on the date of the Change in Control, and shall continue to vest and be payable, or shall be forfeited, in accordance with the provisions of the Terms and Conditions that would apply in the absence of a Change in Control; provided, however, that if the Participant incurs a Qualifying Termination, the Participant shall be credited and become vested in 100 percent of the Participant’s unvested Acquirer Units upon the date of such Qualifying Termination, which shall be distributed in accordance with Section 3(e)(iv).  

		
	(ii)
	Notwithstanding the foregoing, if for any reason the acquirer does not agree to the provisions of Section 3(d)(i), then: (A) if the Participant is employed by the Corporation or one of its Subsidiaries on the date of the Change in Control, the Participant shall have credited and become vested in, upon the date of the Change in Control, 100 percent of the Participant’s unvested RSUs; and (B) if the Participant previously terminated employment with Northern Trust under circumstances described in Section 3(c)(iv), 3(c)(vii) or 3(c)(viii) as applicable, the Participant shall have credited and become vested on the date of the Change in Control in the number of RSUs in which the Participant would otherwise have become vested had the Participant complied with the conditions of Section 3(c)(iv), 3(c)(vii) or 3(c)(viii), as applicable, through the end of the RSU Vesting Period.

		
	(e)
	Distribution. 

		
	(i)
	RSUs that become vested upon a vesting date within the RSU Vesting Period pursuant to Section 3(b) or Section 3(c)(iv), 3(c)(vii) or 3(c)(viii), as applicable, shall be distributed on such vesting date, provided that such RSUs shall be treated as distributed on such vesting date if they are distributed no later than the last day of the calendar year in which such vesting date occurs, or, if later, by the 15th day of the third calendar month after such vesting date occurs, subject to and in accordance with the provisions of Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that the 

12
 

Participant shall in no event have the right directly or indirectly to designate the taxable year of payment.
		
	(ii)
	RSUs that become vested prior to the expiration of the RSU Vesting Period upon a Participant’s deemed termination of employment due to Disability (described in Section 3(c)(iii)), or Retirement under Section 3(c)(v), or termination of employment in the circumstances described in Section 3(c)(v) or 3(c)(vi), (“distribution event”) (with the number of unvested RSUs that become vested on such distribution event determined in accordance with Section 3(c) of these Terms and Conditions), shall be distributed, as soon as practicable, but no later than 60 days, after such distribution event, subject to and in accordance with the provisions of Treasury Regulation Section 1.409A-3(b), including without limitation the requirement that the Participant shall in no event have the right directly or indirectly to designate the taxable year of payment.

		
	(iii)
	RSUs that become vested prior to the expiration of the RSU Vesting Period upon a Participant’s death pursuant to Section 3(c)(ii) (with the number of unvested RSUs that become vested on death determined in accordance with Section 3(c) of these Terms and Conditions), shall be distributed to the Participant’s Beneficiary as soon as practicable, but no later than 60 days, after the Participant’s death, subject to and in accordance with the provisions of Treasury Regulation Section 1.409A-3(b), including without limitation the requirement that the Beneficiary shall in no event have the right directly or indirectly to designate the taxable year of payment. Such distribution shall be made to such Beneficiary and in such proportions as the Participant may designate in writing.

In the event of the Participant’s termination of employment with Northern Trust on account of death after the expiration of the RSU Vesting Period but prior to full distribution of the RSUs pursuant to these Terms and Conditions, the Participant’s RSUs shall be distributed, within the period described in Section 3(e)(i), to the Participant’s Beneficiary.
		
	(iv)
	Acquirer Units that become vested upon a Qualifying Termination under Section 3(d)(i), shall be distributed, as soon as practicable, but no later than 60 days, after such Qualifying Termination, subject to and in accordance with the provisions of, Treasury Regulation Section 1.409A-3(b), including without limitation the requirement that the Participant shall in no event have the right directly or indirectly to designate the taxable year of payment. 

		
	(v)
	In the event of a Change in Control, if the acquirer does not agree to the provisions of Section 3(d)(i), the Stock Unit Award shall be terminated upon such Change in Control and the Participant shall be entitled to a distribution of all RSUs which become vested pursuant to Section 3(d)(ii) and such distribution shall be made consistent with Treas. Reg. 1.409A-3(j)(4)(ix)(B), subject to satisfaction of the conditions thereof.  

		
	(vi)
	RSUs shall be distributed only in shares of Common Stock so that, pursuant to Section 3(a) of these Terms and Conditions and this Section 3(e), a Participant shall be entitled to receive one share of Common Stock for each RSU in the Participant’s Stock Unit Account.  Notwithstanding the foregoing, in the event of a Change in Control, Acquirer Units described in Section 3(d)(i) (or RSUs vested prior to the Change in Control under Section 3(c) that have not yet been distributed as of the Change in Control) shall be settled in common equity of the acquirer, and RSUs that become vested in accordance with Section 3

13
 

(d)(ii) (or RSUs vested prior to the Change in Control under Section 3(c) that have not yet been distributed as of the Change in Control) shall be settled in cash. 

		
	4.
	Performance Stock Units. 

		
	(a)
	Grant.  A Performance Stock Unit (“PSU”) is the right, subject to the terms and conditions of the Plan and the Stock Unit Agreement, to receive a distribution of a share of Common Stock pursuant to Section 4(e) of these Terms and Conditions.  An award of PSUs is intended to qualify as “performance based compensation” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.  No grants of PSUs with respect to a Performance Period shall be made following the 90th day of the Performance Period.

		
	(b)
	Vesting.  Subject to all of the provisions of the Stock Unit Agreement, upon the last day of the Performance Period, the Participant shall become vested in such number of PSUs, if any, as determined under the schedule below, based on the average annual rate of return on equity attained by the Corporation for the Performance Period, but only if the Participant remains continuously employed by the Corporation or one of its Subsidiaries through the last day of the Performance Period; any PSUs that do not become vested in accordance with this Section 4(b) shall be forfeited and revert to the Corporation. The Committee, in its sole and absolute discretion, shall determine the average annual rate of return on equity attained by the Corporation for the Performance Period and certify the percentage of PSUs vested.  If the Participant’s employment with Northern Trust is terminated for any reason prior to the end of the Performance Period then, subject to Sections 4(c) and 4(d), the PSUs in the Participant’s Stock Unit Account that have not yet vested shall be forfeited and revert to the Corporation on such employment termination date.  Upon the forfeiture of any PSUs, the Corporation shall have no further obligation to the Participant with respect to such PSUs, including the obligation to credit Dividend Equivalents with respect thereto.

		
	(i)
	Subject to all of the provisions of these Terms and Conditions, upon the last day of the three-year performance period beginning on January 1, 2016 and ending on December 31, 2018 (the “Performance Period”) the PSUs under the Participant’s Stock Unit Agreement will vest in accordance with the following table (such table and the remaining provisions of this Section 4(b)(i) referred to as the “PSU Schedule”) based on the average annual rate of return on equity for the Performance Period attained by the Corporation: 

	
		
	Average Annual Rate ofReturn on Equity
	Percentage ofPSUs Vested

	Less than 7.5%
	0%

	7.5%
	50%

	11.0%
	100%

	13.0%
	115%

	≥ 15.0%
	125%

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If the average annual rate of return on equity for the Performance Period is between 7.5% and 11.0%, 11.0% and 13.0%, or 13.0% and 15.0%, the final percentage of PSUs that become vested will be determined by straightline interpolation between the applicable percentage levels.  The average annual rate of return on equity for the Performance Period attained by the Corporation is the return on average common equity, based on the Corporation’s net income, and shall be determined by the Committee in its sole and absolute discretion in accordance with generally accepted accounting principles (subject to the adjustments set forth below).  
For purposes of this Section 4(b)(i), the average annual rate of return on equity shall be calculated as the simple average annual rate of return on equity for the three-year Performance Period referenced above, measured across the Corporation as a whole (or in the case of a Participant to which Section 4(d)(i) or 4(d)(ii) of these Terms and Conditions applies, for the modified Performance Period described in Section 4(d)(i)(A) or 4(d)(ii), as applicable, treating any fractional year as a full year).
Notwithstanding anything herein to the contrary, for purposes of determining the average annual rate of return on equity for the Performance Period, if any of the following items, alone or in combination with any of the others, would produce a change to net income in excess of $100 million, net income will be determined by excluding such items:
		
	(A)
	the gains or losses resulting from, and the expenses incurred in connection with, the acquisition or disposition of a business, a merger, or a similar transaction, and integration in connection therewith; 

		
	(B)
	the impact of securities issuances in connection with events described in item (A), above, and expenses incurred in connection therewith;  

		
	(C)
	any gain, loss, income or expense resulting from changes in accounting principles, tax laws, or other laws or provisions affecting reported results, that become effective during the Performance Period; 

		
	(D)
	any gain or loss resulting from, and expenses incurred in connection with, any litigation or regulatory investigations; 

		
	(E)
	any charges and expenses incurred in connection with restructuring activity, including but not limited to, reductions in force; 

		
	(F)
	the impact of discontinued operations;  

		
	(G)
	asset write-downs; 

		
	(H)
	the impact on goodwill; or 

		
	(I)
	any other gain, loss, income or expense with respect to the Performance Period that is nonrecurring in nature.  

All amounts referenced in the foregoing list shall be determined in accordance with GAAP and shall be consistent with the Corporation’s financial disclosures.

15
 

In all events, and notwithstanding anything to the contrary herein, the Committee has the discretion to decrease any award. 
The Committee’s determination of the average annual rate of return on equity for a Performance Period shall be final.

		
	(c)
	Accelerated and Pro Rated Vesting.

		
	(i)
	The Participant shall automatically forfeit all rights to any PSUs in the Participant’s Stock Unit Account as of the date of the Participant’s termination of employment with Northern Trust, subject to the following:

		
	(ii)
	If: (A) the Participant’s termination of employment with Northern Trust is on account of death or Disability and occurs prior to the end of the Performance Period; and (B) in the case of Disability, the Participant does not engage in conduct or activity described in Section 6(a) of these Terms and Conditions during the Performance Period; then, subject to Section 4(c)(v) below, on the last day of the Performance Period, the Participant shall become vested in such number of PSUs, if any, as determined in accordance with the PSU Schedule, based on the average annual rate of return on equity attained by the Corporation (as determined by the Committee in its sole and absolute discretion) for the Performance Period, and any such PSUs that become vested shall be distributed in accordance with Section 4(e)(i) or 4(e)(ii), as applicable.

 
		
	(iii)
	If prior to the end of the Performance Period, the Participant’s employment with Northern Trust is terminated, and

		
	(A)
	either (I) the Participant’s termination of employment is on or after the date the Participant satisfies the conditions for Retirement and is other than for Cause; (II) the Participant is a member of the Management Group on the date of the grant of the PSUs, the termination is other than for Cause, and the Participant is 55 years or older on the date of such termination of employment; or (III) the Participant’s employment with Northern Trust is terminated under circumstances that qualify as a Severance Eligible Termination; and 

		
	(B)
	the Participant does not engage in conduct or activity described in Section

6(a) of these Terms and Conditions during the Performance Period;

then, subject to Section 4(c)(iv) and 4(c)(v), as of the date of the Participant’s termination of employment with Northern Trust, the Participant shall retain a pro-rated number of unvested PSUs (the “Pro Rated PSUs”) equal to: (X) the number of PSUs, if any, that would have become vested in the absence of a termination of employment during the Performance Period, assuming that the Corporation achieved the Target Performance Level; multiplied by (Y) a fraction (the “Pro Rata PSU Fraction”), the numerator of which shall be the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Performance Period and the denominator of which shall be the number of full calendar months in the Performance Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.  All unvested PSUs of the Participant that are not Pro Rated PSUs as determined under this Section 4(c)(iii) shall be immediately forfeited upon the Participant’s termination of 

16
 

employment with Northern Trust and revert to the Corporation. Upon the forfeiture of any PSUs, the Corporation shall have no further obligation to the Participant with respect to such PSUs, including the obligation to credit Dividend Equivalents with respect thereto.  On the last day of the Performance Period, the Participant shall become vested in such number of Pro Rated PSUs, if any, as determined in accordance with the PSU Schedule, and any such Pro Rated PSUs that become vested shall be distributed in accordance with Section 4(e)(i).  

		
	(iv)
	Notwithstanding the provisions of Section 4(c)(iii), if: (A) prior to the end of the Performance Period, the Participant’s employment with Northern Trust is terminated under circumstances that qualify as a Severance Eligible Termination; (B) the Participant is not a “Named Executive Officer” as defined pursuant to Item 402(a)(3) of Regulation S-K; and (C) the Participant does not engage in conduct or activity described in Section 6(a) of these Terms and Conditions during the Performance Period, then, in lieu of the Pro Rated PSUs described in Section 4(c)(iii) and subject to Section 4(c)(v), as of the date of the Participant’s termination of employment with Northern Trust, the Participant shall retain a pro-rated number of unvested PSUs (the “Enhanced Pro Rated PSUs”) equal to: (X) the number of PSUs, if any, that would have become vested in the absence of a termination of employment during the Performance Period, assuming that the Corporation achieved the Target Performance Level; multiplied by (Y) a fraction (the “Enhanced Pro Rata PSU Fraction”), the numerator of which shall be equal to the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Performance Period plus 12 additional months (provided that the total number of months in the numerator shall in no event exceed the total number of months in the Performance Period and further provided that the Enhanced Pro Rata PSU Fraction shall in no event have a value greater than one), and the denominator of which shall be equal to the number of full calendar months in the Performance Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.  All unvested PSUs of the Participant that are not Enhanced Pro Rated PSUs as determined under this Section 4(c)(iv) shall be immediately forfeited upon the Participant’s termination of employment with Northern Trust and revert to the Corporation. Upon the forfeiture of any PSUs, the Corporation shall have no further obligation to the Participant with respect to such PSUs, including the obligation to credit Dividend Equivalents with respect thereto.  On the last day of the Performance Period, the Participant shall become vested in such number of Enhanced Pro Rated PSUs, if any, as determined in accordance with the PSU Schedule, and any such Enhanced Pro Rated PSUs that become vested shall be distributed in accordance with Section 4(e)(i).

		
	(v)
	Notwithstanding any provision of these Terms and Conditions, except as provided in Section 4(d), there shall be no vesting of any PSUs prior to the expiration of the Performance Period, and vesting shall only occur to the extent it is determined by the Committee that the Corporation has satisfied the performance criteria for the Performance Period in accordance with the PSU Schedule. If the Participant’s employment with Northern Trust is terminated for a reason described in Section 4(c)(ii), 4(c)(iii) or 4(c)(iv), any PSUs, Pro Rated PSUs, or Enhanced Pro Rated PSUs, as applicable, that do not become vested at the end of the Performance Period pursuant to Section 4(c)(ii), 4(c)(iii) or 4(c)(iv), as applicable, shall be immediately forfeited and revert to the Corporation. Upon the forfeiture of any PSUs, the Corporation shall have no further obligation to the 

17
 

Participant with respect to such PSUs, including the obligation to credit Dividend Equivalents with respect thereto.

		
	(d)
	Vesting Upon a Change in Control.  

		
	(i)
	In the event of a Change in Control, if the Participant has not incurred a termination of employment with Northern Trust on or prior to the date of such Change in Control, the following provisions shall apply.

		
	(A)
	The Participant shall be immediately vested in the number of the Participant’s unvested PSUs equal to: (I) the applicable percentage of the Participant’s PSUs that would have become vested in accordance with the PSU Schedule, applied as if the Performance Period ended on the last day of the month immediately preceding the Change in Control (such period referred to as the “modified Performance Period described in Section 4(d)(i)(A)”), based on the Actual Performance Level achieved during such modified Performance Period; multiplied by (II) the Participant’s Pro Rata Target Performance Level PSUs. The Participant’s “Pro Rata Target Performance Level PSUs” refers to the number of the Participant’s PSUs equal to: (X) the number of PSUs that would have become vested in the absence of a Change in Control, assuming the Corporation achieved the Target Performance Level; multiplied by (Y) a fraction, the numerator of which is the number of days from the first day of the Performance Period through the date of the Change in Control, and the denominator of which is the number of days in the Performance Period.  The PSUs, if any, that become vested under this Section 4(d)(i)(A) shall be converted to Acquirer Units with a fair market value equal to the Fair Market Value of the Common Stock subject to such PSUs on the date of the Change in Control, and shall be distributed in accordance with Section 4(e)(iii).  Any such Pro Rata Target Performance Level PSUs that do not become vested as of the date of the Change in Control pursuant to this Section 4(d)(i)(A) shall be immediately forfeited and revert to the Corporation. Upon the forfeiture of any PSUs, the Corporation shall have no further obligation to the Participant with respect to such PSUs, including the obligation to credit Dividend Equivalents with respect thereto. 

		
	(B)
	A number of the Participant’s PSUs equal to: (I) the number of PSUs that would have become vested in the absence of a Change in Control, assuming the Corporation achieved the Target Performance Level; multiplied by (II) a fraction, the numerator of which is the number of days from the date of the Change in Control through the last day of the Performance Period, and the denominator of which is the number of days in the Performance Period (such product referred to as the “Pro Rata Post-Change in Control PSUs”), shall be converted to Acquirer Units with a fair market value equal to the Fair Market Value of the Common Stock subject to such Pro Rata Post-Change in Control PSUs on the date of the Change in Control.  The Acquirer Units described in this Section 4(d)(i)(B) shall not be subject to the performance vesting provisions of Section 4(b)(i), and shall become vested if and only if the Participant remains continuously employed through the end of the Performance Period, and the Participant shall forfeit such Acquirer Units upon any termination of employment with Northern Trust, the acquirer and all of their Subsidiaries, subject to the following:

18
 

(X)  if the Participant’s termination of employment is a Qualifying Termination, the Participant shall have credited, and become vested in, 100 percent of such Acquirer Units upon the date of such Qualifying Termination, which shall be distributed in accordance with Section 4(e)(iii);  
(Y)  if the Participant incurs a termination of employment in circumstances described in Section 4(c)(ii), 4(c)(iii) or 4(c)(iv), on or after the Change in Control and prior to the end of the Performance Period, but such termination of employment is not a Qualifying Termination, the Participant shall have credited, and become vested in, on such date of termination, a pro-rated portion of such Acquirer Units, determined by multiplying: (a) such Acquirer Units; by (b) a fraction, the numerator of which is the number of days between the date of the Change in Control and the date of the Participant’s termination of employment, and the denominator of which is the number of days in the Performance Period after the date of the Change in Control, which shall be distributed in accordance with Section 4(e)(iii), subject to Section 4(e)(ii).  
Any such Acquirer Units that do not become vested as of the date of the Participant’s termination of employment pursuant to clause (X) or (Y) of this Section 4(d)(i)(B), as applicable, shall be immediately forfeited and revert to the Corporation or the acquirer, as applicable.  Upon the forfeiture of any Acquirer Units, the Corporation and the acquirer, as applicable, shall have no further obligation to the Participant with respect to such Acquirer Units, including the obligation to credit Dividend Equivalents with respect thereto.  
		
	(ii)
	If prior to a Change in Control, a Participant’s employment with Northern Trust is terminated in circumstances described in Section 4(c)(ii), upon the date of the Change in Control, the Participant will immediately vest in the number of PSUs, if any, that would have become vested in accordance with the PSU Schedule, applied as if the Performance Period ended on the last day of the month immediately preceding the Change in Control (such period referred to as the “modified Performance Period described in Section 4(d)(ii)”), based on the Corporation’s Actual Performance Level during such modified Performance Period.  If prior to a Change in Control, a Participant incurs a termination of employment with Northern Trust in circumstances described in Section 4(c)(iii) or 4(c)(iv), upon the date of the Change in Control, the Participant will immediately vest in the number of unvested PSUs determined by multiplying: (A) the Pro Rated PSUs as determined under Section 4(c)(iii) or the Enhanced Pro Rated PSUs as described under 4(c)(iv), as applicable (taking into account the full Performance Period for purposes of the applicable proration fraction); by (B) the applicable percentage of the Participant’s PSUs that would have become vested in accordance with the PSU Schedule, based on the Corporation’s Actual Performance Level during the modified Performance Period described in this Section 4(d)(ii). The PSUs, if any, that become vested under this Section 4(d)(ii) shall be converted to Acquirer Units with a fair market value equal to the Fair Market Value of the Common Stock subject to such vested PSUs on the date of the Change in Control, and shall be distributed in accordance with Section 4(e)(iii).  Any such PSUs that do not become vested as of the date of the Change in Control pursuant to this Section 4(d)(ii) shall be immediately forfeited and revert to the Corporation. Upon the forfeiture of any PSUs, the Corporation shall have no further obligation to the Participant with respect to such PSUs, including the obligation to credit Dividend Equivalents with respect thereto.        

19
 

		
	(iii)
	Notwithstanding the foregoing, if for any reason the acquirer does not agree to the provisions of Sections 4(d)(i) and 4(d)(ii), then: (A) if the Participant is employed on the date of the Change in Control, the Participant shall have credited and become vested upon the date of the Change in Control in the number of PSUs in which the Participant would have become vested assuming that the Corporation achieved the Target Performance Level for the Performance Period; and (B) if the Participant terminated employment with Northern Trust prior to the date of the Change in Control, under circumstances described in Section 4(c)(ii), 4(c)(iii) or 4(c)(iv), the Participant shall become vested upon the date of the Change in Control in a number of PSUs equal to the number of PSUs in which the Participant would have become vested under Section 4(c)(ii), 4(c)(iii) or 4(c)(iv) assuming that the Corporation achieved Target Performance Level for the Performance Period and such Participant’s remaining unvested PSUs shall be forfeited.

		
	(e)
	Distribution.

		
	(i)
	PSUs that become vested pursuant to Section 4(b), 4(c)(ii), 4(c)(iii) or 4(c)(iv) on the last day of the Performance Period, shall be distributed on such vesting date, provided that such PSUs shall be treated as distributed on such vesting date if they are distributed no later than the 15th day of the third calendar month after the calendar year in which the Performance Period ends.

		
	(ii)
	In the event of the Participant’s death during the Performance Period or thereafter but prior to full distribution to the Participant pursuant to these Terms and Conditions, the Participant’s PSUs, if any, that become vested on the last day of the Performance Period pursuant to Section 4(c)(ii) shall be distributed to the Participant’s Beneficiary on such date in accordance with Section 4(e)(i), above, and such distribution shall be made to such Beneficiary and in such proportions as the Participant may designate in writing.

		
	(iii)
	Acquirer Units into which vested PSUs have been converted in accordance with Section 4(d)(i) or 4(d)(ii), shall be distributed upon the last day of the Performance Period, provided that if the Participant becomes vested on account of a Qualifying Termination pursuant to clause (X) of Section 4(d)(i)(B) such Acquirer Units shall be distributed on such vesting date.    

		
	(iv)
	In the event of a Change in Control, if the acquirer does not agree to the provisions of  Section 4(d)(i) or 4(d)(ii), the Stock Unit Award shall be terminated upon such Change in Control, the Participant shall be entitled to a distribution of all PSUs which become vested pursuant to Section 4(d)(iii) and such distribution shall be made consistent with Treas. Reg. 1.409A-3(j)(4)(ix)(B), subject to satisfaction of the conditions thereof.  

		
	(v)
	PSUs shall be distributed only in shares of Common Stock so that, pursuant to Section 4(a) of these Terms and Conditions and this Section 4(e), a Participant shall be entitled to receive one share of Common Stock for each PSU in the Participant’s Stock Unit Account.  Notwithstanding the foregoing, in the event of a Change in Control, Acquirer Units described in Section 4(d)(i) or 4(d)(ii) shall be settled in common equity of the acquirer, and PSUs that become vested in accordance with Section 4(d)(iii) shall be settled in cash. 

20
 

		
	5.
	Terms and Conditions Related Only to Awards of Stock Units.  The following provisions shall apply to RSUs and PSUs (collectively referred to as “Stock Units”).

		
	(a)
	Stock Unit Account.  The Corporation shall maintain an account (“Stock Unit Account”) in the name of the Participant which shall reflect the number of Stock Units awarded to the Participant.

		
	(b)
	Dividend Equivalents.  

		
	(i)
	Upon the payment of any dividend on Common Stock occurring during the period preceding the distribution of the Participant’s RSU Awards pursuant to Section 3(e) of these Terms and Conditions, the Corporation shall promptly (and in any event no later than the 15th day of the third month of the calendar year following the calendar year in which the dividend is declared) pay to the Participant an amount in cash equal in value to the dividends that the Participant would have received had the Participant been the actual owner of the number of shares of Common Stock represented by the RSUs in the Participant’s Stock Unit Account on that date (“Dividend Equivalents”).

		
	(ii)
	Upon the payment of any dividend on Common Stock during the period preceding the distribution of the Participant’s PSU Awards pursuant to Section 4(e) of these Terms and Conditions, the Corporation shall credit to a PSU Cash Account an amount (the “PSU Dividend Amount”) equal in value to the dividends that the Participant would have received had the Participant been the actual owner of the number of shares of Common Stock represented by the PSUs in the Participant’s Stock Unit Account on that date. The Participant’s PSU Cash Account shall be credited with interest on the PSU Dividend Amount, from the date that the dividend was paid through the date that the related PSU (or applicable portion thereof) becomes vested and is distributed, at a per-annum rate equal to the mid-term applicable federal rate for the month of February 2016, compounded annually. A Participant’s PSU Cash Account is subject to vesting as described in Sections 4(b) and 4(c), and the PSU Cash Account (or portion thereof) shall be distributed on the date that the PSUs to which the Account (or applicable portion thereof) is attributable become vested and are distributed.  Notwithstanding the foregoing, the Participant shall never become vested in more than 100 percent of the deferred dividends plus interest even if more than 100 percent of the underlying PSUs become vested at the end of the Performance Period.

		
	(c)
	Forfeiture.  The Stock Units granted to the Participant pursuant to the Stock Unit Agreement (and any PSU Cash Account) shall be forfeited and revert to the Corporation: (i) in accordance with Section 6(a), if the Participant engages in conduct or activity described in Section 6(a) of these Terms and Conditions; or (ii) in accordance with Section 3(b) or 4(b) (subject to Sections 3(c), 3(d), 4(c) and 4(d), as applicable) of these Terms and Conditions, if the Participant’s employment with Northern Trust is terminated (A) prior to the expiration of the RSU Vesting Period described in Section 3(b) in the case of an RSU Award, or (B) prior to the last day of the Performance Period, and in accordance with Sections 4(c) and 4(d) under certain conditions described therein in the case of a Performance Stock Unit Award.

		
	(d)
	Delivery of Shares.  The Corporation may delay the issuance or delivery of shares of Common Stock if the Corporation reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at 

21
 

the earliest date at which the Corporation reasonably anticipates that such issuance or delivery will not cause such violation.

		
	(e)
	Adjustment.  The Stock Units provided herein are subject to adjustment in accordance with the provisions of Section 11 of the Plan.

		
	(f)
	Separation from Service.  Notwithstanding anything herein to the contrary, the provisions of this Stock Unit Award, including without limitation Sections 3(e) and 4(e), shall be subject to the provisions of the Plan, including without limitation Section 14 of the Plan.  Pursuant to and not by way of limitation of the preceding sentence, notwithstanding anything herein to the contrary, an Award that is subject to Code Section 409A shall not be distributable on account of Retirement, Disability or termination of employment unless the Participant incurs a “Separation from Service,” as defined in the Plan, and any distribution described herein shall be delayed as necessary to meet the requirements of Section 14(e) of the Plan.

		
	6.
	General Terms and Conditions Related to Awards of Stock Options, Restricted Stock Units or Performance Stock Units.

		
	(a)
	Forfeitures and Recoupments.

		
	(i)
	Engaging in Restricted Activity Without Written Consent of the Corporation.  Notwithstanding anything to the contrary in these Terms and Conditions, if the Participant, without the written consent of the Corporation: 

		
	(A)
	at any time after the date of these Terms and Conditions, has divulged, directly or indirectly, or used, for the Participant’s own or another’s benefit, any Confidential Information; or 

		
	(B)
	at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by Northern Trust for any reason, has Solicited, or assisted in the Solicitation of, any Client or Prospective Client (provided, however, that: (I) this Section 6(a)(i)(B) shall not apply to the Participant’s Solicitation of any Client or Prospective Client with whom he or she had a business relationship prior to the start of his or her employment with Northern Trust, provided no Confidential Information, directly or indirectly, is used in such Solicitation; and (II) if the Participant is a resident of California, this Section 6(a)(i)(B) shall not apply, and the following shall apply: at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by Northern Trust for any reason, except as authorized by the Corporation in the course of the Participant’s duties for the Corporation: (a) has used or referred to any Confidential Information in order to provide, or directly assist in the provision of, any Competitive Services or Products to any Client or Prospective Client; or (b) has used or directly referred to any Confidential Information in order to Solicit, or directly assist in the Solicitation of, any Client or Prospective Client); or

		
	(C)
	at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by Northern Trust for any reason, has solicited, encouraged, advised, induced or caused any employee of 

22
 

the Corporation or any of its Subsidiaries to terminate his or her employment with Northern Trust, or provided any assistance, encouragement, information, or suggestion to any person or entity regarding the solicitation or hiring of any employee of Northern Trust; 

then the Participant’s then-outstanding Stock Options or Stock Units (in either case, whether vested or unvested) shall be forfeited to the Corporation by notice from the Committee in writing to the Participant within a reasonable period of time after the Committee acquires knowledge of the Participant’s violation of this Section 6(a)(i).  In the event that a Participant’s Stock Options or Stock Units are forfeited pursuant to the preceding sentence or the provisions of Section 6(a)(ii), below, the Corporation shall have no obligation to honor the exercise of any such Stock Options by the Participant (or the Participant’s Beneficiary) and shall not distribute any such Stock Units to the Participant (or the Participant’s Beneficiary) pursuant to Section 3(e) or 4(e), and the Corporation shall have no further obligations to the Participant with respect to such Stock Options or such Stock Units, including but not limited to the obligation to pay or credit any Dividend Equivalents with respect to such Stock Units.  

In addition, in the event of any action by the Participant to which Section 6(a)(i) applies, the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any exercise by the Participant or payment or delivery to the Participant with respect to any Stock Options or Stock Units occurring within twelve (12) months prior to, or at any time following, the date of the Participant’s termination of employment with Northern Trust for any reason (including but not limited to termination of employment due to Retirement or Disability, and recoup any “gain realized” in connection with such Stock Options or Stock Units as described in Section 6(a)(iv) below. 

		
	(ii)
	Misconduct and Restatement of Financials.  Consistent with the Corporation’s strategies to discourage excessively risky behavior, and notwithstanding any other provision in these Terms and Conditions, in the event that:

		
	(A)
	the Corporation is required to restate its financial statements filed with the U.S. Securities and Exchange Commission on Form 10-Q or Form 10-K or re-file quarterly financial data with the Board of Governors of the Federal Reserve System due to any reason other than changes in accounting policy or applicable law (a “Restatement”), and the Committee determines that such Restatement resulted, in whole or in material part, from the Participant: (I) intentionally engaging in conduct that resulted in a material weakness in internal control over financial reporting and was inconsistent with the standards of conduct of the business judgment rule, as defined below; or (II) personally and knowingly engaging in practices that materially contributed to circumstances that resulted in a material weakness in internal control over financial reporting and that were inconsistent with the standards of conduct of the business judgment rule; or

		
	(B)
	the Committee determines that the Participant has engaged in conduct that is grounds for termination for Cause and is inconsistent with the standards of conduct of the business judgment rule (“Misconduct”); or 

23
 

		
	(C)
	a Significant Risk Outcome occurs that the Committee determines is the direct and proximate result of the Participant’s conduct that: (I) violated the Northern Trust Code of Business Conduct and Ethics, including any willful or reckless disregard of risk management policies, programs and procedures; and (II) was inconsistent with the standards of conduct of the business judgment rule; provided, however, that this Section 6(a)(ii)(C) applies only to grants of Restricted Stock Units and only if the Participant is a member of the Management Group or Operating Group on the date of the grant of such Restricted Stock Units;

then the Committee shall review: (X) in the case of a Restatement, all then-outstanding Stock Options or Stock Units (whether vested or unvested) of the Participant, and all Stock Options or Stock Units with respect to which there has been an exercise by the Participant or payment or delivery to the Participant within the 36-month period immediately preceding the date of the Restatement; (Y) in the case of Misconduct, all then-outstanding Stock Options or Stock Units (in each case, whether vested or unvested) of the Participant, and all Stock Options or Stock Units with respect to which there has been an exercise by the Participant or payment or delivery during the period after the date of the Misconduct; and (Z) in the case of a Significant Risk Outcome, then-outstanding RSUs (whether vested or unvested) and RSUs with respect to which there has been payment or delivery to the Participant, each of which were granted to the Participant in respect of performance in the year or years in which the Participant’s conduct described in Section 6(a)(ii)(C) occurred.

In the event of a Restatement described in Section 6(a)(ii)(A), the Committee shall declare the Participant’s then-outstanding, vested Stock Options or Stock Units that would not have become vested based on accurate financial data or restated results to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the Restatement, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind exercise by the Participant or any payment or delivery with respect to any Stock Options or Stock Units occurring within 36 months prior to the date of the Restatement that would not have become vested or been paid based on accurate financial data or restated results, and recoup any gain realized in connection with such Stock Options or Stock Units as described in Section 6(a)(iv), below.  In the event of Misconduct described in Section 6(a)(ii)(B) (other than any actions or events included in Section 6(a)(i), 6(a)(ii)(A) or 6(a)(ii)(C)), the Committee shall declare the Participant’s then-outstanding Stock Options or Stock Units (whether vested or unvested) to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the discovery of the Misconduct, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation and as permitted by applicable law, rescind any exercise by the Participant or payment or delivery with respect to any Stock Options or Stock Units occurring after the date such Misconduct occurred and recoup any gain realized in connection with such Stock Options or Stock Units as described in Section 6(a)(iv), below.  In the event of a Significant Risk Outcome described in Section 6(a)(ii)(C), the Committee shall declare the Participant’s then-outstanding RSUs (whether vested or unvested) that were granted to the Participant in respect of performance in the year or years in which the Participant’s conduct described in Section 6(a)(ii)(C) occurred to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the Committee’s determination, and the Corporation shall to the extent the Committee determines it practicable and in the best 

24
 

interests of the Corporation, and as permitted by applicable law, rescind any payment or delivery with respect to any RSUs granted to the Participant in respect of performance in the year or years in which the Participant’s conduct occurred and recoup any gain realized in connection with such RSUs as described in Section 6(a)(iv), below.    

A Participant’s actions satisfy the “business judgment rule” if such actions were taken in good faith, in a manner that an ordinarily prudent person would act under similar circumstances, and in the interests of the Corporation.  In interpreting and applying the preceding sentence, the Committee shall use as a guide the standards of conduct of the business judgment rule as construed by the Delaware courts in applying the Delaware General Corporation Law.

		
	(iii)
	If the Participant is characterized as US or UK Code Staff in the Participant’s Award Agreement on the date of grant, Section 6(a)(ii) shall not apply, and the following shall apply:

		
	(A)
	Restatement of Financials. Consistent with the Corporation’s risk-mitigation strategies for its compensation programs, and notwithstanding any other provision in these Terms and Conditions, in the event of a Restatement, as described in Section 6(a)(ii) above, and the Committee determines that such Restatement resulted, in whole or in material part, from the Participant: (I) intentionally engaging in conduct that resulted in a material weakness in internal control over financial reporting and was inconsistent with the standards of conduct of the business judgment rule, as defined in Section 6(a)(ii) above; or (II) personally and knowingly engaging in practices that materially contribute to circumstances that resulted in a material weakness in internal control over financial reporting and that were inconsistent with the standards of conduct of the business judgment rule; then the Committee shall review all then-outstanding Stock Options or Stock Units of the Participant (whether vested or unvested), and all Stock Options or Stock Units with respect to which there has been an exercise by the Participant or payment or delivery to the Participant within the 36-month period immediately preceding the date of the Restatement.

In the event of a Restatement described above, the Committee shall declare the Participant’s then-outstanding, vested Stock Options or Stock Units that would not have become vested based on accurate financial data or restated results to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the Restatement and the Corporation shall, to the extent the Committee determines practicable and in the best interests of the Corporation, as permitted by applicable law, rescind any exercise by the Participant or payment or delivery with respect to any Stock Options or Stock Units occurring within 36 months prior to the date of the Restatement that would not have become vested or been paid based on accurate financial data or restated results, and recoup any gain realized in connection with such Stock Options or Stock Units as described in Section 6(a)(iv) below.

		
	(B)
	Misconduct, Risk Management Failure and Financial Downturn. Consistent with the Corporation’s risk-mitigation strategies for its compensation programs, and notwithstanding any other provision in these Terms and Conditions, in the event that the Committee determines that:

25
 

		
	(I)
	(x) there is reasonable evidence of misbehavior or material error on the part of the Participant (including without limitation if the Participant has engaged in conduct that is grounds for termination for Cause or is inconsistent with the standards of conduct of the business judgment rule); (y) the Participant participated in or was responsible for conduct which resulted in significant losses for the Corporation; or (z) the Participant failed to meet appropriate standards of fitness and propriety including as required by the UK Financial Conduct Authority and/or the UK Prudential Regulation Authority (each such circumstance being “Misconduct”); or

		
	(II)
	the Corporation or the relevant business unit of the Corporation in relation to the Participant suffers a material failure of risk management (“Significant Risk Management Failure”); or

		
	(III)
	the Corporation or the relevant business unit of the Corporation in relation to the Participant suffers a material downturn in financial performance (“Financial Downturn”); 

then:
		
	(X) 
	the Committee shall review all then-outstanding Stock Options and Stock Units of the Participant (whether vested or unvested), and may determine that such number of those Stock Options and Stock Units as it considers to be appropriate (which may be all of them) shall be forfeited to the Corporation by notice from the Committee in writing to the Participant; and

		
	(Y)
	in the case of Misconduct or Significant Risk Management Failure, the Committee may, to the extent it determines appropriate (which may be all exercises by the Participant or payments or deliveries) and as permitted by applicable law, rescind any exercise by the Participant, payment or delivery with respect to any Stock Options or Stock Units pursuant to an Award made on or after January 1, 2016, provided that the Misconduct or Significant Risk Management Failure occurs within seven years of the date the Award is made, and recoup any gain realized in connection with such Stock Options or Stock Units as described in Section 6(a)(iv) below.

In the case of a Significant Risk Management Failure, the Committee shall take into account the proximity of the Participant to the failure of risk management in question and the Participant’s level of responsibility in determining its course of action.
		
	(iv)
	Rescission and Recoupment.  Upon the rescission, pursuant to the provisions of Section 6(a)(i), 6(a)(ii), or 6(a)(iii), of any exercise by the Participant or payment or delivery with respect to any Stock Options or Stock Units, the Corporation shall be entitled to recoup any “gains realized” in connection with such Stock Options or Stock Units, in such manner and on such terms and conditions as the Committee shall require.  “Gains realized” shall include: (A) the amount of any cash (including Dividend Equivalents) distributed to the Participant with respect to; (B) any cash or shares of Common Stock (or proceeds attributable to the sale thereof ) paid or delivered in settlement of; and (C) any other amounts determined by the Committee to have been realized in connection with, such rescinded Stock Options or Stock Units.  If the Participant fails to repay any such amounts 

26
 

to the Corporation within 60 days after receipt of written demand, the Corporation shall be entitled, subject to applicable law and the requirements of Internal Revenue Code Section 409A, to deduct from any amounts the Corporation owes the Participant from time to time the amount of all gains realized, or to sue for repayment of such amounts, or to pursue both remedies.

		
	(b)
	Withholding/Delivery of Shares.  

		
	(i)
	All distributions of Stock Units hereunder are subject to withholding by the Corporation for all applicable federal, state or local taxes.  With respect to distributions in shares of Common Stock, subject to such rules and limitations as may be established by the Committee from time to time, such withholding obligations shall be satisfied through the withholding of shares of Common Stock to which the Participant is otherwise entitled under the Stock Unit Award; provided, however, that such shares may be used to satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such taxable income).

		
	(ii)
	Delivery of shares of Common Stock upon exercise of the Participant’s Stock Option is subject to the withholding of all applicable federal, state, and local taxes.  At the Participant’s election, subject to such rules and limitations as may be established by the Committee, such withholding obligations shall be satisfied:  (A) by cash payment by the Participant; (B) through the surrender of shares of Common Stock which the Participant already owns that are acceptable to the Committee; or (C) through surrender of shares of Common Stock to which the Participant is otherwise entitled under the Plan; provided, however, that such shares under this clause (C) may be used to satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such taxable income).  Payment of federal income taxes may be accomplished through a combination of withholding of shares and delivery of previously acquired shares.  The Corporation may delay the issuance or delivery of shares of Common Stock if the Corporation reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which the Corporation reasonably anticipates that such issuance or delivery will not cause such violation.  As a Stock Option holder, the Participant has no interest in the shares covered by the Stock Option until the shares are actually issued. 

		
	(c)
	Re-Employment.  If, after the Participant’s termination of employment, the Participant is re-employed by the Corporation or one of its Subsidiaries, upon the Participant’s return he or she will be considered a new hire for purposes of the Plan.  Stock Options that previously expired upon the Participant’s termination of employment remain expired and are not reinstated.  Stock Units that were previously forfeited upon the Participant’s termination of employment remain forfeited and are not reinstated. 

		
	(d)
	Amendments.  The Committee may amend the terms of the Award Agreement at any time, except that any amendment that adversely affects the Participant’s rights in any material way requires the Participant’s written consent.  Notwithstanding anything in the Award Agreement to the contrary, including without limitation the preceding sentence, in the event that the Committee determines that the Participant’s Award, or the performance by the Corporation of 

27
 

any of its obligations under the Award Agreement, would violate any applicable law, the Participant’s Awards shall be forfeited to the Corporation and cancelled, and the Corporation shall have no obligation to honor the exercise of the Participant’s Stock Options by the Participant or the Participant’s Beneficiary and shall not distribute any such Stock Units to the Participant or the Participant’s Beneficiary, and the Corporation shall have no further obligations to the Participant or the Participant’s Beneficiary with respect to such Stock Options or such Stock Units, including but not limited to the obligation to pay or credit any Dividend Equivalents with respect to such Stock Units.  Notwithstanding anything in the Award Agreement to the contrary, the terms and conditions of the Participant’s Award may be amended by the Committee to comply with or reflect changes to applicable law, including regulations adopted by the SEC to implement the mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act with respect to the recoupment of erroneously awarded or paid compensation and NASDAQ listing standards adopted pursuant thereto.
		
	(e)
	Administration.  The Plan is administered by the Committee.  The rights of the Participant hereunder are expressly subject to the terms and conditions of the Plan (including continued stockholder approval of the Plan, as needed), together with such guidelines as have been or may be adopted from time to time by the Committee.  The Participant hereby acknowledges receipt of a copy of the Plan.

		
	(f)
	No Right to Employment.  Nothing in the Plan or the Award Agreement shall be construed as creating any right in the Participant to continued employment or as altering or amending the existing terms and conditions of employment of the Participant except as otherwise specifically provided in the Award Agreement.

		
	(g)
	Nontransferability.  No interest of the Participant under the Award Agreement is transferable except as provided therein.  In the case of a Stock Option Award, the Participant’s Stock Option (whether a non-qualified stock option or an incentive stock option) is exercisable, during the Participant’s lifetime, only by the Participant or the Participant’s personal representative. 

		
	(h)
	No Rights as Stockholder.  Except as provided herein, the Participant will have no rights as a stockholder with respect to any unvested Stock Units or Stock Options.

		
	(i)
	Interpretation and Applicable Law.  Any interpretation by the Committee of the terms and conditions of the Plan, the Award Agreement or any guidelines shall be final.  All questions pertaining to the validity, construction and administration of the Plan, the Award Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or the Award Agreement shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state. 

		
	(j)
	Sole Agreement.  The Award Agreement, together with the Plan, is the entire agreement between the parties to the Award Agreement.  No amendment or modification of the terms of the agreement shall be binding on either party unless reduced to writing and signed by the party to be bound.  The agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors. 

		
	(k)
	Securities Transactions Policy and Procedures.  Notwithstanding anything to the contrary in the Award Agreement, all Awards are subject to the Corporation’s Securities Transactions Policy and Procedures, including any black-out periods imposed thereunder.

28Exhibit

EXHIBIT 10.1

 

SCI 401(K) RETIREMENT
SAVINGS PLAN 

 

TABLE OF CONTENTS
Article 11
Definitions1
1.1ACP Safe Harbor Matching Contribution    1
1.2ACP Safe Harbor Matching Contribution Account    1
1.3ACP Test    1
1.4Actual Deferral Percentage    1
1.5Administrator    1
1.6Adopting Employer    1
1.7ADP Safe Harbor Contribution    2
1.8ADP Safe Harbor Matching Contribution    2
1.9ADP Safe Harbor Non-Elective Contribution    2
1.10ADP Test    2
1.11Affiliated Employer    2
1.12Allocation Period    2
1.13Annual Additions    2
1.14Annuity Starting Date    2
1.15Automatic Contribution Arrangement    2
1.16Back Pay    2
1.17Beneficiary    2
1.18Benefiting Participant    3
1.19Break in Eligibility Service    3
1.20Break in Vesting Service.    3
1.21Cash or Deferred Contribution    3
1.22Catch-Up Contribution    3
1.23Catch-Up Contribution Limit    3
1.24Code    4
1.25Code §3401 Compensation    4
1.26Code §414(s) Compensation    4
1.27Code §414(s) Safe Harbor Exclusions    4
1.28Code §415(c)(3) Compensation    4
1.29Code §415 Safe Harbor Compensation    5
1.30Code §415 Statutory Compensation    5
1.31Commissioned Employee    6
1.32Committee    6
1.33Compensation    6
1.34Compensation Determination Period    7
1.35Component of the Plan    7
1.36Contribution Percentage    7
1.37Contribution Percentage Amounts    7
1.38Counting of Hours Method    8
1.39Covered Employee    8
1.40Current Year Testing Method    8
1.41Deemed Code §125 Compensation    8
1.42Deemed Deferrals    8
1.43Default Elective Deferral    8
1.44Default Percentage    8
1.45Designated Beneficiary    8
1.46Designated Roth Account    8
1.47Determination Date    8
1.48Differential Wage Payments    8
1.49Disability    9
1.50Distributee    9
1.51Distribution Calendar Year    9
1.52EACA    9
1.53Early Retirement Age    9

i

 

1.54Earned Income    9
1.55Elapsed Time Method    9
1.56Elective Contributions    9
1.57Elective Deferral    10
1.58Eligible Automatic Contribution Arrangement    10
1.59Eligible Employee    10
1.60Eligible Retirement Plan    10
1.61Eligible Rollover Distribution    10
1.62Employee    11
1.63Employee Contribution    11
1.64Employer    11
1.65Employment Commencement Date    11
1.66ERISA    11
1.67Excess Aggregate Contributions    11
1.68Excess Contributions    12
1.69Excess Elective Deferrals    12
1.70401(k) Plan    12
1.71401(m) Plan    12
1.72403(b) Employee    12
1.73Foreign Compensation    12
1.74Forfeiture    12
1.75Forfeiture Account    12
1.76Form W-2 Compensation    12
1.77HCE    12
1.78Highly Compensated Employee    13
1.79Hour of Service    13
1.80Hourly Employees    13
1.81Immediately Distributable    13
1.82In-Plan Roth Rollover    14
1.83Key Employee    14
1.84Leased Employee    14
1.85Life Expectancy (or Life Expectancy Rule)    14
1.86Limitation Year    14
1.87Matching Contribution    14
1.88Matching Contribution Account    14
1.89Maternity or Paternity Leave    14
1.90Merger and Acquisition Employee    14
1.91Named Fiduciary    14
1.92Non-Elective Contribution    14
1.93Non-Highly Compensated Employee    15
1.94Non-Key Employee    15
1.95Non-Resident Alien    15
1.96Non-Safe Harbor 401(k) Plan    15
1.97Non-Safe Harbor 401(m) Plan    15
1.98Non-Safe Harbor Matching Contribution    15
1.99Non-Safe Harbor Matching Contribution Account    15
1.100Non-Safe Harbor Non-Elective Contribution    15
1.101Non-Safe Harbor Non-Elective Contribution Account    15
1.102Normal Form of Distribution    15
1.103Normal Retirement Age    15
1.104Optional Form of Distribution    15
1.105Otherwise Excludable Participant    15
1.106Participant    16
1.107Participant's Account    16
1.108Participant's Account Balance    16
1.109Part-Time Employee    16
1.110Period of Service and 1-Year Period of Service    16

ii

 

1.111Period of Severance    16
1.112Permissive Aggregation Group    17
1.113Plan    17
1.114Plan Year    17
1.115Policy    17
1.116Post-Severance Compensation    17
1.117Post-Year End Compensation    17
1.118Pre-Tax Elective Deferral    17
1.119Pre-Tax Elective Deferral Account    17
1.120Prior Year Testing Method    17
1.121Puerto Rico Based Employees    17
1.122QACA    18
1.123QACA Safe Harbor Contribution    18
1.124QACA ADP Safe Harbor Matching Contribution    18
1.125QACA ADP Safe Harbor Matching Contribution Account    18
1.126QACA ADP Safe Harbor Non-Elective Contribution    18
1.127QACA ADP Safe Harbor Non-Elective Contribution Account    18
1.128QACA Safe Harbor 401(k) Plan    18
1.129QJSA    18
1.130QJSA Requirements    18
1.131QMAC    18
1.132QNEC    18
1.133QPSA    18
1.134Qualified Automatic Contribution Arrangement    18
1.135Qualified Joint and Survivor Annuity    18
1.136Qualified Matching Contribution    18
1.137Qualified Matching Contribution Account    19
1.138Qualified Military Service    19
1.139Qualified Non-Elective Contribution    19
1.140Qualified Non-Elective Contribution Account    19
1.141Qualified Pre-Retirement Survivor Annuity    19
1.142Reemployment Commencement Date    19
1.143Regulation    19
1.144Required Aggregation Group    19
1.145Required Beginning Date    19
1.146Rollover Contribution    20
1.147Rollover Contribution Account    20
1.148Roth Elective Deferral    20
1.149Roth Elective Deferral Account    20
1.150Salaried Employee    20
1.151Self-Employed Individual    20
1.152Service    20
1.153Sponsoring Employer    20
1.154Spouse    20
1.155Temporary Employee    20
1.156Terminated (or Terminates) Employment    21
1.157Terminated Participant    21
1.158Termination of Employment    21
1.159Top Heavy    21
1.160Top Heavy Minimum Allocation    21
1.161Top Heavy Ratio    21
1.162Traditional ADP Safe Harbor Matching Contribution    22
1.163Traditional ADP Safe Harbor Matching Contribution Account    23
1.164Traditional ADP Safe Harbor Non-Elective Contribution    23
1.165Traditional ADP Safe Harbor Non-Elective Contribution Account    23
1.166Traditional ADP Safe Harbor Contribution    23
1.167Traditional Safe Harbor 401(k) Plan    23

iii

 

1.168Traditional Safe Harbor Notice    23
1.169Transfer Contribution    23
1.170Transfer Contribution Account    23
1.171True-Up Contribution    23
1.172Trustee    23
1.173Trust (or Trust Fund)    23
1.174Union Employee    23
1.175Valuation Date    24
1.176Vested Aggregate Account    24
1.177Vested, Vested Interest or Vesting    24
1.178Vesting Computation Period    24
1.179Voluntary Employee Contribution    24
1.180Voluntary Employee Contribution Account    24
1.181Year of Eligibility Service    24
1.182Year of Vesting Service    25
Article 226
Plan Participation26
2.1Eligibility and Entry Date Requirements    26
2.2Waiver of Participation    26
2.3Participation By Employees Whose Status Changes    27
2.4Reemployment After Termination of Employment.    27
Article 328
Contributions and Allocations28
3.1General Contribution and Allocation Provisions    28
3.2Elective Deferrals    29
3.3Non-Safe Harbor Matching Contributions    33
3.4Non-Safe Harbor Non-Elective Contributions    37
3.5ADP Safe Harbor Contributions    38
3.6ACP Safe Harbor Matching Contributions    38
3.7Qualified Matching Contributions    38
3.8Qualified Non-Elective Contributions    38
3.9Top Heavy Minimum Allocation    38
3.10Forfeitures and Their Application    40
3.11Allocation of Earnings and Losses    42
3.12Failsafe Allocation    42
3.13Rollover Contributions    42
3.14Voluntary Employee Contributions    42
Article 443
Plan Benefits43
4.1Benefit Upon Retirement    43
4.2Benefit Upon Death    43
4.3Benefit Upon Disability    43
4.4Benefit Upon Termination of Employment    43
4.5Determination of Vested Interest    43
Article 545
Distribution of Benefits45
5.1Distributions for Reasons Other Than Death    45
5.2Distributions Because of Death    45
5.3In-Service Distributions for Reasons Other Than Hardship    46
5.4Mandatory Cash-Out of Benefits    47
5.5Restrictions on Immediate Distributions    48
5.6Qualified Reservist Distributions    48
5.7Active Duty Severance Distributions    49
5.8Financial Hardship Distributions    49
5.9Distribution of Rollover Contributions    49
5.10Distribution of Voluntary Employee Contributions    49

iv

 

5.11Distribution of Transfer Contributions    49
5.12Direct Rollovers    50
5.13Restrictions on Distribution of Elective Deferrals and Other Contributions    50
5.14Missing Payees and Unclaimed Benefits    50
5.15Distribution in the Event of Legal Incapacity    50
5.16Earnings Before Benefit Distribution    51
5.17Participant/Spousal Waiver and Consent Requirements    51
5.18In-Plan Roth Rollovers    52
5.19Distribution of Property    53
5.20Statutory Commencement of Benefits    53
5.21Required Distributions    53
Article 656
Code §415 Limitations56
6.1Maximum Annual Additions    56
6.2Adjustments to Maximum Annual Addition    56
6.3Multiple Plans and Multiple Employers    56
6.4Adjustment for Excessive Annual Additions    56
Article 757
Loans, Insurance and Directed Investments57
7.1Loans to Participants    57
7.2Insurance on Participants    58
7.3Key Man Insurance    58
7.4Directed Investment Accounts    58
Article 859
Duties of the Administrator59
8.1Appointment, Resignation, Removal and Succession    59
8.2General Powers and Duties    59
8.3Functioning of the Committee    59
8.4Multiple Administrators    59
8.5Correcting Administrative Errors    59
8.6Promulgating Notices, Policies and Procedures    59
8.7Employment of Agents and Counsel    60
8.8Compensation and Expenses    60
8.9Qualified Domestic Relations Orders    60
8.10Appointment of Investment Manager    60
8.11Claims Procedures    60
8.12ERISA Accounts    64
Article 965
Trustee Provisions65
9.1Adoption of Trust Provisions    65
9.2Appointment, Resignation, Removal and Succession of Trustee    65
9.3Investment Alternatives    65
9.4Valuation of the Trust    67
9.5Compensation and Expenses    67
9.6Payments From the Trust    67
9.7Payment of Taxes    67
9.8Accounts, Records and Reports    67
9.9Direction by Others    67
9.10Employment of Agents and Counsel    68
9.11No Guarantee Against Loss    68
9.12Indemnification    68
9.13Application of Payments    68
9.14Multiple Trustees    68
9.15Trustee as Participant or Beneficiary    68
9.16No Self-Dealing    68
9.17Investment Manager    68

v

 

9.18Exclusive Benefit Rule    68
Article 1069
Adopting Employer Provisions69
10.1Adoption by Other Employers    69
10.2Adoption of Alternate Provisions by Adopting Employer    69
10.3Plan Contributions    69
10.4Plan Amendments    69
10.5Plan Expenses    69
10.6Employee Transfers    69
10.7Multiple Employer Provisions Under Code §413(c)    69
10.8Termination of Adoption    69
Article 1171
Amendment, Termination, Merger and Transfers71
11.1Plan Amendment    71
11.2Termination of the Plan.    72
11.3Merger or Consolidation    73
11.4Plan-to-Plan Elective Transfers    73
Article 1274
Miscellaneous Provisions74
12.1Qualified Plan Status    74
12.2No Contract of Employment    74
12.3No Title to Assets    74
12.4Assignment and Alienation    74
12.5Exclusive Benefit Rule    74
12.6Military Service Credit    74
12.7HEART Death Provisions    74
12.8HEART Disability Provisions    74
12.9Severability of Provisions    74
12.10Fiduciaries and Bonding    74
12.11Rules of Plan Construction    75
12.12Reimbursement of Costs of Legal Action    75
12.13No Duplication of Benefits    75
12.14Evidence Furnished Conclusive    75
12.15Release of Claims    75
12.16Discontinued Contributions    75
12.17Multiple Copies of Plan And/or Trust    76
12.18Dual and Multiple Trusts    76
12.19Written Elections and Forms    76
12.20Prior Provisions of Amended and Restated Plans    76
12.21Limitation of Liability and Indemnification    76
12.22Disaster Relief Policy    76
12.23Loss of Volume Submitter Status    76

vi

SCI 401(K) RETIREMENT SAVINGS PLAN

The SCI 401(k) Retirement Savings Plan (hereafter referred to as the “Plan”) is hereby adopted by Service Corporation International (hereafter referred to as the “Sponsoring Employer”) as of the date set forth on the Execution Page.

Introduction

The Sponsoring Employer previously established a profit sharing plan with a cash or deferred arrangement under Code §401(k), effective July 1, 2000, which the Sponsoring Employer wishes to amend and restate. Therefore, effective January 1, 2016 (except for those specific provisions that have an earlier or later effective date), the Sponsoring Employer hereby amends and restates the Plan. This amended and restated Plan is intended to comply with the requirements of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986, as amended by subsequent legislation, including the Pension Protection Act of 2006, the Heroes Earnings Assistance and Tax Relief Act of 2008 (HEART), and the Worker, Retiree and Employer Recovery Act of 2008 (WRERA), and to comply with all applicable rulings and Regulations thereunder.  The Plan Number is #002.

Article 1

Definitions

		
	1.1
	ACP Safe Harbor Matching Contribution. The term ACP Safe Harbor Matching Contribution means a Matching Contribution made to this Plan, or to any other defined contribution plan sponsored by the Employer, that falls within the safe harbor requirements of Code §401(m)(11) or Code §401(m)(12) and is intended to automatically satisfy the ACP Test for a Plan Year. 

		
	1.2
	ACP Safe Harbor Matching Contribution Account. The term ACP Safe Harbor Matching Contribution Account means the account to which a Participant's ACP Safe Harbor Matching Contributions are credited.

		
	1.3
	ACP Test. The term ACP Test means the Actual Contribution Percentage test set forth in Code §401(m)(2) that is performed each Plan Year on a Non-Safe Harbor 401(m) Plan.

		
	1.4
	Actual Deferral Percentage. The term Actual Deferral Percentage means, for a specified group of Participants (either HCEs or NHCEs) for a Plan Year, the average of the ratios (calculated separately for each Participant in such group) of the amount of Employer contributions actually paid to the Trust on behalf of such Participant for the Plan Year to the Participant's Code §414(s) Compensation for such Plan Year. Employer contributions on behalf of any Participant will include (a) any Elective Deferrals (other than Catch-up Contributions) made pursuant to the Participant's deferral election (including Excess Elective Deferrals of HCEs), but excluding Excess Elective Deferrals of NHCEs that arise solely from Elective Deferrals made under the Plan or plans of the Employer and Elective Deferrals that are taken into account in the Actual Contribution Percentage Test (provided the ADP Test is satisfied both with and without exclusion of these Elective Deferrals); and (b) if elected by the Employer, QNECs and QMACs. In computing Actual Deferral Percentages, an Employee who would be a Participant but for the failure to make Elective Deferrals will be treated as a Participant on whose behalf no Elective Deferrals are made.

		
	1.5
	Administrator. The term Administrator means the Sponsoring Employer unless the Sponsoring Employer appoints another Administrator under Section 8.1. The term Administrator also means a Qualified Termination Administrator ("QTA") charged with the task of holding the assets of an orphan plan as permitted by the Department of Labor. A QTA will be an eligible custodian such as a bank, mutual fund house, or insurance company. Third party record-keepers cannot be QTAs. 

		
	1.6
	Adopting Employer. The term Adopting Employer means any employer that adopts the Plan in writing with the consent of the Sponsoring Employer in accordance with Article 10 of the Plan. An Affiliated Employer is not considered an Adopting Employer unless such Affiliated Employer has executed a written agreement signifying its adoption of the Plan.

		
	1.7
	ADP Safe Harbor Contribution. The term ADP Safe Harbor Contribution means a Traditional ADP Safe Harbor Matching Contribution, a Traditional ADP Safe Harbor Non-Elective Contribution, a QACA ADP Safe Harbor Matching Contribution, or a QACA ADP Safe Harbor Non-Elective Contribution.

1

		
	1.8
	ADP Safe Harbor Matching Contribution. The term ADP Safe Harbor Matching Contribution means a Traditional ADP Safe Harbor Matching Contribution or a QACA ADP Safe Harbor Matching Contribution.

		
	1.9
	ADP Safe Harbor Non-Elective Contribution. The term ADP Safe Harbor Non-Elective Contribution means a Traditional ADP Safe Harbor Non-Elective Contribution or a QACA ADP Safe Harbor Non-Elective Contribution.

		
	1.10
	ADP Test. The term ADP Test means the average deferral percentage test set forth in Code §401(k)(3) that is performed each Plan Year on a Non-Safe Harbor 401(k) Plan.

		
	1.11
	Affiliated Employer. The term Affiliated Employer means (a) a controlled group of corporations as defined in Code §414(b); (b) a trade or business (whether or not incorporated) under common control as described in Code §414(c); (c) any organization (whether or not incorporated) which is a member of an affiliated service group as described in Code §414(m); or (d) any entity required to be aggregated as described in Code §414(o). Any such entity will be considered an Affiliated Employer regardless of whether such entity adopts the Plan.

		
	1.12
	Allocation Period. The term Allocation Period means a period of 12 consecutive months or less for which (a) an Employer contribution is made and allocated; (b) Forfeitures are allocated; and/or (c) earnings and losses are allocated. Unless the Employer elects otherwise, Compensation considered for purposes of contributions and allocations will be limited to Compensation paid within the Allocation Period. The Allocation Period for each contribution made under the Plan shall be as set forth in the Section of the Plan which sets forth the terms and conditions of the contribution to which the Allocation Period relates.

		
	1.13
	Annual Additions. The term Annual Additions means the sum of the following amounts credited to a Participant's Account for any Limitation Year: (a) Employer contributions; (b) Employee Contributions; (c) Forfeitures; (d) amounts allocated to an individual medical account, as defined in Code §415(l)(2), which is part of a pension or annuity plan maintained by the Employer; (e) amounts derived from contributions paid or accrued that are attributable to post-retirement medical benefits, allocated to the separate account of a Key Employee, as defined in Code §419A(d)(3), under a welfare fund, as defined in Code §419(e), maintained by the Employer; and (f) allocations under a simplified employee plan. Annual Additions do not include Rollovers, loan repayments, Catch-up Contributions, repayments of either prior Plan distributions or prior distributions of mandatory Employee Contributions, direct transfers of contributions from another plan, deductible contributions to a simplified employee pension plan, voluntary deductible contributions, and any Annual Additions in excess of the limitation on Annual Additions set forth in (2) of the Plan.

		
	1.14
	Annuity Starting Date. The term Annuity Starting Date means the first day of the first period for which a benefit is paid as an annuity, in the case of a benefit not payable as an annuity, the first day all events have occurred which entitle the Participant to the benefit. The first day of the first period for which a benefit is to be paid by reason of Disability will be treated as the Annuity Starting Date only if it is not an auxiliary benefit.

		
	1.15
	Automatic Contribution Arrangement. The term Automatic Contribution Arrangement means an arrangement under which, in the absence of an affirmative election by a Covered Employee, a certain percentage will be withheld from a Covered Employee's Compensation and will be contributed to the Plan as an Elective Deferral.

		
	1.16
	Back Pay. The term Back Pay means payments awarded by an administrative agency or court or pursuant to a bona fide agreement by an Employer to compensate an Employee for lost wages.

		
	1.17
	Beneficiary. The term Beneficiary means the recipient designated by a Participant to receive the benefit payable upon the Participant's death, or the recipient designated by a Beneficiary to receive any benefit which may be payable in the event of the Beneficiary's death prior to receiving the entire death benefit to which the Beneficiary is entitled. All such Beneficiary designations will be made in accordance with the following:

		
	(a)
	Beneficiary Designations by a Participant. Subject to the provisions of Section 5.17 regarding the rights of a Participant's Spouse, each Participant may designate a Beneficiary in writing with the Administrator. If a Participant designates his or her Spouse as Beneficiary and the Participant and Spouse are legally divorced subsequent to the date of the designation, the designation of such Spouse as a Beneficiary will be deemed null and void unless the Participant, subsequent to the legal divorce, reaffirms the designation in writing. In the absence of any other designation, the Participant will be deemed to have designated the following 

2

Beneficiaries in the following order: (1) the Participant's Spouse (if then living); (2) the Participant's issue, per stirpes; and (3) the Participant's estate. No Beneficiary will have any rights granted to Beneficiaries under the terms of the Plan until the death of the Participant (or Beneficiary).

		
	(b)
	Beneficiary Designations by a Beneficiary. In the absence of a Beneficiary designation or other directive from a Participant to the contrary, any Beneficiary may name his or her own Beneficiary under Section 5.2(d) of the Plan to receive any benefits payable in the event of the Beneficiary's death prior to the receipt of all the Participant's death benefits to which the Beneficiary was entitled.

		
	1.18
	Benefiting Participant. The term Benefiting Participant means a Participant who is eligible to receive an allocation of any type of Employer contributions or related Forfeitures as of the last day of an Allocation Period in accordance with the allocation conditions set forth in Article 3. Whether a Participant is a Benefiting Participant for any Allocation Period is determined separately for each type of contribution. 

		
	1.19
	Break in Eligibility Service. The term Break in Eligibility Service means a 1-Year Period of Severance. With respect to the Elective Deferral component of a 401(k) Plan, a Participant who incurs a Break in Eligibility Service but who does not Terminate Employment may,  continue to have Elective Deferrals made on his or her behalf to the Plan. However, such Participant will not be eligible to receive an allocation of any Non-Safe Harbor Matching Contributions or Non-Safe Harbor Non-Elective Contributions unless such Participant is also a Benefiting Participant for the applicable Allocation Period. 

		
	1.19
	Break in Vesting Service. The term Break in Vesting Service means a Vesting Computation Period during which an Employee is not credited with more than 500 Hours of Service. If a Vesting Computation Period is less than 12 consecutive months, then the Hours of Service threshold set forth in the preceding sentence will be proportionately reduced if the Hours of Service threshold is greater than one.  

		
	1.21
	Cash or Deferred Contribution. The term Cash or Deferred Contribution means an Employer amount that the Participant can elect to have the Employer either (a) provide to the Participant as cash; or (b) contribute to the Plan as an Elective Deferral, which contribution defers the receipt of Compensation by the Participant.

		
	1.22 
	Catch-Up Contribution. The term Catch-Up Contribution means Elective Deferrals made to the Plan that are in excess of an otherwise applicable Plan limit and that are made by Participants who are age 50 or over by the end of their taxable year. An otherwise applicable Plan limit is a limit that applies to Elective Deferrals without regard to Catch-Up Contributions, such as (a) the limit on Annual Additions; (b) the dollar limit on Elective Deferrals under Code §402(g) (not counting Catch-Up Contributions); (c) the limit imposed on Elective Deferrals by the ADP Test; or (d) a Plan imposed limit set forth in a resolution properly executed by the Employer which is considered to be an amendment to the Plan. Catch-Up Contributions are not subject to the limit on Annual Additions, are not counted in the ADP Test, and are not counted in determining the Top Heavy Minimum Allocations under Section 3.9. Catch-Up Contributions made in prior years are counted in determining if this is a Top Heavy Plan. The total amount of Catch-Up Contributions for any taxable year will not exceed the Catch-Up Contribution Limit. The Employer may, in accordance with an administrative policy regarding Elective Deferrals, set forth additional restrictions or conditions with respect to Catch-Up Contributions.

		
	1.23 
	Catch-Up Contribution Limit. The term Catch-Up Contribution Limit means the statutory limit on Catch-Up Contributions that applies to a Participant who is eligible to make Catch-Up Contributions in a taxable year. A Participant's Catch-Up Contributions for a taxable year may not exceed (a) the dollar limit on Catch-Up Contributions under Code §414(v)(2)(B)(i) for the taxable year, or (b) when added to other Elective Deferrals, 100% of the Participant's Compensation for the taxable year. The dollar limit on Catch-Up Contributions under Code §414(v)(2)(B)(i) was $5,000 for taxable years beginning in 2006. After 2006, the $5,000 limit will be adjusted by the Secretary of the Treasury for cost-of-living increases under Code §414(v)(2)(C). Any such adjustments will be in multiples of $500.

		
	1.24
	Code. The term Code means the Internal Revenue Code of 1986, as amended from time to time. All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered.

3

		
	1.25
	Code §3401 Compensation. The term Code §3401 Compensation means wages within the meaning of Code §3401(a) (for purposes of income tax withholding at the source), but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code §3401(a)(2)).

		
	1.26
	Code §414(s) Compensation. The term Code §414(s) Compensation means, for testing purposes (including, but not limited to, the ADP Test and the ACP Test), any compensation that qualifies as a nondiscriminatory definition of compensation under Code §414(s) and the Regulations promulgated thereunder. The Administrator is not bound by any other definition of compensation in the Plan in determining Code §414(s) Compensation. The Administrator may determine on an annual basis (and within its discretion) Code §414(s) Compensation, which will be applied consistently to all Participants for a Plan Year; to all applicable tests that are administered for such Plan Year; and to all plans (including this Plan) of the Sponsoring Employer and Adopting Employers for such Plan Year. Code §414(s) Compensation may be determined over the Plan Year for which the applicable test is being performed or the calendar year ending within such Plan Year. In determining Code §414(s) Compensation, the Administrator within its discretion may take into consideration only the Compensation received while the Employee is a Participant under the Component of the Plan being tested, and/or only the Compensation for the portion of the Plan Year during which the Plan was a 401(k) Plan. 

		
	1.27
	Code §414(s) Safe Harbor Exclusions. The term Code §414(s) Safe Harbor Exclusions means all of the benefits set forth in Regulation §1.414(s)-1(c)(3), including reimbursements or other expense allowances, cash and noncash fringe benefits, moving expenses, deferred compensation, and welfare benefits, even if some or all of such amounts are includible in an Employee’s gross income for a Compensation Determination Period. 

		
	1.28
	Code §415(c)(3) Compensation. The term Code §415(c)(3) Compensation means the following:

		
	(a)
	General Rule. Notwithstanding paragraphs (b), (c) and (d) below, Code §415(c)(3) Compensation will always include Elective Contributions, Post-Severance Compensation and Differential Wage Payments. Back pay, within the meaning of Regulation §1.415(c)-2(g)(8)), will also be treated as Code §415(c)(3) Compensation for the Limitation Year to which the back pay relates to the extent it represents wages and compensation that would otherwise be included under this definition.

		
	(b)
	Top Heavy Minimum Allocations and Key Employee Determinations. In determining the amount of any Top Heavy Minimum Allocation and whether an Employee is a Key Employee, the term Code §415(c)(3) Compensation means the Code §415 Safe Harbor Compensation that is paid or made available to the Participant during the Limitation Year. 

		
	(c)
	Code §415 Limitation Determinations. In determining a Participant's Code §415 limitation for any Limitation Year, the term Code §415(c)(3) Compensation means the Code §415 Safe Harbor Compensation that is paid or made available to the Participant during the Limitation Year. 

		
	(d)
	HCE and Other Statutory Determinations. In determining whether a Participant is a Highly Compensated Employee, and in determining any other statutory determination not otherwise described herein, the term Code §415(c)(3) Compensation means the Code §415 Safe Harbor Compensation that is paid or made available to the Participant during the Limitation Year. 

		
	(e)
	Self-Employed Individuals. In the case of an Employee who is a Self-Employed Individual, the term Code §415(c)(3) Compensation means his or her Earned Income, plus amounts deferred at his or her election that would be includible in gross income but for Code §§402(e)(3), 402(h)(1)(B), §402(k), or 457(b).

		
	1.29
	Code §415 Safe Harbor Compensation. The term Code §415 Safe Harbor Compensation means an Employee's compensation as determined in accordance with Regulation §1.415(c)-2(d)(2) and with the following:

		
	(a)
	Amounts Included. Code §415 Safe Harbor Compensation includes wages, salaries, Differential Wage Payments, fees for professional services, and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan, to the extent that the amounts are includible in gross income (or to the extent amounts 

4

would have been received and includible otherwise but for an election under Code §§125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b)). These amounts include, but are not limited to commissions paid to salespersons, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a non-accountable plan as described in Regulation §1.62-2(c).

		
	(b)
	Amounts Excluded. Code §415 Safe Harbor Compensation does not include (1) Employer contributions (other than elective contributions described in Code §§402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or 457(b)) to a plan of deferred compensation (including a simplified employee pension described in Code §408(k) or a simple retirement account described in Code §408(p), and whether or not qualified) to the extent such contributions are not includible in the Employee's gross income for the taxable year in which contributed, and any distributions (whether or not includible in gross income when distributed) from a plan of deferred compensation (whether or not qualified); (2) amounts realized from the exercise of a non-statutory stock option (that is, an option other than a statutory stock option as defined in Regulation §1.421-1(b)), or when restricted stock (or property) held by the Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture; (3) amounts realized from the sale, exchange or other disposition of stock acquired under a statutory stock option; (4) other amounts that receive special tax benefits, such as premiums for group-term life insurance (but only to the extent that the premiums are not includible in the gross income of the Employee and are not salary reduction amounts that are described in Code §125); and (5) other items of remuneration that are similar to any of the items listed in clauses (1) through (4) above.

		
	(c)
	Self-Employed Individuals. In the case of a Self-Employed Individual, the term Code §415 Safe Harbor Compensation means his or her Earned Income, plus amounts deferred at his or her election that would be includible in gross income but for the rules of Code §§402(e)(3), 402(h)(1)(B), §402(k), or 457(b).

		
	1.30
	Code §415 Statutory Compensation. The term Code §415 Statutory Compensation means an Employee's compensation as determined in accordance with Regulation §1.415(c)-2(b) and (c) and with the following:

		
	(a)
	Amounts Included. Code §415 Statutory Compensation includes (1) wages, salaries, Differential Wage Payments, fees for professional services, and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan, to the extent the amounts are includible in gross income (including, but not limited to, commissions paid to salespersons, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a non-accountable plan as described in Regulation §1.62-2(c)); 

 
(2) amounts described in Code §§104(a)(3), 105(a) or 105(h), but only to the extent includible in the gross income of the Employee; (3) amounts paid or reimbursed by the Employer for moving expenses incurred by an Employee, but only to the extent that at the time of the payment it is reasonable to believe these amounts are not deductible by the Employee under Code §217; (4) the value of a non-statutory option (which is an option other than a statutory option as defined in Regulation §1.421-1(b)) granted to an Employee by the Employer, but only to the extent that the value of the option is includible in the gross income of the Employee for the taxable year in which granted; (5) the amount includible in the gross income of an Employee upon making the election described in Code §83(b); and (6) amounts that are includible in the gross income of an Employee under the rules of Code §§409A or 457(f)(1)(A) or because the amounts are constructively received by the Employee. 

		
	(b)
	Amounts Excluded. Code §415 Statutory Compensation does not include (1) Employer contributions (other than elective contributions described in Code §§402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or 457(b)) to a plan of deferred compensation (including a simplified employee pension described in Code §408(k) or a simple retirement account described in Code §408(p), and whether or not qualified) to the extent such contributions are not includible in the Employee's gross income for the taxable year in which contributed, and any distributions (whether or not includible in gross income when distributed) from a plan of deferred compensation (whether or not qualified); (2) amounts realized from the exercise of a non-statutory stock option (that is, an option other than a statutory stock option as defined in Regulation §1.421-1(b)), or when restricted stock (or property) held by the Employee either becomes freely transferable or is no longer subject 

5

to a substantial risk of forfeiture; (3) amounts realized from the sale, exchange or other disposition of stock acquired under a statutory stock option; (4) other amounts that receive special tax benefits, such as premiums for group-term life insurance (but only to the extent that the premiums are not includible in the gross income of the Employee and are not salary reduction amounts that are described in Code §125); and (5) other items of remuneration that are similar to any of the items listed in clauses (1) through (4) above. 

		
	(c)
	Self-Employed Individuals. In the case of a Self-Employed Individual, the term Code §415 Statutory Compensation means his or her Earned Income, plus amounts deferred at his or her election that would be includible in gross income but for the rules of Code §§402(e)(3), 402(h)(1)(B), §402(k), or 457(b).

		
	1.31
	Commissioned Employee. The term Commissioned Employee means an Employee paid primarily in commissions.

		
	1.32
	Committee. The term Committee means the administrative/advisory group that the Sponsoring Employer may establish and to which the Sponsoring Employer may delegate certain responsibilities as Administrator. The Sponsoring Employer may elect to assign another name for such administrative/advisory group. The Sponsoring Employer may appoint one or more members to the Committee. Members of the Committee need not be Participants or Beneficiaries, and officers and directors of the Sponsoring Employer are not precluded from serving as members of the Committee.

		
	1.33
	Compensation. The term Compensation means the remuneration used to determine the amount and allocation of Employer and Employee contributions (other than Top Heavy Minimum Allocations), subject to the following:

		
	(a)
	General Rule. Any definition of Compensation under this Section will include the following amounts unless specifically excluded with respect to a particular Component of the Plan: (1) Elective Contributions; (2) Post-Severance Compensation; (3) Differential Wage Payments; (4) Deemed Code §125 Compensation; and (5) Back Pay.

		
	(b)
	Compensation Used for Elective Deferral Purposes. In determining Elective Deferrals, the term Compensation means the Code §415 Safe Harbor Compensation paid or made available to the Participant during the Plan Year, including Elective Contributions, and excluding (1) Code §414(s) Safe Harbor Exclusions; (2) amounts received prior to the date the Employee becomes a Participant in the Elective Deferral Component of the Plan; (3) Differential Wage Payments; and (4) short-term disability payments paid by a third party administrator.

		
	(c)
	Compensation Used for Non-Safe Harbor Matching Contribution Purposes. In determining Non-Safe Harbor Matching Contributions, the term Compensation means the Code §415 Safe Harbor Compensation paid or made available to the Participant during the Plan Year, including Elective Contributions, and excluding (1) Code §414(s) Safe Harbor Exclusions; (2) amounts received prior to the date the Employee becomes a Participant in the Non-Safe Harbor Matching Contribution Component of the Plan; (3) Differential Wage Payments; and (4) short-term disability payments paid by a third party administrator.

		
	(d)
	Compensation Used for Non-Safe Harbor Non-Elective Contribution Purposes. In determining Non-Safe Harbor Non-Elective Contributions, the term Compensation means the Code §415 Safe Harbor Compensation paid or made available to the Participant during the Plan Year, including Elective Contributions, and excluding (1) Code §414(s) Safe Harbor Exclusions; (2) amounts received prior to the date the Employee becomes a Participant in the Non-Safe Harbor Non-Elective Contribution Component of the Plan; (3) Differential Wage Payments; and (4) short-term disability payments paid by a third party administrator.

		
	(e)
	Prorating Compensation and the Code §401(a)(17) Compensation Limit for Each Allocation Period. If an Allocation Period is shorter than the Plan Year, then the Employer may elect, pursuant to the Employer's discretion, to prorate each Participant's Compensation (and if applicable, the Code §401(a)(17) compensation limit) for the Allocation Period. However, any such proration of Compensation or the Code §401(a)(17) compensation limit can only be made on a uniform, nondiscriminatory basis. 

		
	(f)
	Self-Employed Individuals. In the case of an Employee who is a Self-Employed Individual, Compensation means the Earned Income of the Self-Employed Individual.

6

		
	(g)
	Annual Compensation Limit. In determining Compensation for all purposes other than Elective Deferral purposes under Code §402(g), a Participant's Compensation for any Compensation Determination Period will not exceed $200,000, as adjusted for cost-of-living increases under Code §401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to annual Compensation for the Compensation Determination Period that begins with or within such calendar year. If Compensation for any prior Compensation Determination Period is used to determine Plan allocations for the current Plan Year, then the annual Compensation for such prior Compensation Determination Period is subject to the annual Compensation limit in effect for that prior Compensation Determination Period. If a Compensation Determination Period is less than 12 consecutive months, the annual Compensation limit will be prorated by multiplying it by a fraction, the numerator of which is the number of months in the Compensation Determination Period, and the denominator of which is 12. If an Allocation Period is less than the Compensation Determination Period, the Employer may elect to prorate a Participant's Compensation for the Allocation Period by multiplying the annual Compensation limit by a fraction, the numerator of which is the number of days, weeks or months in the Allocation Period, and the denominator of which is the number of days, weeks or months in the Compensation Determination Period.

		
	1.34
	Compensation Determination Period. The term Compensation Determination Period means, for each definition of Compensation with respect to a particular Component of the Plan, either the Plan Year, the Fiscal Year ending with or within the Plan Year, or the calendar year ending with or within the Plan Year, as specifically set forth in the Plan with respect to the particular Component of the Plan. However, for purposes of a specific statutory determination (e.g. whether an Employee is a HCE), the term Compensation Determination Period means the computation period stated in the Plan or otherwise defined by statute.

		
	1.35
	Component of the Plan. The term Component of the Plan means a specific type of contribution permitted under the terms of the Plan.

		
	1.36
	Contribution Percentage. The term Contribution Percentage means the ratio (expressed as a percentage) of the Participant's Contribution Percentage Amounts to the Participant's Compensation for the Plan Year, calculated in accordance with the requirements of Code §401(m)(3).

		
	1.37
	Contribution Percentage Amounts. The term Contribution Percentage Amounts means the sum of the Elective Deferrals, Employee Contributions, Non-Safe Harbor Matching Contributions, QMACs, and QNECs made under the Plan on behalf of a Participant for the Plan Year, subject to the following: (a) Non-Safe Harbor Matching Contributions that are forfeited either to correct Excess Aggregate Contributions or because the contributions to which they relate are Excess Elective Deferrals, Excess Contributions or Excess Aggregate Contributions will not be included; (b) QMACs and QNECs that are used in determining the ADP Test will not be included; and (c) Elective Deferrals will only be included so long as the ADP Test is met before their inclusion and continues to be met following the exclusion of the Elective Deferrals that are used to meet the ACP Test.

		
	1.38
	Counting of Hours Method. The term Counting of Hours Method means a method for crediting service for eligibility, for Vesting, for determining a Participant's allocation, and/or for applying the allocation conditions for an Employer contribution or Forfeiture. Under the Counting of Hours Method, an Employee is credited with the number of Hours of Service for which the Employee is paid or entitled to payment (or such other circumstances for which Hours of Service are credited), pursuant to the definition of Hour of Service. 

		
	1.39
	Covered Employee. The term Covered Employee means a Participant who is identified as being covered under an Automatic Contribution Arrangement, an Eligible Automatic Contribution Arrangement, or the Elective Deferral portion of a Qualified Automatic Contribution Arrangement.

		
	1.40
	Current Year Testing Method. The term Current Year Testing Method means the nondiscrimination testing method in which (a) for purposes of the ADP Test, the ADP for Participants who are HCEs for the current Plan Year is compared to the ADP for Participants who are NHCEs for the current Plan Year; and (b) for purposes of the ACP Test, the ACP for Participants who are HCEs for the current Plan Year is compared to the ACP for Participants who are NHCEs for the current Plan Year.

7

		
	1.41
	Deemed Code §125 Compensation. The term Deemed Code §125 Compensation means an amount that is excludable from the gross income of the Employee under Code §106 and that is not available to the Employee in cash in lieu of group health coverage under a Code §125 arrangement solely because that Employee is not able to certify that he or she has other health coverage. Amounts are Deemed Code §125 Compensation only if the Employer does not otherwise request or collect information regarding the Employee's other health coverage as part of the enrollment process for the health plan.

		
	1.42
	Deemed Deferrals. The term Deemed Deferrals means the Elective Deferrals a Participant is deemed to have made during his or her period of Qualified Military Service. Deemed Deferrals will be equal to the lesser of (a) the average actual Elective Deferrals the Participant made during the 12-month period immediately preceding the Participant's period of Qualified Military Service; or (b) if the Participant had less than 12 months of service with the Employer before commencing his or her period of Qualified Military Service, the average Elective Deferrals the Participant made during the actual length of his or her continuous service with the Employer.

		
	1.43
	Default Elective Deferral. The term Default Elective Deferral means an Elective Deferral contributed under an ACA, EACA or QACA on behalf of Covered Employees who do not have an Affirmative Election in effect regarding Elective Deferrals.

		
	1.44
	Default Percentage. The term Default Percentage means an arrangement under which, in the absence of an Affirmative Election by a Covered Employee, a specified Default Percentage of the Covered Employee's Compensation will be withheld and will be contributed to the Plan as an Elective Deferral.

		
	1.45
	Designated Beneficiary. The term Designated Beneficiary means the individual designated by the Participant (or surviving Spouse) under Code §401(a)(9) and Regulation §1.401(a)(9) as the beneficiary of the Participant’s interest in the Plan.

		
	1.46
	Designated Roth Account. The term Designated Roth Account means a separate account to which an Employer allocates an Employee’s designated Roth contributions and their gains and losses. The Employer must separately account for all contributions, gains and losses to this Designated Roth Account until this account balance is completely distributed.

		
	1.47
	Determination Date. The term Determination Date means, for any Plan Year subsequent to the first Plan Year of the Plan, the last day of the preceding Plan Year. For the first Plan Year of the Plan, the term Determination Date means the last day of the first Plan Year of the Plan.

		
	1.48
	Differential Wage Payments. The term Differential Wage Payments means any payment as defined in Code §3401(h) which is made by the Employer for a remuneration period after December 31, 2008 which (a) is made to an individual with respect to any period during which an individual is performing service in the uniformed services (as defined in chapter 43 of title 38, United States Code) while on active duty for a period of more than 30 days; and (b) represents all or a portion of the remuneration such individual would have received from the Employer if he or she was performing services for the Employer.

		
	1.49
	Disability. The term Disability means a physical or mental impairment arising after an Employee has become a Participant (a) which, in the opinion of a physician acceptable to the Administrator, totally and permanently prevents the Participant from engaging in any occupation for pay or profit; (b) which, in the opinion of a physician acceptable to the Administrator, totally and permanently prevents the Participant from performing his or her customary and usual duties for the Employer; or (c) which qualifies the Participant for disability benefits under the Social Security Act in effect on the date that the Participant suffers the mental or physical impairment. 

		
	1.50
	Distributee. The term Distributee means, for direct rollover purposes, an Employee or former Employee. The Employee's or former Employee's surviving Spouse and the Employee’s or former Employee's Spouse or former Spouse who is the alternate payee under a Qualified Domestic Relations Order, as defined in Code §414(p), are Distributees with regard to the interest of the Spouse or former Spouse. For distributions after December 31, 2006, a Distributee includes the Employee's or former Employee's non-Spouse designated beneficiary.

8

		
	1.51
	Distribution Calendar Year. The term Distribution Calendar Year means a calendar year for which a minimum distribution is required. For distributions beginning before the date of the Participant's death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year that contains the Participant's Required Beginning Date. If a Participant elects the Life Expectancy Rule, then for distributions beginning after the Participant's death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin under Section 5.21(b)(2)(B). The required minimum distribution for the Participant's first Distribution Calendar Year will be made on or before the Participant's Required Beginning Date. The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Participant's Required Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar Year.

		
	1.52
	EACA. The term EACA means an Eligible Automatic Contribution Arrangement. 

		
	1.53
	Early Retirement Age. There is no Early Retirement Age, except that an Early Retirement Age shall be recognized for account balances transferred as of January 1, 2015 from the Stewart Enterprises, Inc. Employees’ Retirement Trust (“SEI Plan”) to this Plan as follows: the Early Retirement Age is the later of Age 60 or the date the former Participant of the SEI Plan completes three Years of Vesting Service. Such Participant shall become 100% Vested in his or her transferred Account balances; provided, however, with respect to a Participant who has attained Early Retirement Age and who is 100% Vested in his transferred Account balances as of January 1, 2015, such Participant shall be 100% Vested in any future Non-Safe Harbor Matching Contributions and Non-Safe Harbor Non-Elective Contribution Accounts under the Plan.

		
	1.54
	Earned Income. The term Earned Income means the net earnings from self-employment in the trade or business with respect to which the Plan is established, and for which 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 thereto. Net earnings will be reduced by Employer contributions to a qualified plan to the extent they are deductible under Code §404. Net earnings will be determined with regard to the deduction allowed to the taxpayer by Code §164(f) for taxable years beginning after December 31, 1989.

		
	1.55
	Elapsed Time Method. The term Elapsed Time Method means a method for crediting service for eligibility, for Vesting, for determining a Participant's allocation, and/or for applying the allocation conditions for an Employer contribution or Forfeiture, pursuant to the definition of Period of Service.

		
	1.56
	Elective Contributions. The term Elective Contributions means amounts that would otherwise be included in an Employee's compensation but for an election by the Employee under Code §125(a), Code §132(f)(4), Code §402(e)(3), Code §402(h)(1)(B), Code §402(k) or Code §457(b).

		
	1.57
	Elective Deferral. The term Elective Deferral means Employer contributions made to the Plan at the election of the Participant in lieu of cash Compensation, and will include contributions made pursuant to a Salary Deferral Agreement or other deferral mechanism. In any taxable year, a Participant's Elective Deferral is the sum of all Employer contributions made on behalf of such Participant pursuant to an election to defer under (a) any qualified cash or deferred arrangement under Code §401(k); (b) any salary reduction simplified employee pension described in Code §408(k)(6); (c) any SIMPLE IRA Plan described in Code §408(p); (d) any plan under Code §501(c)(18); and (e) any Employer contributions made on the behalf of a Participant for the purchase of an annuity contract under Code §403(b) pursuant to a Salary Deferral Agreement. The term Elective Deferral includes Pre-Tax Elective Deferrals and Roth Elective Deferrals. An Elective Deferral must relate to Compensation that either would have been received by the Employee in the Plan Year but for the Employee's election to defer, or if elected by the Sponsoring Employer for purposes of the ADP Test, is attributable to services performed by the Employee in the Plan Year and, but for the Employee's election to defer, would have been received by the Employee within 21⁄2 months after the close of the Plan Year. If elected by the Sponsoring Employer for purposes of the ADP Test, then this Plan will provide for Elective Deferrals that relate to Compensation that would have been received after the close of a Plan Year to be considered for such prior Plan Year rather than the Plan Year in which the Compensation would have been received. Amounts described above that are allocated to a Participant's Account and that exceed the maximum Annual Addition permitted under Section 6.1 will not be considered Elective Deferrals.

9

		
	1.58
	Eligible Automatic Contribution Arrangement. The term Eligible Automatic Contribution Arrangement means an Automatic Contribution Arrangement that satisfies applicable uniformity and notice requirements. 

		
	1.59
	Eligible Employee. The term Eligible Employee means any Employee who is not a member of an ineligible class of Employees as described in Section 2.1 and who thereby is eligible to participate in the Plan after satisfying any applicable age or service requirement for the Plan. Furthermore, the Employer may elect at any time to reclassify any Employee who had been excluded from participating in the Plan (or in a Component of the Plan). The term Eligible Employee also means any Employee who receives an allocation pursuant to a corrective amendment adopted under Regulation §1.401(a)(4)-11(g). 

		
	1.60
	Eligible Retirement Plan. The term Eligible Retirement Plan means one of the following that accepts the Distributee's Eligible Rollover Distribution: (a) an eligible plan under Code §457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan; (b) a traditional IRA; (c) a Roth IRA; (d) an annuity plan described in Code §403(a); (e) an annuity contract described in Code §403(b); or (f) a qualified plan described in Code §401(a). The definition of Eligible Retirement Plan will also apply in the case of a distribution to a surviving Spouse, or to a Spouse or former spouse who is the alternate payee under a Qualified Domestic Relations Order, as defined in Code §414(p). If any portion of an Eligible Rollover Distribution is attributable to payments or distributions from a Designated Roth Account, an Eligible Retirement Plan with respect to such portion will include only another Designated Roth Account of the individual from whose account the payments or distributions were made, or a Roth IRA of such individual.

		
	1.61
	Eligible Rollover Distribution. The term Eligible Rollover Distribution means a distribution from the Plan of all or any portion of the Plan balance to the credit of the Distributee, determined in accordance with the following:

		
	(a)
	Treatment of Voluntary Employee Contributions. An Eligible Rollover Distribution may include Voluntary Employee Contributions which are not includible in gross income. The portion of an Eligible Rollover Distribution attributable to Voluntary Employee Contributions can be paid to (1) a traditional individual retirement account or annuity described in Code §408(a) or (b) (a "traditional IRA"); (2) a Roth individual retirement account or annuity described in Code §408A (a "Roth IRA"); or (3) a qualified plan or an annuity contract described in Code §401(a) and Code §403(b), respectively, that agrees to separate accounting for amounts so transferred (and earnings thereon), including separately accounting for the portion of such distribution that is includible in gross income and the portion of such distribution not so includible. When a distribution includes Voluntary Employee Contributions not includible in gross income, the amount that is rolled over will first be attributed to amounts includible in gross income.

		
	(b)
	Distributions That Are Not Included. An Eligible Rollover Distribution does not include (1) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's named beneficiary, or for a specified period of ten years or more; (2) any distribution to the extent it is a required minimum distribution under Code §401(a)(9); (3) the portion of any distribution that is not includible in gross income determined without regard to the exclusion for net unrealized appreciation with respect to Employer securities; 

 
(4) distribution of Excess Elective Deferrals, including any income allocable thereto; (5) distribution of Excess Contributions, including any income allocable thereto; (6) distribution of Excess Aggregate Contributions, including any income allocable thereto; (7) loans that are treated as deemed distributions under Code §72(p); (8) dividends paid on Employer securities as described in Code §404(k); (9) the costs of life insurance coverage (P.S. 58 costs); (10) prohibited allocations treated as deemed distributions under Code §409(p); (11) the portion of any distribution attributable to financial hardship; 
 
(12) distributions that are permissible withdrawals from an EACA or QACA; and (13) any other distribution that is reasonably expected to total less than $200 during a year. For purposes of the $200 rule, a distribution from a Designated Roth Account and a distribution from other accounts under the plan are treated as made under separate plans. 

10

		
	1.62
	Employee. The term Employee means the following:

		
	(a)
	Included Individuals. The following individuals will be considered Employees: (1) any person who is reported on the payroll records of the Employer as an employee and who is deemed by the Employer to be a common law employee; (2) any person who is reported on the payroll records of an Affiliated Employer as an employee and who is deemed by the Affiliated Employer to be a common law employee (even if the Affiliated Employer is not an Adopting Employer), except for purposes of determining eligibility to participate in the Plan; (3) any Self-Employed Individual who derives Earned Income from the Employer; (4) any person who is considered a Leased Employee except as set forth in paragraph (b) below; (5) any individual classified as other than a common law employee by the Employer, if such individual is then or thereafter held to be a common law employee of the Employer for any other purpose by any governmental authority, including, without limitation, the Internal Revenue Service, the Department of Labor or a court of competent jurisdiction; (6) an individual receiving Differential Wage Payments; and (7) any individual considered an Employee of the Employer under Code §3121(b) and (d). 

		
	(b)
	Excluded Individuals. A Leased Employee will not be considered an Employee if Leased Employees do not constitute more than 20% of the Employer's NHCE work force and the Leased Employees are covered by a money purchase plan providing for (1) a non-integrated Employer contribution of at least 10% of each Leased Employee's Compensation as defined in Code §415(c)(3); (2) immediate participation; and 

 
(3) 100% full and immediate vesting. In addition, any individual who performs services for the Employer and who is classified as an Independent Contractor by the Employer will not be considered an Employee. 

		
	1.63
	Employee Contribution. The term Employee Contribution means any contribution (including Voluntary Employee Contributions and mandatory employee contributions) made by or on behalf of a Participant that is included in the Participant's gross income in the year in which the contribution is made (other than Roth Elective Deferrals) and that is maintained under a separate account to which earnings and losses are allocated.

		
	1.64
	Employer. The term Employer means the Sponsoring Employer and any Adopting Employer.

		
	1.65
	Employment Commencement Date. The term Employment Commencement Date means the first day that an Employee is credited with an Hour of Service with respect to an Employer or an Affiliated Employer.

		
	1.66
	ERISA. The term ERISA means the Employee Retirement Income Security Act of 1974, as amended. All citations to sections of ERISA are to such sections as they may be amended or renumbered from time to time.

		
	1.67
	Excess Aggregate Contributions. The term Excess Aggregate Contributions means, with respect to any Plan Year, the excess of (a) the aggregate Contribution Percentage Amounts used in computing the numerator of the Contribution Percentage actually made on behalf of Participants who are HCEs for such Plan Year, over (b) the maximum Contribution Percentage Amounts permitted by the ACP Test (determined by hypothetically reducing Contribution Percentage Amounts made on behalf of Participants who are HCEs in order of their Contribution Percentages beginning with the highest of such Contribution Percentages). Such determination will be made after first determining Excess Elective Deferrals and then determining Excess Contributions.

		
	1.68
	Excess Contributions. The term Excess Contributions means, with respect to any Plan Year, the excess of (a) the aggregate amount of Employer contributions actually taken into account in computing the Actual Deferral Percentage of HCEs for such Plan Year, over (b) the maximum amount of such contributions permitted by the ADP Test (determined by hypothetically reducing contributions made on behalf of HCEs in the order of their Actual Deferral Percentages, beginning with the highest of such percentages).

		
	1.69
	Excess Elective Deferrals. The term Excess Elective Deferrals means those Elective Deferrals of a Participant that either are made during (a) the Participant's taxable year and exceed the dollar limitation under Code §402(g) (including, if applicable, the Catch-up Contribution Limit for such taxable year); or (b) a calendar year and exceed the dollar limitation under Code §402(g) (including, if applicable, the Catch-Up Contribution Limit for the Participant's taxable year beginning in such calendar year), counting only Elective Deferrals made under this Plan and any other plan, contract or arrangement maintained by the Sponsoring Employer.

11

		
	1.70
	401(k) Plan. The term 401(k) Plan means a plan that permits the plan's participants to have Elective Deferrals made on their behalf to the plan.

		
	1.71
	401(m) Plan. The term 401(m) Plan means a plan that permits (or requires) the plan's participants to make Employee Contributions and/or that allocates Matching Contributions to participants in the plan.

		
	1.72
	403(b) Employee. The term 403(b) Employee means an Employee who is also an employee of a Code §501(c)(3) organization and is eligible to make Elective Deferrals to a Code §403(b) plan sponsored by the Employer.

		
	1.73
	Foreign Compensation. The term Foreign Compensation means amounts paid as compensation to a Non-Resident Alien who is not a Participant in the Plan.

		
	1.74
	Forfeiture. The term Forfeiture means the amount by which a Participant's Account balance attributable to Employer contributions exceeds his or her Vested Interest in the Participant's Account balance attributable to Employer contributions as of the date set forth in Section 3.10. The term Forfeiture also means any amount that is removed from a Participant's Account pursuant to any Employee Plans Compliance Resolution System (EPCRS) program or any other correction guidance that is issued by the Internal Revenue Service. The term Forfeiture also means the non-Vested portion of Matching Contributions that are removed from a Participant's Account to correct Excess Aggregate Contributions, and Matching Contributions (both the Vested and non-Vested portions) removed from a Participant's Account because such Matching Contributions relate to Excess Elective Deferrals, Excess Contributions, or Excess Aggregate Contributions. No Forfeitures will occur solely because (a) a Participant withdraws Employee Contributions from the Plan; (b) a Participant transfers employment between Employers (or Affiliated Employers); or (c) a Participant withdraws Elective Deferrals from the Plan.

		
	1.75
	Forfeiture Account. The term Forfeiture Account means the notational bookkeeping account into which all Forfeitures are placed pending allocation (or other use).

		
	1.76
	Form W-2 Compensation. The term Form W-2 Compensation means wages within the meaning of Code §3401(a), and all other payments of compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code §§6041(d), 6051(a)(3), and 6052. Form W-2 Compensation will be determined without regard to any rules under Code §3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code §3401(a)(2)).

		
	1.77
	HCE. The term HCE means any Highly Compensated Employee.

		
	1.78
	Highly Compensated Employee. The term Highly Compensated Employee means any Employee who (a) was a 5% owner as defined in Code §416(i)(1)(B)(i) at any time during the Plan Year or during the look-back year. In determining whether an Employee is a HCE based on his or her status as a 5% owner, the look-back year will be the 12-month period immediately preceding the Plan Year for which the determination is being made; or (b) for the look-back year, had Compensation in excess of $80,000 as adjusted under Code §415(d) (except that the base period will be the calendar quarter ending September 30, 1996). In determining if an Employee is a HCE based on Code §415(c)(3) Compensation, the look-back year will be the 12-month period immediately preceding the Plan Year for which the determination is being made, and the top paid group election in Code §414(q)(3) will be applied. In determining if an individual is a highly compensated former Employee, the rules under Regulation §1.414(q)-1T, A-4 and Notice 97-45 for determining which Employees are HCEs for the Plan Year for which the determination is being made will be applied. If the Employer maintains more than one qualified retirement plan, this Section will be applied in a uniform, consistent manner to all such plans.

		
	1.79
	Hour of Service. The term Hour of Service means with respect to any Plan provision in which Service is determined by the Elapsed Time Method, each hour for which an Employee is paid, or is entitled to payment, by the Employer or an Affiliated Employer for the performance of duties. With respect to any Plan provision in which Service is determined by the Counting of Hours Method, the term Hour of Service means the following: 

		
	(a)
	Determination of Hours. The term Hour of Service means (1) each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer or an Affiliated Employer, which will be 

12

credited to the Employee for the computation period in which the duties are performed; (2) each hour for which an Employee is paid, or entitled to payment, by the Employer or an Affiliated Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence, except that no more than 501 Hours of Service will be credited under this clause (2) for any single continuous period (regardless of whether such period occurs in a single computation period); and (3) each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer or an Affiliated Employer, except that the same Hours of Service will not be credited both under clause (1) or clause (2), as the case may be, and under this clause (3), and these Hours of Service 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. Hours of Service under this paragraph will be calculated and credited pursuant to Department of Labor Regulation §2530.200b-2, which is incorporated herein by reference. Furthermore, Hours of Service will be credited for any individual who is considered to be an Employee under Code §414(n) or Code §414(o).

		
	(b)
	Maternity or Paternity Leave. In determining whether a Break in Eligibility (or Vesting) Service has occurred in a computation period for purposes of an Employee's eligibility for Plan participation, Vesting, and benefit allocation purposes, an individual on Maternity or Paternity Leave will receive credit for up to 501 Hours of Service which would otherwise have been credited but for such absence, or where hours cannot be determined, 8 Hours of Service per day of such absence. The Hours of Service credited for a Maternity or Paternity Leave will be credited in the computation period in which the absence begins if the crediting is necessary to prevent a Break in Eligibility (or Vesting) Service in that computation period, or in all other cases, in the following computation period.

		
	(c)
	Use of Equivalencies. The Administrator may elect for all Employees or for one or more different classifications of Employees (provided such classifications are reasonable, are consistently applied, and are nondiscriminatory) to apply one or more of the equivalency methods set forth in Department of Labor Regulation §2530.200b-3.

		
	1.80
	Hourly Employees. The term Hourly Employee means an Employee paid primarily on an hourly basis. 

		
	1.81
	Immediately Distributable. The term Immediately Distributable means any part of the Participant's benefit that could be distributed to the Participant (or his or her surviving Spouse) before the Participant reaches (or would have reached if not deceased) the later of Normal Retirement Age or age 62.

		
	1.82
	In-Plan Roth Rollover. The term In-Plan Roth Rollover means a rollover to a Participant's Roth Elective Deferral Account from another account maintained on behalf of the Participant under the Plan.

		
	1.83
	Key Employee. The term Key Employee means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the Determination Date is (a) an officer of the Employer having annual Code §415(c)(3) Compensation greater than $130,000, as adjusted under Code §416(i)(1); (b) a 5% owner of the Employer; or (c) a 1% owner of the Employer having annual Code §415(c)(3) Compensation of more than $150,000. For purposes of this Section, the Determination Date is, for any Plan Year subsequent to the first Plan Year of the Plan, the last day of the preceding Plan Year. For the first Plan Year of the Plan, the Determination Date is the last day of that first Plan Year.

		
	1.84
	Leased Employee. The term Leased Employee means any person (other than an Employee of the recipient-Employer) who, pursuant to an agreement between the recipient-Employer and another person (the "Leasing Organization") has performed services for the recipient-Employer (or for the recipient-Employer and related persons determined under Code §414(n)(6)) on a substantially full time basis for a period of at least one year, and such services are performed under primary direction or control by the recipient-Employer. Contributions or benefits provided to a Leased Employee by the Leasing Organization attributable to services performed for the recipient-Employer will be treated as provided by the recipient-Employer.

		
	1.85
	Life Expectancy (or Life Expectancy Rule). The term Life Expectancy (or Life Expectancy Rule) means, for required distribution purposes, life expectancy as computed by use of the Table in Regulation §1.401(a)(9)-9.

13

		
	1.86
	Limitation Year. The term Limitation Year means the Plan Year. If the Limitation Year is amended to a different 12-consecutive month period, then the new Limitation Year must begin on a date within the Limitation Year in which the amendment is made.

		
	1.87
	Matching Contribution. The term Matching Contribution means either (a) an ADP Safe Harbor Matching Contribution; (b) an ACP Safe Harbor Matching Contribution; (c) a Qualified Matching Contribution; (d) a Non-Safe Harbor Matching Contribution; (e) a QACA Matching Contribution; or (f) a Non-Elective Contribution made pursuant to USERRA, depending on the context in which the term is used in the Plan. 

		
	1.88
	Matching Contribution Account. The term Matching Contribution Account means the sub-account to which a Participant's Matching Contributions are allocated.

		
	1.89
	Maternity or Paternity Leave. The term Maternity or Paternity Leave means an Employee's absence from work because of (a) the Employee's pregnancy; (b) the birth of the Employee's child; (c) the placement of a child with the Employee in connection with the adoption of such child by the Employee; or (d) the need to care for such child for a period beginning immediately following the child's birth or placement as set forth above.

		
	1.90
	Merger and Acquisition Employee. The term Merger and Acquisition Employee means an individual who becomes, or ceases to be, a member of a group described in Code §414(b), (c), (m), or (o) during the transition period if the specific conditions in Code §410(b)(6)(C)(i) are satisfied. For purposes of this definition, the transition period will be as defined in Code § 410(b)(6)(C)(ii) as the period beginning on the date of the change in members of a group and ending on the last day of the first plan year beginning after the date of such change.

		
	1.91
	Named Fiduciary. The term Named Fiduciary means the Administrator or other fiduciary named by the Administrator to control and manage the operation and administration of the Plan. To the extent authorized by the Administrator, a Named Fiduciary may delegate its responsibilities to a third party or parties. 

		
	1.92
	Non-Elective Contribution. The term Non-Elective Contribution means any ADP Safe Harbor Non-Elective Contribution, Non-Safe Harbor Non-Elective Contribution, Prevailing Wage Contribution or QACA Non-Elective Contribution, Top Heavy Minimum Allocation or Gateway Allocation that is not used to offset any Matching Contribution or is not treated as a Qualified Non-Elective Contribution or a Qualified Matching Contribution, depending on the context in which the term is used in the Plan.

		
	1.92
	Non-Highly Compensated Employee. The term Non-Highly Compensated Employee means any Employee who is not a Highly Compensated Employee. 

		
	1.94
	Non-Key Employee. The term Non-Key Employee means any Employee who is not a Key Employee. A former Key Employee (a Key Employee during any Plan Year prior to the Plan Year that includes the Determination Date) is a Non-Key Employee for purposes of determining whether such former Key Employee is required to receive a Top Heavy Minimum Allocation; however, a former Key Employee is ignored for purposes of determining whether the Plan is Top Heavy.

		
	1.95
	Non-Resident Alien. The term Non-Resident Alien means an individual who is neither a citizen of the United States of America (USA) nor a resident of the USA within the meaning of Code §7701(b)(1)(A). Notwithstanding the foregoing, when used for purposes of determining an ineligible class of Employees under Section 2.1, the term Non-Resident Alien means a Non-Resident Alien (as defined in the preceding sentence) who does not receive earned income (within the meaning of Code §911(d)(2)) from the Employer which constitutes income from sources within the United States (within the meaning of Code §861(a)(3)).

		
	1.96
	Non-Safe Harbor 401(k) Plan. The term Non-Safe Harbor 401(k) Plan means a 401(k) Plan which does not automatically satisfy the ADP Test under Code §401(k). 

		
	1.97
	Non-Safe Harbor 401(m) Plan. The term Non-Safe Harbor 401(m) Plan means a 401(m) Plan which does not automatically satisfy the ACP Test under Code §401(m). 

14

		
	1.98
	Non-Safe Harbor Matching Contribution. The term Non-Safe Harbor Matching Contribution means an Employer contribution made to this or any other defined contribution plan on behalf of a Participant on account of a Participant's Elective Deferrals and/or a Participant's Voluntary Employee Contributions made by such Participant under a plan maintained by the Employer. 

		
	1.99
	Non-Safe Harbor Matching Contribution Account. The term Non-Safe Harbor Matching Contribution Account means the account to which a Participant's Non-Safe Harbor Matching Contributions are allocated.

		
	1.100
	Non-Safe Harbor Non-Elective Contribution. The term Non-Safe Harbor Non-Elective Contribution means an Employer contribution that is allocated to a Participant's Non-Safe Harbor Non-Elective Contribution Account and that the Participant may not elect to receive in cash until such contributions are distributed from the Plan. 

		
	1.101
	Non-Safe Harbor Non-Elective Contribution Account. The term Non-Safe Harbor Non-Elective Contribution Account means the account to which a Participant's Non-Safe Harbor Non-Elective Contributions are allocated.

		
	1.102
	Normal Form of Distribution. The term Normal Form of Distribution means the form in which a Participant's benefit will be distributed absent an election to the contrary.

		
	1.103
	Normal Retirement Age. The term Normal Retirement Age means the later of age 65 or the third anniversary of the date the Participant commenced participation in the Plan. There is no mandatory retirement Age under the terms of the Plan.

		
	1.104
	Optional Form of Distribution. The term Optional Form of Distribution means a form of distribution other than the Normal Form of Distribution set forth in Section 5.1(a). 

		
	1.105
	Otherwise Excludable Participant. The term Otherwise Excludable Participant means a Participant in the Plan (or a Component of the Plan) who (a) has not satisfied the statutory age and service requirements set forth in Code §410(a)(1)(A), and (b) has not reached such Participant's "hypothetical entry date,” which is the date that, had the Plan (or a Component of the Plan) utilized the statutory age and service requirements under Code §410(a)(1)(A) as the eligibility requirements, an Otherwise Excludable Participant would hypothetically enter the Plan (or component) and would no longer be considered an Otherwise Excludable Participant. The "hypothetical entry date" for purposes of this Plan is the Employee's statutory entry date under Code §410(a)(4) after the Employee satisfies the statutory age and service requirements under Code §410(a)(1)(A).

		
	1.106
	Participant. The term Participant means an Eligible Employee who has commenced participation in the Plan (or a Component of the Plan) by satisfying the eligibility and entry date requirements and on whose behalf the Plan continues to maintain a Participant's Account, subject to the following provisions:

		
	(a)
	Included Individuals. The term Participant will include (1) individuals who are eligible to enter into a Salary Deferral Agreement but have not elected to do so; (2) individuals who have Terminated Employment but have not yet received a distribution of their entire Vested Account; (3) individuals who have Terminated Employment with no Vested Interest who are earning or retaining credited service under the Plan; (4) retired individuals or individuals who have incurred a Termination of Employment and are currently receiving distributions from the Plan; (5) retired individuals who have incurred a Termination of Employment and are entitled to future benefits from the Plan; and (6) deceased individuals who have one or more Beneficiaries receiving or entitled to receive benefits under the Plan.

		
	(b)
	Excluded Individuals. The term Participant will not include (1) any non-Vested former Employee who has incurred a Break in Eligibility Service; (2) any former Employee who has received a distribution of his or her Vested Aggregate Account; (3) any individual to whom an insurance company has made an irrevocable commitment to pay all the benefits to which the individual is entitled under the Plan; and 

 
(4) any alternate payee under a QDRO.

		
	1.107
	Participant's Account. The term Participant's Account means the account which represents the undistributed value of the following amounts which have been allocated to the Plan on behalf of a Participant: (a) Employer contributions; 

15

(b) earnings/losses; (c) Forfeitures; and (d) the proceeds of any Policies purchased on the Participant's life under Section 7.2. 

		
	1.108
	Participant's Account Balance. The term Participant's Account Balance means the Participant's Account balance as of the last Valuation Date in the calendar year immediately preceding the Distribution Calendar Year (the "valuation calendar year") increased by any contributions made and allocated or Forfeitures allocated to the account as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The Participant's Account Balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the Distribution Calendar Year if distributed or transferred in the valuation calendar year. This definition only applies to required minimum distributions under Section 5.21.

		
	1.109
	Part-Time Employee. The term Part-Time Employee means any person who is customarily employed by an Employer on a part-time, temporary, or irregular basis and is customarily credited with fewer than 1,000 Hours of Service per Plan Year.

		
	1.110
	Period of Service and 1-Year Period of Service. The term Period of Service means a period of time during which the Employee is employed with the Employer, an Affiliated Employer or an Adopting Employer, commencing on an Employee's Employment Commencement Date or Reemployment Commencement Date and ending on the date that the Employee's Period of Severance begins. The term 1-Year Period of Service means a twelve consecutive month Period of Service. An Employee will receive credit for Periods of Service of less than 12-consecutive months by aggregating (subject to the limitations set forth in Sections 1.181 and 1.182) all non-successive Periods of Service and all Periods of Service which are fractional years or which do not constitute a whole 1-Year Period of Service, regardless of whether they are consecutive. Fractional periods of a year are expressed in terms of days, on the basis that a day of service is credited if an Employee is credited with an Hour of Service during such day, and on the basis that 12 months of service (30 days being deemed to be a month of service in the case of the aggregation of fractional months of service) or 365 days of service equals a 1-Year Period of Service. An Employee will also be credited for all purposes, as applicable, with a fractional Period of Service for any Period of Severance that is less than a 1-Year Period of Severance. 

		
	1.111
	Period of Severance. The term Period of Severance means a continuous period of time during which the Employee is not employed by the Employer. A Period of Severance begins on the earlier of (a) the date on which an Employee retires, dies, quits or is discharged from employment by the Employer or an Affiliated Employer, or (b) the first anniversary of the first date on which an Employee remains absent from service with the Employer or an Affiliated Employer (with or without pay) for any reason other than the Employee retiring, dying, quitting or being discharged from employment by the Employer or an Affiliated Employer, such as for vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. However, in the case of an Employee who is absent from work for Maternity or Paternity Leave, the 12-consecutive month period beginning on the first anniversary of the first date of such absence under clause (b) of the previous sentence will not constitute a Period of Severance. A Period of Severance ends as of an Employee's Reemployment Commencement Date. The term 1-Year Period of Severance means a 12-consecutive month Period of Severance during which an Employee fails to perform an Hour of Service.

		
	1.112
	Permissive Aggregation Group. The term Permissive Aggregation Group means a group consisting of the Required Aggregation Group plus any other plan or plans of the Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Code §401(a)(4) and §410.

		
	1.113
	Plan. The term Plan means the SCI 401(k) Retirement Savings Plan (including any Addenda), as amended from time to time. 

		
	1.114
	Plan Year. The term Plan Year means the Plan's twelve consecutive month accounting year beginning January 1st and ending the following December 31st. If the Plan Year is changed, a short Plan Year will be established beginning the day after the last day of the Plan Year in effect before the change and ending on the last day of the new Plan Year.

16

		
	1.115
	Policy. The term Policy means a life insurance policy or annuity contract purchased by the Plan pursuant to the provisions of Section 7.2 of the Plan. 

		
	1.116
	Post-Severance Compensation. The term Post-Severance Compensation means, for Limitation Years that begin on or after July 1, 2007 (or any earlier date elected by prior amendment), amounts paid by the later of 21⁄2 months after an Employee's Termination of Employment or the end of the Limitation Year that includes the date of the Employee's Termination of Employment, provided the payment (a) is regular compensation for services during the Employee's regular working hours, or compensation for services outside the Employee's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments, and, absent a severance from employment, the payments would have been paid to the Employee while the Employee continued in employment with the Employer; or (b) is for unused accrued vacation. Any payments not described above will not be considered Post-Severance Compensation if paid after Termination of Employment, even if they are paid by the later of 21⁄2 months after Termination of Employment or the end of the Limitation Year that includes the date of Termination of Employment. 

		
	1.117
	Post-Year End Compensation. The term Post-Year End Compensation means amounts earned but not paid during the Limitation Year solely because of the timing of pay periods and pay dates.

		
	1.118
	Pre-Tax Elective Deferral. The term Pre-Tax Elective Deferral means an Elective Deferral that is not includible in gross income at the time deferred.

		
	1.119
	Pre-Tax Elective Deferral Account. The term Pre-Tax Elective Deferral Account means the sub-account to which a Participant's Pre-Tax Elective Deferrals are allocated.

		
	1.120
	Prior Year Testing Method. The term Prior Year Testing Method means the nondiscrimination testing method in which (a) for purposes of the ADP Test, the ADP for Participants who are HCEs for the current Plan Year is compared to the ADP for Participants who are NHCEs for the prior Plan Year; and (b) for purposes of the ACP Test, the ACP for Participants who are HCEs for the current Plan Year is compared to the ACP for Participants who are NHCEs for the prior Plan. For the first Plan Year that Participants are permitted (or required) to make Elective Deferrals and this is not a successor plan, the ADP/ACP for Participants who are NHCEs for the prior Plan Year will be the greater of 3% or the ADP/ACP for Participants who are NHCEs for the first Plan Year.

		
	1.121
	Puerto Rico Based Employees. The term Puerto Rico Based Employees means an Employee who resides in Puerto Rico.

		
	1.122
	QACA. The term QACA means a Qualified Automatic Contribution Arrangement.

		
	1.123
	QACA Safe Harbor Contribution. The term QACA Safe Harbor Contribution means either a QACA ADP Safe Harbor Matching Contribution and/or a QACA ADP Safe Harbor Non-Elective Contribution.

1.124 QACA ADP Safe Harbor Matching Contribution. The term QACA ADP Safe Harbor Matching Contribution means a Matching Contribution made by the Employer to this Plan, or to any other Employer-sponsored defined contribution plan, that falls within the safe harbor requirements of Code §401(k)(13) and is intended to automatically satisfy the ADP Test and the ACP Test for a Plan Year. 

		
	1.125
	QACA ADP Safe Harbor Matching Contribution Account. The term QACA ADP Safe Harbor Matching Contribution Account means the account to which a Participant's QACA ADP Safe Harbor Matching Contributions are credited.

		
	1.126
	QACA ADP Safe Harbor Non-Elective Contribution. The term QACA ADP Safe Harbor Non-Elective Contribution means a Non-Elective Contribution made by the Employer to this Plan, or to any other Employer-sponsored defined contribution plan, that falls within the safe harbor requirements of Code §401(k)(13) and is intended to automatically satisfy the ADP Test for a Plan Year. 

		
	1.127
	QACA ADP Safe Harbor Non-Elective Contribution Account. The term QACA ADP Safe Harbor Non-Elective Contribution Account means the account to which a Participant's QACA ADP Safe Harbor Non-Elective Contributions are credited.

17

		
	1.128
	QACA Safe Harbor 401(k) Plan. The term QACA Safe Harbor 401(k) Plan means a 401(k) Plan which automatically satisfies the ADP Test in accordance with one of the methods described in Code §401(k)(13).  

		
	1.129
	QJSA. The term QJSA means a Qualified Joint and Survivor Annuity.

		
	1.130
	QJSA Requirements. The term QJSA Requirements means, with respect to a referenced portion of a Participant's benefit, that such benefit is subject to the requirements of Code §401(a)(11) and Code §417.

		
	1.131
	QMAC. The term QMAC means a Qualified Matching Contribution.

		
	1.132
	QNEC. The term QNEC means a Qualified Non-Elective Contribution.

		
	1.133
	QPSA. The term QPSA means a Qualified Preretirement Survivor Annuity.

		
	1.134
	Qualified Automatic Contribution Arrangement. The term Qualified Automatic Contribution Arrangement means an Automatic Contribution Arrangement that satisfies applicable uniformity and notice requirements, and under which the Employer makes a QACA ADP Safe Harbor Matching Contribution or QACA ADP Safe Harbor Non-Elective Contribution. 

		
	1.135
	Qualified Joint and Survivor Annuity. The term Qualified Joint and Survivor Annuity or QJSA means, with respect to a Participant who is married on the Annuity Starting Date and has not died before such date, an immediate annuity for the life of the Participant with a survivor annuity for the life of the Participant's surviving Spouse which is not less than 50% nor more than 100% of the annuity that is payable during the joint lives of the Participant and his or her Spouse and which is the amount of annuity which can be purchased with the Participant's Vested Aggregate Account. The actual survivor annuity percentage will be elected by the Participant when the Qualified Joint and Survivor Annuity is to be distributed, but will be 50% if no election is made. With respect to a Participant who is not married on the Annuity Starting Date and has not died before such date, the term "Qualified Joint and Survivor Annuity" means an immediate annuity for his or her life.

		
	1.136
	Qualified Matching Contribution. The term Qualified Matching Contribution means a Matching Contribution made to this Plan, or to any other defined contribution plan sponsored by the Employer, that is used to satisfy the ADP Test, the ACP Test or the Top Heavy Minimum Allocation requirement, and that is subject to the distribution and non-forfeitability requirements of Code §401(k) when made to the Plan. The Employer may elect to treat all or any portion of a Non-Safe Harbor Matching Contribution as a QMAC. 

		
	1.137
	Qualified Matching Contribution Account. The term Qualified Matching Contribution Account means the account to which a Participant's Qualified Matching Contributions are allocated.

		
	1.138
	Qualified Military Service. The term Qualified Military Service means any service in the uniformed services (under chapter 43 of title 38, United States Code) by any individual if such individual is entitled to reemployment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994.

		
	1.139
	Qualified Non-Elective Contribution. The term Qualified Non-Elective Contribution means a Non-Elective Contribution made to this Plan, or any other defined contribution plan sponsored by the Employer, that is used to satisfy the ADP Test, the ACP Test or the Top Heavy Minimum Allocation requirement, and that is subject to the distribution and non-forfeitability requirements of Code §401(k) when made to the Plan. The Employer may elect to treat all or any portion of a Non-Safe Harbor Non-Elective Contribution as a QNEC.

		
	1.140
	Qualified Non-Elective Contribution Account. The term Qualified Non-Elective Contribution Account means the account to which a Participant's Qualified Non-Elective Contributions are allocated. 

		
	1.141
	Qualified Pre-Retirement Survivor Annuity The term Qualified Pre-Retirement Survivor Annuity means an annuity payable for the life of a deceased Participant's surviving Spouse which is equal to the amount of benefit which can be purchased by 50% of the deceased Participant's Vested Aggregate Account balance, determined at the 

18

date of death. In determining a Participant's Vested Aggregate Account balance, any security interest held by the Plan because of a loan outstanding to the Participant will be taken into account. 

		
	1.142
	Reemployment Commencement Date. The term Reemployment Commencement Date means the first day on which an Employee is credited with an Hour of Service with respect to an Employer or an Affiliated Employer following the Employee's Termination of Employment. 

		
	1.143
	Regulation. The term Regulation means any regulation promulgated by the Secretary of the Treasury or any delegates thereof, as amended and/or renumbered from time to time. If this Plan references a regulation that is promulgated by any other Department, Agency, Commission, or other federal entity, then the name of such Department, Agency, Commission, or other federal entity will be referenced with such regulation. 

		
	1.144
	Required Aggregation Group. The term Required Aggregation Group means a group consisting of (a) each qualified plan of the Employer in which at least one Key Employee participates (or participated) at any time during the Plan Year containing the Determination Date or during any of the four preceding Plan Years (regardless of whether the plan has terminated); and (b) any other qualified plan of the Employer which enables a plan described in clause (a) above to satisfy the requirements of Code §401(a)(4) or §410. 

1.145 Required Beginning Date. The term Required Beginning Date means, with respect to a Participant who is a 5% owner as defined in Code §416, April 1st of the calendar year following the calendar year in which the Participant reaches age 701⁄2. With respect to a Participant who is not a 5% owner, the term Required Beginning Date means the April 1st of the calendar year following the later of the calendar year in which the Participant reaches age 701⁄2 or in which the Participant actually retires, subject to paragraphs (a), (b) and (c) below: 

		
	(a)
	Election to Defer Distribution. Any Participant other than a 5% owner who attains age 701⁄2 after 1995 may elect by April 1 of the calendar year following the calendar year in which the Participant attains age 701⁄2 (or by December 31, 1997 in the case of a Participant who attains age 701⁄2 in 1996), to defer distributions until April 1 of the calendar year following the calendar year in which he retires. If no such election is made, the Participant will begin receiving distributions by April 1 of the calendar year following the calendar year in which such Participant attains age 701⁄2.

		
	(b)
	Election to Suspend Distribution. Any Participant other than a 5% owner who attains age 701⁄2 prior to 1997 may elect to cease distributions and recommence by April 1 of the calendar year following the calendar year in which he or she retires. In such an event, the Administrator may, on a uniform non-discriminatory basis, elect that a new Annuity Starting Date will occur upon the distribution recommencement date.

		
	(c)
	Elimination of Pre-Retirement Age 701⁄2 Distribution Option. The pre-retirement Age 701⁄2 distribution option will only be eliminated for Employees who reach age 701⁄2 in or after a calendar year that begins after the later of December 31, 1998 or the adoption date of the GUST restatement of this Plan. The pre-retirement age 701⁄2 distribution option is an optional form of benefit under which benefits payable in a particular distribution form (including any modifications that may be elected after benefit commencement) begin at a time during the period that begins on or after January 1st of the calendar year in which an Employee reaches Age 701⁄2 and ends April 1 of the immediately following calendar year.

		
	1.146
	Rollover Contribution. The term Rollover Contribution means an amount which may be contributed to the Plan by an individual eligible under Section 3.13 to make such contributions to the Plan. Such amount must be an Eligible Rollover Distribution as set forth in Code and in a form acceptable to the Administrator.   

		
	1.147
	Rollover Contribution Account. The term Rollover Contribution Account means the account to which a Participant's Rollover Contributions are allocated.

		
	1.148
	Roth Elective Deferral. The term Roth Elective Deferral means an Elective Deferral designated irrevocably by the Participant at the time of the cash or deferred election as an Elective Deferrals that is being made in lieu of all or a portion of the Pre-Tax Elective Deferrals the Participant is otherwise eligible to make under the Plan; and is treated by the Employer as includible in the Participant’s income at the time the Participant would have received that amount in cash if the Participant had not made a cash or deferred election.

19

		
	1.149
	Roth Elective Deferral Account. The term Roth Elective Deferral Account means the account to which a Participant's Roth Elective Deferrals are allocated. No contributions other than Roth Elective Deferrals, and properly attributable earnings or losses thereon, will be credited to such account. The Plan will maintain a record of the amount of Roth Elective Deferrals in each Roth Elective Deferral Account. Gains, losses, and other credits or charges must be separately allocated on a reasonable and consistent basis to each Participant’s Roth Elective Deferral Account and the Participant’s other accounts under the Plan.

		
	1.150
	Salaried Employee. The term Salaried Employee means an Employee paid primarily in the form of salary. 

		
	1.151
	Self-Employed Individual. The term Self-Employed Individual means an individual who owns an interest in the Employer (other than stock) and has Earned Income for the taxable year from the trade or business for which the Plan is established, or would have had Earned Income but for the fact that the trade or business had no net profits for the taxable year.

		
	1.152
	Service. The term Service means a Year of Eligibility Service in the context of Plan provisions that relate to determining an Employee's eligibility to participate in the Plan, and a Year of Vesting Service in the context of Plan provisions that relate to determining a Participant's Vested Interest in his or her Participant's Account.

		
	1.153
	Sponsoring Employer. The term Sponsoring Employer means Service Corporation International (and any successor thereto that elects to assume sponsorship of this Plan).

		
	1.154
	Spouse. The term Spouse means the person to whom the Participant is legally married.

		
	1.155
	Temporary Employee. The term Temporary Employee means an Employee employed on a temporary or periodic basis pursuant to which such Employee from time to time accepts, at his sole discretion, job assignments having a fixed or limited duration, such as (but not limited to) special projects to cover unusual or cyclical employment needs at potentially varying rates of compensation with each job assignment and who is classified in the Employer’s records as a Temporary Employee.

		
	1.156
	Terminated (or Terminates) Employment. The terms Terminated Employment and Terminates Employment mean that a person has incurred a Termination of Employment.

		
	1.157
	Terminated Participant. The term Terminated Participant means a Participant who has Terminated Employment for reasons other than retirement, death or Disability.

		
	1.158
	Termination of Employment. The term Termination of Employment means that a person ceases to be an Employee with the Employer or an Affiliated Employer, taking into account: (a) the existence of a controlled group or an affiliated service group; (b) whether the person has gone to work for an Adopting Employer;  (c) whether the person's new employer has been substituted as the sponsor of the Plan (or a spun-off portion of the Plan); and (d) whether there has been a transfer of Plan assets and liabilities of the person's benefits from this Plan to a plan sponsored by the person's new employer.

		
	1.159
	Top Heavy. The term Top Heavy means, for the Plan Year containing the Determination Date, (a) if this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group, that the Top Heavy Ratio for this Plan exceeds 60%; (b) if this Plan is a part of a Required Aggregation Group but not part of a Permissive Aggregation Group, that the Top Heavy Ratio for the Required Aggregation Group exceeds 60%; or (c) if this Plan is a part of a Required Aggregation Group and part of a Permissive Aggregation Group, that the Top Heavy Ratio for the Permissive Aggregation Group exceeds 60%.

		
	1.160
	Top Heavy Minimum Allocation. The term Top Heavy Minimum Allocation means, if a defined benefit plan is not part of a Required Aggregation Group or a Permissive Aggregation Group with this Plan, an amount of Employer contributions and Forfeitures equal to an Employee's Code §415(c)(3) Compensation multiplied by the lesser of 3% or the largest percentage of Employer contributions (including any Elective Deferrals made on behalf of a Key Employee to a 401(k) Plan maintained by the Employer) and Forfeitures that are allocated to the Participant's Account of a Key Employee for that Plan Year, expressed as a percentage of such Key Employee's Code §415(c)(3) 

20

Compensation. However, (a) Elective Deferrals made on behalf of a Participant to a 401(k) Plan (and, for Plan Years beginning before 2002, Matching Contributions) cannot be used to satisfy the Top Heavy Minimum Allocation; (b) the Top Heavy Minimum Allocation is determined without regard to any Social Security contribution; and (c) the Top Heavy Minimum Allocation, to the extent required to be non-forfeitable under Code §416(b), may not be forfeited under Code §411(a)(3)(B) or §411(a)(3)(D).

		
	1.161
	Top Heavy Ratio. The term Top Heavy Ratio means for Plan Years beginning on or after January 1, 2002, in determining if this Plan is Top Heavy, a ratio that is calculated in accordance with the following provisions:

		
	(a)
	Employer Only Maintains DC Plans. If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer has not maintained any defined benefit plan which during the 5-year period ending on the Determination Date(s) has or has had accrued benefits, then the Top Heavy Ratio for this Plan alone, for the Required Aggregation Group, or for the Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the Participant's Account balances of all Key Employees as of the Determination Date(s) (including any part of any Participant's Account balance distributed during the 1-year period ending on the Determination Date(s); however, including any part of any Participant's Account balance distributed during the 5-year period ending on the Determination Date in the case of a distribution made for a reason other than Termination of Employment, death, or Disability), and the denominator of which is the sum of all Participant's Account balances (including any part of any Participant's Account balance distributed in the 1-year period ending on the Determination Date(s); however, including any part of any Participant's Account balance distributed during the 5-year period ending on the Determination Date in the case of a distribution made for a reason other than Termination of Employment, death, or Disability), both computed in accordance with Code §416 and the Regulations thereunder. Both the numerator and denominator of the Top Heavy Ratio are increased to reflect any contribution that is not actually made as of the Determination Date, but which is required to be taken into account on that Determination Date under Code §416 and the Regulations thereunder.

		
	(b)
	Employer Maintains Both DB and DC Plans. If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer maintains or has maintained one or more defined benefit plans which during the 5-year period ending on the Determination Date(s) has or has had any accrued benefits, then the Top Heavy Ratio for any Required Aggregation Group or for any Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the Participant's Account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with paragraph (a), and the present value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the Participant's Account balances under the aggregated defined contribution plan(s) for all Participants, determined in accordance with paragraph (a) above, and the present value of accrued benefits under the defined benefit plan(s) for all Participants as of the Determination Date(s), all determined in accordance with Code §416 and the Regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the Top Heavy Ratio are increased for any distribution of an accrued benefit made in the 1-year period ending on the Determination Date (or the 5-year period ending on the Determination Date in the case of a distribution made for a reason other than Termination of Employment, death, or Disability).

		
	(c)
	Value of Participant's Account Balances and the Present Value of Accrued Benefits. For purposes of paragraphs (a) and (b), the value of the Participant's Account balances and the present value of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date, except as provided in Code §416 and the Regulations for the first and second Plan Years of a defined benefit plan. The Participant's Account balances and accrued benefits will be disregarded for a Participant (1) who is not a Key Employee during the 12-month period ending on the Determination Date but was a Key Employee in a prior year, or  (2) who has not been credited with at least one Hour of Service with any Employer maintaining the Plan at any time during the 1-year period ending on the Determination Date. The calculation of the Top Heavy Ratio and the extent to which distributions, Rollover Contributions, and Transfer Contributions are taken into account will be made in accordance with Code §416 and the Regulations thereunder. Deductible employee contributions will not be taken into account in computing the Top Heavy Ratio. When aggregating plans, the value of the Participant's Account balances 

21

and accrued benefits will be calculated with reference to the Determination Dates that fall within the same calendar year. The accrued benefit of a Participant other than a Key Employee will be determined under (1) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Employer, or (2) if there is no such method, then as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional rule of Code §411(b)(1)(C).

		
	(d)
	Computing Present Values. In establishing the present value of accrued benefits to compute the Top Heavy Ratio, benefits not in pay status are handled on the basis that retirement occurs on the automatic vesting date or, if later, the date of reference. Benefits are discounted only for interest and mortality. Unless different actuarial assumptions are elected in an administrative policy that is promulgated under Section 8.6 by the Administrator, the following factors apply: (1) with respect to the interest assumption: (A) pre-retirement: 6% interest, and (B) post-retirement: 5% interest; and (2) with respect to the mortality assumption: (A) pre-retirement: no mortality assumption, and (B) post-retirement: the mortality assumption will be the 1994 Group Annuity Reserving Mortality Table projected to 2002 based on a fixed blend of 50% of the unloaded Male mortality rates and 50% of the unloaded Female mortality rates (the 1994 GAR Mortality Table) as set forth in Revenue Ruling 2001-62.

		
	1.162
	Traditional ADP Safe Harbor Matching Contribution. The term Traditional ADP Safe Harbor Matching Contribution means a Matching Contribution made to this Plan, or to any other defined contribution plan sponsored by the Employer, that falls within the safe harbor requirements of Code §401(k)(12) and is intended to automatically satisfy the ADP and/or ACP Test for a Plan Year. Such contributions can be either "basic" or "enhanced" as may be set forth in Section 3.5.

		
	1.163
	Traditional ADP Safe Harbor Matching Contribution Account. The term Traditional ADP Safe Harbor Matching Contribution Account means the account to which a Participant's Traditional ADP Safe Harbor Matching Contributions are credited.

		
	1.164
	Traditional ADP Safe Harbor Non-Elective Contribution. The term Traditional ADP Safe Harbor Non-Elective Contribution means a Non-Elective Contribution made to this Plan, or any other defined contribution plan sponsored by the Employer, that falls within the ADP Safe Harbor requirements of Code §401(k)(12) and is intended to automatically satisfy the ADP Test for a Plan Year. Such contributions can be either "mandatory" or "contingent" as may be set forth in Section 3.5.

		
	1.165
	Traditional ADP Safe Harbor Non-Elective Contribution Account. The term Traditional ADP Safe Harbor Non-Elective Contribution Account means the account to which a Participant's Traditional ADP Safe Harbor Non-Elective Contributions are credited.

		
	1.166
	Traditional ADP Safe Harbor Contribution. The term Traditional ADP Safe Harbor Contribution means a Traditional ADP Safe Harbor Matching Contribution or a Traditional ADP Safe Harbor Non-Elective Contribution.

		
	1.167
	Traditional Safe Harbor 401(k) Plan. The term Traditional Safe Harbor 401(k) Plan means a 401(k) Plan that automatically satisfies the ADP Test in accordance with one of the methods described in Code §401(k)(12).  

		
	1.168
	Traditional Safe Harbor Notice. The term Traditional Safe Harbor Notice means a comprehensive notice provided by the Employer to each Safe Harbor Participant that explains his or her rights and obligations under the Plan and that is written in a manner calculated to be understood by the average Safe Harbor Participant. Such notice must also comply with the requirements set forth in Regulation §1.401(k)-3(d) and, if applicable, Regulation §1.401(m)-3(e).

		
	1.169
	Transfer Contribution. The term Transfer Contribution means a non-taxable transfer of a Participant's benefit directly or indirectly from another qualified plan to this Plan. Transfer Contributions include assets transferred to this Plan from another plan as a result of a merger or similar transaction involving this Plan and the other plan. Any direct or indirect trustee-to-trustee transfer of assets from a defined benefit plan, a money purchase plan, a target benefit plan, a stock bonus plan, or a profit sharing plan that provided for a life annuity form of payment to the Participant will be considered a Transfer Contribution. Elective Deferrals, QNECs, QMACs, ADP Safe Harbor Non-Elective Contributions, or ADP Safe Harbor Matching Contributions that are transferred to this Plan in a direct or 

22

indirect trustee-to-trustee transfer from another qualified plan and that remain subject to the distribution restrictions set forth in Regulation §1.401(k)-1(d) will also be considered a Transfer Contribution. The assets that are transferred from another qualified plan in a plan-to-plan elective transfer pursuant to Section 11.4 will also be considered a Transfer Contribution. 

		
	1.170
	Transfer Contribution Account. The term Transfer Contribution Account means the account to which a Participant's Transfer Contributions, if any, are allocated.

		
	1.171
	True-Up Contribution. The term True-Up Contribution means an additional Employer contribution made on behalf of a Participant equal to the difference between (a) an allocation to a Participant, and (b) the allocation a Participant would be entitled to receive if the Allocation Period applied to such contribution was a 12-month computation period.

		
	1.172
	Trustee. The term Trustee means the persons or entity named as trustee or trustees of the Trust.

		
	1.173
	Trust (or Trust Fund). The terms Trust and Trust Fund mean the assets of the Plan.

		
	1.174
	Union Employee. The term Union Employee means an Employee whose employment is governed by a collective bargaining agreement between Employee representatives and the Employer in which retirement benefits were the subject of good faith bargaining unless such agreement expressly provides for the inclusion of such Employees as Participants in the Plan.

		
	1.175
	Valuation Date. The term Valuation Date means the date when the value of the Trust Fund is determined. A Valuation Date of the Trust Fund must occur as of the last day of each Plan Year. However, the Administrator can value all or any portion of the assets of the Trust Fund more frequently, including, but not limited to, semi-annually, quarterly, monthly, daily; or on each Plan Entry Date the Administrator may implement any additional Valuation Dates for any reason. For purposes of calculating the Top Heavy Ratio under Section 3.9, the term Valuation Date means the date when the Participant's Account balances or accrued benefits are valued.

		
	1.176
	Vested Aggregate Account. The term Vested Aggregate Account means a Participant's Vested Interest in the aggregate value of his or her Participant's Account and any accounts attributable to the Participant's own Plan contributions (including the Participant's Rollover Contribution Account and Transfer Contribution Account).

		
	1.177
	Vested, Vested Interest or Vesting. The terms Vested, Vested Interest and Vesting mean a Participant's non-forfeitable percentage in an account maintained on his or her behalf under the Plan. A Participant's Vested Interest in his or her Participant's Account will be determined in accordance with Section 4.5.

		
	1.178
	Vesting Computation Period. The term Vesting Computation Period means a period of twelve consecutive months used in determining a Participant's Vested Interest in the Plan (or in a component of the Plan). Each Vesting Computation Period will consist of each Plan Year. If a Vesting Computation Period is less than twelve consecutive months and the Hours of Service requirement set forth herein is greater than one Hour of Service, then such Hours of Service requirement will be proportionately reduced in determining whether an Employee is credited with a Year of Vesting Service during the short Vesting Computation Period. Alternatively, with respect to a short Vesting Computation Period, an Employee will be credited with a Year of Vesting Service pursuant to Department of Labor Regulation §2530.203‐2(c). 

		
	1.179
	Voluntary Employee Contribution. The term Voluntary Employee Contribution means an Employee Contribution which is made voluntarily to the Plan by a Participant.

		
	1.180
	Voluntary Employee Contribution Account. The term Voluntary Employee Contribution Account means the sub-account to which a Participant's Voluntary Employee Contributions, if any, are allocated.

		
	1.181
	Year of Eligibility Service. The term Year of Eligibility Service means a 1-year Period of Service. A Participant's Years of Eligibility Service will be used to determine his or her eligibility to participate in the Plan. All of an Employee's Years of Eligibility Service are counted in determining his or her eligibility to participate, subject to the following provisions: 

23

		
	(a)
	Eligibility Rule of Parity. In the case of a Participant who does not have a Vested Interest  in his or her Participant's Account, Years of Eligibility Service credited before a period of consecutive Breaks in Eligibility Service will not be counted in determining the Participant's eligibility to participate in the Plan (or in a Component of the Plan) if the number of consecutive Breaks in Eligibility Service in such period equals or exceeds the greater of five or the aggregate number of Years of Eligibility Service credited before such breaks. Such aggregate number of Years of Eligibility Service will not include any Years of Eligibility Service disregarded under the preceding sentence by reason of prior Breaks in Eligibility Service. If a Participant's Years of Eligibility Service are disregarded pursuant to the preceding, such Participant will be treated as a new Employee for eligibility purposes. If a Participant's Years of Eligibility Service may not be disregarded pursuant to the preceding, such Participant will continue to participate in the Plan, or, if terminated, will participate immediately upon reemployment.

    
		
	(b)
	Ignoring Eligibility Service If the Service Requirement Is More Than One Year. If this Plan (or a Component of the Plan) at any time provides (1) that an Employee must complete more than one Year of Eligibility Service for eligibility purposes, and (2) that such Employee will have a 100% Vested Interest in his or her Participant's Account (or the subaccount that relates to such component) upon becoming a Participant in the Plan, then with respect to an Employee who incurs a Break in Eligibility Service before satisfying such eligibility requirement, the Employee's Years of Eligibility Service credited prior to the Break in Eligibility Service will not be counted for eligibility purposes.

		
	(c)
	Prior Service Credit. If the Employer maintains (or has ever maintained) any plan of a predecessor employer, then Service during the existence of the predecessor plan with the predecessor employer will be credited as Years of Eligibility Service with the Employer. In addition, an Employee will receive credit for all Years of Eligibility Service with (1) the Wilson Financial Group (excluding the Kelly Funeral Home, Inc. division); and (2) the Keystone Group in determining eligibility to participate in the Elective Deferral Component of the Plan, the Non-Safe Harbor Matching Contribution Component of the Plan, and the Non-Safe Harbor Non-Elective Contribution Component of the Plan. If the Employer does not maintain (and has never maintained) any plan of a predecessor employer and Service with the employers described in the preceding sentence exceeds five Years of Eligibility Service, then the crediting of such Service must comply with the requirements of Regulation §1.401(a)(4)-11(d).

		
	1.182
	Year of Vesting Service. The term Year of Vesting Service means a Vesting Computation Period in which a Participant is credited with at least 1,000 Hours of Service. A Participant's Years of Vesting Service will be used to determine the Participant's Vested Interest in his or her Participant's Account. All of an Employee's Years of Vesting Service are counted in making such determination, subject to the following provisions: 

		
	(a)
	Five-Year Break in Vesting Service Rule. In the case of a Participant (whether Vested or not) who has incurred five consecutive Breaks in Vesting Service, all Years of Vesting Service credited after such breaks will not be counted in determining the Participant's Vested Interest in his or her Participant's Account balance that accrued before such breaks, but both pre-break Years of Vesting Service and post-break Years of Vesting Service will be counted in determining the Vested Interest in his or her Participant's Account balance that accrues after such breaks. In the case of a Participant who has not incurred five consecutive Breaks in Vesting Service, both the pre-break Years of Vesting Service and the post-break Years of Vesting Service will be counted in determining the Participant's Vested Interest in his or her pre-break and post-break Participant's Account balance.  

		
	(b)
	Vesting Rule of Parity. If a non-Vested Participant has incurred five or more consecutive Breaks in Vesting Service, Years of Vesting service credited prior to such breaks will not be counted in determining the Participant's Vested Interest if the number of consecutive Breaks in Vesting Service is less than the number of Years of Vesting Service. In applying the rule of parity under this paragraph, a Participant who has an Elective Deferral Account balance is not considered to be a non-Vested Participant.

		
	(c)
	Prior Service Credit. If the Employer maintains (or has ever maintained) any plan of a predecessor employer, then Service during the existence of the predecessor plan with the predecessor employer will be credited as Years of Vesting Service with the Employer. In addition, an Employee will receive credit for all Years of Vesting Service with (1) Wilson Financial Group (excluding the Kelly Funeral Home, Inc. division); and (2) 

24

Keystone Group in determining the Vested Interest in the Participant's Non-Safe Harbor Matching Contribution Account and Non-Safe Harbor Non-Elective Contribution Account. Additionally, an Employee shall be credited with all Years of Vesting Service completed prior to a Break in Service if such Employee had a non-forfeitable accrued benefit under the SCI Cash balance Plan or SCI Pension Plan at the time he or she first incurred a 1-year Break in Service. If the Employer does not maintain (and has never maintained) any plan of a predecessor employer and Service with the employers described in the preceding sentence exceeds five Years of Vesting Service, then the crediting of such Service must comply with the requirements of Regulation §1.401(a)(4)-11(d).  

Article 2

Plan Participation

		
	2.1
	Eligibility and Entry Date Requirements. An Eligible Employee who was a Participant on December 31, 2015 will continue to participate in the Plan. Otherwise, an Eligible Employee will become eligible to enter the Plan as a Participant in accordance with the following provisions:

		
	(a)
	Elective Deferrals. An Eligible Employee will be eligible to enter the Elective Deferral Component of the Plan as a Participant in accordance with the following provisions:

		
	(1)
	Eligible Employees. For purposes of Section 2.1(a), all Employees are Eligible Employees except for the following ineligible class of Employees: Union Employees.

		
	(2)
	Eligibility Requirements. For purposes of Section 2.1(a), an Eligible Employee described in Section 2.1(a)(1) will be eligible to enter the Plan as a Participant on the applicable entry date described in Section 2.1(a)(3) upon reaching age 21 and being credited with a 2-month Period of Service.

		
	(3)
	Entry Date. For purposes of Section 2.1(a), an Eligible Employee described in Section 2.1(a)(1) who has satisfied the eligibility requirements in Section 2.1(a)(2) will enter the Plan as a Participant on the first day of the month coincident with or following the date the requirements are satisfied.  

		
	(b)
	Non-Safe Harbor Matching Contributions. An Eligible Employee will be eligible to enter the Plan as a Participant for the purpose of receiving allocations of any Non-Safe Harbor Matching Contributions made to the Plan in accordance with the following provisions: 

		
	(1)
	Eligible Employees. For purposes of Section 2.1(b), all Employees are Eligible Employees except for the following ineligible class of Employees: Union Employees. 

 
		
	(2)
	Eligibility Requirements. For purposes of Section 2.1(b), an Eligible Employee described in Section 2.1(b)(1) will be eligible to enter the Plan as a Participant on the applicable entry date described in Section 2.1(b)(3) upon reaching age 21 and being credited with a 2-month Period of Service.

		
	(3)
	Entry Date. For purposes of Section 2.1(b), an Eligible Employee described in Section 2.1(b)(1) who has satisfied the eligibility requirements in Section 2.1(b)(2) will enter the Plan as a Participant on the first day of the month coincident with or following the date the requirements are satisfied.   

		
	(c)
	Non-Safe Harbor Non-Elective Contributions. An Eligible Employee will be eligible to enter the Plan as a Participant for the purpose of receiving allocations of any Non-Safe Harbor Non-Elective Contributions made to the Plan in accordance with the following provisions: 

		
	(1)
	Eligible Employees. For purposes of Section 2.1(c), all Employees are Eligible Employees except for the following ineligible class of Employees: Union Employees.   

		
	(2)
	Eligibility Requirements. For purposes of Section 2.1(c), an Eligible Employee described in Section 2.1(c)(1) will be eligible to enter the Plan as a Participant on the applicable entry date described in Section 2.1(c)(3) upon reaching age 21 and being credited with a 2-month Period of Service.

25

		
	(3)
	Entry Date. For purposes of Section 2.1(c), an Eligible Employee described in Section 2.1(c)(1) who has satisfied the eligibility requirements in Section 2.1(c)(2) will enter the Plan as a Participant on the first day of the month coincident with or following the date the requirements are satisfied.  

		
	2.2
	Waiver of Participation. An Employee who has satisfied the eligibility requirements set forth in Section 2.1 is not permitted to waive participation in the Plan. 

		
	2.3
	Participation By Employees Whose Status Changes. If an Employee who is not an Eligible Employee becomes an Eligible Employee with respect to a particular Component of the Plan, then the Employee will participate in the Plan immediately with respect to such component so long as the Employee (a) has satisfied the minimum age and Service requirements for that component and (b) would have previously become a Participant with respect to that component had the Employee always been an Eligible Employee with respect to such component. The participation of a Participant who is no longer an Eligible Employee with respect to a particular Component of the Plan will be suspended and such Participant will be entitled to allocations for the Allocation Period with respect to such component only to the extent the Participant, while he or she was an Eligible Employee for that component, satisfies any allocation conditions (including any requirement that the Employee must be an Eligible Employee on the last day of the Allocation Period) with respect to that component. Upon again becoming an Eligible Employee with respect to that Component of the Plan, a suspended Participant will immediately resume eligibility with respect to that component. Years of Vesting Service while an Employee is not an Eligible Employee will nevertheless be recognized for purposes of determining the Vested Interest of such Employee under Section 4.5 with respect to a particular Component of the Plan. 

		
	2.4
	Reemployment After Termination of Employment. If an Employee Terminates Employment and is subsequently reemployed by the Employer or an Affiliated Employer, such Employee's Years of Eligibility Service will be determined in accordance with the rules described in the definition of Year of Eligibility Service.

Article 3

Contributions and Allocations

		
	3.1
	General Contribution and Allocation Provisions. The Employer intends to make contributions to the Plan, unless the Plan is a Frozen Plan, subject to the following provisions:

		
	(a)
	Types and Amount of Contributions. The type and amount of any contribution will be determined by the Employer, and such determination by the Employer will be binding on the Trustee, Administrator and all Participants and may not be reviewed in any manner. However, no Employer contribution will be made for any Participant who is not a Benefiting Participant for an Allocation Period unless otherwise required by the Top Heavy Minimum Allocation provisions in Section 3.9. In addition, if the Plan provides contributions or benefits for Employees some or all of whom are owner-employees as defined in Code §401(c)(3), such contributions or benefits can only be provided with respect to the Earned Income of such owner-employees derived from the trade or business with respect to which the Plan is established.  

		
	(b)
	No Guarantee. The Employer does not guarantee either the making of Employer contributions or the payment of benefits under the Plan. The Employer reserves the right to reduce, suspend or discontinue contributions for any reason at any time; however, if the Plan is deemed to be terminated as a result of such reduction, suspension or discontinuance, then the provisions of Article 11 will become effective. 

		
	(c)
	Frequency of Contributions and Allocations. Unless otherwise specified with respect to a particular Component of the Plan, any Employer contribution made under the terms of the Plan may, at the election of the Administrator, be contributed (1) each payroll period; (2) each month; (3) each Plan quarter; (4) on an annual basis; or (5) on any Allocation Period as determined by the Employer, provided that such Allocation Period does not discriminate in favor of Highly Compensated Employees. The Employer may elect a different Allocation Period for each type of Employer contribution. Employer contributions will be allocated based on the applicable Allocation Period. 

		
	(d)
	Form of Contribution. If the contribution is not used to reduce an obligation or liability of an Employer to the Plan, and the contribution is unencumbered and discretionary, then any contribution may consist of (1) 

26

cash; (2) cash equivalencies; (3) qualifying employer real property and/or qualifying employer securities as defined in ERISA §§407(d)(4) and 407(d)(5), provided the acquisition of such real property and/or securities satisfies the requirements of ERISA §408(e); or (4) any other property that is not prohibited under Code §4975 and is acceptable to the Trustee under the terms of the Trust agreement. 

		
	(e)
	Refund of Contributions. Contributions that are made to the Plan by the Employer can only be returned to the Employer in accordance with the following provisions:

		
	(1)
	Failure of the Plan to Initially Qualify. If the Plan fails to initially satisfy the requirements of Code §401(a) and the Employer declines to amend the Plan to satisfy the requirements, then Employer contributions made prior to the date qualification is denied must be returned to the Employer within one year of the date of such denial, but only if the application for the qualification is made by the time prescribed by law for filing the Employer's tax return for the taxable year in which the Plan is adopted, or by such later date as the Secretary of the Treasury may prescribe.

		
	(2)
	Contributions Made Under a Mistake of Fact. If a contribution is attributable in whole or in part to a good faith mistake of fact, including a good faith mistake in determining the deductibility of the contribution under Code §404, an amount may be returned to the Employer equal to the excess of the amount that had been contributed over the amount that would have been contributed if the mistake of fact had not occurred (which excess will hereafter be known as a "Mistaken Contribution"). Earnings attributable to a Mistaken Contribution will not be returned, but losses attributable to the Mistaken Contribution will reduce the amount so returned. The Mistaken Contribution will be returned within one year of the date the Mistaken Contribution was made or the deduction disallowed, as the case may be.

		
	(3)
	Nondeductible Contributions. All Employer contributions are conditioned on deductibility and will otherwise be returned to the Employer unless an Employer intentionally makes a nondeductible contribution (for example, to correct an administrative error or restore a Forfeiture).

		
	(f)
	Duty to Collect Contributions. To the extent not otherwise assigned pursuant to Department of Labor Field Assistance Bulletin 2008-1, it is the duty of the Named Fiduciary to collect delinquent Employer contributions, Elective Deferrals and Employee Contributions, as well as loan repayments from Participants and any amounts distributed from the Plan which are not for the exclusive purpose of providing benefits to Participants and/or Beneficiaries or for defraying reasonable expenses of the Plan pursuant to ERISA §404(a)(1).

		
	3.2
	Elective Deferrals. Elective Deferrals will be made and allocated in accordance with the following provisions:

		
	(a)
	Salary Deferral Agreements and Deferral Elections. Each Participant in the Elective Deferral Component of the Plan may submit a Salary Deferral Agreement to the Administrator at any time authorizing the Employer to withhold all or a portion of the Participant's Compensation as an Elective Deferral, subject to the following provisions:

		
	(1)
	Amount Must Be Specified. Each Participant must specify the amount of Compensation to be withheld as either a percentage of Compensation (including zero) or as a whole dollar amount (including zero); provided, however, that the Administrator may direct that such percentage or dollar amount of Compensation be rounded to the next highest or lowest dollar or percentage. If an Automatic Contribution Arrangement is implemented by the Employer, then the Participant must be given an effective opportunity to elect a different amount (including no amount). 

		
	(2)
	Maximum and Minimum Elective Deferrals. The minimum Elective Deferral permitted is 1% of a Participant's Compensation. The maximum Elective Deferral is 50% of a Participant's Compensation per Plan Year.

		
	(3)
	Effective Date. A Participant's Salary Deferral Agreement may be entered into as of such date or dates (but at least once per Plan Year) as established by the Administrator. Salary Deferral Agreements will be effective as soon as administratively feasible after receipt thereof by the Administrator (unless a 

27

later pay period is specified by the Participant in the agreement) and will remain in effect until such time or time as established by the Administrator (or until such time or times set forth in the Plan with respect to any automatic enrollment program that may be established under the terms of the Plan).

		
	(4)
	Modification, Suspension or Cancellation. A Participant may modify an existing Salary Deferral Agreement to increase or decrease the percentage or amount being withheld by filing a new agreement with the Administrator at any time. The Participant may also at any time suspend or cancel a Salary Deferral Agreement upon reasonable written notice to the Administrator, in which event, the Participant will not be permitted to file a new Salary Deferral Agreement until the first available date the Participant would otherwise be entitled to change an existing Salary Deferral Agreement as specified above. If necessary to insure that the Plan satisfies the ADP Test, or upon a Participant reaching the Elective Deferral limit of Code §402(g), the Employer may temporarily suspend a Participant's Salary Deferral Agreement upon notice to the Participant.  

		
	(b)
	Roth Elective Deferrals. A Participant may elect to classify all or a portion of an Elective Deferral as a Roth Elective Deferral, subject to the minimum and maximum amounts provided under section 3.2(a)(2) above. An Elective Deferral contributed as one type of Elective Deferral may not later be reclassified as the other type of Elective Deferral, except in the case of an In-Plan Roth Rollover. All of a Participant's Pre-tax Elective Deferrals will be allocated to the Participant's Pre-Tax Elective Deferral Account, and all of a Participant's Roth Elective Deferrals will be allocated to the Participant's Roth Elective Deferral Account.

		
	(c)
	Cash or Deferred Option. The Employer may declare a Cash or Deferred Contribution for any Plan Year. In such event, the Employer will provide each Participant entitled to such contribution with the right to elect to receive as cash some or all of such contribution. Any amount a Participant elects not to receive as cash will be deemed an Elective Deferral of the Participant, will be contributed to the Plan within 21⁄2 months after the end of the Plan Year, and will be allocated to the Participant's Elective Deferral Account. 

		
	(d)
	Catch-Up Contributions. Catch-Up Contributions are permitted. For any Plan Year in which this is a Safe Harbor 401(k) Plan, Catch-Up Contributions will be treated as Elective Deferrals and will be matched in accordance with the Safe Harbor Matching Contribution formula, if any, set forth in the Plan. For any Plan Year in which this is a Non-Safe Harbor 401(k) Plan, Catch-Up Contributions will only be matched to the extent provided under Section 3.3. 

		
	(e)
	Eligible Automatic Contribution Arrangement (EACA). The Employer established an EACA pursuant to Code §414(w) and the Regulations thereunder effective July 1, 2014. The EACA was established in accordance with, and subject to, the following provisions:

		
	(1)
	Covered Employees. Covered Employees will include all Participants in the Elective Deferral Component of the Plan who are entering the Elective Deferral Component of the Plan for the first time or are reentering this Component following rehire. 

		
	(2)
	Default Elective Deferral. The Default Percentage applied to a Covered Employee’s Compensation for each pay period will be equal to 3%.   

		
	(3)
	Classification of Default Elective Deferrals. Default Elective Deferrals will be classified as 100% Pre-Tax Elective Deferrals.  

		
	(4)
	Overriding Election. A Covered Employee will have a reasonable opportunity after receipt of the notice described in subparagraph (6) to file a Salary Deferral Agreement with the Administrator. Default Elective Deferrals being made on behalf of a Covered Employee will cease or will be adjusted in accordance with a Covered Employee’s Salary Deferral Agreement as soon as administratively feasible after the Covered Employee files the agreement with the Administrator. For purposes of this paragraph, a Covered Employee's Salary Deferral Agreement will not expire with respect to the EACA. 

		
	(5)
	Uniformity Requirement. The same percentage of Compensation will be withheld as a Default Elective Deferral from all Covered Employees subject to the Default Percentage; provided, however, 

28

that Default Elective Deferrals will be reduced or stopped to meet the limitations under Code §401(a)(17), §402(g), and §415 and to satisfy any suspension period required after a distribution.

		
	(6)
	Notice Requirement. At least 30 days, but not more than 90 days, before the beginning of the Plan Year, the Employer will provide each Covered Employee with a notice of the Covered Employee's rights and obligations under the EACA Arrangement, written in a manner calculated to be understood by the average Covered Employee. If an Employee becomes a Covered Employee after the 90th day before the beginning of the Plan Year and does not receive the notice for that reason, then the notice will be provided no more than 90 days before the Employee becomes a Covered Employee, but not later than the date the Employee becomes a Covered Employee. The notice will accurately describe (A) the amount of Default Elective Deferrals to be made on the Covered Employee’s behalf in the absence of a Salary Deferral Agreement being filed with the Administrator; (B) the Covered Employee’s right to elect to have no Elective Deferrals made on his or her behalf or to have a different amount of Elective Deferrals made; (C) how Default Elective Deferrals will be invested in the absence of the Covered Employee’s Investment Instructions; and (D) the Covered Employee's right to make a withdrawal of Default Elective Deferrals and the procedure for making such a withdrawal.

		
	(7)
	Withdrawal of Default Elective Deferrals.  Covered Participants may request a withdrawal of their Default Elective Deferrals within 90 days of the date the Compensation subject to the Default Percentage would have otherwise been included in the Participant's gross income.  Such applications are limited to Covered Participants who have never had a Salary Deferral Agreement in effect with respect to the Plan. The amount of withdrawal will be equal to the Default Elective Deferrals made through the earlier of (A) the pay date for the second payroll period that begins after the Covered Employee’s withdrawal request and (B) the first pay date that occurs after 30 days after the Covered Employee’s request, plus earnings attributable thereto through the date of distribution. Any fee charged to the Covered Employee for the withdrawal may not be greater than any other fee charged for a cash distribution. Unless the Covered Employee affirmatively elects otherwise, any withdrawal request will be treated as an affirmative election to stop having Elective Deferrals made on the Covered Employee’s behalf as of the date specified above. Default Elective Deferrals distributed pursuant to this subparagraph are not counted towards the dollar limitation on Elective Deferrals under Code §402(g) nor for the ADP Test. Matching Contributions that might otherwise be allocated to a Covered Employee’s account on behalf of Default Elective Deferrals will not be allocated to the extent the Covered Employee withdraws such Elective Deferrals pursuant to this subparagraph and any Matching Contributions already made on account of Default Elective Deferrals that are later withdrawn pursuant to this subparagraph will be forfeited.

		
	(f)
	Limitations on Elective Deferrals. No Participant will be permitted to have Elective Deferrals made under the Plan, or any other plan, contract, or arrangement maintained by the Employer, during any calendar year in excess of the dollar limitation set forth in Code §402(g) (including Catch-Up Contributions in the case of a Participant aged 50 or over by the end of the calendar year) in effect for the Participant's taxable year beginning in such calendar year. The dollar limitation in Code §402(g) was $15,000 for taxable years beginning in 2006. After 2006, the $15,000 limit will be adjusted in multiples of $500 by the Secretary of the Treasury for cost-of-living increases under Code §402(g)(4).

		
	(g)
	ADP Test. Each Plan Year that the Plan is a Non-Safe Harbor 401(k) Plan, the ADP Test will be performed using the Current Year Testing Method and the "125% Test" or "Lesser of 200% or 2% Test" as follows: 

		
	(1)
	125% Test. The "125% Test" will be satisfied if the ADP for Participants who are HCEs for the current Plan Year does not exceed 125% of the ADP for Participants who are NHCEs for the current Plan Year. 

		
	(2)
	Lesser of 200% or 2% Test. The "Lesser of 200% or 2% Test" will be satisfied if the ADP for Participants who are HCEs for the current Plan Year does not exceed the lesser of (A) 200% of the ADP for Participants who are NHCEs for the current Plan Year, or (B) the ADP of such Participants for the current Plan Year plus 2%. 

		
	(h)
	ADP Testing Rules. The following rules will (or may) apply to the performance of the ADP Test:

29

		
	(1)
	Otherwise Excludable Participant Testing Option. The special rules set forth in Code §401(k)(3)(F) and in Regulation §1.401(k)–1(b)(4) may be applied when performing the ADP Test. 

		
	(2)
	First Plan Year Testing Option. If this is not a successor plan for the first Plan Year that the Plan permits any Participant to make Elective Deferrals, then regardless of the testing method set forth in paragraph (g) above, the Prior Year Testing Method will be deemed to have been elected for such first Plan Year and the Actual Deferral Percentage for Participants who are NHCEs for purposes of the ADP Test will be deemed to be equal to the greater of 3% or the Actual Deferral Percentage for Participants who are NHCEs for the first Plan Year. 

		
	(3)
	Modifications to Testing Method. Once the Employer has elected the Current Year Testing Method, the Employer can elect the Prior Year Testing Method for a Plan Year only if the Plan has used the Current Year Testing Method for each of the preceding five Plan Years (or if lesser, the number of Plan Years that the Plan has been in existence) or if, as a result of a merger or acquisition described in Code §410(b)(6)(C)(i), the Employer maintains a 401(k) Plan using the Prior Year Testing Method and a 401(k) Plan using the Current Year Testing Method and the change is made within the transition period described in Code §410(b)(6)(C)(ii). 

		
	(4)
	HCEs as Sole Participants in the Plan Year Being Tested. If the Employer has elected the Prior Year Testing Method and there are no Participants who were NHCEs in the prior Plan Year, the ADP Test will be deemed satisfied for the Plan Year being tested. If the Employer has elected the Current Year Testing Method and there are no Participants who are NHCEs in the current Plan Year, the ADP Test will be deemed satisfied for the Plan Year being tested. The provisions of this subparagraph may be utilized with subparagraph (5) below. 

    
		
	(5)
	Permissive Disaggregation Rule. The Employer may elect in any Plan Year to apply the permissive disaggregation rules Regulation §1.401(k)–1(b)(4) by disaggregating the Plan into separate plans and separately performing the ADP Test (A) for all Participants who are Otherwise Excludable Participants and (B) for all Participants who are not Otherwise Excludable Participants. 

		
	(6)
	Early Participation Rule. Pursuant to Code §401(k)(3)(F), the Employer may elect in any Plan Year to perform the ADP Test (determined without regard to disaggregation under Regulation §1.410(b)–7(c)(3)), by using the ADP for all Participants who are HCEs for the current Plan Year and the ADP for Participants who are NHCEs for the current Plan Year if the Current Year Testing Method is used, or for the prior Plan Year if the Prior Year Testing Method, disregarding all Otherwise Excludable Participants who are NHCEs. 

		
	(7)
	Plan Aggregation. If this Plan satisfies Code §401(k), §401(a)(4) or §410(b) only if it is aggregated with one or more other plans, or if one or more other plans satisfy Code §401(k), §401(a)(4) or §410(b) only if it is aggregated with this Plan, then the ADP Test will be performed by determining the Actual Deferral Percentage of Employees as if all such plans were a single plan. Plans may be aggregated hereunder only if they have the same Plan Year and use the same ADP testing method (i.e., the Current Year Testing Method or the Prior Year Testing Method).

		
	(8)
	Special Rule for Safe Harbor 401(k) Plans. In accordance with Regulation §1.401(k)-1(e)(7), it is impermissible for the Employer to use the ADP Test for a Plan Year in which it is intended for the Plan through its written terms to be a Safe Harbor 401(k) Plan and the Employer fails to satisfy the requirements of such Safe Harbor 401(k) Plan for the Plan Year.

		
	(i)
	ADP Test Correction. If the Plan fails to satisfy the ADP Test for a Plan Year, the Employer will use one or more of the following correction methods to satisfy the ADP Test for such Plan Year (and the Employer has the discretion to determine which one or more of the correction methods may be used to satisfy the ADP Test): (1) make a QNEC and/or a QMAC to the Plan to the extent such contributions may be used under the Regulations in the ADP Test; (2) distribute Excess Contributions of HCEs in accordance with paragraph (j) below; and (3) recharacterize as Catch-Up Contributions the Excess Contributions of a Participant who is a 

30

HCE, but only to the extent that such amount, in combination with other Catch-Up Contributions made by that Participant, would not cause the Catch-Up Contribution Limit to be exceeded for the taxable year of the Participant.
 
		
	(j)
	Distribution of Excess Contributions. Excess Contributions, plus any income and minus any loss allocable thereto, will be distributed no later than 12 months after a Plan Year to Participants to whose accounts such Excess Contributions were allocated for such Plan Year, except to the extent such contributions are classified as Catch-up Contributions. Distribution will be made in accordance with the following:

		
	(1)
	Allocation to HCEs. Excess Contributions will be allocated to the Highly Compensated Employees with the largest amounts of Employer contributions taken into account in calculating the ADP Test for the Plan Year in which the Excess Contributions arose, beginning with the Highly Compensated Employee with the largest amount of such Employer contributions and continuing in descending order until all the Excess Contributions have been allocated. To the extent a Highly Compensated Employee has not reached his or her Catch-Up Contribution Limit, Excess Contributions allocated to such Highly Compensated Employee will be treated as Catch-Up Contributions and will not be treated as Excess Contributions. Excess Contributions will be treated as Annual Additions, even if such Excess Contributions are distributed.

		
	(2)
	Distribution After 21⁄2 Months. If Excess Contributions (other than Catch-up Contributions) are distributed more than 21⁄2 months (6 months if the Employer has adopted an EACA and has elected that all Participants are Covered Employees) after the last day of the Plan Year in which such Excess Contributions arose, then a 10% excise tax will be imposed on the Employer with respect to such Excess Contributions. 

		
	(3)
	Adjustment for Net Income or Loss. For Plan Years beginning after 2007, Excess Contributions will be adjusted for any income or loss up to the end of the Plan Year, and no adjustment will be made for income or loss during the period between the end of the Participant's taxable year and the date of distribution. The Plan may use any reasonable method for computing income or loss allocable to Excess Contribution, provided such method is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income or loss to Participants' Accounts. 

		
	(4)
	Accounting for Excess Contributions. Excess Contributions allocated to a Participant will be distributed from his or her Elective Deferral Account and Qualified Matching Contribution Account in proportion to the Participant's Elective Deferrals and QMACs (to the extent used in the ADP Test) for the Plan Year. Excess Contributions will be distributed from the Participant's Qualified Non-Elective Contribution Account only to the extent the Excess Contributions exceed the balance in the Participant's Elective Deferral Account and Qualified Matching Contribution Account. 

		
	(5)
	Source and Ordering of Distribution. Distribution of Excess Contributions will be taken from a Participant's investment options (if any) based on rules established by the Administrator. Any such distribution will be made from the following sources in the following order (unless a policy for the order of the sources to distribute Excess Contributions is established by the Administrator, in which case such policy will control): (A) unmatched Elective Deferrals; (B) matched Elective Deferrals; (C) Qualified Matching Contributions that are tested in the ACP Test and that are utilized in (or shifted into) the ADP Test; and (D) Qualified Non-Elective Contributions to the extent that such contributions are utilized in the ADP Test. For Plan Years beginning after 2005, unless a different rule is established by the Administrator, distribution of Elective Deferrals that are Excess Contributions will first be made from a Participant's Roth Elective Deferral Account, if any, before the Participant's Pre-Tax Elective Deferral Account, to the extent that Roth Elective Deferrals were made for the Plan Year, unless the Administrator permits the Participant to specify otherwise. 

		
	3.3
	Non-Safe Harbor Matching Contributions. Non-Safe Harbor Matching Contributions which are made to the Plan will be made and allocated to each Benefiting Participant's Non-Safe Harbor Matching Contribution Account in accordance with, and subject to, the following provisions: 

31

		
	(a)
	Contribution Formula. Except as otherwise provided in this Section,  the Employer must make a Non-Safe Harbor Matching Contribution equal to the amount determined by the following formula based on a Benefiting Participant's Years of Vesting Service: (1) with respect to Benefiting Participants who have completed from 0 to 5 Years of Vesting Service, 75% of Elective Deferrals for the Allocation Period, not to exceed 6% of Compensation for the Allocation Period; (2) with respect to Benefiting Participants who have completed from 6 to 10 Years of Vesting Service, 100% of Elective Deferrals for the Allocation Period, not to exceed 6% of Compensation for the Allocation Period; and (3) with respect to Benefiting Participants who have completed from 11 or more Years of Vesting Service, 125% of Elective Deferrals for the Allocation Period, not to exceed 6% of Compensation for the Allocation Period.   

		
	(b)
	Benefiting Participants. Non-Safe Harbor Matching Contributions contributed on a Participant's behalf will be allocated to the Participant's Non-Safe Harbor Matching Contribution Account. A Participant who makes an Elective Deferral during the Allocation Period will be a Benefiting Participant under this Section and thus be eligible to receive an allocation of Non-Safe Harbor Matching Contributions for that Allocation Period in accordance with the following provisions: 

		
	(1)
	Participants Employed on Last Day of the Allocation Period. Any Participant who is an Employee on the last day of the Allocation Period and who at any time during the Allocation Period is an Eligible Employee under Section 2.1(b)(1) will be a Benefiting Participant for that Allocation Period regardless of the number of Hours of Service with which he or she is credited during the Allocation Period.

		
	(2)
	Participants Who Terminate Before the Last Day of the Allocation Period. Any Participant who Terminates Employment with the Employer before the last day of the Allocation Period and who at any time during the Allocation Period is an Eligible Employee under Section 2.1(b)(1) will only be a Benefiting Participant for that Allocation Period as follows: (A) a Participant who Terminates Employment because of retirement on or after Normal Retirement Age will be a Benefiting Participant regardless of the number of Hours of Service with which he or she is credited during the Allocation Period; (B) a Participant who Terminates Employment because of his or her death will be a Benefiting Participant regardless of the number of Hours of Service with which he or she is credited during the Allocation Period; (C) a Participant who Terminates Employment because of his or her Disability will be a Benefiting Participant regardless of the number of Hours of Service with which he or she is credited during the Allocation Period; and (D) a Participant who Terminates Employment for reasons other than retirement on or after Normal Retirement Age, death or Disability will be a Benefiting Participant regardless of the number of Hours of Service with which he or she is credited during the Allocation Period.

		
	(c)
	Treatment as QMACs. The Administrator may elect to treat all or any portion of a Non-Safe Harbor Matching Contribution as a QMAC sufficient to satisfy the ADP Test, to the extent that such QMAC is not used to satisfy the ACP Test (but, so long as the QMAC is not precluded from being used in the ACP Test). 

		
	(d)
	True-Ups. If the Allocation Period for Non-Safe Harbor Matching Contributions is a computation period that is less than the Plan Year, and on the last day of any Plan Year, the dollar amount of the Non-Safe Harbor Matching Contributions made on behalf of a Benefiting Participant is less than the dollar amount that would have been made had the Allocation Period for the Non-Safe Harbor Matching Contributions been a 12-month Allocation Period, then the Employer may elect, at the Employer's discretion to make a True-Up Contribution to such Participant’s Non-Safe Harbor Matching Contribution Account in an amount sufficient that the Participant’s Non-Safe Harbor Matching Contribution for the Plan Year is equal to the Non-Safe Harbor Matching Contribution that would have been made had the Non-Safe Harbor Matching Contribution Allocation Period been the Plan Year. Any such additional Non-Safe Harbor Matching Contributions can only be made on a uniform, nondiscriminatory basis. In determining the group of Participants who are eligible to receive the additional Non-Safe Harbor Matching Contributions described in this paragraph, the Employer may require that a Participant be employed by the Employer on the last day of the Allocation Period in addition to any other allocation conditions used to determine Benefiting Participants for purposes of other Non-Safe Harbor Matching Contributions. 

32

		
	(e)
	Matching of Catch-Up Contributions and Voluntary Employee Contributions.  Non-Safe Harbor Matching Contributions will not be made with respect to Catch-Up Contributions and Voluntary Employee Contributions.  

		
	(f)
	Excess Elective Deferrals and Excess Contributions Not Required to Be Matched. To the extent Non-Safe Harbor Matching Contributions (including QMACs) are contributed on an annual basis, no Non-Safe Harbor Matching Contribution (including QMACs) will be required with respect to that portion of an Elective Deferral which for that Plan Year is determined to be either an Excess Elective Deferral (unless the Excess Elective Deferral is for a NHCE) or an Excess Contribution. Furthermore, Matching Contributions (including QMACs) that have been allocated to a Participant's Account must be forfeited if the contributions to which they relate are Excess Elective Deferrals (unless the Excess Elective Deferrals are for NHCEs), Excess Contributions, or Excess Aggregate Contributions. 

		
	(g)
	Right to Each Rate of Match. The right to each rate of Non-Safe Harbor Matching Contributions (determining the rate using the amount of Non-Safe Harbor Matching Contributions, Elective Deferrals and Employee Contributions determined after any corrections under Regulation §§1.401(k)–2(b)(1)(i) and 1.401(m)–2(b)(1)(i), and treating different rates as existing if they are based on definitions of Compensation or other requirements or formulas that are not substantially the same) must not discriminate in favor of Highly Compensated Employees.

		
	(h)
	ACP Test. Each Plan Year the Plan is a Non-Safe Harbor 401(m) Plan, the ACP Test will be performed using the Current Year Testing Method and the "125% Test" or the "Lesser of 200% or 2% Test" as follows:

		
	(1)
	125% Test. The "125% Test" will be satisfied if the ACP for Participants who are HCEs for the current Plan Year does not exceed 125% of the ACP for Participants who are NHCEs for the current Plan Year. 

		
	(2)
	Lesser of 200% or 2% Test. The "Lesser of 200% or 2% Test" will be satisfied if the ACP for Participants who are HCEs for the current Plan Year does not exceed the lesser of (A) 200% of the ACP for Participants who are NHCEs for the current Plan Year, or (B) the ACP of such Participants for the current Plan Year plus 2%. 

		
	(i)
	ACP Testing Rules.  The following rules will (or may) apply to the performance of the ACP Test:

		
	(1)
	Modifications to Testing Method. Once the Employer has elected the Current Year Testing Method, the Employer can elect the Prior Year Testing Method for a Plan Year only if the Plan has used the Current Year Testing Method for each of the preceding five Plan Years (or if lesser, the number of Plan Years that the Plan has been in existence) or if, as a result of a merger or acquisition described in Code §410(b)(6)(C)(i), the Employer maintains a 401(m) Plan using the Prior Year Testing Method and a 401(m) Plan using the Current Year Testing Method and the change is made within the transition period described in Code §410(b)(6)(C)(ii).

		
	(2)
	First Plan Year Testing Option. If this is not a successor plan for the first Plan Year that the Plan permits any Participant to make Employee Contributions hereto, provides for Non-Safe Harbor Matching Contributions, or both, then regardless of the testing method set forth in paragraph (h) above, the Prior Year Testing Method will be deemed to have been elected for such first Plan Year and the Contribution Percentage for Participants who are NHCEs for purposes of the ACP Test will be deemed to be equal to the greater of 3% or the Contribution Percentage for Participants who are NHCEs for the first Plan Year. 

		
	(3)
	HCEs as Sole Participants in the Plan Year Being Tested. If the Employer has elected the Prior Year Testing Method and there are no Participants who were NHCEs in the prior Plan Year, the ACP Test will be deemed satisfied for the Plan Year being tested. If the Employer has elected the Current Year Testing Method and there are no Participants who are NHCEs in the current Plan Year, the ACP Test will be deemed satisfied for the Plan Year being tested. The provisions of this subparagraph may be utilized with subparagraph (4) below. 

33

		
	(4)
	Permissive Disaggregation Rule. The Employer may elect in any Plan Year to apply the permissive disaggregation rules set forth in Regulation §1.401(m)–1(b)(4), by disaggregating the Plan into separate plans and performing the ACP Test separately for all Participants who are Otherwise Excludable Participants and for all Participants who are not Otherwise Excludable Participants. 

		
	(5)
	Early Participation Rule. Pursuant to Code §401(m)(5)(C), the Employer may elect in any Plan Year to perform the ACP Test (determined without regard to disaggregation under Regulation §1.410(b)–7(c)(3)) by using the ACP for all Participants who are HCEs for the Plan Year and the ACP for Participants who are NHCEs for the current Plan Year if the Current Year Testing Method is used, or for the prior Plan Year if the Prior Year Testing Method is used, disregarding all Otherwise Excludable Participants who are NHCEs. 

		
	(6)
	Plan Aggregation and Coverage Change Rules. If this Plan satisfies Code §401(m), §401(a)(4), or §410(b) only by being aggregated with one or more other plans of the Employer, or if one or more other plans satisfy Code §401(m), §401(a)(4), or §410(b) only by being aggregated with this Plan, this Section will be applied by determining the Contribution Percentage of the Employees as if all such plans (including this Plan) were a single plan. If the Plan uses the Prior Year Testing Method and more than 10% of the Employer's NHCEs are involved in a plan coverage change as defined in Regulation §1.401(m)-2(c)(4), then any adjustments to the Contribution Percentage of NHCEs for the prior Plan Year will be made in accordance with such Regulation. Plans may be aggregated only if they have the same Plan Year and use the same ACP testing method (i.e., Prior Year Testing Method or Current Year Testing Method). 

		
	(7)
	Special Rule for Safe Harbor 401(m) Plans. In accordance with Regulation §1.401(m)-1(c)(2), it is impermissible for the Employer to use the ACP Test for a Plan Year in which it is intended for the Plan, through its written terms, to be a Safe Harbor 401(m) Plan and the Employer fails to satisfy the requirements of such Safe Harbor 401(m) Plan for the Plan Year.

		
	(j)
	ACP Test Correction. If the Plan fails to satisfy the ACP Test for a Plan Year, the Employer will use one or more of the following correction methods to satisfy the ACP Test for such Plan Year (and the Employer has the discretion to determine which one or more of the correction methods may be used to satisfy the ACP Test): (1) make a QNEC and/or a QMAC to the Plan to the extent such contributions may be used under the Regulations in the ACP Test; (2) distribute Excess Aggregate Contributions of HCEs in accordance with paragraph (k) below.

		
	(k)
	Distribution of Excess Aggregate Contributions. Excess Aggregate Contributions, plus any income and minus any loss allocable thereto, will be forfeited, if forfeitable, or if not forfeitable, distributed no later than 12 months after a Plan Year to Participants to whose Accounts such Excess Aggregate Contributions were allocated for such Plan Year. Distribution will be made in accordance with the following provisions:

		
	(1)
	Allocation to HCEs. Excess Aggregate Contributions will be allocated to the HCEs who have the largest Contribution Percentage Amounts taken into account in calculating the ACP Test for the Plan Year in which the Excess Aggregate Contributions arose, beginning with the HCEs with the largest Contribution Percentage Amounts and continuing in descending order until all the Excess Aggregate Contributions have been allocated. Excess Aggregate Contributions will be treated as Annual Additions, even if such Excess Aggregate Contributions are distributed.

		
	(2)
	Distribution of Excess Aggregate Contributions After 21⁄2 Months. If Excess Aggregate Contributions are distributed more than 6 months after the last day of the Plan Year in which such Excess Aggregate Contributions arose, then a 10% excise tax will be imposed on the Employer maintaining the Plan with respect to such Excess Aggregate Contributions.

		
	(3)
	Adjustment for Net Income or Loss. For Plan Years beginning after 2007, Excess Aggregate Contributions will be adjusted for any income or loss up to the end of the Plan Year, and no adjustment will be made for income or loss during the period between the end of the Plan Year and the date of distribution. The Plan may use any reasonable method for computing income or loss allocable to Excess 

34

Aggregate Contributions, provided such method is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income or loss to Participants' Accounts.

		
	(4)
	Accounting for Excess Aggregate Contributions. Excess Aggregate Contributions allocated to a Participant will be forfeited (if forfeitable) or will be distributed on a pro-rata basis from the Participant's Voluntary Employee Contribution Account, Mandatory Employee Contribution Account, Matching Contribution Account and Qualified Matching Contribution Account (and if applicable, from the Qualified Non-Elective Contribution Account, Pre-Tax Elective Deferral Account, Roth Elective Deferral Account, or any combination thereof). Any Forfeitures of Excess Aggregate Contributions will be used and/or allocated pursuant to Section 3.10.

		
	(5)
	Source and Ordering of Distribution. Distribution of Excess Aggregate Contributions will be taken from a Participant's investment options (if any) based on rules established by the Administrator. In the absence of an administrative policy to the contrary established by the Administrator, Excess Aggregate Contributions will be distributed from the following sources in the following order: (A) unmatched Voluntary Employee Contributions; (B) unmatched Elective Deferrals that are tested in the ADP Test and that are utilized in, or shifted into, the ACP Test; (C) matched Voluntary Employee Contributions and the Matching Contributions that relate to such Voluntary Employee Contributions; (D) matched Elective Deferrals that are tested in the ADP Test and that are utilized in, or shifted into, the ACP Test and the Matching Contributions that relate to such Elective Deferrals; (E) Non-Safe Harbor Matching Contributions; (F) Qualified Matching Contributions; and (G) Qualified Non-Elective Contributions to the extent that such contributions are utilized in the ACP Test. With respect to Elective Deferrals that are tested in the ADP Test, that are utilized in, or shifted into, the ACP Test, and that become Excess Aggregate Contributions, then for Plan Years beginning after 2005, unless a different rule is established by the Administrator, distribution of such Elective Deferrals that are Excess Aggregate Contributions will first be made from a Participant's Roth Elective Deferral Account (to the extent Roth Elective Deferrals were made for the Plan Year) before distribution is made from the Participant's Pre-Tax Elective Deferral Account, unless the Administrator permits the Participant to specify otherwise.

		
	3.4
	Non-Safe Harbor Non-Elective Contributions. Non-Safe Harbor Non-Elective Contributions which are made to the Plan will be made and allocated to each Benefiting Participant's Non-Safe Harbor Non-Elective Contribution Account in accordance with, and subject to, the following provisions: 

		
	(a)
	Amount. The amount of the Employer's Non-Safe Harbor Non-Elective Contribution for any Allocation Period will be determined in the sole discretion of the Employer, and such determination will be binding on the Trustee, Administrator and all Participants and may not be reviewed in any manner.

		
	(b)
	Allocation Method. Non-Safe Harbor Non-Elective Contributions will be allocated to the Non-Safe Harbor Non-Elective Contribution Account of each Benefiting Participant in the ratio that his or her Compensation for the Allocation Period bears to the total Compensation of all Benefiting Participants for the Allocation Period.  

		
	(c)
	Benefiting Participants. A Participant will be a Benefiting Participant under this Section and be eligible to receive an allocation of the Employer’s Non-Safe Harbor Non-Elective Contributions for that Allocation Period in accordance with the following provisions: 

		
	(1)
	Participants Employed on Last Day of the Allocation Period. Any Participant who is an Employee on the last day of the Allocation Period and who on that date is an Eligible Employee under Section 2.1(c)(1) will be a Benefiting Participant for that Allocation Period regardless of the number of Hours of Service with which he or she is credited during the Allocation Period.

		
	(2)
	Participants Who Terminate Before the Last Day of the Allocation Period. Any Participant who Terminates Employment with the Employer before the last day of the Allocation Period and who on the date of Termination of Employment is not an Eligible Employee under Section 2.1(c)(1) will not 

35

be a Benefiting Participant for that Allocation Period. A Participant who Terminates Employment with the Employer before the last the day of the Allocation Period and who on the date of Termination of Employment is an Eligible Employee under Section 2.1(c)(1) will only be a Benefiting Participant for that Allocation Period as follows: (A) a Participant who Terminates Employment because of retirement on or after Normal Retirement Age will be a Benefiting Participant regardless of the number of Hours of Service with which he or she is credited during the Allocation Period; (B) a Participant who Terminates Employment because of his or her death will be a Benefiting Participant regardless of the number of Hours of Service with which he or she is credited during the Allocation Period; (C) a Participant who Terminates Employment because of his or her Disability will be a Benefiting Participant regardless of the number of Hours of Service with which he or she is credited during the Allocation Period; and (D) a Participant who Terminates Employment for reasons other than retirement on or after Normal Retirement Age, death or Disability will not be a Benefiting Participant.

		
	(d)
	Effect of Top Heavy on Allocation Method. Notwithstanding anything in this Section to the contrary, if the Plan is Top Heavy for any Plan Year and if the allocation method set forth above, along with any other allocations that are permitted to be used to satisfy the Top Heavy Minimum Allocation requirements of Section 3.9, does not satisfy the Top Heavy Minimum Allocation requirements (because, for example, either a Benefiting Participant's Compensation that is used in the allocation method does not satisfy Code §415(c)(3) Compensation, the Compensation Determination Period is other than the entire Plan Year, or the allocation method is not sufficient to allocate the Top Heavy Minimum Allocation to any Non-Key Employee), then the Top Heavy Minimum Allocation will be allocated before any allocations under the allocation method (or will be allocated simultaneously therewith if no Key Employee has any Employer contributions [including any Elective Deferrals made on behalf of a Key Employee to a 401(k) Plan maintained by the Employer] or Forfeitures allocated to the Participant's Account for that Plan Year). However, the allocation method may take into account such Top Heavy Minimum Allocation.

		
	3.5
	ADP Safe Harbor Contributions. ADP Safe Harbor Contributions are not permitted. 

		
	3.6
	ACP Safe Harbor Matching Contributions. ACP Safe Harbor Matching Contributions are not permitted. 

		
	3.7
	Qualified Matching Contributions. The Employer may make QMACs in such amounts as the Employer may determine. For this purpose, each Participant will be assigned to his or her own allocation group. The Employer will notify the Administrator or Trustee in writing, by no later than the due date of the Employer’s tax return for the year to which the contribution relates, of the amount of the contribution to be allocated to each allocation group. QMACs will be allocated to the Qualified Matching Contribution Account of each Participant on whose behalf a QMAC is made. All QMACs used in the ADP Test or the ACP Test must also satisfy the requirements of Regulation §1.401(k)-2(a)(6) and §1.401(m)-2(a)(6). 

		
	3.8
	Qualified Non-Elective Contributions. The Employer may make QNECs in such amounts as the Employer may determine. For this purpose, each Participant will be assigned to his or her own allocation group. The Employer will notify the Administrator or Trustee in writing, by no later than the due date of the Employer’s tax return for the year to which the contribution relates, of the amount of the contribution to be allocated to each allocation group. QNECs will be allocated to the Qualified Non-Elective Contribution Account of each Participant on whose behalf a QNEC is made. All QNECs used in the ADP Test or the ACP Test must also satisfy the requirements of Regulation §1.401(k)-2(a)(6) and §1.401(m)-2(a)(6).  

		
	3.9
	Top Heavy Minimum Allocation. In any Plan Year in which the Plan is Top Heavy and a Key Employee receives an allocation of Employer contributions or Forfeitures, each Participant who is described in paragraph (a) below will receive a Top Heavy Minimum Allocation, determined in accordance with the following: 

		
	(a)
	Who Must Receive the Top Heavy Minimum Allocation. The Top Heavy Minimum Allocation will be made for each Participant who is a Non-Key Employee who is employed by an Employer on the last day of the Plan Year, even if such Participant (1) fails to complete any minimum Period of Service required to receive an allocation of Employer contributions or Forfeitures for the Plan Year; (2) fails to make Elective Deferrals to the Plan in the case of a 401(k) Plan; (3) receives Compensation that is less than a stated amount; or (4) 

36

declines to make a mandatory employee contribution. The Top Heavy Minimum Allocation is not required for a Participant whose participation is limited to a Rollover Contribution.

		
	(b)
	Participation in Multiple Defined Contribution Plans. If (1) this Plan is not part of a Required Aggregation Group or a Permissive Aggregation Group with a defined benefit plan, (2) this Plan is part of a Required Aggregation Group or a Permissive Aggregation Group with one or more defined contribution plans, (3) a Participant who is described in paragraph (a) participates in this Plan and in one or more defined contribution plans that are part of the Required Aggregation Group or the Permissive Aggregation Group, and (4) the allocation of Employer contributions and Forfeitures of each plan that is part of the Required Aggregation Group or the Permissive Aggregation Group (when each plan is considered separately) is insufficient to satisfy the Top Heavy Minimum Allocation requirement with respect to such Participant, the Top Heavy Minimum Allocation requirement will nevertheless be satisfied if the aggregate allocation of Employer contributions and Forfeitures that are made on behalf of such Participant under this Plan and all other defined contribution plans that are part of the Required Aggregation Group or the Permissive Aggregation Group (and any other defined contribution plan that is sponsored by the Employer) is sufficient to satisfy the Top Heavy Minimum Allocation requirement. However, if the aggregate allocation of Employer contributions and Forfeitures that are made on behalf of a Participant under this Plan and all other defined contribution plans that are part of the Required Aggregation Group or the Permissive Aggregation Group (and any other defined contribution plan that is sponsored by the Employer) is not sufficient to satisfy the Top Heavy Minimum Allocation requirement, then the Employer will make an additional contribution on behalf of such Participant to this Plan and/or to one or more defined contribution plans that are part of the Required Aggregation Group or the Permissive Aggregation Group (or any other defined contribution plan that is sponsored by the Employer) in order that the aggregate allocation of Employer contributions and Forfeitures that are made on behalf of such Participant under this Plan and all defined contribution plans that are part of the Required Aggregation Group or the Permissive Aggregation Group (and any other defined contribution plan that is sponsored by the Employer) satisfies the Top Heavy Minimum Allocation requirement.

		
	(c)
	Required or Permissive Aggregation Group With a DB Plan. If this Plan is part of a Required Aggregation Group or a Permissive Aggregation Group with a defined benefit plan, the Sponsoring Employer may, in its discretion, determine to satisfy the requirements of Code §416 with respect to each Participant described in paragraph (a) who participates in this Plan and in the defined benefit plan which is part of the Required Aggregation Group or the Permissive Aggregation Group, by any of the following methods:

		
	(1)
	Defined Benefit Minimum Benefit. A defined benefit minimum, which is an accrued benefit at any point in time equal to at least the product of (A) an Employee's average annual Code §415(c)(3) Compensation for the period of consecutive years (not exceeding five) when the Employee had the highest aggregate Code §415(c)(3) Compensation from the Employer and (B) the lesser of 2% per Year of Vesting Service or 20%, subject to Code §416 and the Regulations thereunder.

		
	(2)
	Floor Offset Arrangement. A floor offset approach, pursuant to Revenue Ruling 76-259, under which the defined benefit minimum of the defined benefit plan that is provided pursuant to paragraph (c)(1) is offset by the benefits provided under the defined contribution plan. 

		
	(3)
	Using Comparability. A demonstration, using a comparability analysis pursuant to Revenue Ruling 81-202, that the plans are providing benefits at least equal to the defined benefit minimum that is provided pursuant to paragraph (c)(1) above. 

		
	(4)
	5% Defined Contribution Allocation. An allocation of Employer contributions and Forfeitures that are made on behalf of such Participant under this Plan (or any defined contribution plan that is sponsored by the Employer) equal to 5% of an Employee's Code §415(c)(3) Compensation for each Plan Year that the Required Aggregation Group or the Permissive Aggregation Group is Top Heavy. 

		
	(d)
	Contributions That Can Be Used to Satisfy Top Heavy Minimum. All Employer contributions to the Plan (other than Elective Deferrals that are made on behalf of a Participant, and, for Plan Years beginning before 2002, Matching Contributions), will be taken into account in determining if the Employer has satisfied the Top Heavy minimum benefit and/or Top Heavy Minimum Allocation requirements of this Section. 

37

Furthermore, the following Employer contributions that are made on behalf of a Participant to a 401(k) Plan may also be taken into account in determining whether the Top Heavy minimum benefit and/or Top Heavy Minimum Allocation requirements have been satisfied: Non-Safe Harbor Non-Elective Contributions; Qualified Non-Elective Contributions; ADP Safe Harbor Non-Elective Contributions; Matching Contributions (including Qualified Matching Contributions) for Plan Years beginning after 2001; and any other Employer contributions as may be permitted by law.

		
	(e)
	Limited Exemption from Top Heavy. The Plan shall not be treated as Top Heavy if Plan contributions for the Plan Year in question consist solely of Elective Deferrals, ADP Safe Harbor Non-Elective Contributions, ADP Safe Harbor Matching Contributions, ACP Safe Harbor Matching Contributions and Rollover Contributions as long as all Participants eligible for the Elective Deferral Component of the Plan are Safe Harbor Participants. Furthermore, if the Plan (but for the prior sentence) would be treated as a Top Heavy Plan because the Plan is a member of a Required Aggregation Group or Permissive Aggregation Group which is Top Heavy, then the QACA ADP Safe Harbor Contributions may be taken into account in determining whether any other plan in the Required Aggregation Group or the Permissive Aggregation Group meets the Top Heavy requirements of Code §416.

		
	3.10
	Forfeitures and Their Application. The following provisions relate to Forfeitures and their application:

		
	(a)
	When Forfeitures Occur. The date upon which a Forfeiture occurs is the earlier of the date a Participant who Terminated Employment receives a distribution of the Vested Interest in his or her Participant's Account, or the date the Participant incurs five consecutive Breaks in Vesting Service after Termination of Employment. If a Participant's Vested Interest in his or her Participant's Account balance is zero on the date he or she Terminates Employment, the Participant will be deemed to have received a distribution of such Vested Interest on the date of termination and a Forfeiture will be deemed to have occurred on the date of such termination.  

		
	(b)
	Application of Forfeitures. The Administrator may elect to use any portion of the Forfeiture Account to pay administrative expenses incurred by the Plan. Any portion of the Forfeiture Account that is not used to pay such expenses will be used first to restore previous Forfeitures of Participants' Accounts under paragraph (c) below and/or to restore Participants' Accounts under Section 5.14. Any remaining Forfeitures will, at the direction of the Employer, (1) be allocated to Participants; (2) be used to reduce any combination of Employer contributions (to the extent permitted under IRS guidelines); and/or (3) be added to any combination of Employer contributions (to the extent permitted under IRS guidelines) to be allocated therewith. Any Forfeitures the Employer elects to allocate to Participants under clause (1) will be allocated on a uniform, nondiscriminatory basis, and in determining the group of Participants who are eligible to receive any such allocation, the Employer may require that a Participant be employed by the Employer on the last day of the Allocation Period in addition to any other allocation conditions used to determine Benefiting Participants for purposes of other Employer contributions.

		
	(c)
	Restoration of Forfeitures of Rehired Employees. If a Participant who is not 100% Vested in his or her Participant's Account Terminates Employment, a Forfeiture of all or a portion of the Participant's Account of the Participant who has Terminated Employment has (or may) have occurred, and the Participant is subsequently reemployed by the Employer, then his or her Participant's Account will be administered in accordance with the following provisions:

		
	(1)
	Reemployment of a Participant After 5 Consecutive Breaks in Service. If the Participant is reemployed by the Employer after incurring five consecutive Breaks in Service, then any previous Forfeiture of the Participant's Account will not be restored under the terms of this Plan.

		
	(2)
	Reemployment of a Non-Vested Participant Before 5 Consecutive Breaks. If a Participant's Vested Interest in the entire Participant's Account attributable to Employer contributions is zero percent (0%) on the date the Participant Terminates Employment and the Participant is subsequently reemployed by the Employer before incurring five consecutive Breaks in Vesting Service, the previous Forfeiture of such Participant's Account will be restored, calculated as of the date the Forfeiture occurred (unadjusted by subsequent gains and losses). 

38

		
	(3)
	Reemployment of a Vested Participant Before 5 Consecutive Breaks Where a Distribution But No Forfeiture Has Occurred. If a Participant's Vested Interest in the Participant's Account balance attributable to Employer contributions is less than a 100% (but greater than 0%) on the date that the Participant Terminates Employment, the Participant is subsequently reemployed by the Employer before incurring 5 consecutive Breaks in Service, and a Forfeiture of the non-Vested portion of the Participant's Account attributable to Employer contributions has not occurred but a distribution of all or a portion of such Participant's Account has occurred, then a separate bookkeeping account will be established for the Participant's Account at the time of distribution and the Participant's Vested Interest in the separate bookkeeping account at any relevant time will be an amount ("X") determined according to the following formula: X = P(AB + (R x D)) - (R x D)), where "P" is the Vested Interest at the relevant time, "AB" is the respective account balance at the relevant time, "D" is the amount of the distribution, and "R" is the ratio of the respective account balance at the relevant time to the respective account balance after distribution.

		
	(4)
	Reemployment of a Vested Participant Before 5 Consecutive Breaks Where a Distribution and Forfeiture Has Occurred. If a Participant's Vested Interest in the Participant's Account balance attributable to Employer contributions is less than a 100% (but greater than 0%) on the date that the Participant Terminates Employment, the Participant is subsequently reemployed by the Employer before incurring five consecutive Breaks in Service, a distribution of all or a portion of the Vested Interest in the Participant's Account has occurred, and a Forfeiture of the non-Vested portion of the Participant's Account attributable to Employer contributions has occurred (which may not necessarily occur at the same time that the distribution occurs), then the previous Forfeiture of such Participant's Account balance attributable to Employer contributions will be restored, calculated as of the date the Forfeiture occurred (unadjusted by subsequent gains and losses) and based upon the Employer's decision whether the Participant is required to repay to the Plan the full amount of all distributions which were attributable to Employer contributions. With respect to the Employer's decision to require such repayment, the following provisions will apply:

		
	(A)
	Time of Restoration If Repayment Is Not Required. If the Employer decides that the Participant is not required to repay to the Plan the full amount of all distributions which were attributable to Employer contributions (including Elective Deferrals) in order to have the previous Forfeiture of such Participant's Account balance attributable to Employer contributions restored, then such restoration will occur in the Plan Year in which the Participant is reemployed by the Employer. 

		
	(B)
	Time of Restoration If Repayment Is Required. If the Employer decides that the Participant is required to repay to the Plan the full amount of all distributions which were attributable to Employer contributions (including Elective Deferrals) in order to have the previous Forfeiture of such Participant's Account balance attributable to Employer contributions restored, then, such repayment by the Participant must be made before the earlier of 

 
(i) five years after the Participant's Reemployment Commencement Date, or (ii) the date on which the Participant incurs five consecutive Breaks in Service following the date of distribution of either the entire or the remaining Vested Interest in the Participant's Account. Such restoration of the previous Forfeiture of such Participant's Account balance attributable to Employer contributions will occur in the Plan Year that the Participant repays to the Plan the full (or any remaining) amount of the distribution which was attributable to Employer contributions (including Elective Deferrals).

		
	(d)
	Sources of Restoration. The sources to restore a previous Forfeiture of the non-Vested portion of the Participant's Account balance attributable to Employer contributions pursuant to this Section will be made first by using available Forfeitures to restore the previous Forfeiture and, if such available Forfeitures are insufficient to restore the previous Forfeiture, by the Employer making a special Employer contribution to the Plan to the extent necessary to restore the previous Forfeiture.

		
	3.11
	Allocation of Earnings and Losses. As of each Valuation Date, amounts in Participants' accounts which have not been segregated from the general Trust Fund for investment purposes (accounts which have been segregated include 

39

any Directed Investment Accounts established under Section 7.4) and which have not been distributed since the prior Valuation Date will have the net income of the Trust Fund earned since the prior Valuation Date allocated in accordance with such rules and procedures that are established by the Administrator and that are applied in a uniform and nondiscriminatory manner based upon the investments of the Trust Fund and the Participants' accounts to which the net income is allocated. For purposes of this Section, the term "net income" means the net of any interest, dividends, unrealized appreciation and depreciation, capital gains and losses, and investment expenses of the Trust Fund determined on each Valuation Date. However, Participants' accounts which have been segregated for investment purposes (including any Directed Investment Accounts established under Section 7.4) will only have the net income earned thereon allocated thereto. Policy dividends or credits will be allocated to the Participant's Account for whose benefit the Policy is held.

		
	3.12
	Failsafe Allocation. If the Plan fails to satisfy the minimum coverage requirements of Code §410(b), no automatic "failsafe" is provided under the Plan. Rather, the Employer must timely execute a corrective amendment pursuant Regulation §1.401(a)(4)-11(g).  

		
	3.13
	Rollover Contributions.  Any Eligible Employee (whether a Participant or not) is permitted to make Rollover Contributions to the Plan. Rollover Contributions will be accepted from the following types of plans: (1) 401(a) or 403(a) plans, excluding voluntary employee after-tax contributions, (2) 403(b) plans, excluding voluntary employee after-tax contributions, (3) 457(b) governmental plans, and (4) individual retirement accounts and individual retirement annuities. Rollover Contributions can include Roth Elective Deferrals. Rollover Contributions will be allocated to an Employee's Rollover Contribution Account in which the Employee will have a 100% Vested Interest. The Administrator may choose for investment purposes either to segregate Rollover Contribution Accounts into separate interest bearing accounts or to invest them as part of the general Trust Fund, except for that portion of an Employee's Rollover Contribution Account which an Employee may be permitted to self-direct under Section 7.4. 

		
	3.14
	Voluntary Employee Contributions.  Voluntary Employee Contributions are no longer permitted. 

40

Article 4

Plan Benefits

		
	4.1
	Benefit Upon Retirement. Every Participant who reaches Normal Retirement Age (or Early Retirement Age as defined under Section 1.53) prior to Termination of Employment will be entitled upon subsequent Termination of Employment to receive his or her Vested Aggregate Account balance determined as of the Valuation Date coinciding with or immediately preceding the date of distribution. A Participant who remains employed by the Employer after his or her Normal Retirement Age will continue to participate in the Plan until his or her subsequent Termination of Employment. Distribution will be made under Article 5.

		
	4.2
	Benefit Upon Death. Upon the death of a Participant prior to Termination of Employment, or upon the death of a Terminated Participant prior to distribution of his or her Vested Aggregate Account, his or her Beneficiary will be entitled to the Participant's Vested Aggregate Account balance determined as of the Valuation Date coinciding with or immediately preceding the date of distribution. If a Beneficiary who is living on the date of the Participant's death dies prior to receiving the entire death benefit to which such Beneficiary is entitled, then the undistributed portion of such death benefit will be paid in a single payment to the named beneficiary of such Beneficiary, or if there is no such named beneficiary, then to the estate of such deceased Beneficiary. The Administrator's determination that a Participant has died and that a particular person has a right to receive a death benefit will be final. Distribution will be made under Article 5.

		
	4.3
	Benefit Upon Disability. If a Participant suffers a Disability prior to Termination of Employment, or if a Terminated Participant suffers a Disability prior to distribution of his or her Vested Aggregate Account, he or she will be entitled to his or her Vested Aggregate Account balance determined as of the Valuation Date coinciding with or immediately preceding the date of distribution. Distribution will be made under Article 5.

		
	4.4
	Benefit Upon Termination of Employment. A Terminated Participant will be entitled to his or her Vested Aggregate Account balance determined as of the Valuation Date coinciding with or immediately preceding the date of distribution. Distribution will be made under Article 5.

		
	4.5
	Determination of Vested Interest. A Participant's Vested Interest in his or her Participant's Account will be determined in accordance with the following provisions:

		
	(a)
	Accounts Required To Be 100% Vested. A Participant will at all times have a 100% Vested Interest in the following accounts maintained from time to time on his or her behalf by the Plan: the Elective Deferral Account, Traditional ADP Safe Harbor Matching Contribution Account, Traditional ADP Safe Harbor Non-Elective Contribution Account, Qualified Matching Contribution Account, Qualified Non-Elective Contribution Account, Rollover Contribution Account and Voluntary Employee Contribution Account.

		
	(b)
	Vesting Upon Normal Retirement Age Prior to Termination of Employment. Notwithstanding any other Vesting provision of the Plan to the contrary, a Participant will have a 100% Vested Interest in his or her Participant's Account upon reaching Normal Retirement Age prior to Termination of Employment.

		
	(c)
	Vesting Upon Death Prior to Termination of Employment. Notwithstanding any other Vesting provision of the Plan to the contrary, a Participant will have a 100% Vested Interest in his or her Participant's Account upon his or her death prior to Termination of Employment.

		
	(d)
	Vesting Upon Disability Prior to Termination of Employment. Notwithstanding any other Vesting provision of the Plan to the contrary, a Participant will have a 100% Vested Interest in his or her Participant's Account upon suffering a Disability prior to Termination of Employment.

		
	(e)
	Vesting of Non-Safe Harbor Matching Contributions. (1) A Participant's Vested Interest in his or her Non-Safe Harbor Matching Contribution Account will be determined by the Vesting schedule immediately following this paragraph based on the Participant's credited Years of Vesting Service. In determining a Participant's Vested Interest under this paragraph, all Years of Vesting Service will be counted. Notwithstanding the foregoing, a Participant's Vested Interest in his or her Non-Safe Harbor Matching Contribution Account balance that existed prior to January 1, 2001 will be determined by the Vesting schedule in effect prior to January 1, 2001.  

41

1 Year of Vesting Service    0% Vested
2 Years of Vesting Service    0% Vested
3 Years of Vesting Service    100% Vested

(2) A Participant’s Vested Interest in his or her Prior Palm Mortuary Matching Contributions Account, if any, and Prior WFG Matching Contributions Account, if any, shall be 100% at all times.

		
	(f)
	Vesting of Non-Safe Harbor Non-Elective Contributions. (1) A Participant's Vested Interest in his or her Non-Safe Harbor Non-Elective Contribution Account will be determined by the Vesting schedule immediately following this paragraph based on the Participant's credited Years of Vesting Service. In determining a Participant's Vested Interest under this paragraph, all Years of Vesting Service will be counted. 

1 Year of Vesting Service    0% Vested
2 Years of Vesting Service    0% Vested
3 Years of Vesting Service    100% Vested

(2) A Participant’s Vested Interest in his or her Prior WFG Non-Safe Harbor Non-Elective Contributions Account, if any, shall be 100% at all times.

(3) A Participants Vested Interest in his Prior Palm Mortuary Non-Safe Harbor Non-Elective Contributions Account, If any, shall be as follows: 

1 Year of Vesting Service    20% Vested
2 Years of Vesting Service    40% Vested
3 Years of Vesting Service    60% Vested
4 Years of Vesting Service    80% Vested
5 Years of Vesting Service    100% Vested

		
	(g)
	Vesting Upon Complete or Partial Termination or Upon Complete Discontinuance of Contributions. Upon the complete termination or partial termination of the Plan, or upon a complete discontinuance of contributions under the Plan, each affected Participant will have a 100% Vested Interest in his or her unpaid Participants' Account balance. 

		
	(h)
	Amendments to the Vesting Schedule. No amendment to the Plan may directly or indirectly reduce a Participant's Vested Interest in his or her Participant's Account. If the Plan is amended in any way that directly or indirectly affects the computation of a Participant's Vested Interest in his or her Participant's Account, or the Plan is deemed amended by an automatic change to or from a Top Heavy Vesting schedule, then the following provisions will apply:

		
	(1)
	Participant Election. Any Participant with at least three Years of Vesting Service may, by filing a written request with the Administrator, elect to have the Vested Interest in his or her Participant's Account computed by the Vesting schedule in effect prior to the amendment. A Participant who fails to make an election will have the Vested Interest in his or her Participant's Account computed under the new schedule. The period in which the election may be made will begin on the date the amendment is adopted or is deemed to be made and will end on the latest of (A) 60 days after the amendment is adopted; (B) 60 days after the amendment becomes effective; or (C) 60 days after the Participant is issued written notice of the amendment by the Employer or Administrator.

		
	(2)
	Preservation of Vested Interest. Notwithstanding the forgoing, if the Vesting schedule is amended, then in the case of an Employee who is a Participant as of the later of the date such amendment is adopted or the date it becomes effective, the Vested Interest in his or her Participant's Account determined as of such date will not be less than his or her Vested Interest computed under the Plan without regard to such amendment.

Article 5

Distribution of Benefits

42

		
	5.1
	Distributions for Reasons Other Than Death. Except as may otherwise be provided in this Article 5, the benefit a Participant is entitled to receive under Sections 4.1, 4.3 and 4.4 will be distributed as set forth below:

		
	(a)
	Normal Form of Distribution. Unless otherwise elected under paragraph (b), a Participant's benefit will be distributed in the Normal Form of Distribution, which is a single payment. 

		
	(b)
	Optional Forms of Distribution.  A Participant may waive the Normal Form of Distribution and elect to have his or her benefit distributed in an Optional Form of Distribution as follows: the Optional Form of Distribution permitted is designated sums from time to time as elected by the Participant. Notwithstanding the foregoing, a former Participant who is receiving installment payments from the portion of his Account under the prior WFG Employee Savings Plan shall continue to receive distributions under this form until he or she elects to receive distribution in full.  All Optional Forms of Distribution are available on a non-discriminatory basis and not subject to the Administrator's discretion. 

		
	(c)
	Time of Distribution of Retirement Benefits. Distribution of the benefit a Participant is entitled to receive under Section 4.1 will begin within an administratively reasonable time after the Participant's Termination of Employment on or after his or her Normal Retirement Age.

		
	(d)
	Time of Distribution of Disability Benefits. Distribution of the Disability benefit a Participant is entitled to receive under Section 4.3 will begin on the date that a distribution is to be made to a Terminated Participant under paragraph (e) below.  

 
		
	(e)
	Time of Distribution to a Terminated Participant. Distribution of the benefit a Terminated Participant is entitled to receive under Section 4.4 will be made within an administratively reasonable time after the Participant requests payment. 

		
	(f)
	Partial Distributions. If a Participant receives a distribution of less than 100% of his or her Vested Aggregate Account balance, the Administrator will, in a uniform nondiscriminatory manner, determine the portion (including zero) of the distribution to be made from each of the Participant's sub-accounts.

		
	5.2
	Distributions Because of Death. Except as may otherwise be provided in this Article 5, the benefit a Participant's Beneficiary is entitled to receive under Section 4.2 will be distributed as set forth below:

		
	(a)
	Death Benefit Payable to a Surviving Spouse. If a Participant dies before the Annuity Starting Date and the Participant has a surviving Spouse on the date of the Participant's death, the surviving Spouse will be entitled to receive a death benefit determined in accordance with the following provisions:

		
	(1)
	Form of Distribution. Notwithstanding any other Beneficiary designation made by the Participant, the surviving Spouse will be entitled to receive 100% of the Participant's death benefit unless the surviving Spouse has waived that right under Section 5.17. Any portion of the death benefit that the surviving Spouse has not waived will be distributed in a single payment.  

		
	(2)
	Time of Distribution. Any death benefit payable to a surviving Spouse will be distributed within a reasonable time after the death of the Participant, but not later than December 31st of the calendar year which contains the fifth anniversary of the date of the Participant's death pursuant to Section 5.21(b)(2)(A), if required minimum distributions to the Participant have not begun. However, if the surviving Spouse elects the Life Expectancy rule under Section , the surviving Spouse may elect to defer distribution of the death benefit, but distribution to the surviving Spouse must begin no later than December 31st of the calendar year in which the deceased Participant would have attained age 701⁄2.   

		
	(3)
	Death of Surviving Spouse Before Distribution Begins. If the surviving Spouse dies before distribution begins, then distribution will be made as if the surviving Spouse were the Participant. 

		
	(b)
	Death Benefit Payable to a Non-Spouse Beneficiary. Any death benefit payable to a non-Spouse Beneficiary will be distributed in a single payment. Any such death benefit will be distributed within a reasonable time 

43

after the death of the Participant, but not later than December 31st of the calendar year which contains the fifth anniversary of the date of the Participant's death under Section 5.21(b)(2)(A), if required minimum distributions to the Participant have not begun. However, if the non-Spouse Beneficiary elects the Life Expectancy rule under Section, then distribution of the death benefit must begin no later than December 31st of the calendar year immediately following the calendar year in which the Participant died. 

		
	(c)
	Distribution If the Participant or Other Payee Is In Pay Status. If a Participant or Beneficiary who has begun receiving distribution of benefits dies before the entire benefit is distributed, the balance thereof will be distributed to the Participant's Beneficiary (or Beneficiary's Beneficiary) at least as rapidly as under the method of distribution being used on the date of the Participant's or Beneficiary's death.

		
	(d)
	Payments to a Beneficiary of a Beneficiary. In the absence of a written Beneficiary designation from the deceased Participant to the contrary, any Beneficiary may name his or her own Beneficiary to receive any benefits payable in the event of the Beneficiary's death prior to receiving the entire death benefit to which the Beneficiary is entitled. If a Beneficiary has not named his or her own Beneficiary, then the Beneficiary's estate will be the Beneficiary. If any benefit is payable under this paragraph to a Beneficiary of the deceased Participant's Beneficiary, to the estate of the deceased Participant's Beneficiary, or to any other Beneficiary or the estate thereof, then subject to the limitations regarding the latest dates for benefit payment of this Section and Section 5.21, the Administrator may (1) continue to pay the remaining value of such benefits in the amount and form already commenced; (2) pay such benefits in any other manner permitted under the Plan for distribution of benefits upon death; and/or (3) if payments have not commenced, pay such benefits in any other manner permitted under the Plan for distribution of benefits upon death. Distribution to the Beneficiary of a Beneficiary must begin no later than the date that a distribution would have been made to the Participant's Beneficiary. The Administrator's determination under this paragraph will be final and will be applied in a uniform manner that does not discriminate in favor of Participants who are HCEs.

		
	5.3
	In-Service Distributions for Reasons Other Than Hardship. Subject to any applicable waiver and consent requirements in Section 5.17, a Participant who is still an Employee may request an in-service distribution of all or a portion of his or her Vested Interest in accordance with the provisions below. The number of times during any Plan Year that a Participant can request such a distribution may be limited by the Administrator if such limit does not discriminate in favor of HCEs. 

		
	(a)
	Elective Deferral Account. A Participant may request an in-service distribution of up to 100% of the Vested Interest in his or her Elective Deferral Account at any time on or after the date the Participant reaches Normal Retirement Age, or at any time on or after the date the Participant reaches age 591⁄2.

		
	(b)
	Qualified Matching Contribution Account. A Participant may request an in-service distribution of up to 100% of the Vested Interest in his or her Qualified Matching Contribution Account at any time on or after the date the Participant reaches Normal Retirement Age, or at any time on or after the date the Participant reaches age 591⁄2.

		
	(c)
	Qualified Non-Elective Contribution Account. A Participant may request an in-service distribution of up to 100% of the Vested Interest in his or her Qualified Non-Elective Contribution Account at any time on or after the date the Participant reaches Normal Retirement Age, or at any time on or after the date the Participant reaches age 591⁄2.

		
	(d)
	Non-Safe Harbor Matching Contribution Account. A Participant may request an in-service distribution of up to 100% of the Vested Interest in his or her Non-Safe Harbor Matching Contribution Account at any time on or after the date the Participant reaches Normal Retirement Age, or at any time on or after the date the Participant has reached age 591⁄2. 

		
	(e)
	Non-Safe Harbor Non-Elective Contribution Account. A Participant may request an in-service distribution of up to 100% of the Vested Interest in his or her Non-Safe Harbor Non-Elective Contribution at any time on or after the date the Participant reaches Normal Retirement Age, or at any time on or after the date the Participant has reached age 591⁄2 . 

44

		
	(f)
	Rollover Contribution Account. A Participant may request an in-service distribution of up to 100% of the Vested Interest in his or her Rollover Contribution Account at any time. 

		
	(g)
	Voluntary Employee Contribution Account. A Participant may request an in-service distribution at any time of up to 100% of the Vested Interest in his or her Voluntary Employee Contribution Account transferred to this Plan from the Stewart Enterprise, Inc. Employees’ Retirement Trust. 

		
	(h)
	Participants Not 100% Vested. If a distribution is made under this Section when the Participant has less than a 100% Vested Interest in his or her Non-Safe Harbor Non-Elective Contribution Account or Matching Contribution Account and such Vested Interest may increase, a separate account will be established at the time of distribution, and at any relevant time the Participant's Vested Interest in the separate account will be equal to an amount ("X") determined by the following formula: X = P(AB + (R x D)) - (R x D), where "P" is the Vested Interest at the relevant time, "AB" is the respective account balance at the relevant time, "D" is the amount of the distribution, and "R" is the ratio of the respective account balance at the relevant time to the respective account balance after distribution. 

		
	(i)
	Time and Manner of Distribution. A distribution under this Section will be made in a single payment within an administratively reasonable time after the request is received by the Administrator.

		
	5.4
	Mandatory Cash-Out of Benefits. The Vested Aggregate Account balance of a Participant who has Terminated Employment will be distributed without the consent of the Participant (or the Participant's Spouse) in accordance with the following provisions: 

		
	(a)
	Cash-Out Threshold. Distribution can only be made under this Section if a Participant's Vested Aggregate Account on or after the date of Termination of Employment does not exceed $5,000 (the "cash-out threshold"), which will be determined by including the Participant's Rollover Contribution Account. 

		
	(b)
	Form of Distribution. Distribution under this Section will, at the election of the Participant, be made as a lump sum cash payment or as a direct rollover under Section 5.12. However, if the Participant does not make an election, then the following provisions will apply: (1) if the distribution is $1,000 or less (including the Participant's Rollover Contribution Account), distribution will be made in the form of a lump sum cash payment not less than 30 days and not more than 180 days after the Code §402(f) notice is provided to the Participant; and (2) if the amount of the distribution exceeds $1,000 (including the Participant's Rollover Contribution Account), the Administrator will pay the distribution in an automatic direct rollover to an individual retirement account within the meaning of Code §408(a) or an individual retirement annuity within the meaning of Code §408(b) not less than 30 days and not more than 180 days after the Code §402(f) notice is provided to the Participant.

		
	(c)
	Time of Distribution. Distribution will be made as soon as administratively feasible after the Participant Terminates Employment; provided, however, that if a Participant would have received a distribution under the preceding sentence but for the fact that his or her Vested Aggregate Account exceeded the cash-out threshold, and if at a later time the Participant's Vested Aggregate Account is reduced to an amount not greater than the cash-out threshold, the Administrator will distribute such Vested Aggregate Account in a lump sum without the Participant's consent as soon as administratively feasible after the date the Participant's Vested Aggregate Account no longer exceeds the cash-out threshold.

		
	5.5
	Restrictions on Immediate Distributions. If a Participant's Vested Aggregate Account balance exceeds the amount set forth in paragraph (a) below and is Immediately Distributable, the following provisions will apply:

		
	(a)
	General Rule. If the Vested Aggregate Account balance of a Participant who has Terminated Employment exceeds $5,000 (or if there are remaining payments to be made under a distribution option that previously commenced) and such amount is Immediately Distributable, the Participant must consent to any such distribution. With respect to any portion of a distribution that is subject to the QJSA Requirements, the Participant's Spouse, if any, must also consent to the distribution. 

45

		
	(b)
	Consent Requirements. The consent of the Participant to any benefit that is Immediately Distributable must be obtained in writing within the 180-day period ending on the Annuity Starting Date. With respect to any portion of the Participant's Account that is Immediately Distributable and is subject to the QJSA Requirements, the consent of the Participant's Spouse, if any, must also be obtained in writing during 180-day period ending on the Annuity Starting Date unless the distribution is made in the form of a QJSA. However, neither the Participant nor the Spouse must consent to a distribution required by Code §401(a)(9) or §415 while the benefit is Immediately Distributable. 

		
	(c)
	Notification Requirement. The Administrator must notify the Participant of the right to defer any distribution until it is no longer Immediately Distributable (and, for Plan Years beginning after December 31, 2006, the consequences of failing to defer any distribution). With respect to any portion of the Participant's Account which is subject to the QJSA Requirements, the Participant's Spouse must also be so notified. Notification will include a general explanation of the material features and relative values of the optional forms of distribution available under the Plan in a manner that would satisfy the notice requirements of Code §417(a)(3), and will be provided no less than 30 days or more than 180 days prior to the Annuity Starting Date. Notwithstanding the other requirements of this Section, the notices prescribed by this Section need not be given to a Participant if the Plan "fully subsidizes" the costs of a QJSA or QPSA. A plan fully subsidizes the costs of a benefit if no increases in cost, or decreases in benefits, to the Participant may result from the Participant's failure to elect another benefit. 

		
	(d)
	Waiver of Minimum 30-Day Notice Requirement. Distribution of a Participant's benefit may begin less than 30 days after the notice described in paragraph (c) above is given to the Participant if (1) the Administrator clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving notice to consider the decision of whether or not to elect a distribution; (2) the Participant, after receiving the notice, affirmatively elects a distribution (or a particular distribution option); and (3) with respect to any portion of the Participant's Account which is subject to the QJSA Requirements, the Participant does not revoke the election at any time prior to the expiration of the 7-day period that begins on the date the notice is given. 

		
	(e)
	Consent Not Needed on Plan Termination. If upon Plan termination neither the Employer nor an Affiliated Employer maintains another defined contribution plan other than an employee stock ownership plan (ESOP) as defined in Code §4975(e)(7), then the Participant's benefit will, without the consent of the Participant or his or her Spouse, be distributed to the Participant in accordance with the distribution provisions of the Plan. If the Employer or an Affiliated Employer maintains another defined contribution plan (other than an ESOP), then the Participant's benefit will, without the consent of the Participant or his or her Spouse, be transferred to the other plan if the Participant does not consent to an immediate distribution under this Section. However, this paragraph will not apply to any portion of the Participant's Account subject to the QJSA Requirements if the Plan, upon termination, offers an annuity option purchased from a commercial provider with respect to such portion of the Participant's Account. 

		
	5.6
	Qualified Reservist Distributions. Subject to any applicable waiver and consent requirements in Section 5.17, a Participant who is a member of a reserve component (as defined in §101 of title 37, United States Code) and who is ordered or called to active duty after September 11, 2001 for a period of at least 180 days or an indefinite period may elect to take a distribution (a "Qualified Reservist Distribution") of up to 100% of his or her Elective Deferrals during the period beginning on the date of his or her call-up order and ending at the close of the active duty period.

		
	5.7
	Active Duty Severance Distributions. Active Duty Severance Distributions are not permitted. 

		
	5.8
	Financial Hardship Distributions. A Participant who is still an Employee may request a distribution from the Administrator on account of the Participant's immediate and heavy financial need. Any such distribution will be made in accordance with the rules and procedures established by the Administrator in an administrative policy. Such administrative policy will include (but will not be limited to) (a) the standards to be used in determining if a Participant has incurred a financial hardship (based on non-discriminatory and objective criteria), and (b) the accounts from which hardship distributions can be made, and the percentage of such accounts that can be distributed. Any such distribution of the Participant's Elective Deferrals, QMACs and/or QNECs will not include any earnings credited 

46

thereto. Any distribution under this Section will occur within an administratively reasonable time after the request is received by the Administrator, and will only be made in a single payment.

		
	5.9
	Distribution of Rollover Contributions. Subject to any applicable waiver and consent requirements in Section 5.17, an Employee may request a distribution of up to 100% of his or her Rollover Contribution Account at any time. A distribution under this Section will be made within an administratively reasonable time after the request by the Participant in accordance with the rules set forth under Sections 5.1 and 5.3. A distribution under this Section (a) will not prevent an Employee from accruing future benefits from Employer contributions, and (b) can be re-deposited to the Employee's Rollover Contribution Account if such amount continues to be deemed a Rollover Contribution except for the fact that it originated from this Plan.

		
	5.10
	Distribution of Voluntary Employee Contributions. Subject to any applicable waiver and consent requirements in Section 5.17 an Employee may request a distribution of up to 100% of his or her Voluntary Employee Contribution Account only at the time a Participant is entitled to a distribution of his or her Vested Aggregate Account under Section 5.1 unless the Participant takes an in-service distribution of his or her Voluntary Employee Contribution Account under Section 5.3. A distribution under this Section will be made within an administratively reasonable time after the request by the Participant. Any distribution made prior to the time a Participant is entitled to a distribution of his or her Vested Aggregate Account under Section 5.1 will only be made in a single payment. Any distribution made after the Participant is entitled to a distribution of his or her Vested Aggregate Account under Section 5.1 will, at the election of the Participant, be distributed in a single payment or in the same manner as the Participant's Account under Section 5.1. Any distribution under this Section which is attributable to post-1986 Voluntary Employee Contributions can only be made along with a portion of the earnings thereon, such earnings to be determined by the following formula: DA [1-(V - V+E)]. For purposes of applying the aforementioned formula, the term DA means the distribution amount, the term V means the amount of Voluntary Employee Contributions, and the term V+E means the amount of Voluntary Employee Contributions plus the earnings attributable thereto. A distribution under this Section will not prevent an Employee from accruing future benefits from Employer contributions.

		
	5.11
	Distribution of Transfer Contributions. A Participant's Transfer Contribution Account will be distributed at the same time and in the same manner as the Participant's Account is distributed under Sections 5.1 or 5.2, subject to the following provisions:

 
		
	(a)
	Transfer Contributions That Remain Subject to the QJSA Requirements. If a Transfer Contribution was a direct or indirect transfer from a plan that was subject to the QJSA Requirements at the time of the transfer, distribution of such contribution will be distributed in accordance with the QJSA Requirements of this Article 5, including the applicable Spousal consent requirements set forth in Section 5.17. 

		
	(b)
	Special Rule for Elective Deferral Transfers. If a Transfer Contribution was an Elective Contribution as defined in Regulation §1.401(k)-1(g)(3) (including any Qualified Non-Elective Contributions, Qualified Matching Contributions, and ADP Safe Harbor Contributions) which are transferred to this Plan in a direct or indirect trustee-to-trustee transfer from another qualified plan and are subject to the distribution restrictions set forth in Regulation §1.401(k)-1(d), then the distribution of such Transfer Contributions (including post-transfer earnings thereon) will be subject to the limitations in Regulation §1.401(k)-1(d). 

		
	5.12
	Direct Rollovers. Notwithstanding any provision of the Plan that would otherwise limit a Distributee's election, a Distributee may elect, at the time and in the manner prescribed by the Plan, to have any portion of an Eligible Rollover Distribution paid directly (a "Direct Rollover") to an Eligible Retirement Plan specified by the Distributee. However, for distributions after December 31, 2006, a Direct Rollover to a Distributee who is a non-Spouse Beneficiary can only be made to a "traditional" or Roth IRA established on behalf of the non-Spouse Beneficiary for the purpose of receiving the distribution. This Section will be applied by treating any amount distributed from the Participant’s Roth Elective Deferral Account as a separate distribution from any amount distributed from the Participant's other Plan accounts, even if the amounts are distributed at the same time. 

		
	5.13
	Restrictions on Distribution of Elective Deferrals and Other Contributions. Notwithstanding any other provision of the Plan, and subject to the consent requirements set forth in Section 5.17, Elective Deferrals, ADP Safe Harbor Contributions, QMACs, QNECs, and the earnings allocable to each such contribution, can only be distributed from the Plan upon the earliest to occur of the following dates: (a) the date a Participant Terminates Employment; (b) the 

47

date a Participant dies; (c) the date a Participant suffers a Disability; (d) the date a Participant reaches age 591⁄2 if in-service distributions at such age are permitted under Section 5.3; (e) the date a Participant qualifies for a financial hardship distribution if such distributions are permitted under Section 5.8; (f) the date a Participant qualifies for a Qualified Reservist Distribution if such distributions are permitted under Section 5.6; (g) the date a Participant qualifies for an Active Duty Severance Distribution if such distributions are permitted under Section 5.7; (h) the occurrence of a federally declared disaster where resulting legislation authorizes a distribution; and (i) the date the Plan is terminated without the Employer maintaining another defined contribution plan (other than an employee stock ownership plan as defined in Code §4975(e)(7) or §409(a), a simplified employee pension plan as defined in Code §408(k), a SIMPLE IRA plan as defined in Code §408(p), a plan or contract described in Code §403(b) or a plan described in Code §457(b) or (f)) at any time during the period beginning on the date of plan termination and ending 12 months after all assets have been distributed from the Plan. Distribution under clause (i) above can only be made in a lump sum.

		
	5.14
	Missing Payees and Unclaimed Benefits. With respect to a Participant or Beneficiary who has not claimed any benefit (the "missing payee") to which such missing payee is entitled, and with respect to any Participant or Beneficiary who has not satisfied the administrative requirements for benefit payment, the Administrator may elect to either (a) segregate the benefit into an interest bearing account, in which event an annual maintenance fee as may be set from time to time in a policy established by the Administrator may be assessed against the segregated account; (b) subject to a policy established by the Administrator, distribute the benefit at any time in any manner which is sanctioned by the Internal Revenue Service and/or the Department of Labor, which may include (but not be limited to) (1) distribute the benefit in an automatic direct rollover to an individual retirement plan designated by the Administrator; such individual retirement plan may be either an individual retirement account within the meaning of Code §408(a) or an individual retirement annuity within the meaning of Code §408(b); or (2) distribute the benefit to the Pension Benefit Guaranty Corporation or any other authorized Federal Department or agency; (c) distribute the benefit to any person or entity who is appointed under State (or Commonwealth) law to act as a duly authorized guardian, legal representative, conservator, or power of attorney; or (d) treat the entire benefit as a Forfeiture. If a missing payee whose benefit has been forfeited is located, or if a payee whose benefit has been forfeited for failure to satisfy the administrative requirements for benefit payment subsequently satisfies such administrative requirements and claims his or her benefit, and if the Plan has not terminated (or if the Plan has terminated, all benefits have not yet been paid), then the benefit will be restored. The Administrator, on a case by case basis, may elect to restore the benefit by the use of earnings from non-segregated assets of the Fund, by Employer contributions, by available Forfeitures of the Forfeiture Account, or by any combination thereof. However, if any such payee has not been located (or satisfied the administrative requirements for benefit payment) by the time the Plan terminates and all benefits have been distributed from the Plan, then the Forfeiture of such unpaid benefit will not be restored.

		
	5.15
	Distribution in the Event of Legal Incapacity. If any person entitled to benefits (the "Payee") is under any legal incapacity by virtue of age or mental condition, payments may be made in one or more of the following ways as directed by the Administrator: (a) to a court-appointed guardian of the Payee; (b) to the person/entity having a valid power of attorney of the Payee or the Payee's estate; (c) to any other person/entity authorized under State (or Commonwealth) law to receive benefits on behalf of the Payee; or (d) if the Payee is a minor, to the authorized person/entity of the Payee (e.g., custodian or guardian) under any State's (or Commonwealth's) Uniform Transfers to Minors Act or Uniform Gifts to Minors Act.

		
	5.16
	Earnings Before Benefit Distribution. As of the Valuation Date coinciding with or next following the date a Participant Terminates Employment with the Employer for any reason, the Administrator will, until a distribution is made to the Participant or the Participant's Beneficiary in accordance with Sections 5.1 or 5.2, direct the Trustee in a uniform nondiscriminatory manner to either (a) invest the Participant's Vested Aggregate Account balance determined as of such Valuation Date in a separate interest bearing account; or (b) leave the Participant's Vested Aggregate Account balance as part of the general Trust Fund. If the Participant's Vested Aggregate Account balance remains as part of the general Trust Fund, then such account will either (a) share in the allocation of net earnings and losses under Section 3.11 as a non-segregated account, or (b) be granted interest at a rate consistent with the interest bearing investments of the Trust Fund.

		
	5.17
	Participant/Spousal Waiver and Consent Requirements. To the extent a distribution from the Plan requires the Participant's consent, or the consent of the Participant's Spouse, the following provisions will apply: 

48

		
	(a)
	Normal Form of Distribution Is Not a QJSA. If the Normal Form of Distribution under the Plan is not a QJSA, all distributions can be made from the Plan to a Participant without the consent of the Participant's Spouse, except for any portion of the Participant's Account which is subject to the QJSA Requirements. Subject to the provisions of the next sentence, with regard to a death benefit payable to a Spouse, a Spouse can elect to waive such death benefit under Section 5.2 of the Plan, but the election will not be effective unless (1) the election is in writing; (2) the election designates a specific Beneficiary or form of benefit which may not be changed without Spousal consent (or the Spouse's consent expressly permits designations by the Participant without any requirement of further Spousal consent); and (3) the Spouse's consent acknowledges the effect of the election and is witnessed by the Administrator or a notary public. With regard to a distribution of any portion of a Participant's Account which is subject to the QJSA and/or the QPSA requirements, the provisions in paragraph (b) below apply.

		
	(b)
	Normal Form of Distribution Is a QJSA. If the Normal Form of Distribution under the Plan is a QJSA, or with respect to any portion of the Participant's Account which is subject to the QJSA Requirements, the following provisions will apply:

		
	(1)
	Election to Waive a QJSA. A married Participant's election to waive a QJSA, or an unmarried Participant's election to waive a life annuity, must be in writing and must be made during the 180-day period ending on the Annuity Starting Date. The election may be revoked in writing and a new election may be made at any time, and any number of times, during the election period.

		
	(2)
	Election to Waive a QPSA. A married Participant's election to waive a QPSA must be in writing and must be made during an election period beginning on the first day of the Plan Year in which the Participant reaches age 35 and ending on the date of his or her death. The election may be revoked in writing and a new election made at any time and any number of times during the election period. A Terminated Participant's election period concerning the Vested Aggregate Account before Termination of Employment will not begin later than such date. If the surviving Spouse can waive the QPSA and if the Participant has not completed a designation form specifying the time and/or form of payment of the QPSA prior to the Participant's death, the surviving Spouse may elect to receive the QPSA in any optional form permitted in Section 5.2. A Participant who has not yet reached age 35 as of the end of any current Plan Year may make a special election to waive a QPSA for the period beginning on the date of such election and ending on the first day of the Plan Year in which such Participant reaches age 35. This election will not be valid unless the Participant receives the same written explanation of the QPSA as described in subparagraph (3) below. QPSA coverage will be automatically reinstated as of the first day of the Plan Year in which the Participant reaches age 35. A new election to waive a QPSA on or after such date is subject to the full requirements of this Section.   

		
	(3)
	Written Explanation. In the case of a QJSA, the Administrator will no less than 30 days and no more than 180 days prior to the Annuity Starting Date provide to each Participant a written explanation of (A) the terms and conditions of a QJSA; (B) the Participant's right to make and the effect of an election to waive the QJSA form of benefit; (C) the rights of a Participant's Spouse; and (D) the right to make, and the effect of, a revocation of a previous election to waive the QJSA. The Annuity Starting Date for a distribution in a form other than a QJSA may be less than 30 days after receipt of such written explanation provided (A) the Participant has been provided with information that clearly indicates that the Participant has at least 30 days to consider whether to waive the QJSA and to elect (with Spousal consent) a form of distribution other than a QJSA; (B) the Participant is permitted to revoke any affirmative distribution election at least until the Annuity Starting Date or, if later, at any time prior to the expiration of the 7-day period that begins the day after the explanation of the QJSA is provided to the Participant; and (C) the Annuity Starting Date is a date after the date that the written explanation was provided to the Participant. In the case of a QPSA, the Administrator will provide each Participant within the Applicable Period described in subparagraph (4) with a written explanation of the QPSA in such terms and manner as would be comparable to the written explanation applicable to a QJSA. 

49

		
	(4)
	Applicable Period. The term "Applicable Period" means whichever of the following periods ends last: (A) the period beginning with the first day of the Plan Year in which the Participant attains age 32 and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age 35; (B) a reasonable period after the individual becomes a Participant in the Plan; (C) a reasonable period ending after the requirements of Code §401(a)(11) apply to the Participant; or (D) a reasonable period ending after the requirements of Code §417(a)(5) cease to apply with respect to the Participant. For purposes of this subparagraph, a reasonable period means the end of the two year period beginning one year prior to the date the applicable event occurs, and ending one year after that date. 

		
	(5)
	Participants Who Terminate Before Age 35. If a Participant Terminates Employment before the Plan Year in which he or she reaches age 35, the notice required under subparagraph (3) will be provided within the two year period beginning one year prior to Termination of Employment and ending one year after Termination of Employment. If such Participant thereafter returns to employment with the Employer, the Applicable Period for such Participant will be re-determined. 

		
	(6)
	Spousal Consent. A Participant's election not to receive a QJSA or QPSA will not be effective unless (A) the Participant's Spouse consents in writing to the election; (B) the election designates a specific Beneficiary (or form of benefit) which cannot be changed without Spousal consent (or the consent of the Spouse expressly permits designations by the Participant without any requirement of further Spousal consent); and (C) the Spouse's consent acknowledges the effect of the election and is witnessed by the Administrator or a notary public. However, Spousal consent will not be required if there is no Spouse, if the Spouse cannot be located, or if there are other circumstances (under the Code or Regulations) which preclude the necessity of such Spouse's consent. Spousal consent (or establishment that consent cannot be obtained) will be effective only with respect to such Spouse. A consent that permits designations by the Participant without any requirement of further Spousal consent 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 election may be made by a Participant without Spousal consent at any time before benefits begin. No consent will be valid unless the Participant has received notice as provided in subparagraph (3) above.

		
	5.18
	In-Plan Roth Rollovers. In-Plan Roth Rollovers pursuant to the Small Business Jobs Act of 2010 are not permitted. 

		
	5.19
	Distribution of Property. The determination to pay any distribution in property will be made by the Administrator in its sole discretion applied in a nondiscriminatory manner that does not discriminate in favor of Participants who are HCEs.

		
	5.20
	Statutory Commencement of Benefits. Unless the Participant otherwise elects, distribution of a Participant's benefit must begin no later than the 60th day after the latest of the close of the Plan Year in which the Participant (a) reaches the earlier of age 65 or the Normal Retirement Age; (b) reaches the 10th anniversary of the year that the Participant commenced participation in the Plan; or (c) Terminates Employment with the Employer. However, the failure of a Participant (and, with respect to any portion of the Participant's Account which is subject to the QJSA Requirements, the Participant's Spouse) to consent to a distribution while a benefit is Immediately Distributable will be deemed to be an election to defer the payment (or the commencement of the payment) of any benefit sufficient to satisfy this Section. In addition, if this Plan has an Early Retirement Age, then a Participant who satisfies the service requirement (if any) for Early Retirement Age prior to Termination of Employment will be entitled to receive his or her Vested Aggregate Account balance upon the satisfaction of the age requirement (if any) for Early Retirement Age.

		
	5.21
	Required Distributions. All distributions from the Plan will be determined and made in accordance with the Regulations under Code §401(a)(9) and the minimum distribution incidental benefit requirement of Code §401(a)(9)(G). Pursuant thereto, all distributions will be determined in accordance with the following:

		
	(a)
	General Rules. All distributions under this Section will be made in accordance with these general rules: (1) the requirements of this Section will take precedence over any inconsistent provisions of the Plan and any prior Plan amendments; (2) as of the first Distribution Calendar Year, distributions to a Participant, if not 

50

made in a single-sum, may only be made over one of the following periods: (A) the life of the Participant; (B) the joint lives of the Participant and a Designated Beneficiary; (C) a period certain not extending beyond the Life Expectancy of the Participant; or (D) a period certain not extending beyond the joint life and last survivor expectancy of the Participant and a Designated Beneficiary; and (3) notwithstanding the other provisions of this Section, distributions may be made under a designation made before January 1, 1984, in accordance with Tax Equity and Fiscal Responsibility Act (TEFRA) §242(b)(2) and the provisions of the Plan that relate to TEFRA §242(b)(2).

		
	(b)
	Time and Manner of Distribution. All required distributions will be made from the Plan as follows: 

		
	(1)
	Required Beginning Date. The Participant's entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant's Required Beginning Date. 

		
	(2)
	Death of Participant Before Distributions Begin. If the Participant dies before distribution begins, his or her entire interest will be distributed (or begin to be distributed) not later than as follows: 

		
	(A)
	5-Year Rule. If the Participant dies before distribution begins and there is a Designated Beneficiary, the Participant's entire interest will be distributed to the Designated Beneficiary by December 31 of the calendar year containing the fifth anniversary of the Participant's death. If the surviving Spouse is the sole Designated Beneficiary and the surviving Spouse dies after the Participant but before distribution to either the Participant or surviving Spouse begins, this subparagraph will apply as if the surviving Spouse were the Participant and will apply to all distributions.

		
	(B)
	Life Expectancy Rule. Notwithstanding subparagraph (b)(2)(A), a Participant (or, if no election has been made by the Participant prior to his death, then the Designated Beneficiary) may elect on an individual basis to apply the Life Expectancy Rule to distributions after the death of a Participant who has a Designated Beneficiary. The election must be made no later than September 30th of the calendar year in which distribution would be required to begin under this subparagraph. If neither the Participant nor the Beneficiary makes such an election (or the election is received later than September 30th of the calendar year in which distribution would be required to begin under this subparagraph, then distributions will be made in accordance with the 5-Year rule of subparagraph (b)(2)(A) above and the following provisions: (i) if the surviving Spouse is the sole Designated Beneficiary, distributions to the surviving Spouse will begin by the later of December 31 of the calendar year immediately following the calendar year in which the Participant died, or December 31 of the calendar year in which the Participant would have attained age 701⁄2; (ii) if the surviving Spouse is not the sole Designated Beneficiary, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died; (iii) if there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death, the Participant's interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death; and (iv) if the surviving Spouse is the sole Designated Beneficiary and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse begin, then this subparagraph (b)(2)(B), other than clause (i) herein, will apply as if the surviving Spouse were the Participant.

		
	(C)
	Date Distributions Are Deemed To Begin. For purposes of this subparagraph (b)(2) and paragraph (d), unless clause (iv) of subparagraph (b)(2)(B) above applies, distributions are considered to begin on the Participant's Required Beginning Date. If clause (iv) of subparagraph (b)(2)(B) above applies, distributions are considered to begin on the date distributions are required to begin to the surviving Spouse under clause (i) of  subparagraph (b)(2)(B). If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant's Required Beginning Date (or to the Participant's surviving Spouse before the date distributions are required to begin to the surviving Spouse under clause (i) of subparagraph (b)(2)(B)), then the date distributions are considered to begin is the date distributions actually commence.

51

		
	(3)
	Forms of Distribution. Unless the Participant's interest is distributed as an annuity purchased from an insurance company or in a single payment on or before the Required Beginning Date, as of the first Distribution Calendar Year distributions will be made in accordance with paragraph (d). If the Participant's interest is distributed as an annuity purchased from an insurance company, distributions will be made in accordance with Code §401(a)(9) and the Regulations thereunder. 

		
	(c)
	Required Minimum Distributions During the Participant's Lifetime. The amount of required minimum distributions during a Participant's lifetime will be determined as follows:

		
	(1)
	Amount of Required Distribution for Each Distribution Calendar Year. During the Participant's lifetime, the minimum amount that will be distributed each Distribution Calendar Year is the lesser of (A) the quotient obtained by dividing the Participant's Account Balance by the distribution period in the Uniform Lifetime Table set forth in Regulation §1.401(a)(9)-9, using the Participant's age as of the Participant's birthday in the Distribution Calendar Year; or (B) if the Participant's sole Designated Beneficiary for the Distribution Calendar Year is the Participant's Spouse, then the quotient obtained by dividing the Participant's Account Balance by the number in the Joint and Last Survivor Table set forth in Regulation §1.401(a)(9)-9, using the Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in the Distribution Calendar Year.

		
	(2)
	Required Minimum Distributions Continue Through Year of Death. Required minimum distributions will be determined under this paragraph (c) beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant's date of death. 

		
	(d)
	Required Minimum Distributions After the Participant's Death. Required minimum distributions will be made after a Participant's death in accordance with the following provisions: 

		
	(1)
	Death On or After Date Distribution Begins. If a Participant dies on or after the date distribution begins, then the amount of a required minimum distribution will be determined as follows:

		
	(A)
	Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, then the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the longer of the remaining Life Expectancy of the Participant or the remaining Life Expectancy of the Designated Beneficiary, determined in accordance with the following provisions: (i) the Participant's remaining Life Expectancy is calculated using his or her age in the year of death, reduced by one for each subsequent year; (ii) if the surviving Spouse is not the sole Designated Beneficiary, then the Designated Beneficiary's remaining Life Expectancy is calculated using the age of the Beneficiary in the year following the year of the Participant's death, reduced by one for each subsequent calendar year; and (iii) if the surviving Spouse is the sole Designated Beneficiary, then the remaining Life Expectancy of the surviving Spouse is calculated for each Distribution Calendar Year after the year of the Participant's death using the surviving Spouse's age as of the Spouse's birthday in that Distribution Calendar Year. For Distribution Calendar Years after the year of the surviving Spouse's death, the remaining Life Expectancy of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse's birthday in the calendar year of the Spouse's death, reduced by one for each subsequent calendar year.

		
	(B)
	No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant's death, then the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the Participant's remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one each subsequent year. 

52

		
	(2)
	Death Before the Date Distribution Begins. If a Participant dies before the date distribution begins, then the amount of a required minimum distribution will be determined as follows: 

		
	(A)
	Participant Survived by Designated Beneficiary. If (i) a Participant (or, if no election has been made by the Participant prior to the Participant’s death, then the Participant’s Designated Beneficiary) elects the Life Expectancy rule of subparagraph (b)(2)(B); (ii) the Participant dies before the date distributions begin; and (iii) there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as provided in subparagraph (d)(1).

		
	(3)
	No Designated Beneficiary. If the Participant dies before distribution begins and there is no Designated Beneficiary as of September 30 of the year following the year of such death, then distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of such death. 

		
	(A)
	Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If (i) a Participant (or, if no election has been made by the Participant prior to the Participant's death, the Participant's Designated Beneficiary) is permitted to elect the Life Expectancy rule of subparagraph (b)(2)(B); (ii) the Participant dies before distributions begin; (iii) the Participant's surviving Spouse is the Participant's sole Designated Beneficiary; and (iv) the surviving Spouse dies before distributions are required to begin to the surviving Spouse under subparagraph (b)(2)(B)(i), then this subparagraph (d)(2) will apply as if the surviving Spouse were the Participant. 

Article 6

Code §415 Limitations

		
	6.1
	Maximum Annual Additions. Subject to Sections 6.2 and 6.3, the maximum Annual Additions made to a Participant's various accounts maintained under the Plan for any Limitation Year will not exceed the lesser of 

 
(a) $50,000 (base year 2012) as adjusted from time to time in accordance with Code §415(d); or (b) 100% of the Participant's Code §415(c)(3) Compensation (but this limit does not apply to any contribution for medical benefits within the meaning of Code §401(h) or §419A(f)(2) after Termination of Employment which is otherwise treated as an Annual Addition under Code §415(l)(1) or §419A(d)(2)).

		
	6.2
	Adjustments to Maximum Annual Addition. In applying the limitation on Annual Additions set forth in Section 6.1, the following adjustments must be made:

		
	(a)
	Short Limitation Year. If a Limitation Year is less than 12 months, then the dollar limitation of Section 6.1(a) will be adjusted by multiplying the Dollar Limitation by a fraction, the numerator of which is the number of months (including any fractional parts of a month) in the short Limitation Year and the denominator of which is 12. In addition, if the Plan is terminated as of a date other than the last day of the Limitation Year, then the Plan is deemed to have been amended to change the Limitation Year and the Dollar Limitation set forth in Section 6.1(a) will be prorated for the resulting short Limitation Year.

		
	(b)
	Multiple Defined Contribution Plans. If a Participant participates in multiple defined contribution plans sponsored by the Employer which have different Anniversary Dates, the maximum Annual Addition in this Plan for the Limitation Year will be reduced by the Annual Additions credited to the Participant's accounts in the other defined contribution plans during the Limitation Year. If a Participant participates in multiple defined contribution plans sponsored by the Employer which have the same Anniversary Date, then (1) if only one of the plans is subject to Code §412, Annual Additions will first be credited to the Participant's accounts in the plan subject to Code §412; and (2) if none of the plans are subject to Code §412, the maximum Annual Addition in this Plan for a given Limitation Year will either (A) equal the product of (i) the maximum Annual Addition for such Limitation Year minus any other Annual Additions previously credited to the 

53

Participant's account(s), multiplied by (ii) a fraction, the numerator of which is the Annual Additions which would be credited to a Participant's accounts hereunder without regard to the Annual Additions limitation of Section 6.1 and the denominator of which is the Annual Additions for all plans described in this paragraph, or (B) be reduced by the Annual Additions credited to the Participant's accounts in the other defined contribution plans for such Limitation Year.

		
	6.3
	Multiple Plans and Multiple Employers. In applying the limitations of this Article, all defined contribution plans (whether terminated or not) sponsored by the Employer will be treated as one defined contribution plan, and all Affiliated Employers will be considered a single Employer. The special rules regarding Affiliated Employers, affiliated service groups and Leased Employees in Regulation §1.415(a)-1(f)(2) shall be applied.

		
	6.4
	Adjustment for Excessive Annual Additions. For any Limitation Year beginning on or after July 1, 2007, if the Annual Additions allocated to a Participant's Account exceeds the maximum Annual Addition permitted under this Section, then the Sponsoring Employer will follow the rules of any Employee Plans Compliance Resolution System (EPCRS) that is issued by the Internal Revenue Service.

Article 7

Loans, Insurance and Directed Investments

		
	7.1
	Loans to Participants. Loans may be made to Participants and Beneficiaries who make application to the Administrator requesting a loan. The Administrator has the sole right to approve or disapprove the application. Loans will only be made in accordance with a separate written loan program which satisfies the requirements of Code §72(p) and the Regulations thereunder, and which satisfies the following requirements: 

		
	(a)
	General Rules. Loans (1) will be evidenced by a legally enforceable agreement set forth in writing or in such other form as may be approved by the Internal Revenue Service, the terms of which specify the amount, term and repayment schedule of the loan; (2) will be made available to all Participants and Beneficiaries on a reasonably equivalent, non-discriminatory basis; (3) will not be made available to HCEs in an amount greater than the amount made available to other Employees; (4) must be adequately secured and bear a reasonable interest rate; and (5) cannot exceed the present value of the Participant's Vested Aggregate Account balance when the loan is made.

		
	(b)
	Minimum and Maximum Loan. The written loan program may provide for a minimum loan not to exceed $1,000. In addition, no loan to a Participant or Beneficiary can be made to the extent such loan, when added to the outstanding balance of all other loans to the Participant or Beneficiary, would exceed the lesser of $50,000 (reduced by the excess of the highest outstanding balance of loans during the one-year period ending on the day before the loan is made, over the outstanding balance of loans from the Plan on the date the loan is made); or (2) one-half the present value of the Participant's Vested Aggregate Account balance. For the purpose of the limitations set forth in this paragraph, all loans from the plans (including this Plan) of the Employer and other Affiliated Employers are aggregated.

		
	(c)
	Loan Repayments. Any loan by its terms will require that repayment (of both principal and interest) be amortized in level payments, not less frequently than quarterly, over a period not extending beyond five years from the date of the loan, unless such loan is used to acquire a dwelling unit which within a reasonable time (determined at the time the loan is made) will be used as the principal residence of the Participant. In the event of default, then foreclosure on the note and attachment of security will not occur until a distributable event occurs in the Plan. Notwithstanding the foregoing to the contrary, loan repayments may be suspended as permitted under Code §414(u)(4).

		
	(d)
	Assignments and Pledges. An assignment or pledge of any portion of a Participant's interest in the Plan, and a loan, pledge or assignment with respect to any Policy purchased under the Plan, will be treated as a loan made to the Participant hereunder. 

		
	(e)
	Spousal Consent. A Participant must obtain the consent of his or her Spouse, if any, as set forth in Section 5.17 in order to use the remaining Vested Interest of the Participant's Account balance as security for a loan taken from any portion of the Participant's Account which is subject to the QJSA Requirements at the time the loan is made. Any such Spousal consent will be obtained no earlier than the beginning of the 180-day 

54

period that ends on the date on which the loan is to be so secured. The consent must be in writing, must acknowledge the effect of the loan, must be witnessed by a Plan representative or notary public, and will be binding upon the consenting Spouse or any subsequent Spouse with respect to that loan. A new consent will be required if the remaining Participant's Account balance is used for renegotiation, extension, renewal, or other revision of the loan. If valid Spousal consent has been obtained in accordance with this paragraph, then, notwithstanding any other provision of this Plan to the contrary, the Vested portion of the Participant's Account balance that is used as a security interest held by the Plan by reason of a loan that is outstanding to the Participant will be taken into account in determining the amount of the Vested portion of the Participant's 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 Account (determined without regard to the preceding sentence) is payable to the surviving Spouse, then the death benefit will be adjusted by first reducing the Vested portion of the Participant's Account balance by the amount of the security that is used for the loan.

		
	7.2
	Insurance on Participants. The purchase of insurance Policies is not permitted except to the extent otherwise provided under Section 7.3 of the Plan with respect to key man insurance. 

		
	7.3
	Key Man Insurance. The Administrator may instruct the Trustee to purchase insurance Policies on the life of any Participant whose employment is deemed to be key to the Employer's financial success. Such "key man" Policies will be an investment of the Trust Fund and will be payable to the Trust Fund as the beneficiary thereof. The Trustee may exercise any and all rights granted under such Policies.  Neither the Trustee, the Employer, the Administrator, nor any Plan fiduciary (including any Named Fiduciary) will be responsible for the validity of any insurance Policy or the failure of any insurer to make payments thereunder, or for the action of any person which delays payment or renders a Policy void in whole or in part. No insurer which issues such a Policy will be (a) deemed to be a party to this Plan for any purpose; (b) deemed to be responsible for the validity of the Plan; (c) required to look into the terms of the Plan; or (d) required to question any action of the Trustee. The obligations of the insurer will be determined solely by the Policy's terms and any other written agreements between it and the Trustee. The insurer will act only at the written direction of the Trustee, and will be discharged from all liability with respect to any amount paid to the Trustee. The insurer will not be obligated to see that any money paid by it to the Trustee or any other person is properly distributed or applied.

		
	7.4
	Directed Investment Accounts. The Administrator, at its discretion, may implement a program whereby Participants can direct the investment of all (or a portion of) one or more of their accounts (hereafter called Directed Investment Accounts), established pursuant to an administrative policy regarding Directed Investment Accounts promulgated under Section 8.6. Investment directives will only be given in accordance with such policy. If a Participant fails to exercise the right to direct the investment of his or her Directed Investment Accounts, such Directed Investment Accounts will be invested by the Trustee at the direction of the Administrator in a default investment selected by the Administrator which is expected to produce a favorable rate of return and minimizes the overall risk of losing money. With respect to Directed Investment Accounts, fiduciaries will only be protected by ERISA §404(c) for a Plan Year if all of the requirements of ERISA §404(c) and applicable Department of Labor Regulations are complied with on each day of the Plan Year, including the selection of a Qualified Default Investment Arrangement (QDIA) that complies with ERISA §404(c)(5)(A) and Department of Labor Regulation §2550.404c–5, both of which are incorporated herein by reference.

Article 8

Duties of the Administrator

		
	8.1
	Appointment, Resignation, Removal and Succession. Effective April 1, 2016, SCI Shared Resources, LLC (formerly SCI Funeral & Cemetery Purchasing Cooperative, Inc.) will serve as the Administrator until such time that the Sponsoring Employer appoints another Administrator. Each Administrator will continue until his death, resignation or removal. Any Administrator may resign by giving such written notice to the Sponsoring Employer as the Sponsoring Employer requires. If an Administrator dies, resigns, or is removed, a successor will be appointed as promptly as possible and such appointment will become effective upon its acceptance in writing by such successor. Pending the appointment and acceptance of any successor Administrator, any then acting or remaining Administrator will have full power to act.

		
	8.2
	General Powers and Duties. The powers and duties of the Administrator include (a) appointing the Plan's attorney, accountant, actuary, or any other party needed to administer the Plan; (b) directing the Trustees with respect to 

55

payments from the Trust Fund; (c) deciding if a Participant is entitled to a benefit; (d) communicating with Employees regarding their participation and benefits under the Plan, including the administration of all claims procedures; (e) filing any returns and reports with the Internal Revenue Service, Department of Labor, or any other governmental agency; (f) reviewing and approving any financial reports, investment reviews, or other reports prepared by any party under clause (a) above; (g) establishing a funding policy and investment objectives consistent with the purposes of the Plan and ERISA; (h) construing and resolving any question of Plan interpretation; and (i) making any findings of fact the Administrator deems necessary to proper Plan administration. Notwithstanding any contrary provision of this Plan, benefits under this Plan will be paid only if the Administrator decides in its discretion that the applicant is entitled to them. The Administrator's interpretation of Plan provisions, and any findings of fact, including eligibility to participate and eligibility for benefits, are final and will not be subject to "de novo" review unless shown to be arbitrary and capricious.

		
	8.3
	Functioning of the Committee. Any Committee appointed by the Sponsoring Employer will select a chairman and secretary from among its members. Members of the Committee will serve without compensation. The Committee will act by majority vote. The proper expenses of the Committee, and the compensation of its agents, if any, that are appointed pursuant to Section 8.7, will be paid in accordance with Section 8.8. Each member of the Committee will serve until his or her death, disability, resignation, or removal by the Sponsoring Employer. In the case of any vacancy arising from the death, disability, removal, or resignation of a member of the Committee, the Sponsoring Employer may, but is not required to, appoint a successor to serve in his or her place. Unless waived in writing by the Sponsor, if any Committee member who is an Employee or an elected or appointed official resigns or terminates employment with the Sponsoring Employer or an Adopting Employer, such termination will constitute an immediate resignation as a Committee member.

		
	8.4
	Multiple Administrators. If more than one Administrator has been appointed, the Administrators may delegate specific responsibilities among themselves, including the authority to execute documents, unless the Sponsoring Employer revokes such delegation. The Sponsoring Employer and the Trustee will be notified in writing of any such delegation of responsibilities, and the Trustee thereafter may rely upon any documents executed by the appropriate Administrator.

		
	8.5
	Correcting Administrative Errors. The Administrator will take such actions as the Administrator considers necessary and appropriate to remedy administrative or operational errors, including, but not be limited to, (a) any action pursuant to any Employee Plans Compliance Resolution System issued by the Internal Revenue Service, any asset management or fiduciary conduct error correction program issued by the Department of Labor, or any other correction program issued by any Department or governmental agency; (b) a reallocation of Plan assets; (c) an adjustment in the amount of future payments to any Participant, Beneficiary or alternate payee; and (d) the institution, prosecution, and/or settlement of legal actions to recover benefit payments made in error or on the basis of incorrect or incomplete information.

		
	8.6
	Promulgating Notices, Policies and Procedures. The Sponsoring Employer has the power and responsibility to promulgate written notices, policies and/or procedures with respect to the Plan and may delegate such authority to the Administrator. All Plan policies and procedures will be disseminated as required by law. 

		
	8.7
	Employment of Agents and Counsel. The Administrator may appoint such actuaries, accountants, custodians, counsel, agents, consultants, service companies and other persons deemed necessary or desirable in connection with the administration and operation of the Plan. Any person or company so appointed will exercise no discretionary authority over investments or the disposition of Trust assets, and their services and duties will be ministerial only and will be to provide the Plan with those things required by law or by the terms of the Plan without in any way exercising any fiduciary authority or responsibility under the Plan. The duties of a third party administrator will be to safe-keep the individual records for all Participants and to prepare all required actuarial services and disclosure forms under the supervision of the Administrator and any fiduciaries of the Plan. It is expressly stated that the third party administrator's services are only ministerial in nature and that under no circumstances will such third party administrator exercise any discretionary authority whatsoever over Plan Participants, Plan investments, or Plan benefits, or be given any authority or discretion concerning the management and operation of the Plan that would cause them to become fiduciaries of the Plan.

56

		
	8.8
	Compensation and Expenses. The Administrator may receive such compensation as agreed upon between the Sponsoring Employer and the Administrator, provided that any person who already receives full-time pay from the Employer may not receive any fees from the Plan for services as Administrator or in any other capacity, except for reimbursement for expenses actually and properly incurred. The Employer will pay all "settlor" expenses (as described in Department of Labor Advisory Opinion 2001-01-A) incurred by the Administrator, the Committee, or any party appointed under Section 8.7, in the performance of their duties. The Employer may pay, but is not required to pay, all "non-settlor" expenses incurred by the Administrator, the Committee, or any party appointed under Section 8.7, in the performance of their duties. Any "non-settlor" expenses incurred by the Administrator, the Committee, or any party appointed under Section 8.7, that the Employer elects not to pay will be reimbursed from Trust assets. Any expenses paid from the Trust will be charged to each Adopting Employer in the ratio that each Adopting Employer's Participants' Accounts bears to the total of all the Participants' Accounts maintained by this Plan, or in any other reasonable method elected by the Administrator.

		
	8.9
	Qualified Domestic Relations Orders. A Qualified Domestic Relations Order (a "QDRO") is a signed domestic relations order issued by a State or Commonwealth court which creates, recognizes or assigns to an alternate payee(s) the right to receive all or part of a Participant's Plan benefit. An alternate payee is a Spouse, former Spouse, child, or other dependent of a Participant who is treated as a Beneficiary under the Plan as a result of the QDRO. A QDRO will also include (a) an order that is issued with respect to another domestic relations order or QDRO, including an order that revises or amends a prior order; (b) an order issued after the Participant's Annuity Starting Date or death; or (c) an order that names as the alternate payee a person deemed financially dependent upon the Participant, provided that the other requirements for a QDRO as set forth in the Plan's QDRO procedure and/or as defined in Code §414(p) are satisfied. The Administrator will determine if a domestic relations order received by the Plan is a QDRO based on an administrative policy regarding Qualified Domestic Relations Orders promulgated by the Administrator under Section 8.6. Subject to the rules and procedures set forth in such an administrative policy by the Administrator, an alternate payee under a QDRO may receive an immediate distribution of benefits from the Vested portion of a Participant's Account even if that Participant is not yet entitled to receive a distribution of benefits under the Plan. 

		
	8.10
	Appointment of Investment Manager. The Administrator, with the consent of the Sponsoring Employer, may appoint an Investment Manager to manage and control the investment of all or any portion of Trust assets. An Investment Manager must be a person (other than the Trustee) who (a) has the power to manage, acquire, or dispose of Plan assets, (b) is an investment adviser, a bank, or an insurance company as described in ERISA §3(38)(B), and (c) acknowledges fiduciary responsibility to the Plan in writing. The Administrator will enter into an agreement with an Investment Manager that specifies the duties and compensation of the Investment Manager and any other terms and conditions under which the Investment Manager will be retained. The Trustee is not liable for any act or omission of an Investment Manager and is not liable for following an Investment Manager's advice with respect to duties delegated by the Administrator to the Investment Manager. The Administrator can determine the portion of Trust assets to be invested by a designated Investment Manager and can establish investment objectives and guidelines for such Investment Manager.

		
	8.11
	Claims Procedures. Except to the extent that an applicable collective bargaining agreement provides another method of resolving claims under the Plan, the provisions of this Section will control whenever a claim for benefits under the Plan is filed by any Employee, Participant or Beneficiary (the "Claimant") and is denied in whole or in part. The provisions of this Section will also control whenever a Claimant seeks a remedy under any provision of ERISA or other applicable law in connection with any error regarding his or her benefit under the Plan and such claim is denied in whole or in part. 

		
	(a)
	Exhaustion of Remedies. No civil action for benefits under the Plan will be brought unless and until the Claimant has (1) submitted a timely claim for benefits in accordance with the provisions of this Section; (2) been notified by the Administrator that the claim has been denied; (3) filed a written request for a review of the claim in accordance with the applicable provisions of paragraphs (e) or (f) below; and (4) been notified in writing of an adverse benefit determination on review.

		
	(b)
	Grounds for Judicial Review. Any civil action will be based solely on the contentions advanced by the Claimant in the administrative review process, and the judicial review will be limited to the Plan document and the record developed during the administrative review process as set forth in this Section. 

57

		
	(c)
	Definition of Disability Benefit. For purposes of this Section, the term "Disability Benefit" means a benefit that is available under the Plan and that becomes payable upon a determination of a Participant's Disability as determined by the Administrator. The term "Disability Benefit" does not include a benefit that, pursuant to the terms of this Plan, becomes payable upon a determination of a Participant's Disability as determined either by the Social Security Administration or under the Sponsoring Employer's long term disability plan. 

		
	(d)
	Written Claims. Any claim for benefits by the Claimant (or an authorized representative) must be filed in writing with the Administrator; however, the Administrator may permit the filing of a claim for benefits electronically, so long as the Administrator complies with the standards imposed by DOL Regulation §2520.104b-1(c)(1)(i), (iii), and (iv).

		
	(e)
	Review of Non-Disability Benefit Claims. The provisions of this paragraph (e) will apply to any claim by a Claimant for a Plan benefit that is not a Disability Benefit:   

		
	(1)
	Initial Denial. Whenever the Administrator decides for any reason to deny, in whole or in part, a claim for benefits filed by a Claimant, the Administrator will transmit to the Claimant a written or electronic notice (which electronic notice must comply with the standards imposed by DOL Regulation §2520.104b-1(c)(1)(i), (iii), and (iv)) of its decision within 90 days of the date the claim was filed, unless an extension of time is necessary. If special circumstances require an extension, the Administrator will notify the Claimant before the end of the initial 90-day review period that additional review time is necessary. The notice for an extension will (A) specify the circumstances requiring a delay and the date that a decision is expected to be made; and (B) describe any additional information needed to resolve any unresolved issues. Unless the Administrator requires additional information from the Claimant to process the claim, the review period cannot be extended beyond an additional 90 days. If the Administrator requires additional information from the Claimant to process the claim and a timely notice requesting the additional information is transmitted to the Claimant, the Claimant must provide the additional information by 90 days of the date that the notice is provided and the review period may be extended accordingly.

		
	(2)
	Notice of Denial. The notice of an adverse benefit determination will be written in a manner calculated to be understood by the Claimant and will contain the following information: (A) the specific reason(s) for the denial; (B) reference to the specific Plan provisions on which the denial is based; (C) a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; (D) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant's claim; (E) a description of the Plan's review (i.e., appeal) procedures, the time limits applicable to such procedures, and in the event of an adverse review decision, a statement describing any voluntary review procedures and the Claimant's right to obtain copies of such procedures; and (F) a statement that if the Claimant requests a review of the Administrator's decision and the reviewing fiduciary's decision on review is adverse to the Claimant, there is no further administrative review following such initial review, and that the Claimant then has a right to bring a civil action under ERISA §502(a). The notice will also include a statement advising the Claimant that, within 60 days of the date on which he receives such notice, he may obtain review of the decision of the Administrator in accordance with the procedures in subparagraph (3).

		
	(3)
	Right to Appeal. Within the 60-day period beginning on the date the Claimant receives notice regarding disposition of his claim, the Claimant or his authorized representative may request that the claim denial be reviewed by the reviewing fiduciary, by filing with the Administrator a written request for such review. The written request for such review will contain the following information: (A) the date on which the Claimant's request was received by the Administrator, provided that the date on which the Claimant's request for review was in fact received by the Administrator will control in the event that the date of the actual filing is later than the date stated by the Claimant pursuant to this paragraph; (B) the specific portions of the denial of his claim which the Claimant requests the reviewing fiduciary to review; (C) a statement by the Claimant setting forth the basis upon which the Claimant believes the reviewing fiduciary should (i) reverse the previous denial by the Administrator of the Claimant's claim for benefits, and (ii) accept the Claimant's claim as made; and (D) any written comments, documents, 

58

records, and other information (offered as exhibits) which the Claimant desires the reviewing fiduciary to examine in its consideration of the Claimant's position, without regard to whether such information was submitted or considered in the initial benefit determination.

		
	(4)
	Review on Appeal. Except as provided in DOL Regulation §2560.503-1(i)(1)(ii), within 60 days of the date determined under clause (A) in subparagraph (3) (or, if special circumstances require an extension, within 120 days of that date if an extension notice is furnished to the Claimant within the initial 60-day period, indicating the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review), the reviewing fiduciary will conduct a full and fair review of the Administrator's decision denying the Claimant's claim for benefits and will render its written decision on review to the Claimant. The review will take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The reviewing fiduciary's decision on review will be written in a manner calculated to be understood by the Claimant and will contain the following information: (A) the specific reasons for the denial on review; (B) reference to specific Plan provisions on which the denial is based; (C) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim; (D) a statement describing any voluntary review procedures and the Claimant's right to obtain copies thereof; and (E) a statement that there is no further administrative review of the reviewing fiduciary's decision and that the Claimant has a right to bring a civil action under ERISA §502(a).

		
	(f)
	Review of Disability Benefit Claims. The provisions of this paragraph (f) will apply to any claim by a Claimant for a Plan benefit that is a Disability Benefit:

		
	(1)
	Initial Denial. Whenever the Administrator decides for any reason to deny, in whole or in part, a claim for a Disability Benefit filed by a Claimant, the Administrator will transmit to the Claimant a written or electronic notice (which electronic notice must comply with the standards imposed by DOL Regulation §2520.104b-1(c)(1)(i), (iii), and (iv)) of its decision within 45 days of the date the claim was filed, unless an extension of time is necessary. If, prior to the expiration of the initial 45-day period, the Administrator determines that a decision cannot be rendered within that initial 45-day period due to matters beyond the control of the Plan, the Administrator will provide a notice to the Claimant before the end of the 45-day review period that a 30-day extension of time is necessary. If, prior to the end of the first 30-day extension period, the Administrator determines that a decision cannot be rendered within that first 30-day extension period due to matters beyond the control of the Plan, the Administrator will provide a notice to the Claimant before the end of the first 30-day extension period that an additional 30-day extension of time is necessary. Any notice of an extension of time will (A) specify the circumstances requiring the extension of time and the date a decision is expected to be rendered; (B) explain the standards on which entitlement to a Disability Benefit is based; (C) state the unresolved issues that prevent a decision on the claim; and (D) describe any additional information needed to resolve those issues. If the Administrator requires additional information from the Claimant to process the claim for a Disability Benefit and a timely notice requesting the additional information is transmitted to the Claimant, the Claimant must provide the additional information by 45 days of the date that the notice is provided and the review period may be extended accordingly.

		
	(2)
	Notice of Denial. The notice of an adverse determination for a Disability Benefit will be written in a manner calculated to be understood by the Claimant and will contain (A) the specific reasons for the denial of the claim; (B) reference to the specific Plan provisions on which the denial is based; (C) a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; (D) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant's claim; (E) if the claim denial is based on an internal rule, guideline, protocol, or other similar provision, either the specific rule, guideline, protocol, or other similar criterion; or a statement that such a rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy thereof is available upon request, free of charge; (F) if the claim denial is based on a medical necessity or experimental treatment or 

59

similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the Claimant's medical circumstances, or a statement that such explanation is available upon request, free of charge; (G) a description of the review (i.e., appeal) procedures, the time limits applicable to such procedures, and in the event of an adverse review decision, a statement describing any voluntary review procedures and the Claimant's right to obtain copies of such procedures; and (H) a statement that if the Claimant requests a review of the Administrator's decision and the reviewing fiduciary's decision on review is adverse to the Claimant, that there is no further administrative review following such initial review, and that the Claimant then has a right to bring a civil action under ERISA §502(a). The notice will also include a statement advising the Claimant that, within 180 days of the date he receives such notice, he may obtain review of the decision of the Administrator in accordance with the procedures in subparagraph (3) below.

		
	(3)
	Right to Appeal. Within the 180-day period beginning on the date the Claimant receives notice regarding disposition of his claim, the Claimant or his authorized representative may request that the claim denial be reviewed by the reviewing fiduciary, by filing with the Administrator a written request for such review. The written request for such review will contain the following information: (A) the date on which the Claimant's request was received by the Administrator provided that the date on which the Claimant's request for review was in fact received by the Administrator will control in the event that the date of the actual filing is later than the date stated by the Claimant pursuant to this paragraph; (B) the specific portions of the denial of his claim which the Claimant requests the reviewing fiduciary to review; (C) a statement by the Claimant setting forth the basis upon which the Claimant believes the reviewing fiduciary should (i) reverse the previous denial by the Administrator of the Claimant's claim for benefits, and (ii) accept the Claimant's claim as made; and (D) any written comments, documents, records, and other information (offered as exhibits) which the Claimant desires the reviewing fiduciary to examine in its consideration of Claimant's position, without regard to whether such information was submitted or considered in the initial benefit determination.

		
	(4)
	Review by Alternate Fiduciary. Review of a Disability Benefit claim that has been denied in accordance with subparagraphs (1) and (2) above will be conducted by a reviewing fiduciary who is neither the individual who made the adverse benefit determination that is the subject of the appeal, nor the subordinate of such individual. The review will not afford deference to the initial adverse benefit determination, but will take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. If the adverse benefit determination was based on a medical judgment, the reviewing fiduciary will consult with an appropriate health care professional who (A) was not consulted on the original adverse benefit determination, (B) is not subordinate to someone who was consulted on the original adverse benefit determination, and (C) has appropriate training and experience in the field of medicine involved in the medical judgment. Any medical or vocational experts whose advice was obtained on the original adverse benefit determination must be identified during the review, without regard to whether the advice was relied upon in making the benefit determination. The Claimant may request, in writing, a list of such experts.

		
	(5)
	Review on Appeal. Except as provided in DOL Regulation 2560.503-1(i)(3)(ii), within 45 days of the date determined under clause (A) in subparagraph (3) (or, if special circumstances require an extension, within 90 days of that date; provided that an extension notice is furnished to the Claimant within the initial 45-day period, which extension notice will indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review), the reviewing fiduciary will conduct a full and fair review of the Administrator's decision denying the Claimant's claim for benefits and will render its written decision on review to the Claimant. The review will take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The reviewing fiduciary's decision on review will be written in a manner calculated to be understood by the Claimant and will contain (A) the specific reason(s) for the denial on review; (B) reference to specific Plan provisions on which the denial is based; (C) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim; (D) if the 

60

claim denial is based on an internal rule, guideline, protocol, or other similar criterion, either the specific rule, guideline, protocol, or other similar criterion; or a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion is available upon request, free of charge; (E) if the claim denial is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the Claimant's medical circumstances, or a statement that such explanation is available upon request, free of charge; (F) a statement describing any voluntary review procedures and the Claimant's right to obtain copies of such procedures; (G) a statement that there is no further administrative review of the reviewing fiduciary's decision upon review, and that the Claimant has a right to bring a civil action under ERISA §502(a); and (H) the following statement: "You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency."

		
	8.12
	ERISA Accounts. Pursuant to DOL Advisory Opinion 2013-03A and subject to an administrative policy which may be established by the Administrator, the Administrator may establish a “bookkeeping account” and/or a “Plan account” for the purpose of accounting for revenue sharing payments. If a bookkeeping account is established, the financial institution that receives the revenue sharing payments will, under an agreement or arrangement with the Plan, establish this account on the institution’s records and will thereafter use any amounts credited thereto to pay Plan service providers. If a “Plan account” is established, the financial institution that receives any revenue sharing payments will enter into an agreement or arrangement with the Plan to transfer some or all of the revenue sharing payments to the Plan. Any amount transferred to the “Plan account” will become assets of the Plan as defined in ERISA and will be used by the Administrator to pay Plan expenses. If any amount remains in the "Plan account" within a reasonable period of time after the close of the Plan Year, the Administrator will allocate such remainder to Participants as additional earnings of the Plan.

Article 9

Trustee Provisions

		
	9.1
	Adoption of Trust Provisions. The provisions of this Article will apply except to the extent the Sponsoring Employer enters into one or more separate trust or custodial agreements with respect to the Plan, in which event the specific powers and duties of the Trustee will be governed by the terms of such separate trust or custodial agreements. If such separate trust or custodial agreements should for any reason fail, be found invalid or terminate prior to the termination of this Plan and the distribution of all the assets hereof, then this Article will be deemed to become effective with respect to any Trust assets invested therein immediately prior to such failure, invalidity or termination. Alternatively, the Sponsoring Employer may elect to rely on the Trust provisions set forth in this Article, in which event execution of the Plan by the Trustee will be deemed to constitute the establishment and execution of a Trust hereunder.

		
	9.2
	Appointment, Resignation, Removal and Succession of Trustee. The Trust established under the Plan will have one or more individual Trustees, a corporate Trustee, or any combination thereof, appointed as follows:

		
	(a)
	Appointment. Each Trustee will be appointed and will serve until a successor has been named or until such Trustee's resignation, death, incapacity, or removal, in which event the Sponsoring Employer will name a successor Trustee. The term Trustee will include the original and any successor Trustees.

		
	(b)
	Resignation or Removal. A Trustee may resign at any time by giving written notice to the Sponsoring Employer, unless such notice has been waived by the Sponsoring Employer. The Sponsoring Employer may remove a Trustee at any time by giving such Trustee written notice. Such removal may be with or without cause. Unless waived in writing by the Sponsoring Employer, if any Trustee who is an Employee or an elected or appointed official of the Sponsoring Employer or an Adopting Employer resigns or terminates employment with the Sponsoring Employer or Adopting Employer, such termination will constitute an immediate resignation as a Trustee of the Plan.

		
	(c)
	Successor Trustee. A successor Trustee will succeed to title to the Trust by written acceptance filed with the former Trustee and Sponsoring Employer. The former Trustee, upon receipt of such acceptance, will execute 

61

all documents and perform all acts necessary to vest title to the Trust in the successor Trustee. No successor Trustee will be personally liable for any act or failure to act of a predecessor Trustee.

		
	(d)
	Merger or Reorganization of a Corporate Trustee. If any corporate Trustee, before or after qualification, changes its name, consolidates or merges with another corporation, or otherwise reorganizes, any resulting corporation that succeeds to the retirement plan trustee business of such Trustee will become a Trustee hereunder in lieu of such corporate Trustee.

		
	9.3
	Investment Alternatives. In addition to powers given by law, the Trustee may do the following:

 
		
	(a)
	Property. The Trustee may invest in any form of property, including common and preferred stocks, exchange covered call options, bonds, money market instruments, mutual funds, savings accounts, certificates of deposit, Treasury bills, insurance Policies, or in any other property, real or personal, foreign or domestic, having a ready market including securities issued by an institutional Trustee and/or affiliate of such Trustee. An institutional Trustee may invest in its own deposits if they bear a reasonable interest rate. The Trustee may retain, manage, operate, repair, improve and mortgage or lease for any period on such terms as it deems proper any real estate or personal property held by the Trustee, including the power to demolish any building or other improvements in whole or part. The Trustee may erect buildings or other improvements, make leases that extend beyond the term of this Trust, and foreclose, extend, renew, assign, release or partially release and discharge mortgages or other liens.

		
	(b)
	Other Investments. The Trustee may accept and retain for such time as the Trustee deems advisable any securities or other property received or acquired as Trustee, whether or not such securities or property would normally be purchased as investments hereunder. 

		
	(c)
	Registration of Securities. The Trustee may cause any property of the Trust to be issued, held, or registered in its own name or in the name of a nominee, provided, however, that the nominee is (1) a bank or trust company that is subject to supervision by the United States or a State, or a nominee of such bank or trust company; (2) a broker or dealer registered under the Securities Exchange Act of 1934, or a nominee or such broker or dealer; or (3) a clearing agency as defined in section 3(a)(23) of the Securities Exchange Act of 1934, or its nominee. The Trustee may also hold any investments in bearer form if the Trustee at all times shows such investments as part of the Trust. 

		
	(d)
	Proxies. The Trustee may vote proxies and if appropriate pass them on to any investment manager which may have directed the investment in the equity giving rise to the proxy.

		
	(e)
	Pooled Funds. The Trustee may transfer Trust assets to a collective trust established for the pooling of funds of separate retirement trusts or to any other common, collective, or commingled trust which has been or may hereafter be established and maintained by the Trustee and/or affiliates of an institutional Trustee. Such commingling of Trust assets with assets of other qualified trusts is specifically authorized, and to the extent of the investment of the Trust in such a group or collective trust, the terms of the instrument establishing the group or collective trust will be a part hereof as though set forth herein.

		
	(f)
	Cash Reserves. The Trustee may retain in cash as much of the Trust Fund as the Trustee deems advisable to satisfy the liquidity needs of the Plan and to deposit any cash held in the Trust Fund in a bank account without liability for the highest rate of interest available. If a bank is acting as Trustee, such Trustee is specifically given authority to invest in deposits of such Trustee. The Trustee may also hold cash un-invested at any time and from time to time and in such amount or to such extent as the Trustee deems prudent, and the Trustee will not be liable for any losses which may be incurred as the result of the failure to invest the same, except as otherwise provided herein. 

		
	(g)
	Ownership. The Trustee may exercise all ownership rights with respect to any assets held in the Trust.

		
	(h)
	Reorganizations. The Trustee may join in or oppose the reorganization, recapitalization, consolidation, sale or merger of corporations or properties, upon such terms as the Trustee deems wise.

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	(i)
	Loans to the Trust. The Trustee may borrow or raise money for purposes of the Plan in such amounts, and upon such terms and conditions, as the Trustee deems advisable; and for any sum so borrowed, the Trustee may issue a promissory note as Trustee, and secure repayment of the loan by pledging all, or any part, of the Trust Fund as collateral. No person lending money to the Trustee will be bound to see to the application of the money lent or to inquire into the validity or propriety of any borrowing.

		
	(j)
	Agreements With Banks. The Trustee may, with the consent of the Sponsoring Employer, and upon such terms as the Trustee in its discretion deems necessary, enter into an agreement with a bank or trust company providing for the deposit of all or part of the Trust with such bank or trust company, and the appointment of such bank or trust company as the agent or custodian of the Trustee for investment purposes, with such discretion in investing and reinvesting the assets of the Trust as the Trustee deems it necessary or desirable to delegate.

		
	(k)
	Litigation. The Trustee may begin, maintain, or defend any litigation necessary to the administration of the Plan, but the Trustee is not obliged or required to do so unless indemnified to its satisfaction.

		
	(l)
	Claims, Debts and Damages. The Trustee may bring, defend, settle, compromise, or submit to arbitration actions, suits, controversies, or proceedings of any kind arising out of the administration of the Trust, and to satisfy or collect judgments, decrees, or awards of any kind in connection therewith.

		
	(m)
	Margin Accounts, Options and Commodities. The Trustee may borrow on margin, buy options, write covered options, options spreads/straddles, and engage in future/commodities trading.

		
	(n)
	Miscellaneous. The Trustee may do all such acts and exercise all such rights, although not specifically mentioned herein, as the Trustee deems necessary to carry out the purpose of the Plan. The Trustee is not restricted to securities or other property of the character expressly authorized by applicable law for trust investments or that would normally be purchased as trust investments, subject to the requirement that the Trustee discharge its duties with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent man acting in a like capacity and familiar with such matters would use in conducting an enterprise of similar character and with similar aims by diversifying investments in order to minimize the risks of large losses, unless under the circumstances it is clearly prudent not to do so.

		
	9.4
	Valuation of the Trust. On each Valuation Date, the Trustee will determine the net worth of the Trust Fund. The fair market value of securities that are listed on a registered stock exchange will be the prices at which they were last traded on such exchange preceding the close of business on the Valuation Date. If the securities were not traded on the Valuation Date, or if the exchange on which they are traded was not open for business on the Valuation Date, then the securities will be valued at the prices at which they were last traded prior to the Valuation Date. Any unlisted security will be valued at its bid price next preceding the close of business on the Valuation Date, which bid price will be obtained from a registered broker or an investment banker. To determine the fair market value of assets other than securities for which trading or bid prices can be obtained, the Trustee may use any reasonable method to determine the value of such assets, or may elect to employ one or more appraisers for that purpose and rely on the values established by such appraiser or appraisers.

		
	9.5
	Compensation and Expenses. The Trustee, either from the Trust or the Employer, will be reimbursed for all of its expenses and will be paid reasonable compensation as agreed upon with the Employer; but no person who receives full-time pay from the Employer will receive any fees for services to the Plan as Trustee or in any other capacity. Expenses will be paid by each Adopting Employer in the ratio that each Adopting Employer's Participants' Accounts bears to the total of all Participants' Accounts maintained under the terms of the Plan.

		
	9.6
	Payments From the Trust. The Trustee will pay Plan benefits and other payments as the Administrator directs, and the Trustee will not be responsible for the propriety of such payments. Any payment to a Participant, or a Participant's legal representative or Beneficiary in accordance with the terms of the Plan will, to the extent of such payment, be in full satisfaction of all claims arising against the Trust, Trustee, Employer and/or Administrator. Any distribution from the Trust is contingent on the recipient executing a receipt and release acceptable to the Trustee, Administrator, or Employer.

63

		
	9.7
	Payment of Taxes. The Trustee will pay all taxes of the Trust, including property, income, transfer and other taxes which may be levied or assessed upon or in respect of the Trust or any money, property or securities forming a part of the Trust. The Trustee may withhold from distributions to any payee such sum as the Trustee may reasonably estimate as necessary to cover federal and state taxes for which the Trustee may be liable, which are, or may be, assessed with regard to the amount distributable to such payee. Prior to making any payment, the Trustee may require such releases or other documents from any lawful taxing authority and may require such indemnity from a payee or distributee as the Trustee deems necessary.

		
	9.8
	Accounts, Records and Reports. The Trustee will keep accurate records reflecting its administration of the Trust and will make them available to the Administrator for review and audit. At the request of the Administrator, the Trustee will, within 90 days of such request, file with the Administrator an accounting of its administration during such period or periods as the Administrator determines. The Administrator will review the accounting and notify the Trustee within 90 days if the report is disapproved, providing the Trustee with a written description of the items in question. The Trustees will have 60 days to provide the Administrator with a written explanation of the items in question. If the Administrator again disapproves of the report, the Trustee will file its accounting in a court of competent jurisdiction for audit and adjudication.

		
	9.9
	Direction by Others. The Trustee is not answerable for an action taken pursuant to any direction, consent, certificate, or other document on the belief that it is genuine and signed by the proper person. The Administrator will deliver to the Trustee certificates evidencing the individuals authorized to act as the Administrator and specimens of their signatures.

		
	9.10
	Employment of Agents and Counsel. The Trustee may employ such agents, counsel, consultants, or service companies as it deems necessary and may pay their reasonable expenses and compensation. The Trustee will not be liable for any action taken or omitted by it in good faith pursuant to the advice of such agents, counsel, consultants or service companies. Any agent, counsel, consultant, service company and/or its successors will exercise no discretionary authority over investments or the disposition of Trust assets, and their services and duties will be ministerial only and will be to provide the Plan and Trust with those things required by law or by the terms of the Plan without in any way exercising any fiduciary authority or responsibility under the Plan.

		
	9.11
	No Guarantee Against Loss. The Trustee has the authority and discretion to manage and control the Trust Fund to the extent provided in this instrument, but does not guarantee the Trust Fund against investment loss or depreciation in asset value, or guarantee the adequacy of the Trust Fund to meet and discharge all or any liabilities of the Plan. Furthermore, the Trustee will not be liable for the making, retention or sale of any investment or reinvestment made by it, as herein provided, or for any loss to or diminution of the Trust Fund, or for any other loss or damage which may result from the discharge of its duties hereunder, except to the extent it is judicially determined that the Trustees have failed to exercise the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and like aims.

		
	9.12
	Indemnification. The Trustee will be indemnified and saved harmless from and against any and all liability to which the Trustees may be subjected, including all expenses reasonably incurred in its defense, for any action or failure to act resulting from compliance with the instructions of the Sponsoring Employer, the employees or agents of the Sponsoring Employer, the Administrator, or any other fiduciary to the Plan, and for any liability arising from the actions or non-actions of any predecessor Trustees or other fiduciary of the Plan.

		
	9.13
	Application of Payments. The Trustee will not be responsible in any way for the application of any payments it is directed to make or for the adequacy of the Trust Fund to meet and discharge any and all Plan liabilities.

		
	9.14
	Multiple Trustees. If more than one Trustee is appointed by the Sponsoring Employer, then any single Trustee may act independently in undertaking any act and/or transaction on behalf of the Trustees, including signing documents or checks, unless the Sponsoring Employer requires that all acts and/or transactions taken on behalf of the Trust, including signing documents or checks, must have the consent of a majority of the Trustees. The Sponsoring Employer may from time to time also place other restrictions on the Trustees.

64

		
	9.15
	Trustee as Participant or Beneficiary. The Trustees will not be prevented from receiving any benefits to which the Trustee may be entitled as a Participant or Beneficiary as long as the benefits are computed and paid on a basis consistent with the terms of the Plan as applied to other Participants and Beneficiaries.

		
	9.16
	No Self-Dealing. The Trustee will not (a) deal with the Trust assets in its own interest or for its own account; (b) in its individual or in any other capacity, act in any transaction involving the Trust on behalf of a party (or represent a party) whose interests are adverse to the Plan, or its Participants or Beneficiaries; or (c) receive any consideration for its own personal accounts from any party dealing with the Plan in connection with a transaction involving assets of the Trust Fund.

		
	9.17
	Investment Manager. The Trustee is not liable for acts or omissions of an Investment Manager appointed by the Administrator under Section 8.11, and the Trustee is not liable for following the advice of an Investment Manager with respect to any duties delegated by the Administrator to the Investment Manager.

		
	9.18
	Exclusive Benefit Rule. All contributions made by the Employer to the Trust Fund will be used for the exclusive benefit of the Participants and their Beneficiaries and will not be used for nor diverted to any other purpose except the payment of the costs of maintaining the Plan.

Article 10

Adopting Employer Provisions

		
	10.1
	Adoption by Other Employers. With the consent of the Sponsoring Employer, any other employer may adopt this Plan as an Adopting Employer by executing such documents as the Sponsoring Employer deems necessary. An Affiliated Employer is not considered an Adopting Employer unless such Affiliated Employer has executed any such documentation. 

		
	10.2
	Adoption of Alternate Provisions by Adopting Employer. Each Adopting Employer may, with the consent of the Sponsoring Employer, make elections with respect to Plan provisions that will apply only to the Employees of such Adopting Employer (for example, different eligibility requirements, different vesting, etc.), provided such elections are made in accordance with any terms and conditions prescribed by the Sponsoring Employer. 

		
	10.3
	Plan Contributions. Unless otherwise agreed to by the parties, or unless otherwise required by law, no Employer will have any obligation to make contributions to this Plan for or on behalf of the Employees of any other Employer. If an Employee is employed by more than one Employer, any contributions made on his or her behalf will be prorated between those Employers on the basis of the Compensation that the Employee received from each Employer. If any Employer is unable to make a contribution for any Plan Year, any Employer which is an Affiliated Employer of such Employer may make an additional contribution to the Plan on behalf of any Employee of the non-contributing Employer.

		
	10.4
	Plan Amendments. Any amendment to this Plan that is adopted by the Sponsoring Employer, at any time, will be deemed to be accepted by any Adopting Employer.

		
	10.5
	Plan Expenses. Any expenses paid from the Trust will be charged to each Adopting Employer in the ratio that each Adopting Employer's Participants' Accounts bears to the total of all the Participants' Accounts maintained by this Plan, or in any other reasonable method elected by the Administrator.

		
	10.6
	Employee Transfers. An Employee's transfer to or from an Employer or Adopting Employer will not affect his or her Participant's Account balance and total Service under the Plan.

		
	10.7
	Multiple Employer Provisions Under Code §413(c). Notwithstanding any other provision in the Plan, unless the Plan is a collectively bargained plan under Regulation §1.413-1(a), the following provisions will apply to any Adopting Employer that is not also an Affiliated Employer of the Sponsoring Employer:

65

		
	(a)
	Acknowledgement By Adopting Employer. The Adopting Employer will acknowledge that the Plan is a multiple employer plan subject to the rules of Code §413(c). The rules of Code §413(c) and the Regulations thereunder are incorporated herein by reference.

		
	(b)
	Instances of Single Employer Testing. For purposes of Plan participation and Vesting, any Employer that has adopted the Plan will be considered a single employer. An Employee’s Service includes all Service with the Employer or an Affiliated Employer. An Employee who discontinues service with an Employer that has adopted the Plan but resumes service with another Employer that has adopted the Plan will not be considered to have severed employment.

		
	(c)
	Instances of Separate Employer Testing. Employees of any Employer that has adopted the Plan will be treated separately for testing under Code §401(a)(4), §401(k), §401(m), §414(q), and, to the extent Employers that have adopted the Plan do not share Employees, Code §416. Code §410(b) will be applied separately on an employer-by-employer basis, taking into account the generally applicable rules described in Code §401(a)(5), §414(b) and §414(c).

		
	10.8
	Termination of Adoption. Upon termination of adoption, the Adopting Employer may request a transfer of Trust Fund assets attributable to its Employees to a successor qualified retirement plan maintained by the Adopting Employer or its successor. If such request is not made by the Adopting Employer, or if the Administrator refuses to make the transfer because in its opinion a transfer would operate to the detriment of any Participant, would jeopardize the continued qualification of the Plan, or would not comply with any requirements of the Code, Regulations, or rules promulgated by the Department of Treasury or Internal Revenue Service, then termination of adoption by an Adopting Employer as described herein will not be considered a distributable event; distribution of a Participant's Account of an Employee of the Adopting Employer will be made in accordance with the provisions of Article 5 upon the death, retirement, Disability, or the Termination of Employment from the Adopting Employer or former Adopting Employer, as if termination of adoption by the Adopting Employer had not occurred.

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Article 11

Amendment, Termination, Merger and Transfers

		
	11.1
	Plan Amendment. The Plan can be amended at any time in accordance with the following provisions:

		
	(a)
	Amendment by the Volume Submitter Sponsor. Subject to the requirements and limitations set forth in subparagraphs (1), (2) and (3) below, and in paragraphs (c) and (d) below, the Volume Submitter Sponsor can amend any part of the Plan without the consent of the Sponsoring Employer or any Adopting Employer and without the necessity of re-execution of the Plan by the Sponsoring Employer. The Volume Submitter Sponsor will provide each Sponsoring Employer with a copy of any such amendment either by providing a copy of the amendment, by providing substitute or additional pages, or by providing a restated Plan. For purposes of amendments made by the Volume Submitter Sponsor, the Sponsoring Employer can override any such amendment by executing another amendment by the end of the applicable remedial amendment period that applies to such amendment.

		
	(1)
	Scope of Amendments. Any Plan amendments adopted by the Volume Submitter Sponsor will amend the Plan on behalf of all adopting Employers (including those Employers who have adopted the Plan prior to such amendment) for changes in the Code, the Regulations, revenue rulings, other statements published by the Internal Revenue Service (including model, sample or other required good faith amendments, but only if their adoption will not cause the Plan to be individually designed), and for corrections of prior approved plans. These amendments will be applied to all Employers who have adopted the Plan.

		
	(2)
	Cessation of Amendment Authority. The Volume Submitter Sponsor will no longer have authority to amend the Plan on behalf of an adopting Employer as of (A) the date the Internal Revenue Service requires the Employer to file Form 5300 as an individually designed plan as a result of an Employer amendment to incorporate a type of plan not allowed in the Volume Submitter program, as described in Revenue Procedure 2011-49, or (B) the date the Plan is otherwise considered an individually designed plan due to the nature and extent of the amendments. If the Employer is required to obtain a determination letter for any reason in order to maintain reliance on the advisory letter, the Volume Submitter Sponsor's authority to amend the Plan on behalf of the Employer is conditioned on the Plan receiving a favorable determination letter.

		
	(3)
	Recordkeeping. The Volume Submitter Sponsor will maintain, or have maintained on its behalf, a record of the Employers that have adopted the Plan, and will make reasonable and diligent efforts to ensure that each adopting Employer has actually received and is aware of all Plan amendments and that each such Employer adopts new documents when necessary. Notwithstanding the foregoing, where this Plan is not provided to the Sponsoring Employer directly by the Volume Submitter Sponsor but rather by a third party such as a law firm, an actuarial firm, an insurance company, an accounting firm, or a third party administration firm, the responsibility to make reasonable and diligent efforts to ensure that each adopting Employer has actually received and is aware of all amendments and that each such Employer adopts new documents when necessary will be the responsibility of such third party, and the Volume Submitter Sponsor's responsibility will be limited to making reasonable and diligent efforts to ensure that such third party is aware of all Plan amendments. However, the Volume Submitter Sponsor will have no further obligations under this subparagraph after such third party terminates its business relationship with the Volume Submitter Sponsor, in which case the terms of Section 12.23 will apply.

		
	(b)
	Amendment by the Sponsoring Employer. Subject to the requirements and limitations set forth in paragraphs (c) and (d) below, the Sponsoring Employer can amend the Plan in the following manner without affecting the Plan's status as a Volume Submitter Plan: (1) changing any optional selections under the Plan; (2) adding additional language where authorized under the Plan, including language necessary to satisfy Code §415 or Code §416 due to the aggregation of multiple plans; (3) changing the addendums to the Plan from time to time without having to re-execute the Plan; (4) adopting any model, sample and/or "good faith" amendments promulgated/suggested by the IRS, for which the IRS has provided guidance that their adoption will not cause the Plan to be treated as an individually designed plan; (5) adopting any amendments that it deems necessary 

67

to resolve qualification failures under any Employee Plans Compliance Resolution System (EPCRS) promulgated by the Internal Revenue Service; and (6) adopting an amendment to cure a coverage or nondiscrimination testing failure, as permitted under applicable Regulations. The Sponsoring Employer may also amend the Plan at any time for any other reason. The ability to amend the Plan as authorized under this Section applies only to the Sponsoring Employer that executes the signature page of the Plan. Any amendment to the Plan by the Sponsoring Employer under this Section applies to any Affiliated Employer that participates under the Plan as an Adopting Employer. The Sponsoring Employer's amendment of the Plan from one type of defined contribution plan (e.g., a money purchase plan) into another type of defined contribution plan (e.g., a profit sharing plan) will not result in a partial termination or any other event that would require full Vesting of some or all Plan Participants.

		
	(c)
	Manner of Amendment. All Plan amendments can be made by (1) substituting pages with the new elections (or new addendum) and executing an "Amendment By Page Substitution" and attaching it as part of the Plan; (2) executing an "Amendment By Section Replication" in which the section or sections (or addendum or addendums) to be changed are reproduced with the new elections indicated, and attaching it as part of the Plan; (3) executing a properly worded resolution, certificate of action, or meeting minutes and attaching it as part of the Plan; or (4) creating and distributing a Safe Harbor Notice to Safe Harbor Participants. 

    
		
	(d)
	General Requirements. All Plan amendments must be in writing. However, no such amendment or modification (1) can increase the responsibilities of the Trustee or the Administrator without their written consent; (2) can deprive any Participant or Beneficiary of the benefits to which he or she is entitled from the Plan; (3) can result in a decrease in the amount of any Participant's Account except as may be permitted under the terms of Code §412(d)(2), if applicable; or (4) can, except as otherwise provided, permit any part of the Trust Fund (other than as required to pay taxes and administration expenses) to be used for or diverted to purposes other than the exclusive benefit of the Participants or their Beneficiaries, or cause or permit any portion of the Trust Fund to revert to or become the property of the Employer. In addition, no amendment to the Plan will have the effect of eliminating or restricting the ability of a Participant or other payee to receive payment of his or her Account balance or benefit entitlement from the Plan under a particular optional form of benefit provided under the Plan except to the extent permitted by law or Regulation.

		
	11.2
	Termination of the Plan. The Sponsoring Employer at any time can terminate the Plan and Trust in whole or in part in accordance with the following provisions:

		
	(a)
	Termination of Plan. The Sponsoring Employer can terminate the Plan and Trust by filing written notice with the Administrator and Trustee. Upon termination, the Trust will continue to be administered until complete distribution has been made to the Participants and other payees, which distribution must occur as soon as administratively feasible after the termination of the Plan, and must be made in accordance with the provisions of Article 5 of the Plan, including Section 5.5 where applicable. However, the Administrator may elect not to distribute the Accounts of Participants and other payees upon termination of the Plan but instead to transfer the entire Trust Fund assets and liabilities attributable to this terminated Plan to another qualified plan maintained by the Employer or its successor.

		
	(b)
	Discontinuance of Contributions. The Sponsoring Employer may at any time completely discontinue contributions to the Plan but continue the Plan in operation in all other respects, in which event the Trust Fund will continue to be administered until eventual full distribution of all benefits has been made to the Participants and other payees in accordance with Article 5 after their Termination of Employment for any reason. Discontinuance of contributions without an additional notice of termination from the Sponsoring Employer to the Administrator and Trustee will not constitute a termination of the Plan.

		
	(c)
	Vesting Upon Complete or Partial Termination or Complete Discontinuance of Contributions. Upon a complete termination or a partial termination of the Plan, or upon a complete discontinuance of contributions under the Plan, each affected Participant will have a 100% Vested Interest in his or her unpaid Participant's Account.  

		
	11.3
	Merger or Consolidation. This Plan may not be merged or consolidated with, nor may any of its assets or liabilities be transferred to, any other plan, unless the benefits payable to each Participant if the Plan was terminated immediately 

68

after such action would be equal to or greater than the benefits to which such Participant would have been entitled if this Plan had been terminated immediately before such action. If the Employer acquires another company in a Code §410(b)(6)(C) transaction (that is, an asset or stock acquisition, merger, or similar transaction involving a change in the employer of the employees of a business), then employees of the acquired company may be excluded from this Plan regardless of the provisions of Section 2.1 during the period beginning on the date of the transaction and ending on the last day of the Plan Year that begins after the date of the Code §410(b)(6)(C) transaction.

		
	11.4
	Plan-to-Plan Elective Transfers. To permit Participants to consolidate all qualified defined contribution plan accounts into a single plan for investment, distribution, loan and other administrative purposes, the Sponsoring Employer may permit Participants to transfer amounts to and from this Plan under the following rules:

		
	(a)
	Transfers to This Plan. The Sponsoring Employer, at its discretion, may permit a Participant to transfer to this Plan his or her entire interest (both Vested and non-Vested) in another qualified defined contribution plan maintained by the Employer, but only if the Participant is ineligible to actively participate in the other plan at the same time as he or she actively participates in this Plan. Any such transfer into this Plan will be considered a Transfer Contribution. 

		
	(b)
	Transfers From This Plan. The Sponsoring Employer, at its discretion, may permit a Participant to transfer from this Plan his or her entire interest herein (both Vested and non-Vested) into another qualified defined contribution plan maintained by the Employer, but only if the Participant is ineligible to actively participate in this Plan at the same time as he or she actively participates in the other plan. 

		
	(c)
	Transfers Retain Their Identity. Any such transfer to this Plan from another qualified defined contribution plan will maintain its identity from the other plan (e.g., as Elective Deferrals, QMACs, QNECs, Matching Contributions, etc.). 

		
	(d)
	Protected Benefits, Rights and Features. Any such Transfer Contributions into this Plan that have benefits, rights and features (including, but not limited to, certain optional forms of benefit payments, such as annuities) required to be preserved by Code §411(d)(6) will continue to be preserved and protected in this Plan to the extent required by Code §411(d)(6). The Sponsoring Employer (or an Adopting Employer) reserves the right to eliminate any benefits, rights and features (including, but not limited to, certain optional forms of benefit payments) of any Transfer Contributions into this Plan, to the extent permitted under Code §411(d)(6). 

		
	(e)
	Vesting. Transfer Contributions into this Plan must Vest at least as rapidly under this Plan (the transferee plan) as they would Vest under the plan from which the transfer is being made (the transferor plan), as if the transfer had not occurred. If this Plan is the transferee plan and the Vesting schedule under the transferor plan for a specific source of transferred amounts (e.g., Matching Contributions or Non-Safe Harbor Non-Elective Contributions) is less favorable than the Vesting schedule that applies to the same component in this Plan, the Administrator may apply, in a non-discriminatory manner, the Vesting schedule of this Plan's component (e.g., Matching Contributions or Non-Safe Harbor Non-Elective Contributions) to that portion of the Transfer Contributions. 

		
	(f)
	Transfer Requests Subject to Administrative Approval. Any transfer into or from this Plan must be made in cash or property acceptable to the Trustee. Any benefits, rights and features of a Transfer Contribution required to be protected by Code §411(d)(6) must be acceptable to and approved by the Administrator. 

		
	(g)
	Application of this Section. The provisions of this Section will apply to all Transfer Contributions, regardless of whether a Transfer Contribution was an elective transfer initiated by the Participant. 

69

Article 12

Miscellaneous Provisions

		
	12.1
	Qualified Plan Status. This Plan is intended to be a qualified plan under Code §401(a) and Code §501(a).

		
	12.2
	No Contract of Employment. Except as otherwise provided by law, neither the establishment of this Plan, nor any modification to the terms of the Plan, nor the creation of any fund or account, nor the payment of any benefits, will be construed as giving any Employee, Participant or other person any legal or equitable rights against the Employer, against any officer or Employee thereof, or against the Trustee, except as herein provided. Furthermore, under no circumstances will the terms of employment of any Employee or Participant be modified or otherwise affected by this Plan.

		
	12.3
	No Title to Assets. No Employee, Participant or Beneficiary will have any right to, or interest in, any assets of the Trust except as otherwise provided by the terms of the Plan.

		
	12.4
	Assignment and Alienation. Except as may otherwise be permitted under Code §401(a)(13)(C), or as may otherwise be permitted under a Qualified Domestic Relations Order under Section 8.9, or as may otherwise be permitted under Section 7.1 relating to loans to Participants, no right or claim to, or interest in, any part of the Trust, or any payment from the Trust, will be assignable or transferable, or will be subject to sale, mortgage, pledge, hypothecation, commutation, anticipation, garnishment, attachment, execution, or levy of any kind, and the Trustees will not recognize any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute, or anticipate the same, except to the extent required by law.

		
	12.5
	Exclusive Benefit Rule. All contributions made by the Employer or an Affiliated Employer to the Trust will be used for the exclusive benefit of the Participants who are Employees of the Employer or Affiliated Employer and for their Beneficiaries, and will not be used for nor diverted to any other purpose except the payment of the costs of maintaining the Plan. All contributions made by an Adopting Employer who is not an Affiliated Employer will be used for the exclusive benefit of the Participants who are Employees of the Adopting Employer and for their Beneficiaries, and will not be used for nor diverted to any other purpose except the payment of the Adopting Employers' proportionate costs of maintaining the Plan. 

		
	12.6
	Military Service Credit. Notwithstanding any provision of this Plan to the contrary, contributions, benefits and Service credit with respect to Qualified Military Service will be provided in accordance with Code §414(u). 

		
	12.7
	HEART Death Provisions. The Beneficiary of any Participant who dies on or after January 1, 2007 while performing Qualified Military Service is entitled to any additional benefits (other than including contributions relating to the Participant's period of Qualified Military Service, but including Vesting credit for such period and any ancillary life insurance or other survivor benefits) that would have been provided under the Plan had the Participant resumed employment with the Employer on the day preceding the Participant's death and then Terminated Employment on account of such death. 

		
	12.8
	HEART Disability Provisions. Any Participant who suffers a Disability while performing Qualified Military Service will be treated as if such Participant had resumed employment with the Employer on the day preceding the Participant's Disability and then Terminated Employment on account of such Disability. Such Participant will be given Vesting credit for the period of his or her Qualified Military Service. 

		
	12.9
	Severability of Provisions. If any provision of the Plan is held to be invalid or unenforceable, such holding will not affect any other provision of the Plan, and the Plan will be construed and enforced as if such provision had not been included. 

		
	12.10
	Fiduciaries and Bonding. Fiduciaries (including Named Fiduciaries) of the Plan other than a bank, an insurance company, a broker-dealer that is registered under the Securities Exchange Act of 1934 §15(b) and that is subject to the fidelity bond requirements of a self-regulatory organization as defined in ERISA §412(a), or a fiduciary of a Sponsoring Employer that has no common-law employees, will be bonded in an amount that is not less than 10% of the amount of funds under such Plan fiduciary's direct or indirect control, but such bond will not be less than $1,000 nor more than $500,000 (or such other amount as may be required by law). If the Plan holds employer 

70

securities as defined in ERISA §407(d)(1), the maximum bond is increased to $1,000,000 unless the Department of Labor prescribes a larger amount after notice and an opportunity for interested parties to be heard. The bond will provide protection to the Plan against any loss for acts of fraud or dishonesty by a Plan fiduciary acting alone or in concert with others. The cost of such bond will be an expense of either the Sponsoring Employer or the Plan, at the election of the Sponsoring Employer. 

		
	12.11
	Rules of Plan Construction. In interpreting the Plan and Trust, (a) names that are used in the Plan should be used consistently in any documents that are legally binding upon the Plan, but in documents that are not legally binding upon the Plan (such as, but not limited to, summary plan descriptions, summaries of material modifications, notices and election forms), names may use plain English terms; (b) words used in the masculine gender may be construed as though they are also used in the feminine or neuter gender, where applicable (and vice versa); (c) headings and subheadings are inserted for convenience of reference, do not constitute part of this Plan and/or Trust, and are not to be considered in its construction or interpretation; (d) the Plan will be construed and interpreted in accordance with the Code and ERISA, but if the Plan needs to be construed and interpreted according to a State's or Commonwealth's laws (to the extent that such laws are not preempted by the provisions of the Code and ERISA), then this Plan will be construed and interpreted according to the laws of the State or Commonwealth in which the Sponsoring Employer maintains its principal place of business; and 

 
(e) unless a separate Trust agreement otherwise provides, if the Trust needs to be construed and interpreted according to laws of a State or Commonwealth (to the extent that such laws are not preempted by the provisions of the Code and ERISA), the Trust will be construed and interpreted according to the laws of the State or Commonwealth in which the Sponsoring Employer maintains its principal place of business. 

		
	12.12
	Reimbursement of Costs of Legal Action. Unless otherwise prohibited by law, either the Sponsoring Employer or the Trust, in the sole discretion of the Sponsoring Employer, will reimburse the Trustee and/or the Administrator for all costs, attorney’s fees and other expenses associated with any claim, suit or proceeding brought against the Plan or the Trust. 

		
	12.13
	No Duplication of Benefits. There will be no duplication of benefits under the Plan because of employment by more than one participating Employer. 

		
	12.14
	Evidence Furnished Conclusive. Anyone required to give evidence under the terms of the Plan may do so by certificate, affidavit, document or other information that the person who is to act in reliance thereon may consider pertinent, reliable and genuine, and to have been signed, made or presented by the proper party or parties. Plan fiduciaries will be fully protected in acting and relying upon any evidence described hereunder. 

		
	12.15
	Release of Claims. Any payment to a Participant or Beneficiary, to a legal representative thereof, or to a guardian or committee appointed for such Participant or Beneficiary, will, to the extent thereof, be in full satisfaction of all claims hereunder against the Administrator and the Trustee, either of whom may require such Participant, Beneficiary, legal representative, guardian or committee, as a condition precedent to such payment, to execute a receipt and release thereof in such form as determined by the Administrator or Trustee. 

		
	12.16
	Discontinued Contributions. Any Participants' Accounts (or sub-Accounts) that were established for specific contributions to the Plan which are (or have been) discontinued, including Deductible Employee Contributions, will continue to be administered in accordance with the Vesting and Forfeiture provisions of the Plan in effect on the date the discontinuance occurred. For purposes of this Section, a Deductible Employee Contribution is a contribution that was made by a Participant to this Plan or to a predecessor plan for any Plan Year beginning before January 1, 1987 and that was tax deductible by the Participant at the time such contribution was made to the Plan. No portion of a Participant's Deductible Employee Contributions can be invested in life insurance Policies under Section 7.2, and a Participant may only withdraw amounts from his or her Deductible Employee Contributions only if all other amounts credited to the Plan on his or her behalf, other than his Participant's Account, have been distributed to the Participant. 

		
	12.17
	Multiple Copies of Plan And/or Trust. This Plan may be executed in any number of counterparts, each of which will be deemed an original, but all of which will constitute one and the same Agreement and will be binding on the respective successors and assigns of the Employer and all other parties. 

71

		
	12.18
	Dual and Multiple Trusts. Plan assets may be held in multiple separate trusts, or in trust and by an insurance company or by a trust and under a custodial agreement. Plan assets may also be held in a common trust. 

		
	12.19
	Written Elections and Forms. Whenever the word "written" or the words "in writing" are used, such words will include any method of communication permitted by the United States Department of Labor with respect to such documentation. Similarly, the word "form" will include any other method of election permitted under current law, including, but not be limited to, electronic modes to the extent permitted by law. 

		
	12.20
	Prior Provisions of Amended and Restated Plans. If this is an amendment and restatement of the Plan, the provisions of the prior Plan document (and amendments thereto) in effect prior to the restatement date will continue to apply to this Plan to the extent such provisions are not contradicted by any provision of this Plan. 

		
	12.21
	Limitation of Liability and Indemnification. In addition to and in furtherance of any other limitations provided in the Plan, and to the extent permitted by applicable law, the Employer will indemnify and hold harmless its board of directors (collectively and individually), if any, the Administrative/Advisory Committee (collectively and individually), if any, and its officers, Employees, and agents against and with respect to any and all expenses, losses, liabilities, costs, and claims, including legal fees to defend against such liabilities and claims, arising out of their good-faith discharge of responsibilities under or incident to the Plan, excepting only expenses and liabilities resulting from willful misconduct. This indemnity will not preclude further indemnities as may be available under insurance purchased by the Employer or as may be provided by the Employer under any by-law, agreement, vote of shareholders or disinterested directors, or otherwise, as such indemnities are permitted under state law. Payments with respect to any indemnity and payment of expenses or fees under this Section will be made only from assets of the Employer, and will not be made directly or indirectly from Trust assets. 

		
	12.22
	Disaster Relief Policy. The Plan may, pursuant to a written policy established by the Administrator, grant temporary disaster relief to affected Participants pursuant to any applicable statute enacted by the government of the United States or pursuant to any applicable guidance promulgated by an authorized department or agency of the government of the United States. Such administrative policy may include, but will not be limited to, provisions which, to the extent permitted by law, (a) increase the statutory limits on, delay the repayment of, and/or waive the adequate security requirement for, Participant loans; (b) permit the Plan to disregard any procedural requirements, including the consent of the Participant's Spouse, if any, so long as the Administrator makes a good faith effort under the circumstances to comply with the requirements and makes a reasonable attempt to assemble any required documentation as soon as practical thereafter; and/or (c) permits the re-contribution by Participants of prior disaster distributions to the Plan. 

		
	12.23
	Loss of Volume Submitter Status. Notwithstanding any provision in this Plan to the contrary, if this Plan is provided to the Sponsoring Employer by a third party (e.g., a law firm, an actuarial firm, an insurance company, an accounting firm, a third party administration firm, etc.) rather than by the Volume Submitter Sponsor directly, and (a) such third party subsequently terminates its business relationship with the Volume Submitter Sponsor for any reason, or (b) the Volume Submitter Sponsor subsequently terminates its business relationship with such third party for any reason, or (c) the Sponsoring Employer subsequently terminates its business relationship with such third party, then this Plan will no longer be considered a pre-approved volume submitter plan, but rather will be considered an individually designed plan, and the Volume Submitter Sponsor will have no further responsibilities or obligations with respect to the Plan or the Sponsoring Employer.

72

This Plan is hereby executed by the Sponsoring Employer as of the date set forth below.

SERVICE CORPORATION INTERNATIONAL
Plan Sponsor

By: ______Greg Sangalis_________________________

Printed Name: _Greg Sangalis_____________________ 

Title: ____Sr. Vice President_________________________ 

Date: _____4/15/16________________________________

73

SCI 401(k) Retirement Savings Plan
Adopting Employer Agreement

Effective as of January 1, 2016, the Adopting Employers listed on the attached Additional Employer Addendum (“Adopting Employers”) hereby adopt (or re-adopt, if applicable) the SCI 401(k) Retirement Savings Plan as established and maintained by Service Corporation International, and hereby agree to be Adopting Employers under the Plan. The Adopting Employers also agree to abide by such rules and procedures as the Administrator of the Plan deems necessary for the proper administration of the Plan.

Authorized Representative for Service Corporation International, the Sponsoring Employer:

Signature:______Greg Sangalis_______________________________    Title_____Sr. Vice President_______________
 
Print Name_______Greg Sangalis___________________________    Date_____4/15/16__________________

Authorized Representative for the Adopting Employers:

Signature:_______Curtis Briggs_______________________________Title____President/Vice President______
 
Print Name_______Curtis Briggs_____________________________    Date____4/15/16______

74

SCI 401(K) Retirement Savings Plan
Adoption Employer Agreement

Effective as of January 1, 2016, the Adopting Employers listed on the attached Additional employer Addendum (“Adopting Employers”) hereby adopt (re-adopt, if applicable) the SCI 401(K) Retirement Savings Plan as established and maintained by Service Corporation International, and hereby agree to be Adopting employers under the Plan.  The Adopting Employers also agree to abide by such rules and procedures as the Administrator of the Plan deems necessary for the proper administration of the Plan.

Authorized Representatives for the Adopting Employers listed below:

Signature ______Gerald Wilson________     Title ____Chairman_____________
Print Name _____Gerald Wilson________       Date ___4/15/16__________________

Camelia Memorial Lawn, Inc.
Carl Barnes Funeral Home, Inc.
Cooley & Riolo Mortuary, Inc.
Dale Funeral Home, Inc.
Franklin-Strickland Funeral Home, Inc.
WFG – Fuller Funerals, Inc.
Fuller-Sheffield Funeral Service, Inc.
Hamilton Funeral Chapel, Inc.
Holmes Funeral Directors, Inc.
Lincoln Funeral Home, Inc.
WFG – Lockwood Funeral Home, Inc.
MJ Edwards & Sons Funeral Home, Inc.
MJ Edwards Hillside Chapel, Inc. (Stage Road)
MJ Edwards/Whitehaven Funeral Chapel
Mainland Funeral Home, Inc.

Morris-Bates Funeral Home, Inc.
Paradise Funeral Home, Inc.
Paradise Investment Corporation 
Southern Funeral Home, Inc.
Warford-Walker Mortuary, Inc.
WFG – Cristo Rey Funeral Home, Inc.
Wilson Financial Group, Inc.
Wilson-Bannon Mortuary, Inc.
Wilson-Lincoln Cemetery, Inc.

75

ADDITIONAL EMPLOYER ADDENDUM

Plan Name     SCI 401(k) Retirement Savings Plan_____________________________________________       ____
The following employers have adopted the Plan on behalf of their Eligible Employees as permitted under section 1.6 of the Plan:
	
		
	Adopting Employer Name
	Adoption (or Re-Adoption) Date

	1.       Affiliated Family Funeral Service, Inc.
	January 1, 2016

	2.       AFFS Boston, Inc.
	January 1, 2016

	3.       AFFS North, Inc.
	January 1, 2016

	4.       AFFS Norwood, Inc.
	January 1, 2016

	5.       AFFS Quincy, Inc.
	January 1, 2016

	6.       AFFS Salem, Inc.
	January 1, 2016

	7.       AFFS Southcoast East, Inc.
	January 1, 2016

	8.       AFFS Southcoast West, Inc.
	January 1, 2016

	9.       AFFS West, Inc.
	January 1, 2016

	10.     Alderwoods (Arkansas), Inc.
	January 1, 2016

	11.     Alderwoods (Chicago Central), Inc.
	January 1, 2016

	12.     Alderwoods (Chicago North), Inc.
	January 1, 2016

	13.     Alderwoods (Colorado), Inc.
	January 1, 2016

	14.     Alderwoods (Connecticut), Inc.
	January 1, 2016

	15.     Alderwoods (Georgia), LLC
	January 1, 2016

	16.     Alderwoods (Idaho), Inc.
	January 1, 2016

	17.     Alderwoods (Illinois), Inc.
	January 1, 2016

	18.     Alderwoods (Indiana), Inc.
	January 1, 2016

	19.     Alderwoods (Kansas), Inc.
	January 1, 2016

	20.     Alderwoods (Maryland), Inc.
	January 1, 2016

	21.     Alderwoods (Michigan), Inc.
	January 1, 2016

	22.     Alderwoods (Minnesota), LLC
	January 1, 2016

	23.     Alderwoods (Mississippi), Inc.
	January 1, 2016

	24.     Alderwoods (Montana), Inc.
	January 1, 2016

	25.     Alderwoods (Nevada), Inc.
	January 1, 2016

	26.     Alderwoods (New York), LLC
	January 1, 2016

	27.     Alderwoods (North Carolina), Inc.
	January 1, 2016

	28.     Alderwoods (Ohio) Cemetery Management, Inc.
	January 1, 2016

	29.     Alderwoods (Ohio) Funeral Home, Inc.
	January 1, 2016

	30.     Alderwoods (Oklahoma), Inc.
	January 1, 2016

	31.     Alderwoods (Oregon), Inc.
	January 1, 2016

	32.     Alderwoods (Tennessee), LLC
	January 1, 2016

	33.     Alderwoods (Washington), Inc.
	January 1, 2016

76

	
		
	34.     Alderwoods Group (California), Inc.
	January 1, 2016

	35.     Alleva Funeral Home, Inc.
	January 1, 2016

	36.     Auman’s Inc.
	January 1, 2016

	37.     Burgee-Henss-Seitz Funeral Home, Inc.
	January 1, 2016

	38.     Burton L. Hirsch Funeral Home, Inc.
	January 1, 2016

	39.     California Cemetery & Funeral Services, LLC
	January 1, 2016

	40.     Camellia Memorial Lawn, Inc.
	January 1, 2016

	41.     Carl Barnes Funeral Home, Inc.
	January 1, 2016

	42.     Carothers Holding Company, Inc.
	January 1, 2016

	43.     Charles S. Zeiler & Son, Inc.
	January 1, 2016

	44.     Chas. Peter Nagel, LLC
	January 1, 2016

	45.     Chicago Cemetery Corporation
	January 1, 2016

	46.     Christian Funeral Services, Inc.
	January 1, 2016

	47.     Cooley & Riolo Mortuary, Inc.
	January 1, 2016

	48.     Cuffe-McGinn Funeral Home, Inc.
	January 1, 2016

	49.     Dale Funeral Home, Inc.
	January 1, 2016

	50.     Dignity Memorial Network, Inc.
	January 1, 2016

	51.     Doane Beal & Ames, Inc.
	January 1, 2016

	52.     Dunwood Cemetery Service Company
	January 1, 2016

	53.     ECI Cemetery Services of Maryland, LLC
	January 1, 2016

	54.     ECI Services of Maine, Inc.
	January 1, 2016

	55.     ECI Services of New Hampshire, Inc.
	January 1, 2016

	56.     Elmwood Acquisition Corporation
	January 1, 2016

	57.     Ernest A. Richardson Funeral Home, Inc.
	January 1, 2016

	58.     Evergreen Funeral Home and Cemetery, Inc.
	January 1, 2016

	59.     Franklin-Strickland Funeral Home, Inc.
	January 1, 2016

	60.     Fuller-Sheffield Funeral Services, Inc.
	January 1, 2016

	61.     Funeral Service Pennsylvania, LLC 
	January 1, 2016

	62.     Garden State Crematory, Inc.
	January 1, 2016

	63.     George Washington Cemetery Company, LLC
	January 1, 2016

	64.     Green Service Corporation
	January 1, 2016

	65.     H.P. Brandt Funeral Home, Inc.
	January 1, 2016

	66.     Hamilton Funeral Chapel, Inc.
	January 1, 2016

	67.     Hawaiian Memorial Life Plan. LTD.
	January 1, 2016

	68.     Holmes Funeral Directors, Inc.
	January 1, 2016

	69.     Joseph Gawler’s Sons, LLC
	January 1, 2016

	70.     Lemmon Funeral Home of Dulaney Valley, Inc.
	January 1, 2016

	71.     Lincoln Funeral Home, Inc.
	January 1, 2016

	72.     Lineberry Group, Inc.
	January 1, 2016

	73.     M J Edwards & Sons Funeral Home, Inc.
	January 1, 2016

77

	
		
	74.     M J Edwards Hillside Chapel, Inc. (Stage Road)
	January 1, 2016

	75.     M J Edwards/Whitehaven Funeral Chapel
	January 1, 2016

	76.     Mainland Funeral Home, Inc.
	January 1, 2016

	77.     McHugh Funeral Home, Inc.
	January 1, 2016

	78.     Memorial Gardens Association
	January 1, 2016

	79.     Miller-Dippel Funeral Home, Inc.
	January 1, 2016

	80.     Morris-Bates Funeral Home, Inc.
	January 1, 2016

	81.     Mount Auburn Memorial Park, Inc. 
	January 1, 2016

	82.     Mount Vernon Memorial Park
	January 1, 2016

	83.     Neill Funeral Home, Inc.
	January 1, 2016

	84.     New York Funeral Chapels, LLC
	January 1, 2016

	85.     Oak Woods Cemetery Association
	January 1, 2016

	86.     Oak Woods Management Company
	January 1, 2016

	87.     OFTC, Inc.
	January 1, 2016

	88.     Paradise Funeral Home, Inc.
	January 1, 2016

	89.     Paradise Investment Corporation
	January 1, 2016

	90.     Pineview Memorial Park, Inc.
	January 1, 2016

	91.     Poteet Holdings, Inc.
	January 1, 2016

	92.     Ridgewood Cemetery Company, Inc.
	January 1, 2016

	93.     Rohland Funeral Home
	January 1, 2016

	94.     Rosedale Cemetery Company
	January 1, 2016

	95.     Rosedale Funeral Chapel, Inc.
	January 1, 2016

	96.     S&H Properties & Enterprises, Inc.
	January 1, 2016

	97.     SCI Alabama Funeral Services, LLC
	January 1, 2016

	98.     SCI Arizona Funeral Services, Inc.
	January 1, 2016

	99.     SCI Arkansas Funeral Services, Inc.
	January 1, 2016

	100.   SCI California Funeral Services, Inc.
	January 1, 2016

	101.   SCI Colorado Funeral Services, Inc.
	January 1, 2016

	102.   SCI Connecticut Funeral Services, LLC
	January 1, 2016

	103.   SCI Financial Services, Inc.
	January 1, 2016

	104.   SCI Funeral & Cemetery Purchasing Cooperative, Inc.
	January 1, 2016

	105.   SCI Funeral Services of Florida, LLC
	January 1, 2016

	106.   SCI Funeral Services of New York, Inc.
	January 1, 2016

	107.   SCI Georgia Funeral Services, LLC
	January 1, 2016

	108.   SCI Illinois Services, Inc.
	January 1, 2016

	109.   SCI Indiana Funeral Services, Inc.
	January 1, 2016

	110.   SCI Iowa Funeral Services, Inc.
	January 1, 2016

	111.   SCI Kansas Funeral Services, inc.
	January 1, 2016

	112.   SCI Kentucky Funeral Services, Inc.
	January 1, 2016

	113.   SCI Louisiana Funeral Services, Inc.
	January 1, 2016

78

	
		
	114.   SCI Management, LP
	January 1, 2016

	115.   SCI Maryland Funeral Services, Inc. 
	January 1, 2016

	116.   SCI Michigan Funeral Services, Inc.
	January 1, 2016

	117.   SCI Mississippi Funeral Services, Inc.
	January 1, 2016

	118.   SCI Missouri Funeral Services, Inc.
	January 1, 2016

	119.   SCI Nebraska Funeral Services, Inc.
	January 1, 2016

	120.   SCI New Jersey Funeral Services, LLC
	January 1, 2016

	121.   SCI North Carolina Funeral Services, Inc.
	January 1, 2016

	122.   SCI Ohio Funeral Services, Inc.
	January 1, 2016

	123.   SCI Oklahoma Funeral Services, Inc.
	January 1, 2016

	124.   SCI Oregon Funeral Services, Inc.
	January 1, 2016

	125.   SCI Pennsylvania Funeral Services, Inc.
	January 1, 2016

	126.   SCI Rhode Island Funeral Services, LLC
	January 1, 2016

	127.   SCI Services (Alabama), LLC
	January 1, 2016

	128.   SCI South Carolina Funeral Services, Inc.
	January 1, 2016

	129.   SCI Tennessee Funeral Services, LLC
	January 1, 2016

	130.   SCI Texas Funeral Services, Inc.
	January 1, 2016

	131.   SCI Utah Funeral Services, Inc.
	January 1, 2016

	132.   SCI Virginia Funeral Services, Inc. 
	January 1, 2016

	133.   SCI Washington Funeral Services, Inc.
	January 1, 2016

	134.   SCI West Virginia Funeral Services, Inc.
	January 1, 2016

	135.   SCI Western Market Support Center, LLC
	January 1, 2016

	136.   SCI Wisconsin Funeral Services, Inc.
	January 1, 2016

	137.   Saul-Gabauer Funeral Home, Inc.
	January 1, 2016

	138.   Southern Funeral Home, Inc.
	January 1, 2016

	139.   St. Laurent Funeral Home, Inc.
	January 1, 2016

	140.   Stanetsky Memorial Chapel, Inc.
	January 1, 2016

	141.   Sterling-Ashton-Schwab-Witzke Funeral Home of Catonsville, Inc.
	January 1, 2016

	142.   Stewart Enterprises, Inc. 
	January 1, 2016

	143.   Theo C. Auman, Inc.
	January 1, 2016

	144.   Thomas M. Quinn & Sons, LLC 
	January 1, 2016

	145.   Uniservice Corporation
	January 1, 2016

	146.   Universal Memorial Centers V, Inc.
	January 1, 2016

	147.   Vancouver Funeral Chapel, Inc.
	January 1, 2016

	148.   Warford-Walker Mortuary, Inc.
	January 1, 2016

	149.   Wasatch Land and Improvement Company
	January 1, 2016

	150.   Westminster Gardens, Inc.
	January 1, 2016

	151.   WFG-Cristo Rey Funeral Home, Inc.
	January 1, 2016

	152.   WFG-Fuller Funerals, Inc.
	January 1, 2016

	153.   WFG-Lockwood Funeral Home, Inc.
	January 1, 2016

79

	
		
	154.   Wien & Wien, Inc.
	January 1, 2016

	155.   Wilson Financial Group, Inc. 
	January 1, 2016

	156.   Wilson-Bannon Mortuary, Inc.
	January 1, 2016

	157.   Wilson-Lincoln Cemetery, Inc.
	January 1, 2016

	158.   Woodlawn Cemetery of Chicago, Inc.
	January 1, 2016

	159
	 

	160
	 

	161
	 

	162
	 

	163
	 

	164
	 

	165
	 

	166
	 

	167
	 

	168
	 

	169
	 

	170
	 

	171
	 

	172
	 

	173
	 

	174
	 

	175
	 

	176
	 

	177
	 

SCI 401(k) Retirement Savings Plan
Administrative Policy Regarding Financial Hardship Distributions

In accordance with Section 5.8 of the Plan Document of the SCI 401(k) Retirement Savings Plan (the "Plan"), Service Corporation International (the "Sponsoring Employer") hereby implements the rules and procedures set forth below to govern financial hardship distributions. The terms used in this administrative policy will have the same meaning ascribed to those terms in the Plan (or in some cases, in the Summary Plan Description).  This policy is effective January 1, 2016.

AMOUNT AND FORM OF DISTRIBUTION

A Participant who is still an Employee may take a distribution from the Plan because of financial hardship. The amount distributable cannot exceed the amount required to relieve the hardship, including amounts needed to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution. A hardship distribution will only be made in a single sum payment. Hardship distributions can be made from the following accounts:

●    From up to 100% of the Participant's 401(k) Contribution Account(s) (excluding earnings)
●    From up to 100% of the Participant's Vested Matching Contribution Account(s)
●    From up to 100% of the Participant's Vested Profit Sharing Contribution Account(s)

DEFINITION OF FINANCIAL HARDSHIP

80

Financial hardship means an immediate and heavy financial need of the Participant which he or she lacks available resources to satisfy. The following financial needs will be considered immediate and heavy: 

		
	●
	Expenses for (or expenses necessary to obtain) medical care that would be tax deductible under Internal Revenue Code §213(d) (determined without regard to whether the expenses exceed 7.5% of adjusted gross income) for the Participant, or the Participant's spouse, children, or other eligible dependents (as defined in Code §152, without regard to Code §152(b)(1), (b)(2) and (d)(1)(B)), or the Participant’s designated primary beneficiary under the Plan;

		
	●
	Costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant;

		
	●
	Payment of tuition, related educational fees, and room and board expenses, for up to the next 12 months of post-secondary education for the Participant, or the Participant's spouse, children, or other eligible dependents (as defined in Code §152, without regard to Code §152(b)(1), (b)(2) and (d)(1)(B)), or the Participant’s designated primary beneficiary under the Plan;

		
	●
	Payments necessary to prevent the eviction of the Participant from the Participant's principal residence or the foreclosure on the mortgage on that residence;

		
	●
	Payments for burial or funeral expenses for the Participant's deceased parent, spouse, children or dependents (as defined in Code §152, without regard to Code §152(d)(1)(B)), or your designated primary beneficiary under the Plan; or

		
	●
	Expenses for repair of damage to the Participant's principal residence that would qualify for the casualty deduction under Code §165 (without regard to whether the loss exceeds 10% of adjusted gross income). 

SAFE HARBOR DEEMED DISTRIBUTIONS

Any hardship distribution will be deemed to be necessary to satisfy a financial hardship if the Participant has obtained all distributions (other than financial hardship distributions) and all nontaxable loans currently available under all plans maintained by the Employer. Furthermore, the Participant cannot make elective deferrals or after-tax contributions to this Plan or any other plan maintained by the Employer for at least 6 months after receipt of the hardship distribution. Unless the Participant makes an affirmative election at the end of the suspension period, such Participant's Elective Deferrals shall be reinstated at the same percentage that was in effect immediately prior to the suspension.

Hardship distributions made pursuant to this policy are intended to satisfy the safe harbor provisions under IRS Reg. §1.401(k)-1(d)(3)(iii)(B) [deemed immediate and heavy financial need] and §1.401(k)-1(d)(3)(iv)(E) [deemed necessary to satisfy immediate need].

BY ____Curtis Briggs_______________________        DATE____4/15/16_________________________________
For the Plan Administrator

81

Directed Employee Benefit Trust Agreement

This TRUST AGREEMENT (the "Agreement") is entered into by and between the company identified on the Execution Page (the “Company”) and Charles Schwab Bank (the “Trustee”) and is effective on the date it is accepted, in writing, by the Trustee. The Company hereby appoints the Trustee as Trustee under this Agreement, and the Trustee hereby accepts its appointment in accordance with the terms of this Agreement.

ARTICLE 1
ESTABLISHMENT OF TRUST FUND

1.1 Effect of Restated Trust Agreement. This Agreement establishes the trust (the “Trust”) to serve as the funding medium for the Plan (the “Plan”) identified on the Execution Page which was established by the Company for the benefit of its employees. If applicable, any trust agreement for the Plan prior to the effective date of this Agreement is amended, restated and superseded in its entirety by this Agreement and is of no further force and effect.

1.2 Establishment of Trust. The Company established the Plan for the exclusive purpose of providing retirement benefits to certain of its employees and their beneficiaries and defraying the reasonable expenses of administering the Plan. The Plan provides that cash and other assets may be paid to the Trustee by the Company to be held and administered in trust in accordance with the terms of this Agreement. The Company represents that the Plan is qualified under Section 401 of the Internal Revenue Code of 1986, as amended (the "Code"), the Trust constitutes a part of the Plan, and the Trust is exempt from tax under Internal Revenue Code Section 501(a). 

By execution of this Agreement, the Company certifies that it is authorized to enter into this Agreement and to carry out all of its responsibilities as described in this Agreement. The Company will provide the Trustee with copies of all Plan or other documents including the Plan’s investment policy statement and other related ancillary documents governing the Plan and the Trust (collectively, the “Plan Documents”) at or before the time this Agreement is executed by the Company and will provide the Trustee all other documents amending or supplementing the Plan promptly upon their adoption.

1.3 Administrator. The Company has the right to appoint and empower any person(s) or entity to serve as the plan administrator or to serve on the Plan’s administrative committee serving as the plan administrator (collectively the “Administrator”). The Company will certify to the Trustee in writing the appointment of the Administrator by providing the Trustee with a copy of the appropriate resolution or other documentation from the Company in a form acceptable to the Trustee. The Company will notify the Trustee of the name(s) of the Administrator or the names of the members of any committee serving as the Administrator as of the date of this Agreement and will inform Trustee of any subsequent change. In the absence of such certification, the Company will serve as the Administrator. The Administrator is the Plan’s named fiduciary for investments and plan administration and the plan administrator for purposes of the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”).

1.4 Trust Fund. The assets held in the Trust (the “Trust Fund”) will be held, in trust, and consist of all cash, marketable securities, and other property acceptable to the Trustee contributed by the Company or transferred from time to time to the Trust. The Trustee has no duties or responsibilities with respect to any property other than cash, marketable securities, and other property accepted by the Trustee and delivered to it in accordance with this Agreement. The Trust Fund includes all assets transferred to the Trustee from 

Directed Employee Benefit Trust Agreement         Page 1

any prior trustee, all investments, reinvestments, earnings and increments of the Trust Fund, and all additions to the Trust Fund in the form of contributions. The Trustee will maintain the Trust Fund as an account or accounts established on the books and records of the Trustee. The Trustee will provide for the safekeeping and custody of and administer the Trust Fund in accordance with the terms of this Agreement.

1.5 Directed Trustee. The Trustee’s responsibilities are limited to those specifically allocated to it by the terms of this Agreement. The Company acknowledges and agrees that the Trustee will act only as a “directed trustee” at the direction of any entity or person with authority to direct the Trustee under the terms of this Agreement including, but not limited to the Company, the Administrator, an Investment Manager or a participant. The Company acknowledges and agrees that the Trustee has no authority under this Agreement to take any discretionary action with respect to the investment of the assets of the Trust Fund, the administration of the Plan or any other responsibility not specifically allocated to it by this Agreement. The Company warrants and represents that all directions provided to the Trustee from any person or entity authorized to issue directions to the Trustee under the terms of this Agreement will be in conformity with the terms of the Plan Documents. The Company acknowledges and agrees that the Trustee has no responsibility to review the Plan Documents to determine that they, or any direction provided thereunder, conform to the terms of this Agreement.

1.6 Form of Directions. (a) Any action required to be taken by the Company must be by resolution of its board of directors or by written direction of one or more of its president, any vice president, treasurer, or any other officer or employee for which the Trustee has been provided evidence of such officer’s or employee’s authority in writing. The Trustee may rely upon a resolution or direction filed with the Trustee and has no responsibility for any action taken by the Trustee in accordance with any such resolution or direction.

(b) The Administrator may delegate in writing to any other entity or persons any of the Administrator’s rights, powers or responsibilities with respect to the operation and administration of the Trust Fund. The Company or the Administrator will identify in a written notice to the Trustee the identity of the entity or person(s) authorized to give directions to the Trustee on behalf of the Administrator including any third party administrator or recordkeeper (each a “Recordkeeper”). The Trustee is entitled to rely upon such written notice as evidence of the identity and authority of the entity or persons so identified in writing. Any action required to be taken by the Administrator must be by direction of such entity or persons identified and designated by the Administrator to act for the Administrator. The Trustee may rely upon an instrument of designation signed by the Administrator and filed with the Trustee and has no responsibility for any action taken by the Trustee in accordance with any such direction. Notwithstanding anything herein to the contrary, the Administrator may authorize the Trustee to rely on directions from individuals identified by the Recordkeeper in writing and maintained on file with the Trustee as having the authority to act on behalf of the Recordkeeper.

Directed Employee Benefit Trust Agreement         Page 2

(c) Instructions, directions and other communications provided under this Agreement from the Company, the Administrator, an Investment Manager, from a participant with respect to a PCRA or from any of their delegates may be given to the Trustee by letter, facsimile, SWIFT or other electronic means agreed to in writing, from time to time, by the Trustee.

ARTICLE 2
CONTRIBUTIONS AND DISTRIBUTIONS 

2.1 Contributions. The Company will make contributions or transfers in cash or in other property acceptable to the Trustee for inclusion in the Trust Fund. The Company shall ensure that all discretionary, in-kind contributions are unencumbered. The Administrator has the sole responsibility to: (i) monitor or enforce contributions required or permitted by the Plan Documents and to ensure the timeliness of such contributions, (ii) compute the required amount of such contributions, (iii) determine whether the Trust Fund is sufficient to provide benefits described in the Plan Documents, (iv) determine whether contributions made comply with the Plan Documents, and (v) ensure that contributions and transfers comply with the applicable provisions of ERISA, the Code, or the regulations promulgated thereunder. The Administrator is solely responsible for the Company’s failure to make contributions or for the timeliness of such contributions and for the obligation to take action to collect any contributions to the Trust Fund when due.

2.2 Payments and Distributions. At the written direction of the Administrator, the Trustee will, from time to time, make any distributions or transfers from the Trust Fund as specified in such written directions, including distributions for the payment of reasonable Plan expenses. The Trustee has no liability for making any distribution or transfer, as directed by the Administrator, and is under no duty to inquire whether directions from the Administrator conform to Plan Documents, the Code, ERISA or any regulations promulgated thereunder. The Trustee will make distributions and payments from the Trust Fund to such persons, in such amounts, at such times and in such manner as the Administrator may from time to time direct under benefit payment and expense processing procedures established by the Trustee from time to time. The Trustee is not liable for any distribution or payment made in good faith without actual notice or knowledge of the changed condition or status of any recipient. The Administrator will furnish to the Trustee all information necessary to enable Trustee to withhold from each distribution the amount necessary to pay any federal and state income taxes due. If the Administrator directs that any payment or payments be made or discontinued contingent upon future events, it will be the responsibility of the Administrator to notify the Trustee in writing that the event has occurred. Payments by the Trustee will be delivered, transmitted or mailed to addresses or destinations supplied by the Administrator. The Trustee's obligation to make any payment will be satisfied upon such delivery, transmission or mailing. The Trustee has no obligation to determine the identity of persons entitled to benefits of the Plan or their mailing addresses. The Trustee has no obligation to search for or ascertain the whereabouts of any payee of benefits of the Trust Fund. The Trustee will provide the Administrator a periodic list of all outstanding payments made from the Trust Fund including unpaid checks and checks returned to the Trustee. If a payment made to a participant or beneficiary is returned to the Trustee or if the payment is identified as outstanding on the list presented by the Trustee to the Administrator, the Administrator will instruct the Trustee how to dispose of such payment. The Trustee has no obligation to take any further action with respect to such payment pending such instructions.

Directed Employee Benefit Trust Agreement         Page 3

Notwithstanding the foregoing, the Administrator may make distributions from the Trust Fund through a checking account in an insured banking institution established by the Administrator. The Administrator has the responsibility to assure that any such checking account is established and maintained in accordance with ERISA and is properly insured. The Administrator will direct the Trustee to make such deposits from the Trust Fund to such checking account from time to time. The Trustee has no responsibility to account for funds held in or disbursed from any such checking account, or to prepare any tax or informational returns with respect to any distributions made from such account.

2.3 Participant Loans and Qualified Domestic Relations Orders. If the Plan authorizes loans to Plan participants, the Trustee will issue such loans from the Trust at the Administrator’s direction. The Administrator will direct the Trustee in accordance with the terms of the Plan’s loan policy. The loan amounts will be carried by the Trustee as an asset of the Trust Fund equal to the combined unpaid principal balance of all participants. The Trustee will rely conclusively upon the determination of the Administrator with respect to the amount of the combined unpaid principal balance of all participants. The Trustee has no responsibility to ascertain whether a loan complies with the provisions of a Plan, for the decision to grant a loan or for the collection and repayment of a loan. The Administrator is responsible for establishing written procedures to evaluate and administer the payment of benefits under domestic relations orders as required under the Code and ERISA. 

2.4 Disputed Payments. If any controversy or disagreement arises regarding any payment from the Trust Fund or the person(s) to whom payment or delivery of any asset should be made by the Trustee, the Trustee may retain the assets involved in such controversy or disagreement without liability pending settlement of the controversy or disagreement and/or require that such controversy or disagreement be adjudicated pursuant to arbitration as provided in Section 10.7. The Trustee is not liable for the payment of any interest or income on assets it retains pursuant to an arbitrator’s instruction.

ARTICLE 3
ALLOCATION OF INVESTMENT RESPONSIBILITY

3.1 Composition of Trust Fund. The Trust Fund consists of all assets subject to investment responsibility of the Administrator (an “Administrator Portfolio”), the investment responsibility of an Investment Manager (an “Investment Manager Portfolio”), or as provided in Section 3.3 below, a Schwab Personal Choice Retirement Accountۛ (“PCRA”) under the investment responsibility of a participant or his or her designee, and, if applicable, a Company Stock Fund as defined in Section 3.9. Except as otherwise provided in this Agreement, the Administrator has investment responsibility for all assets constituting the Trust Fund. The Trustee has no duty or responsibility to review, initiate action, or make recommendations regarding the Trust Fund and will retain assets in the Trust Fund until directed in writing to dispose of them by either the Administrator, a Participant with respect to a PCRA, or an authorized Investment Manager. Further, the Trust Fund will be composed of assets of funds designated in writing by the Administrator including, if authorized by the Plan Documents, a Company Stock Fund. The Administrator is authorized to terminate the existing funds and establish new funds by giving advance written notice to the Trustee describing the fund to be terminated or established and the effective date thereof; provided that in no event will the Trustee's duties be modified without its written consent. The Administrator or the Recordkeeper as its representative will direct the Trustee to allocate the assets among the funds, any Administrator Portfolio, any Investment Manager Portfolio, or to any PCRA and to transfer cash or assets in-kind among such funds, accounts, or portfolios. The Trustee will use its best efforts to move funds as soon as practicable when transfers are delayed for any reason but will in no event be required to advance its own funds for such purpose.

Directed Employee Benefit Trust Agreement         Page 4

To the extent that the Trust Fund is invested in mutual fund shares or bank commingled funds, the Administrator will initially select the funds available for investment and is responsible, on an ongoing basis, for the decision to retain any fund or to terminate the availability of any fund. To the extent the Trustee is required to enter into a custody or agency agreement with the sponsor of a bank commingled fund or such other type of fund, the Administrator will direct the Trustee to enter into such agreement.

3.2 Funding Policy and Investment Oversight. The Administrator is responsible for establishing and carrying out a funding policy and method for the Plan, as specified in Section 402(b)(1) of ERISA, consistent with the objectives of the Plan and the requirements of ERISA taking into consideration the Plan's short-term and long-term financial needs and objectives. The Trustee is not responsible for establishing the Plan’s funding policy or for ensuring adherence to the policy, nor is the Trustee responsible for the diversification of the Trust Fund. The Administrator is responsible for the Plan’s funding policy, for monitoring the diversification of Trust Fund, for determining the propriety of investment of the Trust Fund and for assuring that the Plan does not violate any provisions of ERISA limiting the acquisition or holding of “employer securities” or “employer real property.”

3.3 Schwab Personal Choice Retirement Accountsۛ. For Plans that permit a participant to direct the investment of his or her account assets under the Plan in a self-directed brokerage account, the Trustee will, upon written instructions from the Administrator, establish on behalf of a participant or beneficiary a PCRA at Charles Schwab & Co., Inc. (the “Broker-Dealer”). If the Plan permits the establishment of PCRAs, the Administrator represents that the Plan meets the requirements of Section 404(c) of ERISA or, in the alternative, that each participant or beneficiary establishing a PCRA is a named fiduciary for purposes of ERISA. The participant or beneficiary will manage the investment of the assets allocated to his or her PCRA and is solely responsible for any loss resulting from his or her exercise of such management and control over the assets segregated into his or her PCRA.

3.4 Investment Manager Portfolios and Investment Manager Authority. The Administrator may appoint one or more investment managers within the meaning of Section 3(38) of ERISA (each an “Investment Manager”) to direct, control and manage the investment of all or a portion of the assets of the Trust Fund, as provided in Sections 3(38) and 403(a)(2) of ERISA. The Administrator may remove an Investment Manager and may appoint a replacement Investment Manager. The Administrator will promptly notify the Trustee in writing of the appointment or removal of each applicable Investment Manager. The Administrator will cause any Investment Manager to acknowledge to the Trustee in writing that it is an investment manager as that term is defined by Section 3(38) of ERISA with respect to the performance of its duties in connection with the Plan and is a fiduciary with respect to the Plan. The Trustee has no responsibility to determine or monitor whether a person or entity acting as an Investment Manager meets or continues to meet these requirements. If the foregoing conditions are met, the Investment Manager will have the power to manage, acquire, or dispose of any Trust assets, or any account portfolio holding any Trust assets for which the Investment Manager has been assigned investment responsibility. The Trustee is not liable for acts or omissions of the Investment Manager, and has no obligation to invest, monitor or otherwise manage any asset held in any Investment Manager Portfolio.

Assets comprising an Investment Manager Portfolio may be held either (1) in the account established by the Trustee for the Trust Fund; (2) in a managed account portfolio (a “Managed Account Portfolio”) established at the direction of the Administrator by the Trustee and held at a sub-custodian selected by the Trustee as directed by the Administrator (a “Sub-Custodian”), (3) in an account at the Broker-Dealer 

Directed Employee Benefit Trust Agreement         Page 5

(a “Schwab Advisor Portfolio Account.”) or (4) at a subcustodian or unaffiliated broker dealer selected by the Administrator (a “Third Party Custodian”).

In the case of any Investment Manager Portfolio established by the Trustee or a Managed Account Portfolio, the Trustee has responsibility for notifying the Sub-Custodian of the revocation of the Investment Manager’s responsibility over assets in Sub-Custodian’s custody, the appointment of a successor Investment Manager, and/or the termination of a Managed Account Portfolio. Any notification from the Administrator confirming the appointment of an Investment Manager or the establishment of a Managed Account Portfolio will include a designation of the specific assets and/or Managed Account Portfolios that are subject to the Investment Manager’s management and control. The Company acknowledges and agrees that the establishment of a Managed Account Portfolio held by a Sub-Custodian appointed by the Trustee as described herein is subject to additional fees as set forth in Section 7.2 and the applicable fee schedules defined therein.

Any Investment Manager Portfolio established at the Broker Dealer as a Schwab Advisor Portfolio Account will be established under a separate written agreement among the Broker-Dealer, the Administrator, and the Trustee and such agreement will govern the sub-custody of all assets comprising an Investment Manager Portfolio at the Broker-Dealer.

Notwithstanding the foregoing, the Administrator, may, in its discretion, select a Third Party Custodian to hold the portion of the Trust Fund’s assets that comprise an Investment Manager Portfolio. If the Administrator selects a Third Party Custodian to hold assets of the Trust Fund, the Administrator must approve and direct the Trustee to enter into a custody or account agreement with the Third Party Custodian. The Third Party Custodian has custodial responsibility for any assets maintained with the Third Party Custodian or its subagents under the custody or account agreement. Further, the Company (which has the authority to do so under the laws of its state of its formation) agrees to indemnify the Trustee from any liability, loss and expense, including reasonable legal fees and expenses, that the Trustee may sustain by reason of acting in accordance with the Administrator’s directions under this paragraph of Section 3.4 with respect to the appointment and custody of assets of the Trust Fund with a Third Party Custodian. This paragraph will survive the termination of this Agreement.

3.5 Administrator Portfolios and Administrator Authority. The Administrator has investment responsibility for any assets of the Trust Fund not otherwise allocated to an Investment Manager Portfolio or PCRA (an “Administrator Portfolio”). In addition, the Administrator has sole investment responsibility for assets held in any Managed Account Portfolio for which an Investment Manager has not been retained, has been removed, or is for any reason unwilling or unable to act. With respect to all assets of the Trust Fund for which the Administrator has investment responsibility, the Trustee, acting only as directed by the Administrator, will enter into any agreements necessary to facilitate any investment. The Trustee is not liable for acts or omissions of the Administrator, and has no obligation to invest, monitor or otherwise manage any asset of the Trust Fund, or any portfolio holding any asset of the Trust that is subject to the management of the Administrator.

3.6 Custody of the Trust Fund. The Trustee, at its sole and exclusive discretion, may accept assets to hold in custody in the Trust Fund, including in a Managed Account Portfolio, a Schwab Advisor Portfolio or a 

Directed Employee Benefit Trust Agreement         Page 6

PCRA. The Administrator, an Investment Manager, or a Participant with respect to a PCRA has sole responsibility to direct the investments for which they have investment authority and to determine whether (i) an applicable investment is appropriate, prudent and permissible under ERISA, the Code, and any other applicable law, rules, and regulations and (ii) whether the investment is permissible under the terms of the Plan Documents. The Administrator has the responsibility to determine whether the assets of the Trust Fund are adequately diversified. The Trustee assumes no, and shall not exercise any, investment management power over the Trust and has no responsibility to determine whether a particular investment decision made by the Administrator fits the investment objectives of the Trust Fund or is otherwise appropriate for the Trust Fund.

For certain assets that are not publicly traded and for assets which the original and/or current cost basis and periodic valuations may not be readily available (each an “Alternative Investment”) that have been accepted by the Trustee for acquisition or holding in the Trust Fund, the Administrator will:

(a)    Consult with competent tax, accounting, and/or legal counsel with respect to the requirements applicable to periodic valuations of such assets.

(b)    Direct the Trustee with respect to the use of original and/or current cost basis with respect to each Alternative Investment, whenever such direction is requested by the Trustee or its affiliate, including but not limited to the time of transfer of such assets to the Trust Fund. 

(c)    Direct the Trustee to value each Alternative Investment asset in accordance with Section 5.3 herein.

(d)    In the event that unrelated business taxable income (“UBTI”) is generated with respect to any Alternative Investment, the Administrator has sole responsibility for any required federal tax reports or filings. 

(e)    If any documents necessary to effectuate the acquisition or holding of any Alternative Investment require execution by a third party, including but not limited to a participant or beneficiary, provide such executed documents to the Trustee within an appropriate timeframe prior to the transaction.

The Company understands that the Trustee, at its sole and exclusive discretion, may refuse to purchase or hold any particular asset in the Trust Fund, including Alternative Investments. The Company acknowledges and agrees that the purchase and holding of assets that pose unique administrative requirements upon the Trustee may be subject to additional fees. In addition, notwithstanding any general indemnity given elsewhere, the Trustee reserves the right to seek specific indemnity from the Company or other appropriate parties where the Trustee determines, in its sole discretion, that the acquisition or holding of a particular asset or class of asset involves unusual business risk. The Trustee’s decision to accept or reject any asset is at the Trustee’s sole and exclusive discretion based on the ministerial requirements related to the custody of such asset. In no event will the decision to accept or reject any asset by the Trustee be deemed an opinion on the prudence of any investment.

3.7 Collective Investment Funds. The Trust Fund may be invested and reinvested, in whole or in part, in any common or collective investment fund (the “Collective Fund" or “Fund") maintained by the Trustee or an Investment Manager exclusively for the commingling and collective investment of assets of qualified retirement plans and tax-exempt trusts in which the Trust is eligible to participate. The documents establishing or amending these trusts are hereby incorporated by reference into this Agreement. 

Directed Employee Benefit Trust Agreement         Page 7

3.8 Insurance Contracts/Pooled Investment Vehicles. The Administrator may direct the Trustee in writing to invest assets of the Trust Fund in insurance products of all kinds authorized under the Plan, including but not limited to: group or individual insurance contracts, annuity contracts, and guaranteed investment contracts, provided however that such contracts are issued by an insurance company or companies qualified to do business in more than one state. The Administrator has the sole responsibility for and shall direct the Trustee with respect to such insurance products. The Administrator is solely responsible for the investment in and management and disposition of these insurance products. 

3.9 Company Stock Fund. To the extent included as an investment option under the terms of the Plan upon the Administrator’s written certification to the Trustee, the Trust Fund may include a Company Stock Fund comprised of investments in qualifying employer securities (“Company Stock”) within the meaning of ERISA Section 407(d)(4) & (5). If the Company Stock Fund is accounted for in a “unitized” manner as directed by the Administrator, the Administrator shall notify the Trustee in writing of the amount of the Company Stock Fund to be maintained in a short term cash investment fund, and the Trustee is not required to advance funds to make any transfers or distributions to facilitate transactions in Company Stock. The Administrator has sole responsibility for determining that the investment in and the exercise of any voting rights appurtenant to Company Stock complies with applicable law. The Administrator has the responsibility for determining how to process the voting, tender, exchange or other corporate action related to shares of Company Stock as provided in Section 3.10 herein. The Company Stock Fund may be held in a Managed Account Portfolio or at the Broker-Dealer as directed by the Administrator.

The Administrator has the sole responsibility to assure compliance with all requirements imposed under the securities laws of the United States or any state, including, but not limited to, registration and filing requirements related to Company Stock held by the Plan. To the extent such securities laws limit the sale or re-sale of such Company Stock, the Administrator is solely responsible for determining the effect any such limitation has on the value of such securities and shall direct the Trustee accordingly. The Administrator has the sole responsibility to determine whether the Trust Fund’s investment in Company Stock is prohibited by ERISA. The Trust Fund may only invest in shares of Company Stock, as identified in writing by the Administrator, that are traded on an exchange permitting a readily ascertainable fair market value.

3.10 Company Stock Voting Rights. All voting rights with respect to the Company Stock held in the Trust Fund and allocated to participants’ accounts will be exercised by the Trustee in such manner as may be directed by the Administrator or for a Plan that requires the pass through voting of Company Stock by respective participants (which term, for purposes of this Article, includes the beneficiary of a deceased participant and any alternate payee for whom an account has been established with an interest in the Company Stock). The Administrator or the Company will engage a tabulation agent to solicit voting instructions from Plan participants.

The Trustee will vote the number of full and fractional shares allocable to each participant's account as directed by the participant if the direction is received, from the tabulation agent, in time for the direction to be processed. The Trustee will vote any Company Stock with respect to which it does not receive timely directions so that the proportion of such stock voted in any particular manner on any matter is the same as the proportion of the stock with respect to which the Trustee has received timely directions which 

Directed Employee Benefit Trust Agreement         Page 8

is so voted. The Administrator will direct the Trustee to vote the Company Stock as tabulated by the tabulating agent and direct the Trustee to vote the undirected shares as described above.

In the case of a public tender or exchange offer of Company Stock, the Trustee will tender the shares of Company Stock attributable to a participant’s account if so directed by the participant, and will not tender shares attributable to the account of a participant who either directs that such shares not be tendered or does not furnish a timely direction. The Administrator or the Company will engage a tabulation agent to solicit tender or exchange instructions from Plan participants. The Administrator will direct the Trustee to tender or exchange the shares of Company Stock as tabulated by the tabulating agent and will direct the Trustee not to tender or exchange the shares of Company Stock as described above. Except as otherwise specifically provided above with respect to proportionate voting and tendering of Company Stock, the Company further acknowledges that the failure of the Administrator to provide a direction to the Trustee with respect to the tender of shares of Company Stock will constitute the determination by and direction of the Administrator to the Trustee not to tender the shares and a representation that the Administrator has made such determination consistent with its fiduciary obligations under ERISA. 

The Company has limited the Trustee’s actions with respect to a Company Stock fund to the purchase of Company Stock and the short term investment of cash both as directed by the Administrator. The Trustee is not liable for the purchase, retention, voting, tender, exchange or sale of Company Stock, and the Company (which has the authority to do so under the laws of the state of its formation) agrees to indemnify the Trustee from any liability, loss and expense, including reasonable legal fees and expenses which the Trustee may sustain by reason of purchase, retention, voting, tender, exchange or sale of Company Stock. This paragraph shall survive the termination of this Agreement.

3.11 Securities Voting Rights. Except as provided in Section 3.10 regarding Company Stock, the Administrator, or any Investment Manager will exercise all voting or other rights in securities held in the Trust Fund. Each Investment Manager is solely responsible and liable for voting or exercising other rights in all securities held in the applicable Investment Manager Portfolio.

The Trustee will deliver to the Administrator, or the person or persons identified by the Administrator, all proxies and powers of attorney and related informational material it receives for any shares or other property held, including Company Stock, in the Trust Fund. Subject to the provisions of Section 3.10, the Administrator will have responsibility for voting such shares and the tendering of such shares, by proxy or in person. The Trustee has no responsibility whatsoever for the voting or tendering of shares of securities held in the Trust or for ascertaining or monitoring whether, or how, proxies are voted or whether the proper number of proxies is received.

3.12 Representations and Warranties

The Company represents and warrants as follows:

(a)    There are no Plan Documents that have not been provided to the Trustee that limit the types of investments in which the plan may invest, the powers of the Trustee, or the ability to pay expenses out of the Plan and, in the event any Plan Document is modified to impose such a limitation, the modified Plan Document will be provided by the Company to the Trustee within fifteen days of the adoption of the modification. The Company acknowledges and agrees that in the event of any conflict between the provisions of this Agreement and any Plan Document, the provisions of this Trust Agreement will control;

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(b)    That no direction will be issued to the Trustee that violates the terms of the Plan Documents, including this Agreement, or ERISA or any regulations issued thereunder;

(c)    That the Company and the Administrator maintain and follow procedures for identifying prohibited transactions as defined under ERISA and applicable ERISA exemptive relief;

(d)    That no direction will be issued to the Trustee that will result in a non-exempt prohibited transaction under ERISA or the Code;

(e)    That the Company will provide the Trustee with appropriate direction in the event the Company discloses material non-public information concerning the Company to the Trustee; 

(f)    There are no existing SEC Form 8-K filings, bankruptcy filings or formal civil or criminal charges filed against the Company or its officers or directors by federal or state regulators other than those that have been disclosed to the Trustee by the Company, and in the event any such filing is made, the Company will provide the Trustee with a copy of such filing within fifteen days;

(g)    That the transfer of the assets of the Trust Fund to the Trustee hereunder and the continuing custody of the Trust Fund by Trustee has been properly authorized in accordance with the requirements of the Plan Documents; and 

(h)    That the Plan Documents are in full force and effect and have not been revoked, modified or amended in any way that would cause the representations made in this Agreement to be inaccurate or incorrect.

ARTICLE 4 
TRUSTEE POWERS AND LIMITATION OF RESPONSIBILITIES

4.1 Powers of the Trustee. Except as otherwise provided in this Agreement and subject to the limitations on powers set forth in Section 4.3 below and elsewhere in this Agreement, the Trustee may hold, manage, care for and protect the assets of the Trust Fund and shall have until actual distribution thereof the following powers and, except to the extent inconsistent herewith, any additional powers now or hereafter conferred by law. For assets held directly by the Trustee, the Trustee will act solely as directed by the Administrator, an Investment Manager, or a Participant with respect to a PCRA Account (each an “Investment Fiduciary”). With respect to assets held by a Sub-Custodian, Third Party Custodian, or at the Broker-Dealer, the Investment Fiduciary will, with respect to the assets under its authority, have the investment powers granted to the Trustee set forth below as limited by the limitation of powers set forth in Section 4.3 below, as if all references therein to the Trustee referred to the Investment Fiduciary.

(a)    To invest any part or all of the Trust in common stock, preferred stock, convertible preferred stock, bonds, debentures, convertible debentures and bonds, mortgages, notes, time certificates of deposit, commercial paper and other evidences of indebtedness (including those of the Trustee, The Charles Schwab Corporation (the "Public Company"), the Broker-Dealer, their affiliates and subsidiaries, to the extent permitted under applicable laws), other securities, annuity contracts, mutual funds (including those advised by the Trustee or its affiliate(s), to the extent permitted by law ( including the requirements of PTCE 77-4), for which the Company hereby acknowledges that the Trustee or its affiliate(s) receives a fee), covered calls and protective puts, U.S. Treasury notes and any other direct or indirect obligations of the United States government or its agencies, other property of any kind (personal, real, or mixed, and tangible or intangible), collective investments, insurance contracts of any type, limited partnerships (if provided with documentation 

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which the Trustee in its sole discretion deems adequate), shares of Company Stock, and to make any other investments as directed.

(b)    To retain the property in the Trust;

(c)    To sell Trust assets, at either public or private sale, at such time or times and on such terms and conditions as it may deem appropriate;

(d)    To consent to or participate in any plan for the reorganization, consolidation, or merger of any business organization, investment company or fund for which the Trust holds any interest, to pay calls and assessments imposed upon the owners of any securities or interest as condition of the Trust’s consent or participation, and to consent to any contract, lease, mortgage, purchase or sale of property related to such plan and any related transactions;

(e)    To renew or extend the time of payment of any obligation due or becoming due;

(f)    To compromise, arbitrate (subject to the restrictions of Section 10.7), or otherwise adjust or settle claims in favor of or against the Trust and to deliver or accept consideration in either total or partial satisfaction of any indebtedness or other obligation, and to continue to hold property so received for the period of time that the Trustee deems appropriate;

(g)    To exercise or dispose of any right it may have as the holder of any security, to convert the same into another security, to acquire any additional security or securities, to make any payments, to exchange any security, or to do any other act with reference thereto;

(h)    To exchange any property for other property upon such terms and conditions as appropriate, and to give or receive money to effect equality in price;

(i)    To sue or defend in connection with any and all securities or property at any time received or held in the Trust and to charge against the Trust all reasonable expenses, including attorney's fees in connection therewith;

(j)    To borrow money from any source (including the Trustee) and to execute promissory notes, mortgages or other obligations and to pledge or mortgage any Trust assets as security, subject to applicable requirements of the Code and ERISA;

(k)    To deposit any security with any protective or reorganization committee, and to delegate to that committee such power and authority as appropriate, and to agree to pay out of the Trust that portion of the expenses and compensation of that committee as deemed appropriate;

(l)    To vote, either in person or by general or limited proxy, or refrain from voting, any corporate securities for any purpose; to exercise or sell any subscription or conversion rights; to consent to and join in or oppose any voting trusts, reorganizations, consolidations, mergers, foreclosures and liquidations and in connection therewith to deposit securities and accept and hold other property received therefor;

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(m)    To the extent permitted under applicable laws, to invest in savings accounts, certificates of deposit or other deposits which bear a reasonable interest rate in a bank, including those of Charles Schwab Bank or any affiliate or subsidiary, if such bank is supervised by the United States or any state;

(n)    To hold in cash, without liability for interest, a portion of the Trust which, in its discretion, is reasonable under the circumstances in consideration of Plan cash requirements including, but not limited to, pending investments, the payment of expenses, or the distribution of benefits;

(o)    To lend securities from the Trust on a secured basis in accordance with a separate written agreement between the Administrator, the Trustee, and its affiliates; and

(p)    To exercise all of the further rights, powers, options and privileges granted, provided for, or vested in trustees generally under pertinent law, so that the powers conferred upon the Trustee herein will not be in limitation of any authority conferred by law, but will be in addition thereto.

4.2 Administrative Powers of the Trustee. The following administrative, non-discretionary powers may be exercised by the Trustee in its administration of the Trust Fund subject to the terms of this Agreement:

(a)    To collect income generated by the Trust investments and proceeds realized on the sale or disposition of assets and to hold the same pending reinvestment or distribution in accordance with this Agreement; provided that the Administrator or applicable Investment Manager will direct the Trustee to take any action required to effect collection of any income or principal amounts with respect to which payment is in default, or if payment is refused after due demand. The Trustee will notify the Administrator or the applicable Investment Manager of any default or refusal to pay;

(b)    To register Trust property in the Trustee's own name, in the name of a nominee or in bearer form, provided the Trustee's records and accounts show that the property is an asset of the Trust Fund;

(c)    To deposit securities in a security depository and permit the securities so deposited to be held in the name of the depository's nominee, and to deposit securities issued or guaranteed by the U.S. Government or any agency or instrumentality thereof, including securities evidenced by book entry rather than by certificate, with the U.S. Department of the Treasury, a Federal Reserve Bank or other appropriate custodial entity, in the same account as the Trustee's own property, provided the Trustee's records and accounts show that such securities are assets of the Trust;

(d)    To have, respecting securities, all the rights, powers and privileges of an owner, including the power to give proxies, pay assessments and other sums deemed by the Trustee to be necessary for the protection of the Trust;

(e)    To appoint agents as necessary or desirable, including legal counsel who may be counsel for the Company; and

(f)    To hold in cash, without liability for interest, any portion of the Trust that is reasonable under the circumstances in consideration of Plan cash requirements including, but not limited to, pending investments, the payment of expenses, or the distribution of benefits and notwithstanding the Trustee’s receipt of “float” from any uninvested cash which, in all cases, shall be considered additional compensation to the Trustee.

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4.3 Limitation of Powers. For purposes of this Agreement, the powers and responsibilities allocated to the Trustee, the Administrator, and each Investment Manager are limited as follows:

(a) The powers are exercisable for the exclusive purpose of providing benefits to the participants and beneficiaries under the Plan and in accordance with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters and consistent with the standards of a prudent man under ERISA;

(b) Subject to (a) immediately above the Administrator or an Investment Manager as applicable will diversify the investments of that portion of the Trust Fund for which it has investment responsibility so as to minimize the risk of large losses;

(c) The Trustee will not make any investment review of, consider the propriety of holding or selling, or vote other than as directed by the Administrator or an applicable Investment Manager, any assets of the Trust Fund subject to the investment responsibility of such fiduciary, except that if the Trustee has not received contrary instructions from either the Administrator or an Investment Manager, the Trustee may invest for short term purposes any cash consisting of U.S. dollars in its custody pursuant to the written instructions of the Administrator in effect from time to time which may include a direction to invest such cash in Collective Funds or money market mutual funds.

4.4 Products of an Affiliate. At the direction of the Administrator, the Trustee may purchase shares of regulated investment companies (or other investment vehicles) including those advised by the Public Company, the Broker-Dealer, the Trustee or any affiliate or subsidiary of any of them ("Affiliated Funds"), except as prohibited by law or regulation.

Uninvested Trust cash may be invested in Affiliated Funds designated by the Administrator for that purpose, unless the Administrator specifically instructs the Trustee to use another fund or account acceptable to the Trustee. 

4.5 Overdrafts. Notwithstanding any other provision in this Agreement to the contrary, the Trustee may, but shall not be obligated, to advance its own funds to settle securities transactions or otherwise cover overdrafts incurred by the Trust Fund. If the Trustee advances its own funds to cover an overdraft, the Administrator will direct the Trustee to sell specific assets of the Trust Fund in an amount sufficient to cover the overdraft. If the Trustee does not receive a direction to sell assets of the Trust Fund to cover an overdraft, the Trustee will have the right to sell Trust Fund assets sufficient to cover the overdraft. 

4.6 Multiple Trusts and Trustees. If the Plan permits the appointment of multiple trustees and the establishment of separate trusts to hold Plan assets, the Company may appoint trustees in addition to the Trustee and establish separate trusts in addition to the Trust to hold Plan assets. The Trustee will have no duty, responsibility or liability for Plan assets held under such separate trusts by other trustees.

4.7 Pooling with Assets of Other Plans. If the Company creates or maintains for its employees or the employees of an affiliated company one or more employee benefit plans qualified under Code Section 401(a) (an “Additional Plan”) in addition to the Plan, the Company may request the Trustee to hold the assets of the Additional Plan(s) in the Trust Fund. With respect to each Additional Plan for which this 

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Agreement is adopted by the Company, the Company shall appoint the Trustee as successor under the trust agreement for the Additional Plan, shall direct the Trustee as successor under that trust agreement to add the assets held thereunder to the assets of the Trust Fund and shall appoint the Administrator as the fiduciary with investment and administrative responsibility for the Additional Plan. The Trustee may hold the Trust Fund as a commingled fund or commingled funds in which the Plan and each separate Additional Plan will have a proportionate undivided interest in the fund or funds in which it participates, except that each fund or asset specifically identified by the Administrator as allocable to the Plan or any Additional Plan, herein referred to as an "identified fund" or "identified asset", and any income, appreciation or depreciation and expenses attributable to the Plan or any Additional Plan or to an identified asset thereof, will be allocated or charged to the Plan or the appropriate Additional Plan. Contributions will be designated by the Administrator as allocable, and distributions shall be designated by the Administrator as chargeable, to the Plan or an Additional Plan and will be so allocated or charged. 

The Administrator will keep records showing the respective interests of the Plan and each Additional Plan in the Trust Fund unless the Trustee enters into an agreement with the Company requiring the maintenance of separate accounts for the Plan and each such Additional Plan. The Company and the Administrator will not permit or cause the assets of the Plan and/or any Additional Plan within the Trust Fund to be used to pay benefits or administrative expenses of any other Plan or Additional Plan within the Trust Fund.

ARTICLE 5
SETTLEMENT OF ACCOUNTS

5.1 Trustee Records. The Trustee will maintain accounts of all receipts and disbursements, including contributions, distributions, purchases, sales and other transactions of the Trust Fund.

5.2 Trustee Reports

(a)    Within sixty (60) days following the close of the Plan’s fiscal year or the close of any other period as may be agreed upon by the Trustee and the Administrator, the Trustee will provide the Administrator a written accounting of the Trust Fund (the “Trust Statement”) setting forth a description of all securities and other property purchased and sold, all receipts, disbursements, and other transactions carried out by it during that fiscal year or other designated period, and a listing of the securities and other property held by the Trustee at the end of such fiscal year or other designated period, together with their cost and fair market values.

(b)    The Administrator may approve the Trust Statement by written notice of approval delivered to the Trustee or by the Administrator’s failure to deliver to the Trustee express objections to the Trust Statement in writing within sixty (60) days from the date upon which the Trust Statement was mailed or otherwise delivered to the Administrator.

(c)    The Trust Statement will be deemed approved upon receipt by the Trustee of the Administrator's written approval of the Trust Statement or upon the passage of the sixty (60) day period of time, except for any matters covered by written objections that have been delivered to the Trustee by the Administrator and for which the Trustee has not given an explanation or made an adjustment satisfactory to the Administrator.

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(d)    The approval of a Trust Statement constitutes a full and complete discharge to the Trustee as to all matters set forth in that Trust Statement as if the account had been settled by a court of competent jurisdiction in an action or proceeding to which the Trustee, the Company and the Administrator were parties.

(e)    If the Trust Statement is not settled as provided above, the Trustee, the Company or the Administrator has the right to submit such controversy or disagreement to arbitration pursuant to Section 10.7, at the expense of the Trust Fund for a settlement of the accounting. Any determination by the arbitrator entered in such proceeding will be conclusive on all persons interested in the Trust Fund.

5.3 Valuation. Notwithstanding any other provision of this Article 5, unless the Trustee is able to obtain the value of the Trust assets, including any Alternative Investments held by the Trust, from readily available public sources, as of each annual valuation date assigned by the Company the Administrator will direct the Trustee with respect to the current fair market value of the Trust assets within the time frame requested by the Trustee, and the Trustee will, in accordance with such valuation direction, account for and report such assets under Section 5.2 of this Agreement. The Trustee will rely conclusively upon the supplied valuation, and the Trustee has no responsibility whatsoever with respect thereto. In the event the Administrator fails to provide a valuation direction, the Trustee is hereby directed to engage an independent appraiser to determine the current fair market value of the Trust assets. In the event Company Stock is valued, the independent appraiser will meet the requirements of Internal Revenue Code Section 401(a) (28) (C). Any expenses and costs of the appraisal will be paid out of the assets of the Trust Fund or, at the option of the Company, by the Company. The market value of the Trust’s interest in any Collective Fund will be the fair market value of the interest as determined by the Collective Fund. For purposes of valuation of Trust assets, the Trustee may report the value of the Collective Fund as reported to it by the manager of the Collective Fund. The valuation of insurance products is the sole responsibility of the Administrator, and the Trustee will follow Administrator’s directions with respect to the valuation of such insurance products. Unless directed in writing by the Administrator to the contrary, the Trustee will price such contracts held in the Trust at $1.00.

The Company further acknowledges and agrees that in no event will the Trustee be responsible for use of any valuation prior to actual receipt of the Administrator’s valuation direction by the Trustee. In the event that an updated valuation is provided by the Administrator as a result of an error or inaccuracy in a prior valuation and additional work is required to correct any error or inaccuracy, the Company will compensate the Trustee based on its standard hourly rates for Extraordinary Services, as defined in the Fee Schedules referenced in Section 7.2 herein.

The Company is responsible for the determination of whether any valuation and the valuation method employed are acceptable and conducted in accordance with applicable legal and regulatory requirements. The Trustee is not liable for any inaccurate valuation and has no duty of investigation or inquiry with respect thereto.

The Company acknowledges and agrees that if any assets of the Trust Fund, including Alternative Investments, are transferred from an account held by a prior trustee or custodian to the Trust Fund, (whether from the Broker-Dealer or an unrelated financial provider): 

(1)    if any asset is valued at zero, the Trustee will use the zero valuation for the asset for all plan purposes until such time as the Administrator directs otherwise or, at the Administrators’ direction, the Trustee obtains a replacement valuation.

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(2)    if the Administrator does not direct the Trustee to value an asset in a timely manner, the Trustee will use the last valuation directed by the Administrator for all Plan purposes as reflected on the records of the prior trustee or custodian. 

ARTICLE 6
SERVICES BY AND BROKERAGE TRANSACTED THROUGH AFFILIATES

6.1 Services by Affiliates. The Trustee may contract or arrange for the provision of services to the Trust by organizations that are affiliated with or subsidiaries of Charles Schwab Bank, including the Public Company and the Broker-Dealer, their respective affiliates and subsidiaries, and their successors and assigns.

6.2 Brokerage. The Trustee is authorized and directed to place securities orders, settle securities trades, hold securities in custody, and perform related activities for the Trust Fund through or by the Broker-Dealer whenever possible unless the Company specifically directs the Trustee to settle a trade directly with another broker-dealer or to settle a trade placed by the Investment Manager for execution at another Broker-Dealer. Trades and related activities transacted through the Broker-Dealer or another broker-dealer are subject to fees and commissions established by the Broker-Dealer or such other broker-dealer, which may be paid from the Trust Fund or netted from the proceeds of trades. Transactions executed by the Broker-Dealer or such other broker-dealer are subject to the applicable account agreement, trading rules and policies as modified or amended from time to time, the applicable rules, regulations, customs and usage of any exchange, market, clearing house or self-regulatory organization and any applicable federal and state laws, rules and regulations.
6.3 Disclosure of Information. The Trustee is authorized to disclose to the Public Company, its affiliates, or to any other persons or organizations that the Trustee determines have a legitimate business purpose for obtaining such information, any information concerning the operation and administration of the Trust. The Trustee is authorized to disclose upon request to companies whose securities are held in the Trust Fund: (1) the Company's and/or the Investment Manager's name and address (2) the Trust’s holdings of securities issued by the requesting company, and (3) with respect to Rule 22c-2 of the Investment Company Act of 1940, the Trust’s taxpayer identification number (“TIN”), and the amounts and dates of each purchase, redemption, transfer or exchange, and other information required by such rule.

ARTICLE 7
TAXES, EXPENSES AND COMPENSATION OF TRUSTEE

7.1 Taxes. The Trustee will notify the Administrator of any tax levied upon or assessed against the Trust Fund of which the Trustee has knowledge. If the Trustee receives no instructions from the Administrator, the Trustee may pay the tax from the Trust Fund provided, that the Trustee assumes no obligation, in the absence a direction, to pay any tax, or to file or prepare any tax returns or other reports required in connection with any taxing authorities for matters covered by this Agreement. If the Administrator wishes to contest the tax assessment, it will give appropriate written instructions to the Trustee. The Trustee will not be required to bring any legal actions or proceedings to contest the validity of any tax assessments unless the Trustee is 

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directed to do so and has been indemnified to its satisfaction against loss or expense related to such actions or proceedings, including reasonable attorney's fees.

7.2 Trustee Compensation and Expenses. The Company (or the Recordkeeper) will quarterly remit payment to the Trustee for the Trustee’s services as well as all reasonable expenses incurred by the Trustee in connection with or relating to the performance of its specifically allocated responsibilities under this Agreement or its status as Trustee, including reasonable attorneys’ fees. The compensation of the Trustee and its affiliates are set forth in the Trustee’s fee schedule or in the applicable agreement between the Recordkeeper and the Company (where such expenses and compensation are forwarded by the Recordkeeper to the Trustee) (the “Fee Schedule”). The Company acknowledges receipt of the Fee Schedule and, where applicable, the Schwab Retirement Account/Personal Choice Retirement Account® Plan Application (“Application”), the Trustee’s Fee Schedule for Unitized Portfolios or any other specific fee schedules applicable to the Trust Fund (“Other Fee Schedules”). If such expenses and compensation are paid by the Recordkeeper to the Trustee, the Company acknowledges and agrees that it has obtained and will continue to obtain disclosure of the expenses and compensation paid to the Trustee from the Recordkeeper. The Company acknowledges and agrees that the amounts described in any applicable Fee Schedule, Application and/or Other Fee Schedules are approved by it and are payable to the Trustee, and that all fees have been taken into consideration in determining the reasonableness of the total amounts payable to the Trustee.

Reasonable compensation includes the float earned on uninvested cash, the reimbursement of expenses incurred by the Trustee, and all other compensation and remuneration as defined in the Fee Schedule, Application, and/or Other Fee Schedules. The Trustee reserves the right to alter its rate of compensation at any time by providing the Company, the Administrator, or the Recordkeeper, as applicable, with written notice of such change at least sixty (60) days prior to the effective date of the change.

The Trustee may withdraw any reasonable expenses, including counsel, appraisal, or accounting fees that are not paid by the Company within thirty (30) days after mailing or other transmission of the Trustee’s invoice to the Company or the Recordkeeper, as applicable, unless an earlier withdrawal of expenses from the Trust Fund is directed in writing by the Administrator. The Trustee reserves the right to charge overdraft fees and, where applicable, will provide notice of such overdraft charges to the Company.

ARTICLE 8
RESIGNATION OR REMOVAL OF TRUSTEE

8.1 Resignation and Removal. The Trustee may resign as trustee hereunder or may be removed by the Company. This resignation or removal may be accomplished at any time by giving sixty (60) days advance written notice to the Trustee or Company, as applicable, unless the receiving party agrees to waive such notice period. Upon resignation or removal, the Company will appoint a successor trustee who will then succeed to all the powers and duties given to the Trustee by this Agreement. The Trustee will transfer all property of the Trust Fund to such successor trustee, in accordance with the written directions of the Administrator. The Trustee may require as a condition of making any transfer to the successor trustee that the successor trustee present evidence that any bonding requirement under ERISA Section 412 has been met. Notwithstanding the foregoing, the Trustee is authorized to reserve such sum of money as it may deem advisable for payment of its fees and expenses in connection with the settlement of its accounts or other expenses of the Trust Fund, and any balance of such reserve remaining after the payment of such fees and expenses will be paid to the successor trustee.

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8.2 Final Settlement of Accounts. Within sixty (60) days of the transfer of the assets of the Trust Fund to the successor trustee, the Trustee will provide the Company with a Trust Statement in the form and manner prescribed for the annual Trust Statement by Section 5.2. Unless the Company files written objections with the Trustee within sixty days after such Trust Statement has been mailed or otherwise delivered, the Company will be deemed to have approved the Trust Statement in accordance with Section 5.2. Upon settlement of its account and transfer of the assets of the Trust Fund to the successor trustee, all rights and privileges under the Plan and this Agreement will vest in the successor trustee and thereafter liability of the Trustee for future action or inaction will terminate subject only to the requirement that the Trustee execute all necessary documents to transfer the assets of the Trust Fund to the successor trustee.

ARTICLE 9
TERMINATION AND AMENDMENT

9.1 Termination. The Company intends for this Trust and the Plan of which it is a part to be a permanent and ongoing arrangement. This Agreement may terminate with respect to the Plan or an Additional Plan by action of the Company or any affiliate which is responsible for making contributions to the Plan or any Additional Plan. Upon termination with respect to the Plan, a contributing affiliate’s participation in the Plan or an Additional Plan, the Trustee will distribute the assets attributable to the Plan or an Additional Plan in the manner directed by the Administrator, in cash or in kind as the Trustee and the Administrator will agree, except that the Trustee shall be entitled to prior receipt of such rulings and determinations from such administrative agencies as it may deem necessary or advisable to assure itself that the distribution directed is in accordance with law and will not subject the Trust Fund or the Trustee to liability, and except, further, that the Trustee may reserve such reasonable amount as the Trustee may deem necessary for outstanding and accrued charges against the Trust Fund. This Agreement shall terminate in its entirety when there is no asset included in the Trust Fund. 

9.2 Amendment. Except as provided for in this Agreement and the Fee Schedule, this Agreement may be amended at any time by written amendment adopted by the Company and the Trustee, provided, that such amendment will not operate:

(a)    to cause any part of the Trust to revert to or be recoverable by the Company or to be used for or diverted to purposes other than the exclusive benefit of participants and their beneficiaries, except to the extent permitted by law and the Plan; or

(b)    to reduce the then accrued benefits or the amounts then held for the benefit of any participant or beneficiary of the Plan.
ARTICLE 10
MISCELLANEOUS

10.1 Headings. The headings in this instrument have been inserted for convenience of reference only and are to be ignored in any construction of the provisions of this Agreement.

10.2 Restriction on Alienation. No person entitled to any benefit under this Trust and the Plan will have any right to assign, alienate, hypothecate, or encumber his or her interest in any benefits under this Agreement and those benefits will not in any way be subject to claim of his or her creditors or liable to attachment, execution, or other process of law. Any attempt at alienation will be void, and the Trustee will disregard any attempted alienation. The Trust will not be liable for or subject to the debts or torts of any participant or 

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beneficiary, and benefits will not be considered an asset of a participant in bankruptcy. This does not preclude the Trustee from complying with a QDRO (as provided in Section 2.3). 

10.3 Advice of Counsel. The Trustee may consult with legal counsel, who may also be counsel for the Company, with respect to its responsibilities under this Agreement and is fully protected in acting or refraining from acting in reliance upon the written advice of legal counsel.

10.4 No Duty to Inquire. All persons dealing with the Trustee are released from inquiring into the decision or authority of the Trustee and from seeing to the proper application of any monies paid or securities or other property delivered to the Trustee.

10.5 No Duty to Investigate. The Trustee will bear no liability for acting upon any instruction, direction or document believed by it to be genuine and presented, transmitted or signed by a party duly authorized to do so, and the Trustee is under no duty to make any investigation or inquiry about the correctness of such instruction or document.

10.6 Indemnification. If the Trustee incurs any liability, loss, claim, suit or expense (including attorney’s fees) in connection with or arising out of its provision of services under this Agreement, or its status as Trustee hereunder, and the Trustee cannot obtain, or would be precluded by law from obtaining, payment or reimbursement of such liability, loss, claim, suit or expense (including attorneys fees) from the Trust Fund, then the Company (which has the authority under the laws of the state of its formation) will indemnify and hold harmless the Trustee, and its officers, employees, affiliates and agents from and against all such liability, loss, claim, suit or expense (including attorney's fees), except to the extent such liability, loss, claim, suit or expense arises directly from the Trustee’s breach in executing its responsibilities specifically allocated to it by the terms of this Agreement, the Trustee’s negligence in its execution of such specifically allocated responsibilities, or the Trustee’s fraud or willful misconduct. The Company’s indemnity obligation under this Section includes, but is not limited to, any liability, loss, claim, suit or expense in connection with or arising out of any of the following:

(a)    Any action or inaction by the Trustee in accordance with the written directions (or the absence of such directions) from the Company, the Administrator, the Recordkeeper, an Investment Manager, a participant, beneficiary, or alternate payee under a QDRO pursuant to Section 2.3 and any person authorized to act on behalf of one or more of them (a “Directing Party”); 

(b)    Any action or inaction by the Trustee that results from the Trustee’s reliance on the action or inaction of a Directing Party, including any such action related to directions to invest Trust assets or otherwise deal with Plan assets; 

(c)    With respect to a direction to invest in Alternative Investments:

(i)    The Trustee’s inability to invest, re-invest, liquidate or collect income received with respect to such Alternative Investments;

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(ii)    The Trustee’s use of any cost basis, unit or share, UBTI, and/or valuation information provided to it in accordance with its acceptance of such Alternative Investments or the Administrator’s directions to the Trustee regarding such information, including, but not limited to: (1) use of a prior annual valuation amount where a subsequent valuation amount has not yet been obtained or for which directions from the Administrator have not yet been provided to the Trustee; (2) the Administrator’s provision of an improper or incorrect valuation amount to the Trustee, (3) the failure of the Administrator to provide a valuation direction to the Trustee; or 

(iii)    The investment, reinvestment, reporting, disclosure, liquidation and distribution under the Plan of and with respect to participant and beneficiary contributions and benefits based on such cost basis, unit or share, UBTI, and/or valuation information.

(d)    The Trustee’s execution of its responsibilities under this Agreement in good faith, except to the extent such liability, loss, claim, suit or expense arises directly from the Trustee’s breach in executing its responsibilities specifically allocated to it by the terms of this Agreement, the Trustee’s negligence in its execution of such specifically allocated responsibilities, or the Trustee’s fraud or willful misconduct;

(e)    The acts or omissions to act of any Directing Party with respect to the Plan or Trust; 

(f)    Any violation by a Directing Party of the provisions of ERISA or the regulations thereunder; 

(g)    Any violation by a Directing Party of the terms of the Plan Documents, instruments, investment policies or guidelines; or

(h)    Any breach of the representations and warranties of Section 3.12 of this Agreement 

Except to the extent the Trustee is required to indemnify the Company, if the Trust ceases to be a tax-exempt trust under Section 401 and Section 501 of the Code, the Company will indemnify the Trustee for any Federal or state taxes which the Trustee is required to pay, including, but not limited to those incurred as a result of any distribution made at the direction of the Administrator and the Company will be subrogated to the right of the Trustee to proceed against any person or decedent’s estate benefiting from such tax payment.

The Trustee shall indemnify and hold harmless the Company, the Administrator, the Plan, and the Trust Fund from any liability, loss, claim, suit or expense (including attorney’s fees and costs of defense) to the extent such liability, loss, claim, suit or expense (including reasonable attorney's fees and costs of defense) arises directly from the Trustee’s breach of its responsibilities specifically allocated to the Trustee by the terms of this Agreement, the Trustee’s negligence in its execution of such specifically allocated responsibilities, or the Trustee’s fraud or willful misconduct.

Directed Employee Benefit Trust Agreement         Page 20

Each party must notify the other promptly in the event that a claim has been made and/or suit has been brought which could give rise to rights under this Article. 

Expenses incurred by a party that it believes are subject to indemnification under this Agreement will be paid by the other party upon such party’s request, provided that the other party may delay payment of any amount in dispute until such dispute is resolved according to the provisions of Section 10.7 of the Agreement. Such resolution may include the award of interest on unpaid amounts determined to be payable to the indemnified party under this Article.

This Section 10.6 will survive termination of this Agreement.

10.7 Arbitration of Disputes. Any dispute between the Company and the Trustee under this Agreement will be resolved by submission of the issue to a member of the American Arbitration Association who is chosen by the Company and the Trustee. If the Company and the Trustee cannot agree on such a choice, each will nominate a member of the American Arbitration Association, and the two nominees will then select an arbitrator. Expenses of the arbitration will be paid as decided by the arbitrator. 

10.8 Entire Agreement. This Agreement and the Plan are both part of and constitute a single, integrated employee benefit Plan and trust and will be construed together. If there is a conflict between the provisions of the Plan and this Agreement, the provisions of this Agreement will control with respect to all rights, duties, responsibilities, obligations, powers and authorities of the Trustee. The Trustee will not be a named fiduciary under the Plan, nor will it have any duty to inquire into, or liability with respect to, the provisions of the Plan.

10.9 Governing Law. The provisions of ERISA and the internal laws of California shall govern the validity, interpretation and enforcement of this Agreement, and in case of conflict, the provisions of ERISA will control. The invalidity of any part of this Agreement shall not affect the remaining parts thereof.

10.10 Recorded Conversations. Subject to applicable law, the Trustee is authorized to tape record conversations between the Trustee and persons acting on behalf of the Plan or a participant in the Plan to verify data on transactions.

10.11 Execution and Counterparts. This Agreement may be executed in several counterparts, each of which will be deemed original and such counterparts will constitute but one instrument that may be sufficiently evidenced by any one counterpart.

10.12 Successors and Assigns. This Agreement is not assignable by any party without the other party’s prior written consent, and any attempted assignment in contravention hereof is null and void. Notwithstanding the foregoing, any corporation or association (i) into which the Trustee may be merged or with which it may be consolidated, (ii) resulting from any merger, consolidation or reorganization to which the Trustee may be a party, or (iii) to which all or any part of the Trustee’s fiduciary business, which includes the collective investment funds, for which the Trustee is the trustee, may be transferred, will have all rights, powers and obligations of the Trustee under this Agreement, without the necessity of executing any instrument or performing any further act.

Directed Employee Benefit Trust Agreement         Page 21

10.13 Force Majeure. The Trustee is not responsible for losses caused directly or indirectly by conditions beyond its control, including, but not limited to, war, natural disasters, government restrictions, exchange or market rulings, strikes, interruptions of communications or data processing services, or disruptions in orderly trading on any exchange or market. 

10.15 Notices, Change of Address. Any notice required or permitted to be given under this Agreement will be sufficient if in writing addressed as follows:

If to the Company, to the address provided on the Execution page.

If to the Trustee, to the following address:

Charles Schwab Bank
Attention: Business Trust Division
211 Main Street, 14th Floor
San Francisco, California 94105

or to such other address as the Company or the Trustee may hereafter specify in writing by providing ten days prior notice of such change to the other party. All notices, requests, demands and other communications will be in writing and will be deemed to have been duly given on the date of service, if served personally on the party to whom notice is to be given, or on the fifth day after mailing, if mailed and properly addressed.

Directed Employee Benefit Trust Agreement         Page 22

Execution Page

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers effective as of the ______ day of _____________, 20_____.

COMPANY
	
	
	Company/Plan Sponsor Name (please print)
   Service Corporation International 

	Plan Name (please print)
   SCI 401(k) Retirement Savings Plan

	Address                                                                                 City                                       State                Zip Code          
   1929 Allen Parkway               Houston                   TX        77019

	
	
	Signature and Date Required

	X Greg Sangalis
Authorized Person Signature                            Date 4/15/16

	Print Name        Greg Sangalis                        Title Sr. Vice President

The undersigned hereby certifies that he/she is the duly elected, qualified and acting Assistant Secretary/General Partner/Managing Member/Other (as set forth below) of the Company identified above (the "Company") and further certifies that the person whose signature appears above is duly authorized with full power to execute this Agreement on behalf of the Company.

	
	
	Signature and Date Required

	X Curtis Briggs                                4/15/16
Certifying Person Signature                            Date

	Vice President                                4/15/16
Print Name                                Title

CHARLES SCHWAB BANK, TRUSTEE
	
	
	Signature and Date Required

	X
Authorizing Person Signature                            Date

	Print Name                                Title

©2014 Charles Schwab Bank. All rights reserved. (201401)         Directed Employee Benefit Trust Agreement

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