Document:

Exhibit 10.3 - Second Amendment

    Exhibit
      10.3

    Execution
      Copy

    

    November
      2, 2006

    

     

    SEMCO
      Energy, Inc. 

    

     

    
      	 	
              Re:

            	
              Second
                Amendment (the “Amendment”) under that certain Second Amended and Restated
                Credit Agreement dated as of September 15, 2005 by and among the
                financial
                institutions from time to time signatory thereto (each a “Lender”, and
                collectively the “Lenders”), LaSalle Bank Midwest National Association, as
                Administrative Agent for the Lenders (in such capacity, “Agent”), and
                SEMCO Energy, Inc. (“Company”), as amended from time to time prior to the
                date hereof (the “Credit
                Agreement”).

            

    

     

    Ladies
      and Gentlemen: 

    

    Reference
      is made to the Credit Agreement. Except as specifically defined to the contrary
      herein, capitalized terms used in this Amendment shall have the meanings given
      them in the Credit Agreement. 

     

    You
      have
      requested that the Lenders consent to modify (i) the calculation in the Credit
      Agreement of the Maximum Leverage Ratio and the Minimum Consolidated Net Worth
      Ratio to exclude certain charges arising from the implementation of FAS No.
      158
      and (ii) the Credit Agreement to permit the Company to obtain securitized
      account receivable financings, subject to certain terms and conditions.

     

    Based
      on
      the Agent’s receipt of the approval of the requisite Lenders (as attached to
      this Amendment) and a closing certificate from you in form and substance
      reasonably acceptable to the Agent, the Agent hereby confirms, for and on behalf
      of the Lenders, the amendments of the Credit Agreement as follows:

     

    1. The
      definition of Consolidated Net Worth in Section 1.1 of the Credit Agreement
      is
      hereby amended by deleting it in its entirety and inserting the following
      language in its place:

     

    Consolidated
      Net Worth
      means, as of the date of any determination thereof, the stockholders’ capital
      and surplus of the Company and its Subsidiaries determined on a consolidated
      basis in accordance with GAAP, and which shall include (whether or not
      includible under GAAP) the principal amount of the Junior Capital, adding back
      (a) an amount equal to all non-cash charges, less any tax deductions or credits
      on account of such charges, taken by the Company in accordance with GAAP under
      FAS No. 142 or FAS No. 144 after December 31, 2004 and (b) the non-cash charge
      incurred on December 31, 2006 and posted to accumulated comprehensive income,
      less any tax credits to accumulated comprehensive income on account of such
      charge, as the result of adopting FAS No. 158.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2. The
      definition of Funded Debt in Section 1.1 of the Credit Agreement is amended
      by
      deleting it in its entirety and inserting the following language in its
      place:

     

    Funded
      Debt
      of
      any Person means, without duplication, (i) all Debt of such Person for borrowed
      money or which has been incurred in connection with the acquisition of assets
      in
      each case having a final maturity of one or more than one year from the date
      of
      origin thereof (or which is renewable or extendible at the option of the obligor
      for a period or periods more than one year from the date of origin), including
      all principal payments in respect thereof that are required to be made within
      one year from the date of any determination of Funded Debt, whether or not
      the
      obligation to make such payments shall constitute a current liability of the
      obligor under GAAP and including any Debt or off balance sheet obligations
      issued pursuant to a Securitization Transaction (whether by a Special Purpose
      Subsidiary or otherwise), provided, however, that Funded Debt shall not include
      (a) Junior Capital, (b) all outstanding Loans made to such Person pursuant
      to
      the Revolving Commitment and the aggregate amount of Debt relating to any
      Permitted Securitization, provided, however, that the aggregate principal amount
      excluded pursuant to this clause (b) shall not exceed $120,000,000 and (c)
      any
      notes of such Person evidencing Debt of such Person which when issued constitute
      a current liability of such Person under GAAP, (ii) all Capitalized Rentals
      of
      such Person, and (iii) Off Balance Sheet Liabilities.

     

    3. The
      definition of Guaranty Event in Section 1.1 of the Credit Agreement is amended
      by deleting it in its entirety and inserting the following language in its
      place:

     

    Guaranty
      Event
      means the failure at any time of the Company and the Guarantors, as of the
      last
      day of any Fiscal Quarter (determined on a consolidated basis for the Company
      and the Guarantors but without regard to any Subsidiaries which are not
      Guarantors), to constitute the source of at least seventy percent (70%) of
      the
      Consolidated Operating Income of the Company and its Subsidiaries (excluding
      any
      Special Purpose Subsidiary) for the four Fiscal Quarter period ending on such
      date or to hold at least seventy percent (70%) of the Consolidated total assets
      of the Company and its Subsidiaries (excluding any Special Purpose Subsidiary)
      on such date.

     

    4. The
      following definition is inserted in Section 1.1 of the Credit Agreement in
      the
      appropriate alphabetical order:

     

    Permitted
      Securitization
      shall mean the transfer or encumbrance of certain accounts receivable of the
      Company or any Subsidiary to a Special Purpose Subsidiary conducted in
      accordance with the following requirements:

     

    
      	(a)  	
              The
                disposition of such accounts receivable will not result in the aggregate
                principal amount of Debt at any time issued and outstanding in respect
                of
                Permitted Securitizations being in excess of $155,000,000 less the
                aggregate principal amount of the Revolving Commitment hereunder
                and of
                any term loans which may from time to time be evidenced hereby (giving
                effect to any permanent reduction in the Revolving Commitment or
                prepayment of any other loan made simultaneously with the closing
                of such
                Permitted Securitization);

            

    

     

    2

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(b)  	
              At
                such time as the Company or a Subsidiary makes the initial transfer
                of
                accounts receivable to a Special Purpose Subsidiary in connection
                with the
                closing of such Permitted Securitization, the Company or such Subsidiary
                shall itself actually receive (substantially contemporaneously with
                such
                disposition) cash in connection with any such Securitization Transaction
                in an amount based on normal and customary advance rates (and taking
                into
                account typical deductions for market-based, arms-length Securitization
                Transactions);

            

    

     

    
      	(c)  	
              Each
                such disposition shall be without recourse to the Company or any
                of its
                Subsidiaries (except for customary clean up call provisions and customary
                representations and warranties relating to the Company’s or any of its
                Subsidiaries’ transfer of accounts receivable) and otherwise on normal and
                customary terms and conditions for comparable asset-based Securitization
                Transactions;

            

    

     

    
      	(d)  	
              Each
                such Securitization Transaction shall be structured on the basis
                of the
                issuance of non-recourse (to the Company or its Subsidiaries other
                than
                the applicable Special Purpose Subsidiary) debt securities by a Special
                Purpose Subsidiary; and

            

    

     

    
      	(e)  	
              Both
                immediately before and immediately after each such disposition, no
                Unmatured Event of Default or Event of Default (whether or not related
                to
                such disposition) shall have occurred and be
                continuing.

            

    

     

    5. The
      following definition is inserted in Section 1.1 of the Credit Agreement in
      the
      appropriate alphabetical order:

     

    Securitization
      Transaction(s)
      shall mean a transfer of, or grant of a lien on, accounts receivable by Company
      or any Subsidiary to a Special Purpose Subsidiary or other special purpose
      or
      limited purpose entity and the issuance (whether by such Special Purpose
      Subsidiary or other special purpose or limited purpose entity or any other
      Person) of debt or of any securities secured directly or indirectly by interests
      in, or of trust or a comparable certificates or other securities directly or
      indirectly evidencing interests in, such accounts receivable.

     

    6. The
      following definition is inserted in Section 1.1 of the Credit Agreement in
      the
      appropriate alphabetical order:

     

    Special
      Purpose Subsidiary
      shall mean any wholly-owned direct or indirect Subsidiary of the Company
      established for the sole purpose of conducting a Permitted Securitization and
      otherwise established and operated in accordance with customary industry
      practices. Special Purpose Subsidiary shall include, but is not limited to,
      any
      entity which constitutes a Qualifying Special Purpose Subsidiary under FASB
      Statement 140.

     

    3

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7. Section
      10.1.10 of the Credit Agreement is hereby amended by deleting it in its entirety
      and inserting the following language in its place:

     

    Section
      10.1.10 Other
      Information.
      (a)
      Promptly from time to time, such other information concerning the Affiliated
      Parties as any Lender or the Administrative Agent may reasonably request, and
      (b) promptly following a Permitted Securitization, (i) copies of all
      documentation related to such Permitted Securization and (ii) copies of all
      notices issued by the Persons party to such Permitted Securitization promptly
      following the delivery thereof. 

     

    8. Section
      11.1(i) of the Credit Agreement is hereby amended by deleting it in its entirety
      and inserting the following language in its place:

     

    (i) Debt
      issued in connection with a Permitted Securitization, in compliance with the
      definition thereof, together with customary clean up call provisions in
      connection with any Permitted Securitization;

     

    9. Section
      11.2 of the Credit Agreement is hereby amended by inserting the following
      language as new clause (i) and renumbering existing clause (i) as clause
      (j):

     

    (i) any
      Lien encumbering property interests, rights or proceeds which are subject of
      a
      transfer or encumbrance pursuant to a Permitted Securitization;
      and

     

    10. Section
      11.9 of the Credit Agreement is hereby amended by deleting it in its entirety
      and inserting the following language in its place:

     

    Section
      11.9 Inconsistent
      Agreements.
      Not, and not permit any other Affiliated Party to, enter into any agreement
      containing any provision which would (a) be violated or breached by any
      borrowing by the Company hereunder or by the performance by any Affiliated
      Party
      of any of its Obligations hereunder or under any other Loan Document, or (b)
      create or permit to exist or become effective any encumbrance or restriction
      on
      the ability of any Subsidiary (other than a Special Purpose Subsidiary in
      connection with a Permitted Securitization) to (i) pay dividends or make other
      distributions to the Company or any other Subsidiary, or pay any Debt owed
      to
      the Company or any other Subsidiary, (ii) make loans or advances to any
      Affiliated Party or (iii) transfer any of its assets or properties to any
      Affiliated Party, other than (A) customary restrictions and conditions contained
      in agreements relating to the sale of all or a substantial part of the assets
      of
      any Subsidiary pending such sale, provided
      that
      such restrictions and conditions apply only to the Subsidiary to be sold and
      such sale is permitted hereunder (B) restrictions or conditions imposed by
      any
      agreement relating to purchase money Debt, Capital Leases, Junior Capital and
      other Debt permitted by this Agreement, (C) customary provisions in leases
      and
      other contracts restricting the assignment thereof, (D) Liens securing
      Indebtedness otherwise permitted to be incurred, under the provisions of Section
      11.2 hereof that limit the right of the debtor to dispose of the assets subject
      to such Liens; (E) provisions with respect to the disposition or distribution
      of
      assets or property in joint venture agreements asset sale agreements, stock
      sale
      agreements and other similar agreements entered into in the ordinary course
      of
      business; and (F) restrictions on deposits (to the extent permitted hereunder)
      imposed by customers under contracts entered into in the ordinary course of
      business.

     

    4

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11. Section
      10.12 of the Credit Agreement is hereby amended by inserting the following
      language at the end of the Section:

     

    Section
      10.12 Guaranty
      Event.
      Within ninety (90) days of the occurrence of a Guaranty Event, the Company
      shall
      cause certain Subsidiaries approved of by the Administrative Agent (which
      approval shall not be unreasonably withheld) to execute and deliver a Guaranty
      (or execute and deliver joinder agreements thereto), together with such
      certificates, resolutions, formation documents and opinions of counsel to the
      Guarantors as the Administrative Agent may reasonably request, such that upon
      execution and delivery of the Guaranty (or the applicable joinder agreements),
      the Guarantors, together with the Company, are the source of at least seventy
      percent (70%) of the Consolidated Operating Income of the Company and all its
      Subsidiaries (excluding any Special Purpose Subsidiaries) for the four Fiscal
      Quarter period most recently ended prior to such date and hold at least seventy
      percent (70%) of the Consolidated total assets of the Company and all its
      Subsidiaries (excluding any Special Purpose Subsidiaries) as of the last day
      of
      the Fiscal Quarter then most recently ended, provided,
      further
      in
      no event shall a Special Purpose Subsidiary be required to become a Guarantor
      hereunder or execute any other Loan Documents.

     

    11. Section
      11.11 of the Credit Agreement is hereby amended by inserting the following
      language as new clause (j) and renumbering existing clause (j) as clause
      (k):

     

    (j) Investments
      in any Subsidiary (including, without limitation, any Special Purpose
      Subsidiary) from and after the date hereof consisting of (x) dispositions of
      specific accounts receivable made pursuant to any Permitted Securitization
      and
      the resultant Debt issued by a Special Purpose Subsidiary as part of such
      Permitted Securitization, in each case to the extent constituting Investments
      hereunder; and (y) the repurchase or replacement from and after the date hereof
      of accounts receivable pursuant to any representations or warranties or clean
      up
      call provisions included in such Permitted Securitization in accordance with
      the
      definition thereof.

     

    12. Section
      11.12 of the Credit Agreement is hereby amended by deleting it in its entirety
      and inserting the following language in its place:

     

    5

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      11.12 Restriction
      of Amendments to Certain Documents.
      Not
      amend or otherwise modify, or waive any rights under any documents relating
      to
      the Junior Capital or any Permitted Securitization if, in any case, such
      amendment, modification or waiver could be adverse to the interests of the
      Lenders or would reasonably be expected to have a Material Adverse
      Effect.

     

    Except
      as
      expressly set forth herein, this Amendment shall not be deemed to amend or
      alter
      in any respect the terms and conditions of the Credit Agreement (including
      without limitation all conditions and requirements for Advances and any
      financial covenants) or any of the other Loan Documents, or to constitute a
      waiver or release by any of the Lenders or the Agent of any right, remedy,
      Unmatured Event of Default or Event of Default under the Credit Agreement or
      any
      of the other Loan Documents. Furthermore, this Amendment shall not affect in
      any
      manner whatsoever any rights and remedies of the Lenders or the Agent with
      respect to any non-compliance by the Company with the Credit Agreement or the
      other Loan Documents, whether in the nature of an Unmatured Event of Default
      or
      Event of Default, and whether now in existence or subsequently arising, all
      of
      which rights and remedies are expressly reserved.

     

     

    6

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    This
      Amendment shall not become effective unless (and until) the Company has
      countersigned and returned to the Agent (which
      shall occur within five (5) Business Days from the date hereof or, after which
      date, unless extended in writing by the Agent, this Amendment shall be deemed
      to
      have lapsed) a
      duplicate original of this letter and the Company has satisfied any other
      conditions to effectiveness contained herein.

     

    
      	 	 	 
	 	
              Very
                truly yours,

               

            
	 	
              LASALLE
                BANK MIDWEST NATIONAL

              ASSOCIATION,
                as Agent

            
	 
 	 
 	 
 
	 	By:  	/s/ Gregory
              E. Castle
	 	 	
              

            
	 	Its: 	First
              Vice President
	 	
              

            

    

     

    
       

      
        	 	 	 
	 	
                Acknowledged
                  and agreed:

                 

              
	 	
                SEMCO
                  ENERGY, INC.

              
	 
 	 
 	 
 
	 	By:  	/s/ Michael
                V. Palmeri
	 	 	
                

              
	 	 	
                Michael
                  V. Palmeri 

                 

              
	 	Its: 	SVP
                & Chief Financial Officer
	 	 	
                

              
	 	 	 
	 	Date:	 
                November 2, 2006 
	 	
                

              

      

       

    

    

     

    7

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AUTHORIZATION
      OF AMENDMENT

     

    

     

    The
      undersigned Lender hereby confirms its approval of the foregoing Amendment
      on
      the terms and conditions set forth therein.

     

    
      
         

        
          	 	 	 
	 	
                  /s/
                    Gregory E. Castle

                
	 	
                  

                
	 	
                  LaSalle
                    Bank Midwest National Association

                
	 
 	 
 	 
 
	 	By:  	/s/ Gregory
                  E. Castle
	 	 	
                  

                
	 	 	
                
	 	Its: 	First
                  Vice President
	 	 	
                  

                
	 	 	 
	 	Date:	 
                  November 2, 2006 
	 	
                  

                

        

         

         

        8

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          AUTHORIZATION
            OF AMENDMENT

           

          

           

          The
            undersigned Lender hereby confirms its approval of the foregoing Amendment
            on
            the terms and conditions set forth therein.

           

          
            
               

              
                	 	 	 
	 	
                        FIFTH
                          THIRD BANK

                      
	 
 	 
 	 
 
	 	By:  	/s/ David
                        J. Mannarino
	 	 	
                        

                      
	 	 	
                      
	 	Its: 	Officer
	 	 	 
	 	Date:	 
                        October 31, 2006 

              

               

               

              8

               

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

         

        
          AUTHORIZATION
            OF AMENDMENT

           

          

           

          The
            undersigned Lender hereby confirms its approval of the foregoing Amendment
            on
            the terms and conditions set forth therein.

           

          
            
               

              
                	 	 	 
	 	
                        Huntington
                          National Bank

                      
	 	
                        

                      
	 	
                        [Lender]

                      
	 
 	 
 	 
 
	 	By:  	/s/ Kevin
                        D. Szachta
	 	 	
                        

                      
	 	 	
                        Kevin
                          D. Szachta

                         

                      
	 	Its: 	Vice
                        President
	 	 	
                        

                      
	 	 	 
	 	Date:	 
                        November 02, 2006 
	 	
                        

                      

              

               

               

              8

            

          

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          AUTHORIZATION
            OF AMENDMENT

           

          

           

          The
            undersigned Lender hereby confirms its approval of the foregoing Amendment
            on
            the terms and conditions set forth therein.

           

          
            
               

              
                	 	 	 
	 	
                         

                      
	 	
                        

                      
	 	
                        U.S.
                          BANK NATIONAL ASSOCIATION

                      
	 
 	 
 	 
 
	 	By:  	/s/ Matthew
                        J. Schulz
	 	 	
                        

                      
	 	 	
                      
	 	Its: 	Vice
                        President
	 	 	
                        

                      
	 	 	 
	 	Date:	 
                        November 1, 2006 
	 	
                        

                      

              

               

               

              8

               

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

               

              
                AUTHORIZATION
                  OF AMENDMENT

                 

                

                 

                The
                  undersigned Lender hereby confirms its approval of the foregoing
                  Amendment on
                  the terms and conditions set forth therein.

                 

                
                  
                     

                    
                      	 	 	 
	 	
                              Comerica
                                Bank

                            
	 	
                              

                            
	 	
                              [Lender]

                            
	 
 	 
 	 
 
	 	By:  	/s/ Blake
                              W. Arnett
	 	 	
                              

                            
	 	 	
                            
	 	Its: 	Assistant
                              Vice President
	 	 	
                              

                            
	 	 	 
	 	Date:	 
                              November 2, 2006 
	 	
                              

                            

                    

                     

                     

                    8

                     

                    
                      
                        
                        

                      

                      
                        
                        

                        
                          

                        

                      

                      
                        
                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      AUTHORIZATION
        OF AMENDMENT

       

      

       

      The
        undersigned Lender hereby confirms its approval of the foregoing Amendment
        on
        the terms and conditions set forth therein.

       

      
        
           

          
            	 	 	 
	 	
                    National
                      City Bank

                  
	 	
                    

                  
	 	
                    [Lender]

                  
	 
 	 
 	 
 
	 	By:  	/s/ Kim
                    Gorman
	 	 	
                    

                  
	 	 	
                  
	 	Its: 	Vice
                    President
	 	 	
                    

                  
	 	 	 
	 	Date:	 
                    November 2, 2006 
	 	
                    

                  

          

           

           

          8Genentech, Inc Tax Reduction Investment Plan, as amended and restated

    
      

    

     

    Exhibit
      10.3

     

     

    GENENTECH,
      INC.

     

    TAX
      REDUCTION INVESTMENT PLAN

     

    (January 1,
      2006 Restatement)

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    

      
        	 	
                 

                Page

              
	
                 

                SECTION
                  1 DEFINITIONS

              	
                 

                2

              
	
                 

                1.1

              	
                 

                Affiliate

              	
                 

                2

              
	
                 

                1.2

              	
                 

                Alternate
                  Payee

              	
                 

                2

              
	
                 

                1.3

              	
                 

                Beneficiary

              	
                 

                2

              
	
                 

                1.4

              	
                 

                Board
                  of Directors

              	
                 

                2

              
	
                 

                1.5

              	
                 

                Catch-Up
                  Contributions

              	
                 

                2

              
	
                 

                1.6

              	
                 

                Code

              	
                 

                2

              
	
                 

                1.7

              	
                 

                Committee

              	
                 

                3

              
	
                 

                1.8

              	
                 

                Common
                  Stock

              	
                 

                3

              
	
                 

                1.9

              	
                 

                Common
                  Stock Fund

              	
                 

                3

              
	
                 

                1.10

              	
                 

                Company

              	
                 

                3

              
	
                 

                1.11

              	
                 

                Compensation

              	
                 

                3

              
	
                 

                1.12

              	
                 

                Compensation
                  Limit

              	
                 

                4

              
	
                 

                1.13

              	
                 

                Disability

              	
                 

                4

              
	
                 

                1.14

              	
                 

                Eligible
                  Bonus

              	
                 

                4

              
	
                 

                1.15

              	
                 

                Eligible
                  Commissions

              	
                 

                4

              
	
                 

                1.16

              	
                 

                Eligible
                  Employee

              	
                 

                5

              
	
                 

                1.17

              	
                 

                Employee

              	
                 

                5

              
	
                 

                1.18

              	
                 

                Employer

              	
                 

                5

              
	
                 

                1.19

              	
                 

                Employer
                  Contributions

              	
                 

                5

              
	
                 

                1.20

              	
                 

                Entry
                  Date

              	
                 

                5

              
	
                 

                1.21

              	
                 

                ERISA

              	
                 

                6

              
	
                 

                1.22

              	
                 

                Highly
                  Compensated Employee or HCE

              	
                 

                6

              
	
                 

                1.23

              	
                 

                Hour
                  of Service

              	
                 

                7

              
	
                 

                1.24

              	
                 

                Investment
                  Funds

              	
                 

                8

              
	
                 

                1.25

              	
                 

                Investment
                  Manager

              	
                 

                8

              
	
                 

                1.26

              	
                 

                Leased
                  Employee

              	
                 

                8

              
	
                 

                1.27

              	
                 

                Leave
                  of Absence

              	
                 

                8

              
	
                 

                1.28

              	
                 

                Matching
                  Contributions

              	
                 

                9

              
	
                 

                1.29

              	
                 

                1934
                  Act

              	
                 

                9

              
	
                 

                1.30

              	
                 

                Nonelective
                  Contributions

              	
                 

                9

              
	
                 

                1.31

              	
                 

                Normal
                  Retirement Age

              	
                 

                9

              
	
                 

                1.32

              	
                 

                Participant

              	
                 

                9

              
	
                 

                1.33

              	
                 

                Participant’s
                  Accounts or Accounts

              	
                 

                9

              
	
                 

                1.34

              	
                 

                Plan

              	
                 

                11

              
	
                 

                1.35

              	
                 

                Plan
                  Year

              	
                 

                11

              
	
                 

                1.36

              	
                 

                Salary
                  Deferrals

              	
                 

                11

              
	
                 

                1.37

              	
                 

                Trust
                  Agreement

              	
                 

                11

              
	
                 

                1.38

              	
                 

                Trust
                  Fund

              	
                 

                11

              
	
                 

                1.39

              	
                 

                Trustee

              	
                 

                11

              
	
                 

                1.40

              	
                 

                Valuation
                  Date

              	
                 

                12

              

      

       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      

        TABLE
          OF CONTENTS

        (Continued)

      

       

      
        	 	
                 

                Page

              
	
                 

                SECTION
                  2 ELIGIBILITY AND PARTICIPATION

              	
                 

                12

              
	
                 

                2.1

              	
                 

                Initial
                  Eligibility

              	
                 

                12

              
	
                 

                2.2

              	
                 

                Employer
                  Aggregation

              	
                 

                12

              
	
                 

                2.3

              	
                 

                Participation

              	
                 

                12

              
	
                 

                2.4

              	
                 

                Voluntary
                  Suspension

              	
                 

                13

              
	
                 

                2.5

              	
                 

                Mandatory
                  Suspension

              	
                 

                13

              
	
                 

                2.6

              	
                 

                Provision
                  of Information

              	
                 

                14

              
	
                 

                2.7

              	
                 

                Termination
                  of Participation

              	
                 

                14

              
	
                 

                2.8

              	
                 

                Acquisitions

              	
                 

                14

              
	
                 

                SECTION
                  3 SALARY DEFERRALS AND CATCH-UP CONTRIBUTIONS

              	
                 

                15

              
	
                 

                3.1

              	
                 

                Salary
                  Deferrals

              	
                 

                15

              
	
                 

                3.2

              	
                 

                Catch-Up
                  Contributions

              	
                 

                18

              
	
                 

                3.3

              	
                 

                Salary
                  Deferral and Catch-Up Contribution Elections

              	
                 

                18

              
	
                 

                3.4

              	
                 

                Payment
                  of Salary Deferrals and Catch-Up Contributions

              	
                 

                21

              
	
                 

                SECTION
                  4 EMPLOYER CONTRIBUTIONS

              	
                 

                22

              
	
                 

                4.1

              	
                 

                Matching
                  Contributions

              	
                 

                22

              
	
                 

                4.2

              	
                 

                Nonelective
                  Contributions

              	
                 

                25

              
	
                 

                4.3

              	
                 

                Timing

              	
                 

                26

              
	
                 

                4.4

              	
                 

                Periodic
                  Contributions

              	
                 

                26

              
	
                 

                4.5

              	
                 

                Reinstatements

              	
                 

                26

              
	
                 

                4.6

              	
                 

                Profits
                  Not Required

              	
                 

                26

              
	
                 

                4.7

              	
                 

                No
                  After-Tax Contributions

              	
                 

                26

              
	
                 

                SECTION
                  5 ALLOCATION OF CONTRIBUTIONS AND INVESTMENTS

              	
                 

                27

              
	
                 

                5.1

              	
                 

                Salary
                  Deferrals and Catch-Up Contributions

              	
                 

                27

              
	
                 

                5.2

              	
                 

                Matching
                  Contributions

              	
                 

                27

              
	
                 

                5.3

              	
                 

                Nonelective
                  Contributions

              	
                 

                27

              
	
                 

                5.4

              	
                 

                Investment

              	
                 

                28

              
	
                 

                5.5

              	
                 

                Limitations
                  on Allocations

              	
                 

                29

              
	
                 

                SECTION
                  6 ACCOUNTS AND INVESTMENT FUNDS

              	
                 

                33

              
	
                 

                6.1

              	
                 

                Participants’
                  Accounts

              	
                 

                33

              
	
                 

                6.2

              	
                 

                Trust
                  Fund Assets

              	
                 

                33

              
	
                 

                6.3

              	
                 

                Investment
                  Funds

              	
                 

                34

              
	
                 

                6.4

              	
                 

                Valuation
                  of Participants’ Accounts

              	
                 

                36

              
	
                 

                6.5

              	
                 

                Valuation
                  of Shares

              	
                 

                36

              
	
                 

                6.6

              	
                 

                Statements
                  of Participants’ Accounts

              	
                 

                36

              
	
                 

                6.7

              	
                 

                Vesting
                  of Participants’ Accounts

              	
                 

                37

              
	
                 

                SECTION
                  7 DISTRIBUTIONS

              	
                 

                37

              
	
                 

                7.1

              	
                 

                Events
                  Permitting Distribution

              	
                 

                37

              
	
                 

                7.2

              	
                 

                Times
                  for Distribution

              	
                 

                38

              
	
                 

                7.3

              	
                 

                Consent
                  Requirement and Immediate Distributions

              	
                 

                39

              
	
                 

                7.4

              	
                 

                Form
                  of Distribution

              	
                 

                40

              

      

       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      

        TABLE
          OF CONTENTS

        (Continued)

      

       

      
        	 	
                 

                Page

              
	
                 

                7.5

              	
                 

                Common
                  Stock Restrictions

              	
                 

                42

              
	
                 

                7.6

              	
                 

                Beneficiary
                  Designations

              	
                 

                42

              
	
                 

                7.7

              	
                 

                Payments
                  to Minors or Incompetents

              	
                 

                43

              
	
                 

                7.8

              	
                 

                Undistributable
                  Accounts

              	
                 

                44

              
	
                 

                SECTION
                  8 WITHDRAWALS, LOANS AND QUALIFIED DOMESTIC RELATIONS
                  ORDERS

              	
                 

                44

              
	
                 

                8.1

              	
                 

                General
                  Rules

              	
                 

                44

              
	
                 

                8.2

              	
                 

                Hardship
                  Withdrawal

              	
                 

                45

              
	
                 

                8.3

              	
                 

                Age
                  591⁄2 Withdrawal

              	
                 

                47

              
	
                 

                8.4

              	
                 

                Loans
                  to Participants

              	
                 

                48

              
	
                 

                8.5

              	
                 

                Qualified
                  Domestic Relations Orders

              	
                 

                51

              
	
                 

                SECTION
                  9 ADMINISTRATION OF THE PLAN

              	
                 

                53

              
	
                 

                9.1

              	
                 

                Plan
                  Administrator

              	
                 

                53

              
	
                 

                9.2

              	
                 

                Committee

              	
                 

                53

              
	
                 

                9.3

              	
                 

                Actions
                  by Committee

              	
                 

                53

              
	
                 

                9.4

              	
                 

                Powers
                  of Committee

              	
                 

                53

              
	
                 

                9.5

              	
                 

                Fiduciary
                  Responsibilities

              	
                 

                55

              
	
                 

                9.6

              	
                 

                Investment
                  Responsibilities

              	
                 

                55

              
	
                 

                9.7

              	
                 

                Voting
                  and Tender Offer Rights in Common Stock

              	
                 

                56

              
	
                 

                9.8

              	
                 

                Decisions
                  of Committee

              	
                 

                60

              
	
                 

                9.9

              	
                 

                Administrative
                  Expenses

              	
                 

                60

              
	
                 

                9.10

              	
                 

                Eligibility
                  to Participate

              	
                 

                60

              
	
                 

                9.11

              	
                 

                Indemnification

              	
                 

                60

              
	
                 

                SECTION
                  10 TRUST FUND AND ROLLOVER CONTRIBUTIONS

              	
                 

                61

              
	
                 

                10.1

              	
                 

                Trust
                  Fund

              	
                 

                61

              
	
                 

                10.2

              	
                 

                No
                  Diversion of Assets

              	
                 

                61

              
	
                 

                10.3

              	
                 

                Continuing
                  Conditions

              	
                 

                62

              
	
                 

                10.4

              	
                 

                Change
                  of Investment Alternatives

              	
                 

                62

              
	
                 

                10.5

              	
                 

                Rollover
                  Contributions

              	
                 

                63

              
	
                 

                SECTION
                  11 MODIFICATION OR TERMINATION OF PLAN

              	
                 

                64

              
	
                 

                11.1

              	
                 

                Employers’
                  Obligations Limited

              	
                 

                64

              
	
                 

                11.2

              	
                 

                Right
                  to Amend or Terminate

              	
                 

                65

              
	
                 

                11.3

              	
                 

                Effect
                  of Termination

              	
                 

                65

              
	
                 

                SECTION
                  12 TOP-HEAVY PLAN

              	
                 

                66

              
	
                 

                12.1

              	
                 

                Top-Heavy
                  Plan Status

              	
                 

                66

              
	
                 

                12.2

              	
                 

                Top-Heavy
                  Plan Provisions

              	
                 

                67

              
	
                 

                SECTION
                  13 GENERAL PROVISIONS

              	
                 

                68

              
	
                 

                13.1

              	
                 

                Plan
                  Information

              	
                 

                68

              
	
                 

                13.2

              	
                 

                Inalienability

              	
                 

                68

              
	
                 

                13.3

              	
                 

                Rights
                  and Duties

              	
                 

                68

              
	
                 

                13.4

              	
                 

                No
                  Enlargement of Employment Rights

              	
                 

                69

              

      

       

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

      
         

        

          TABLE
            OF CONTENTS

          (Continued)

           

        

      

      
        	 	
                 

                Page

              
	
                 

                13.5

              	
                 

                Apportionment
                  of Duties

              	
                 

                69

              
	
                 

                13.6

              	
                 

                Merger,
                  Consolidation or Transfer

              	
                 

                69

              
	
                 

                13.7

              	
                 

                Military
                  Service

              	
                 

                70

              
	
                 

                13.8

              	
                 

                Applicable
                  Law

              	
                 

                70

              
	
                 

                13.9

              	
                 

                Severability

              	
                 

                70

              
	
                 

                13.10

              	
                 

                Captions

              	
                 

                70

              
	
                 

                Appendix
                  A 

              	
                 

                A-1

              

      

    

     

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    

      GENENTECH,
        INC.

      TAX
        REDUCTION INVESTMENT PLAN

      (January 1,
        2006 Restatement)

       

      PREAMBLE

       

      GENENTECH,
        INC. (the “Company”),
        having established the Genentech, Inc. Tax Reduction Investment Plan (the
        “Plan”)
        effective as of January 1, 1985, and having amended and restated the Plan
        effective (most recently) as of January 1, 2004, hereby again amends and
        restates the Plan in its entirety effective as of January 1, 2006, except
        as otherwise indicated herein.

       

      The
        Plan was established and is maintained for the benefit of Eligible Employees
        of
        the Company and its participating Affiliates in order to provide them with
        (1) a
        means of supplementing their retirement income on a tax-favored basis,
        (2) an incentive to continue and increase their efforts to contribute to
        the success of the Company, and (3) the opportunity to acquire an equity
        ownership interest in the Company.

       

      The
        Plan is intended to qualify as (a) a profit-sharing plan (within the meaning
        of
        Section 401(a) of the Code), which includes a qualified cash or deferred
        arrangement (within the meaning of Section 401(k) of the Code), (b) a
        404(c) plan (within the meaning of Section 404(c) of ERISA), and (c) an eligible
        individual account plan (within the meaning of Section 407(d)(3) of ERISA).
        This
        restatement is intended to bring the Plan into compliance with the Treasury
        regulations under Code Sections 401(k) and 401(m), effective as of January
        1,
        2006.

       

      The
        Plan also is designed to constitute a tax-qualified plan and related tax-exempt
        trust under Sections 1165(a), 1165(e) and 1101(17) of the Puerto Rico
        Internal Revenue Code of 1994, as amended.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

         

      

      SECTION 1

       

      DEFINITIONS

       

      The
        following capitalized words and phrases shall have the following meanings
        unless
        a different meaning is plainly required by the context:

       

    

    1.1  
      Affiliate.
      “Affiliate”
      means a corporation, trade or business which is, together with any Employer,
      a
      member of a controlled group of corporations or an affiliated service group
      or
      under common control (within the meaning of Section 414(b), (c), (m) or (o)
      of the Code), but only for the period during which such other entity is so
      affiliated with the Employer.

     

    1.2  
      Alternate
      Payee.
      “Alternate
      Payee”
      means any spouse, former spouse, child or other dependent (within the meaning
      of
      Section 152 of the Code) of a Participant who is recognized by a QDRO (as
      defined in Section 8.5)
      as having a right to receive any immediate or deferred payment of all or a
      portion of the balance credited to a Participant’s Account under the
      Plan.

     

    1.3 
       Beneficiary.
      “Beneficiary”
      means the person or persons entitled to receive benefits under the Plan upon
      the
      death of a Participant in accordance with Section 7.6.

     

    1.4  
      Board
      of Directors.
      “Board
      of Directors”
      means the Board of Directors of the Company, as from time to time
      constituted.

     

    1.5 
       Catch-Up
      Contributions.
      “Catch-Up
      Contributions”
      means as to each Participant the “catch-up contributions” (if any) contributed
      under the Plan by the Employers in accordance with Sections 3.2
      and 5.1.

     

    1.6  
      Code.
      “Code”
      means the Internal Revenue Code of 1986, as amended. Reference to a specific
      Section of the Code shall include such Section, any valid regulation promulgated
      thereunder, and any comparable provision of any future legislation amending,
      supplementing or superseding such Section.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    1.7 
       Committee.
      “Committee”
      means the administrative committee charged with responsibility for the general
      administration of the Plan pursuant to Section 9,
      as it may be constituted from time to time.

    1.8 
       Common
      Stock.
      “Common
      Stock”
      means the common stock of the Company, par value $0.02, as from time to time
      constituted.

     

    1.9   Common
      Stock Fund.
      “Common
      Stock Fund”
      means the Investment Fund that is wholly or primarily invested in shares of
      Common Stock.

     

    1.10
       Company.
      “Company”
      means Genentech, Inc., a Delaware corporation, and any successor by merger,
      consolidation or otherwise that assumes (in writing) the obligations of the
      Company under the Plan.

     

    1.11 
       Compensation.
      “Compensation”
      means all salary, wages, Eligible Commissions and Eligible Bonuses paid by
      any
      Employer with respect to services performed during any period by an Employee,
      including Salary Deferrals and Catch-Up Contributions, but excluding
      (a) any contributions made by any Employer under this Plan (other than
      Salary Deferrals and Catch-Up Contributions) or any other employee benefit
      plan
      (within the meaning of Section 3(3) of ERISA), and (b) other items,
even
      if
      reported as income on the Employee’s IRS Form W-2, such
      as
      income from the exercise of stock options, proceeds from the redemption of
      Common Stock, tuition reimbursements, reimbursements of health club dues,
      Genenchecks, sign-on bonuses, referral bonuses, severance payments, and
      relocation expenses, subject to the following:

     

    (a) A
      Participant’s Compensation shall be determined without regard to any increase or
      decrease in the amount of his or her total remuneration that is paid in cash
      as
      the result of compensation reductions elected under Sections 125 or
      132(f)(4) of the Code; and

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    (b) The
      determination of the amount of a Participant’s Compensation shall be made by his
      or her Employer (or its designee), in accordance with the records of the
      Employer, and shall be conclusive.

     

    1.12 
       Compensation
      Limit.
      “Compensation
      Limit”
      means the dollar limit prescribed in Section 401(a)(17) of the Code, as adjusted
      pursuant to Sections 401(a)(17) and 415(d) of the Code (e.g.,
      $220,000 for 2006).
      No portion of any Participant’s Compensation for a Plan Year that exceeds the
      Compensation Limit shall be taken into account for any purpose under the Plan
      for any Plan Year.

     

    1.13 
       Disability.
      “Disability”
      means the mental or physical inability of a Participant to perform his or her
      normal job as evidenced by the certificate of a medical examiner satisfactory
      to
      the Committee (in its discretion) certifying that the Participant is disabled
      under the standards of the Company’s long-term disability plan.

     

    1.14 
       Eligible
      Bonus.
      “Eligible
      Bonus”
      means (a) any
      annual cash bonus paid by the Employer to an Employee under the Company’s
      Corporate Bonus Program, or (b) any
      fourth calendar quarter commission payment under the Company’s Field Sales
      Incentive Compensation Plan (the “4th
      Quarter Payout”);
      provided,
      however,
      that if the Participant
      receives both payments described in clauses (a) and (b) above in a given
      calendar year, then the term “Eligible
      Bonus”
      means the 4th
      Quarter Payout. Notwithstanding the foregoing, all Eligible Bonus amounts shall
      be determined net of employee stock purchase plan and mandatory deductions
      including, without limitation, Employee-paid FICA and SDI
      withholdings.

     

    1.15 
       Eligible
      Commissions.
      “Eligible
      Commissions”
      means any first, second or third calendar quarter commission payments under
      the
      Company’s Field Sales Incentive Compensation Plan.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    1.16 
       Eligible
      Employee.
      “Eligible
      Employee”
      means every Employee of an Employer except:

    

      (a) 
         An
        Employee who is a member of a collective bargaining unit and who is covered
        by a
        collective bargaining agreement where retirement benefits were the subject
        of
        good faith bargaining, unless the agreement specifically provides for coverage
        of such Employee under this Plan;

       

    

    (b) 
       An
      individual employed by any corporation or other business entity that is merged
      or liquidated into, or whose assets are acquired by any Employer, unless any
      two
      members of the Committee, acting in their capacities as officers of the Company
      rather than as fiduciaries with respect to the Plan, designate (in writing)
      the
      employees of that corporation or other business entity as Eligible Employees
      under the Plan;

     

    (c) An
      Employee whose Compensation is not paid from any Employer’s United States
      payroll; and

     

    (d) An
      individual who, as to any period of time, is classified or treated by an
      Employer as an independent contractor, a consultant, a Leased Employee or an
      employee of an employment agency or any entity other than an Employer,
even
      if
      such individual is subsequently determined to have been a common-law employee
      of
      the Employer during such period.

    

    1.17 
       Employee.
      “Employee” means an individual who is (a) employed by an Employer or Affiliate
      as a common-law employee, or (b) a Leased Employee. However, if Leased
      Employees constitute less than 20% of the nonhighly compensated work force
      (within the meaning of Section 414(n)(5)(C)(ii) of the Code), the term
“Employee”
      shall not include those Leased Employees who are covered by a plan described
      in
      Section 414(n)(5) of the Code.

     

    1.18 
       Employer.
      “Employer”
      means the Company and each Affiliate that adopts this Plan with the approval
      of
      the Board of Directors. 

     

    1.19 
       Employer
      Contributions.
      “Employer
      Contributions”
      means (collectively) Matching Contributions and Nonelective
      Contributions.

     

    1.20 
       Entry
      Date.
      “Entry
      Date”
      means the first day of each payroll period.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    1.21 
       ERISA.
      “ERISA”
      means the Employee Retirement Income Security Act of 1974, as amended. Reference
      to a specific Section of ERISA shall include such Section, any valid regulation
      promulgated thereunder, and any comparable provision of any future legislation
      amending, supplementing or superseding such Section.

     

    1.22 
       Highly
      Compensated Employee
      or HCE.
      “Highly
      Compensated Employee”
      or “HCE”
      means a Highly Compensated Active Employee or a Highly Compensated Former
      Employee, as defined below:

    (a) 
       “Highly
      Compensated Active Employee”
      means any Employee who performs services for an Employer or Affiliate during
      the
      Determination Year and who:

     

    (1) 
       During
      the Look-Back Year (A) received Compensation in excess of the dollar limit
      prescribed in Section 414(q)(1)(B) of the Code, as adjusted pursuant to
      Sections 414(q)(1) and 415(d) of the Code (e.g.,
      $100,000 for 2006), and (B) was a member of the top-paid group (within the
      meaning of Section 414(q)(3) of the Code) for such Year; or

     

    (2) 
       Is
      or was a 5-percent owner (within the meaning of Section 414(q)(2) of the
      Code) at any time during the Determination Year or the Look-Back
      Year. 

     

    (b) 
       “Highly
      Compensated Former Employee”
      means any Employee who (1) separated (or was deemed to have separated) from
      service prior to the Determination Year, (2) performed no services for any
      Employer or Affiliate during the Determination Year, and (3) was a Highly
      Compensated Active Employee for either the Plan Year in which the separation
      occurred or any Determination Year ending on or after his or her 55th
      birthday.

     

    (c) 
       The
      determination of who is a Highly Compensated Employee, including the
      determinations of the number and identity of Employees who are in the top-paid
      group, shall be made in accordance with Section 414(q) of the
      Code.

     

    (d) 
       For
      purposes of applying this Section 1.22:

     

    (1) 
       “Compensation”
      means Total Compensation (as defined in Section 5.5.2(e)
      and applied using the definition of “Affiliate” in Section 1.1 rather than
      in Section 5.5.2(a));

     

    (2) 
       “Determination
      Year”
      means the Plan Year for which the determination is being made; and

     

    (3) 
       “Look-Back
      Year”
      means the Plan Year immediately preceding the Determination Year.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    1.23 
       Hour
      of Service.
      “Hour
      of Service”
      means an hour credited to an Employee under this Section 1.23:

     

    (a) 
       Paid
      Hours.
      An “Hour
      of Service”
      includes each hour for which:

     

    (1) 
       An
      Employee is directly or indirectly paid or entitled to payment by an Employer
      or
      Affiliate for the performance of duties;

     

    (2) 
       An
      Employee is directly or indirectly paid or entitled to payment by an Employer
      or
      Affiliate for periods 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 or Leave of
      Absence (with pay); and

     

    (3) 
       Back
      pay (irrespective of mitigation damages) has been awarded or agreed to by an
      Employer or Affiliate.

     

    (b) 
       No
      Duties Performed.
      Except as otherwise provided in subsection (d) below, no Hours of Service
      shall be credited for periods during which no duties are performed if payment
      by
      an Employer or Affiliate is made or due under a plan maintained solely for
      the
      purpose of complying with applicable worker’s compensation, unemployment
      compensation or disability insurance laws, or is made as reimbursement to an
      Employee for medical or medically related expenses. In no event will more than
      501 Hours of Service be credited under this subsection (b) on account of any
      single continuous period during which an Employee performs no
      duties.

     

    (c) 
       Crediting
      Rules.
      Hours of Service shall be credited under this Section 1.23
      in accordance with U.S. Department of Labor Regulation
      Section 2530.200b-2(b) and (c).

     

    (d) 
       Family-Related
      Absences.
      In the case of an Employee who is absent from active employment with an Employer
      or Affiliate for any period,

     

    (1) 
       By
      reason of her pregnancy or the birth of his or her child,

     

    (2) 
       By
      reason of the placement of a child with the Employee in connection with his
      or
      her adoption of such child,

     

    (3) 
       For
      purposes of caring for any such child for a period beginning immediately
      following such birth or placement, or

     

    (4) 
       On
      account of a leave of absence taken pursuant to the Family and Medical Leave
      Act
      of 1993, as amended (“FMLA”).

     

    “Hour
      of Service”
      means any hour that is not credited as an Hour of Service (because the Employee
      is not paid or entitled to payment therefor) but which would otherwise normally
      have been credited to the Employee (but for the absence) under
      subsections (a) through (c) above. In any case in which the Committee is
      unable to determine the number of hours that would otherwise normally have
      been
      credited to an Employee (but for the absence) under this subsection (d),
      the Employee shall be

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

     credited
      with eight Hours of Service for each day of the absence. Notwithstanding the
      foregoing, (A) no more than 501 Hours of Service shall be credited under
      this subsection (d) to any individual on account of any single pregnancy,
      birth, placement or other FMLA leave, and (B) the hours described in this
      subsection (d) shall be treated as Hours of Service (i) for the Plan
      Year in which the absence begins, to the extent required to credit the Employee
      with 1,000 Hours of Service for that Plan Year, and (ii) with respect to
      the remainder of the 501 Hours of Service maximum, for the next following Plan
      Year.

     

    1.24 
       Investment
      Funds.
      “Investment
      Funds”
      means (collectively) the investment funds described in Section 6.3.

     

    1.25 
       Investment
      Manager.
      “Investment
      Manager”
      means any investment manager appointed by the Committee in accordance with
      Section 9.6.

     

    1.26 
       Leased
      Employee.
      “Leased
      Employee”
      means any person (other than a common-law employee of the Employer or Affiliate)
      who, pursuant to an agreement between the Employer or Affiliate and any other
      person (“leasing
      organization”),
      has performed services for the Employer or Affiliate on a substantially
      full-time basis for a period of at least one (1) year, and such services are
      performed under the primary direction of or control by the Employer or
      Affiliate. Contributions or benefits provided a Leased Employee by a leasing
      organization which are attributable to services performed for the Employer
      or
      Affiliate shall be treated as provided by the Employer or
      Affiliate.

     

    1.27 
       Leave
      of Absence.
      “Leave
      of Absence”
      means the period of an Employee’s absence from active employment:

     

    (a) 
       Authorized
      by his or her Employer in accordance with its established and uniformly
      administered personnel policies, provided
      that
      the Employee returns to active employment after the authorized absence period
      expires, unless the Employee’s failure to return is attributable to his or her
      retirement or death; or 

     

    (b) 
       Because
      of military service in the armed forces of the United States, provided
      that
      the Employee returns to active employment following discharge within the period
      during which he or she retains reemployment rights under federal
      law.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    1.28 
       Matching
      Contributions.
      “Matching
      Contributions”
      means as to each Participant the amounts (if any) contributed under the Plan
      by
      the Employers on account of Salary Deferrals in accordance with
      Sections 4.1
      and 5.2.

     

    1.29 
       1934
      Act.
      “1934
      Act”
      means the Securities Exchange Act of 1934, as amended from time to time.
      Reference to a specific Section of the 1934 Act shall include any Section,
      any
      valid regulation promulgated thereunder, and any comparable provision of any
      future legislation amending, supplementing or superseding such
      Section.

     

    1.30 
       Nonelective
      Contributions.
      “Nonelective
      Contributions”
      means as to each Participant the amounts (if any) contributed under the Plan
      by
      the Employers in accordance with Sections 4.2
      and 5.3.

     

    1.31 
       Normal
      Retirement Age.
      “Normal
      Retirement Age”
      means age 55.

     

    1.32 
       Participant.
      “Participant”
      means an Eligible Employee who has become a Participant in the Plan pursuant
      to
      Section 2.1
      and has not ceased to be a Participant pursuant to Section 2.7,
      subject to the following:

     

    (a) 
       For
      each Plan Year, a Participant shall be classified as an “Active
      Participant”
      if (1) he or she has enrolled in the Plan for any portion of the Plan Year
      by authorizing the required Salary Deferrals and/or Catch-Up Contributions
      in
      accordance with Sections 2.3,
      3.1,
      3.2
      and 3.3,
      or (2) his or her active participation in the Plan is resumed during the
      Plan Year after the end of a suspension period in accordance with
      Section 2.4,
      2.5
      or 8.2.3;
      and

     

    (b) 
       A
      Participant who is not an Active Participant shall be classified as an
“Inactive
      Participant.”

     

    1.33 
       Participant’s
      Accounts or Accounts.
      “Participant’s
      Accounts”
      or “Accounts”
      means as to any Participant the one or more separate accounts maintained in
      order to reflect his or her interest in the Plan. Each Participant’s Accounts
      shall be comprised of several separate subaccounts

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

       

       (as
        specified by the Committee in its discretion), including, but not limited
        to,
        the following subaccounts:

       

    

    1.33.1 
       “Catch-Up
      Contribution Account”
      means the subaccount maintained to record any Catch-Up Contributions that the
      Participant has elected to have contributed to his or her Catch-Up Contribution
      Account pursuant to Sections 3.2
      and 3.3,
      and any adjustments relating thereto.

     

    1.33.2 
       “GenenFlex
      Account”
      means the subaccount maintained to record any excess “flex credits” that the
      Participant previously elected under GenenFlex to have contributed to his or
      her
      GenenFlex Account during Plan Years when such contributions were permitted
      under
      the Plan (“Prior
      Excess Flex Credit Contributions”),
      and any adjustments relating thereto. For this purpose, “GenenFlex”
      means the cafeteria plan maintained by the Company under Section 125 of the
      Code.

     

    1.33.3 
       “Loan
      Account”
      means the subaccount maintained to record any loans made to the Participant
      from
      his or her Accounts pursuant to Sections 5.4.3
      and 8.4.

     

    1.33.4 
       “Matching
      Account”
      means the subaccount maintained to record any Matching Contributions made on
      behalf of the Participant pursuant to Sections 4.1
      and 5.2,
      and any adjustments relating thereto.

     

    1.33.5 
       “Nonelective
      Contribution Account”
      means the subaccount maintained to record any Nonelective Contributions made
      on
      behalf of the Participant pursuant to Sections 4.2
      and 5.3,
      and any adjustments relating thereto.

     

    1.33.6
        “Rollover
      Account”
      means the subaccount maintained to record any transfers to the Plan made by
      or
      on behalf of a Participant pursuant to Section 10.5,
      and any adjustments relating thereto.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     

    1.33.7 
       “Salary
      Deferral Account”
      means the subaccount maintained to record any Salary Deferrals that the
      Participant has elected to have contributed to his or her Salary Deferral
      Account pursuant to Sections 3.1
      and 3.3,
      and any adjustments relating thereto. 

     

    1.34 
       Plan.
      “Plan”
      means the Genentech, Inc. Tax Reduction Investment Plan, formerly the Genentech,
      Inc. Tax Incentive Savings Plan, as set forth in this instrument and as
      heretofore or hereafter amended from time to time in accordance with
      Section 11.2.

     

    1.35 
       Plan
      Year.
      “Plan
      Year”
      means the calendar year.

     

    1.36 
       Salary
      Deferrals.
      “Salary
      Deferrals”
      means as to each Participant the amounts (if any) contributed under the Plan
      by
      the Employers in accordance with Sections 3.4
      and 5.1,
      pursuant to the salary deferral election made by the Participant in accordance
      with Sections 3.1
      and 3.3.
      

     

    1.37 
       Trust
      Agreement.
      “Trust
      Agreement”
      means the trust agreement entered into by and between the Company and the
      Trustee, as amended from time to time for the purpose of establishing and
      maintaining the Trust Fund.

     

    1.38 
       Trust
      Fund.
      “Trust
      Fund”
      means all of the assets, at any time and from time to time, of the trust
      established by the Trust Agreement to hold the assets of the Plan.

     

    1.39 
       Trustee.
      “Trustee”
      means Fidelity Management Trust Company, a Massachusetts trust company, and
      any
      additional, successor or substitute trustee or trustees from time to time acting
      as Trustee of the Trust Fund.

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

    1.40 Valuation
      Date.
      “Valuation
      Date”
      means the last financial business day of each Plan Year, any other financial
      business day where a valuation is required under the terms of the Plan, and
      such
      other date(s) as the Committee (in its discretion) may designate from time
      to
      time.

     

    SECTION 2

     

    ELIGIBILITY
      AND PARTICIPATION

     

    2.1 
       Initial
      Eligibility. 
      An Employee shall become a Participant in the Plan on the date he or she becomes
      an Eligible Employee.

     

    2.2 
       Employer
      Aggregation. 
      The status of an Employee as an Eligible Employee shall not be adversely
      affected merely by reason of his or her employment by more than one Employer
      during any Plan Year. The transfer of a Participant from employment with an
      Employer to employment with an Affiliate that is not an Employer shall not
      constitute an event entitling the Participant to a distribution under
Section 7.

     

    2.3 
       Participation. 
      Each Participant’s decision to become an Active Participant shall be entirely
      voluntary. 

     

    2.3.1 
       Active
      Participation.
      An Employee who has become a Participant under Section 2.1
      may elect to become an Active Participant, effective as of any later Entry
      Date
      on which he or she is then an Eligible Employee, provided
      that
      he or she enrolls in the Plan and elects to make Salary Deferrals and/or
      Catch-Up Contributions, in such manner and within such advance notice period
      as
      the Committee (in its discretion) shall specify, in accordance with Section 3.

     

    2.3.2 
       Inactive
      Participation. 
      A Participant who does not elect to become an Active Participant when eligible
      to do so, or whose active participation in the Plan is suspended pursuant to
      Section 2.4,
      2.5
      or 8.2.3,
      shall be treated as an Inactive Participant until the Entry Date as of which
      he
      or she becomes an Active Participant in accordance with
      Section 2.3.1
      or Section 2.5(d).

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    2.3.3 
       Effect
      of Inactive Participation.
      An Inactive Participant shall not be able to make any Salary Deferrals or
      Catch-Up Contributions nor share in the allocation of Matching Contributions,
      and he or she may not later make the Salary Deferrals or Catch-Up Contributions
      that he or she might otherwise have made during the Participant’s period of
      inactive participation in the Plan. However, an Inactive Participant’s Accounts
      shall continue to share in the allocation of earnings and gains (or losses)
      of
      the Trust Fund as provided in Section 6.4.
      No distribution shall be made to a Participant solely as the result of any
      suspension of his or her active participation in the Plan. 

     

    2.4 
       Voluntary
      Suspension. 
      An Active Participant may voluntarily suspend his or her active participation
      in
      the Plan, thereby suspending his or her Salary Deferrals and/or Catch-Up
      Contributions and becoming an Inactive Participant for future payroll periods
      during the suspension period by giving notice to such person, in such manner
      and
      within such advance notice period as the Committee (in its discretion) shall
      specify.
      A
      Participant whose active participation in the Plan has been voluntarily
      suspended pursuant to this Section 2.4
      may resume his or her status as an Active Participant only in accordance with
      Section 2.3.1.

     

    2.5 
       Mandatory
      Suspension. 
      If a Participant (1) ceases to be an Eligible Employee because he or she
      ceases to meet the requirements of Section 1.16,
      (2) is transferred to employment with an Affiliate
      which is not an Employer, (3) is granted a Leave of Absence without pay,
      (4) is on long-term disability, or (5) is placed on layoff or furlough
      status, then:

     

    (a) 
       His
      or her active participation in the Plan shall be suspended (in accordance with
      Section 2.3.3)
      for each payroll period beginning during the continuation of such ineligible
      status; 

     

    (b) 
       He
      or she shall be treated as an Inactive Participant for the duration of the
      suspension period; and

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

     

    (c) 
       After
      he or she again becomes an Eligible Employee and the conditions described in
      clauses (1) through (5) above cease to apply, his or her status as an Active
      Participant may be resumed only in accordance with Section 2.3.1.
      

     

    (d) 
       Notwithstanding
      the foregoing, if a Participant’s active participation in the Plan is suspended
      because he or she is granted an unpaid Leave of Absence, his or her status
      as an
      Active Participant automatically will resume as of the Entry Date that coincides
      with or next follows his or her return to active employment with an Employer
      (provided that he or she is then an Eligible Employee).

     

    2.6 
       Provision
      of Information. 
      Each Participant shall execute such forms as are required by the Committee
      and
      shall make available to the Committee and the
      Trustee any information they may reasonably request. By virtue of his or her
      participation in the Plan, a Participant agrees, on his or her own behalf and
      on
      behalf of all persons who may make any claim arising out of, relating to, or
      resulting from his or her participation in the Plan, to be bound by all of
      the
      provisions of the Plan, the Trust Agreement and any other related
      agreements.

     

    2.7 
       Termination
      of Participation. 
      An Eligible Employee who has become a Participant shall remain a Participant
      until his or her employment with all Employers and Affiliates terminates or,
      if
      he or she remains alive, until his or her entire Account balance is distributed
      (whichever is later).

     

    2.8 
       Acquisitions. 
      Notwithstanding any contrary Plan provision, if determined by the Committee
      (in
      its discretion), an Eligible Employee who becomes an Employee by reason of
      the
      acquisition by the Company or its Affiliate of the assets and liabilities of,
      or
      the voting stock of, another corporation or other business entity, or another
      type of business transaction effected by the Company or its Affiliate (an
“Acquired Employee”), may elect to become an Active Participant effective as of
      the later of (a) the date on which he or she becomes an Eligible Employee,
      and
      (b) such other date as may be specified by the Committee (which shall in no
      event be later than the Entry Date next following the date on which the Acquired
      Employee became an Eligible Employee), 

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

       

      provided
        that he or she enrolls in the Plan and elects to make Salary Deferrals and/or
        Catch-Up Contributions, in such manner and within such advance notice period
        as
        the Committee (in its discretion) shall specify, in accordance with Section 3.

       

    

    SECTION 3

     

    SALARY
      DEFERRALS AND CATCH-UP CONTRIBUTIONS

     

    3.1 Salary
      Deferrals.

     
      

    3.1.1 General.
      Each Active Participant may elect to defer portions of his or her Compensation
      payments and to have the amounts of such Salary Deferrals contributed by the
      Employer to the Trust Fund and credited to his or her Salary Deferral Account
      under the Plan, provided
      that he or she elects to make Salary Deferrals in accordance with
      Section 3.3.
      Subject
      to Section 5.5,
      an Active Participant may elect to defer:

     

    (a) 
       For
      Plan Years prior to 2007:

     

    (1) 
       A
      portion of each payment of Compensation that would otherwise be made to him
      or
      her, after the election becomes and while it remains effective, equal to any
      whole percentage from 1% to 50% (inclusive) of such payment; 

     

    (2) 
       Subject
      to the issuance of a Compliance Statement by the Internal Revenue Service under
      its Employee Plans Compliance Resolution System, for the Plan Years beginning
      January 1, 2004, January 1, 2005 and January 1, 2006, in addition to any
      election made under subsection (1)
      above, a portion of any Eligible Bonus payment that would otherwise be made
      to
      him or her, after the election becomes and while it remains effective, equal
      to
      any whole percentage that exceeds the deferral election percentage then in
      effect under subsection (1)
      above but does not exceed 99% (or such lesser percentage as is determined by
      the
      Company to comply with mandatory tax withholding and applicable payroll
      deductions) of such payment; and

     

    (b) 
       For
      Plan Years Beginning January 1, 2007 and after:

     

    (1) 
       A
      portion of each payment of Compensation, other than any Eligible Bonus, that
      would otherwise be made to him or her, after the election becomes and while
      it
      remains effective, equal to any whole percentage from 1% to 50% (inclusive)
      of
      such payment;

     

    (2) 
       In
      addition to any election made under subsection (1)
      above, a portion of any Eligible Bonus payment that would otherwise be made
      to
      him or her, after the election becomes and while it remains effective, equal
      to
      any whole percentage from 1% to 99% (inclusive) 

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        
(or
        such lesser percentage as is determined by the Company to comply with mandatory
        tax withholding and applicable payroll deductions) of such
        payment.

    

    

    3.1.2 
       Section
      401(k) Ceiling.
      Notwithstanding any contrary Plan provision, the Committee:

     

    (a) 
       May
      suspend or limit any Participant’s salary deferral election at any time in order
      to prevent the cumulative amount of the Salary Deferrals contributed on behalf
      of the Participant for any calendar year from exceeding the Section 401(k)
      Ceiling.

     

    (b) 
       Shall
      cause any amount allocated to the Participant’s Salary Deferral Account as an
      excess deferral (calculated by taking into account only amounts deferred under
      this and any other cash or deferred arrangement maintained by any Employer
      or
      Affiliate and qualified under Section 401(k) of the Code), together with
      any income allocable thereto for the calendar year to which the excess deferral
      relates, as well as, for the Gap Period, to be distributed to the Participant
      no
      later than the April 15 that next follows the year of deferral in
      accordance with Section 402(g)(2)(A) of the Code.
      For this purpose, the “Gap Period” means the period beginning on the first day
      of the subsequent Plan Year and ending on either the day before the date of
      distribution or on a date selected in accordance with the safe harbor method
      set
      forth in Treas. Reg. § 1.401(k)-2(b)(2)(iv)(D).

     

    (c) 
       May
      cause any other amount allocated to the Participant’s Salary Deferral Account
      and designated by the Participant as an excess deferral, together with any
      income allocable thereto for the calendar year to which the excess deferral
      relates, as well as for the Gap Period, to be distributed to the Participant
      in
      accordance with Section 402(g)(2)(A) of the Code.

     

    (d) 
       Shall
      cause any Matching Contributions allocated to the Participant’s Matching Account
      by reason of any excess deferral distributed pursuant to subsection (b) or
      (c), together with any income allocable thereto for the calendar year to which
      the excess deferral relates, as well as for the Gap Period, to be forfeited
      at
      the time such distribution is made and applied to reduce the next succeeding
      Matching Contribution to the Plan.

    

    For
      purposes of this Section 3.1.2
      and Section 4.1.2,
      the “Section 401(k)
      Ceiling”
      is a dollar amount equal to the dollar limit prescribed in
      Section 402(g)(1) of the Code, as adjusted periodically pursuant to
      Sections 402(g)(5) and 415(d) of the Code (e.g.,
      $15,000 in 2006).

     

    3.1.3 
       Limitations
      on HCE Participants.
      For any Plan Year, the Committee (in its discretion) may limit the period for
      which, and/or specify a lesser maximum percentage at which, Salary Deferrals
      may
      be elected by HCE Participants (as defined in Section 3.1.4)
      in such manner as 

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

      may
        be necessary or appropriate in order to assure that the limitation described
        in
        Section 3.1.5
        will be satisfied.

       

    

    3.1.4 
       HCE
      and Non-HCE Participants.
      All Participants who are Eligible Employees at any time during a Plan Year
      (whether or not they are Active Participants), and who are Highly Compensated
      Employees with respect to the Plan Year, shall be “HCE
      Participants”
      for the Plan Year. All other Participants who are Eligible Employees at any
      time
      during the Plan Year shall be “Non-HCE
      Participants”
      for the Plan Year.

     

    3.1.5 
       Deferral
      Percentage Limitation.
      In no event shall the actual deferral percentage, determined in accordance
      with
      Section 3.1.6
      (the “ADP”),
      for the HCE Participants for a Plan Year exceed the maximum ADP, as determined
      by reference to the ADP for the Non-HCE Participants, in accordance with the
      following table:

     

    
      	
              If
                the ADP for the Non-HCE

              Participants
                (“NHCEs’ ADP”) is:

            	
              Then
                the Maximum ADP for 

              the
                HCE Participants is:

            
	
               

              Less
                than 2%

            	
               

              2.0
                x NHCEs’ ADP

            
	
              2%
                to 8%

            	
              NHCEs’
                ADP + 2%

            
	
              More
                than 8%

            	
              1.25
                x NHCEs’ ADP

            

    

     

    3.1.6 
       Actual
      Deferral Percentage.
      The actual deferral percentage for the HCE or Non-HCE Participants for any
      Plan
      Year shall be calculated by computing the average of the deferral percentages
      (calculated separately for each HCE or Non-HCE Participant) (the “Deferral
      Rates”)
      determined by dividing (1) the total for the Plan Year of all Salary
      Deferrals made by the Participant and credited to his or her Salary Deferral
      Account, by (2) the Participant’s Testing Compensation (as defined in
      Section 3.1.7)
      for the Plan Year. In computing a Participant’s Deferral Rate, the following
      special rules shall apply:

     

    (a) If
      any Employer or Affiliate maintains any other cash or deferred arrangement
      which
      is aggregated by the Company with this Plan for purposes of applying

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

       

      Section 401(a)(4)
        or 410(b) of the Code, then all such cash or deferred arrangements shall
        be
        treated as one plan for purposes of applying Section 3.1.5.

    

     

    (b) 
       If
      an HCE Participant is a participant in any other cash or deferred arrangement
      maintained by any Employer or Affiliate and qualified under Section 401(k)
      of
      the Code, the separate deferral rates determined for the Participant under
      all
      such cash or deferred arrangements shall be aggregated with the separate
      Deferral Rate determined for the Participant under this Section 3.1.6 for
      purposes of applying Section 3.1.5.

     

    3.1.7 
       Testing
      Compensation.
      For purposes of applying Sections 3.1,
      3.3
      and 4.1
      and the non-discrimination tests of Sections 401(k)(3) and 401(m)(2) of the
      Code, “Testing
      Compensation”
      means with respect to any Participant, his
      or her Total Compensation (as defined in Section 5.5.2(e)
      and applied using the definition of “Affiliate” in Section 1.1
      rather than in Section 5.5.2(a)),
      subject to the following:

     

    (a) 
       For
      any Plan Year, the Committee may specify an alternate definition of Testing
      Compensation, provided that such alternate definition satisfies the applicable
      requirements of Treas. Reg. § 1.401(k)-6;

     

    (b) 
       No
      amount in excess of the Compensation Limit shall be taken into account under
      this Section 3.1.7
      for any Plan Year; and 

     

    (c) 
       Compensation
      for periods prior to the time that the individual became a Participant shall
      not
      be taken into account.

     

    3.2 
       Catch-Up
      Contributions. 
      Notwithstanding any contrary Plan provision: 

     

    (a) 
       Eligible
      Participants.
      All Employees who are Participants eligible to make Salary Deferrals under
      this
      Plan and who have attained age fifty (50) before the close of the Plan Year
      shall be eligible to make “catch-up contributions” for the Plan Year in
      accordance with, and subject to the limitations of, Section 414(v) of the
      Code.

     

    (b) 
       Certain
      Code Limitations Inapplicable.
      A Participant’s “catch-up contributions” shall not be taken into account for
      purposes of applying Plan provisions implementing the required limitations
      of
      Sections 402(g) and 415 of the Code, and the Plan shall not be treated as
      failing to satisfy Plan provisions implementing the requirements of
      Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416 of the Code, as
      applicable, by reason of “catch-up contributions” being or having been made
      under the Plan.

     

    3.3 Salary
      Deferral and Catch-Up Contribution Election. 
      Each Active Participant shall determine the percentage(s) of his or her
      Compensation that shall be deferred and contributed to the 

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

       

      Trust
        Fund as his or her Salary Deferrals and/or Catch-Up Contributions in accordance
        with Sections 3.1.1
        and 3.2,
        respectively, at the time he or she becomes an Active Participant and thereafter
        may redetermine such percentage(s) from time to time in accordance with
3.3.2.
        In either event -

       

    

    (a) 
       The
      Active Participant shall make such Salary Deferral and/or Catch-Up Contribution
      elections, in such manner and within such advance notice period as the Committee
      (in its discretion) shall specify; 

     

    (b) 
       No
      Salary Deferrals shall be made by any Active Participant except in accordance
      with his or her Salary Deferral election and the limitations of
      Sections 3.1
      and 5.5;
      and

     

    (c) 
       No
      Catch-Up Contributions shall be made by any Active Participant except in
      accordance with his or her Catch-Up Contribution election and the limitations
      of
      Section 3.2.

    

    3.3.1 
       Amounts.
      The amount of Salary Deferrals or Catch-Up Contributions that may be made by
      each Active Participant for each payroll period shall be the amount in dollars
      and cents that is nearest to the amount of Compensation subject to the deferral
      election multiplied by the percentage elected by the Participant pursuant to
      Section 3.1.1
      or 3.2,
      as applicable.

     

    3.3.2 
       Changes.
      An Active Participant may change the percentage(s) determined under the first
      sentence of this Section 3.3
      by giving notice in such manner and within such advance notice period as the
      Committee (in its discretion) shall specify, effective with respect to
      applicable Compensation paid on such date as the Committee (in its discretion)
      may specify. The Salary Deferral and/or Catch-Up Contribution elections made
      by
      an Active Participant shall remain in effect until his or her active
      participation in the Plan is terminated, except to the extent that the election
      is suspended in accordance with Sections 2.4,
      2.5
      or 8.2.3,
      changed in accordance with this Section 3.3.2,
      or reduced pursuant to Section 3.1.2
      or 3.1.3
      (as applicable).

     

    3.3.3 
       Potential
      Excess ADP.
      In the event that (but for the application of this Section 3.3.3)
      the Committee determines that the ADP for HCE Participants would exceed the
      

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

      maximum
        permitted under Section 3.1.5
        for a Plan Year (the “ADP
        Maximum”),
        then the Committee (in its discretion) may reduce, in accordance with
        Section 3.1.3,
        the percentages or amounts of Salary Deferrals subsequently to be contributed
        on
        behalf of the HCE Participants by such percentages or amounts as, and for
        as
        long as, the Committee (in its discretion) may determine is necessary or
        appropriate in the circumstances then prevailing. If the Committee determines
        that it is no longer necessary to reduce the Salary Deferrals contributed
        on
        behalf of the HCE Participants, the Committee (in its discretion) may permit
        some or all HCE Participants, on a uniform and nondiscriminatory basis, to
        make
        new Salary Deferral elections with respect to their subsequent Compensation
        payments, and shall establish a policy as to the deferral percentages that
        shall
        apply with respect to those HCE Participants who do not make new
        elections.

       

    

    3.3.4 
       Actual
      Excess ADP.
      In the event that the Committee determines that the ADP for the HCE Participants
      exceeds the ADP Maximum for any Plan Year, then the amount of any excess
      contributions (within the meaning of Section 401(k)(8)(B) of the Code)
      contributed on behalf of any HCE Participant shall be distributed, together
      with
      any income allocable thereto for the Plan Year to which the excess contributions
      relate as well as for the Gap Period (as defined in Section 3.1.2(b)),
      to the HCE Participant before the close of the Plan Year that next follows
      that
      Plan Year. 

     

    (a) 
       Determination
      and Allocation of Excess Contributions.
      The amount of excess contributions for HCE Participants for the Plan Year shall
      be determined and allocated among HCE Participants in the following
      manner:

     

    (1) 
       With
      respect to each HCE Participant whose Deferral Rate exceeds the ADP Maximum,
      the
      Committee shall calculate an excess contribution amount by calculating the
      excess of (A) his or her Salary Deferrals, over (B) the product of the
      ADP Maximum times his or her Testing Compensation. The aggregate of the excess
      contributions for all such HCE Participants shall be the total excess
      contributions to be distributed pursuant to this
      Section 3.3.4.

     

    (2) 
       The
      Salary Deferrals of the HCE Participant with the highest total dollar amount
      of
      Salary Deferrals contributed shall be reduced to the extent necessary to cause
      the total dollar amount of his or her Salary Deferrals contributed to equal
      the
      lesser of the dollar 

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

       

       

      amount
        of excess contributions for all HCE Participants calculated pursuant to
        subsection (a)(1) above or the dollar amount of Salary Deferrals of the HCE
        Participant with the next highest total dollar amount of Salary Deferrals
        contributed. This process shall be repeated until the total dollar amount
        of
        reductions of such Salary Deferral contributions equals the total excess
        contributions calculated pursuant to subsection (a)(1)
        above.

    

     

    (3) 
       The
      amount of excess contributions to be distributed to an HCE Participant pursuant
      to this Section 3.3.4
      shall be equal to the total amount by which his or her actual Salary Deferrals
      is reduced under subsection (a)(2) above, but reduced by the amount of any
      excess deferrals previously distributed to the HCE Participant for the Plan
      Year
      under Section 3.1.2.

     

    (b) 
       Forfeiture
      of Related Matching Contributions.
      Any Matching Contributions allocated to the HCE Participant’s Matching Account
      by reason of any excess contributions distributed pursuant to this
      Section 3.3.4,
      together with any income allocable thereto for the Plan Year to which the excess
      contributions relate, shall be forfeited and applied to reduce the next
      succeeding Matching Contribution to the Plan.

     

    (c) 
       Incorporation
      By Reference.
      The foregoing provisions of this Section 3 are intended to satisfy the
      requirements of Section 401(k)(3) of the Code and, to the extent not
      otherwise stated above, the provisions of Section 401(k)(3) of the Code,
      Treas. Reg. § 1.401(k)-1(a)(iv) (to the extent not inconsistent with amendments
      to the Code), and subsequent Internal Revenue Service guidance under
      Section 401(k)(3) of the Code are incorporated herein by
      reference.

     

    3.4 
       Payment
      of Salary Deferrals and Catch-Up
      Contributions. 
      Subject to the foregoing provisions of this Section 3,
      Sections 5.5,
      10.3
      and Section 11,
      the Employers shall pay to the Trust Fund the amounts elected by Active
      Participants to be contributed as Salary Deferrals and/or Catch-Up
      Contributions. Any Salary Deferrals and/or Catch-Up Contributions to be
      contributed for a payroll period in accordance with the preceding sentence
      shall
      be paid to the Trust Fund as soon as practicable and in no event later than
      the
      15th business day of the month that next follows the month in which the
      Compensation related to such Salary Deferrals and/or Catch-Up Contributions
      was
      paid.

     

     

    
      
        
        

      

      
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    SECTION 4

     

    EMPLOYER
      CONTRIBUTIONS

     

    4.1 
       Matching
      Contributions. 
      Subject to the provisions of this Section 4.1,
      Sections 5.5,
      10.3
      and Section 11,
      the Employers shall contribute to the Trust Fund as Matching Contributions
      amounts equal to the following:

     

    4.1.1 
       Basic
      Matching Contributions.
      Effective as of October 1, 2006, the Employer will make Matching Contributions
      for each eligible Active Participant on a payroll by payroll basis equal to
      100%
      of the eligible Active Participant’s Salary Deferral Contributions for the pay
      period, but not to exceed 5% of the eligible Active Participant’s Compensation
      for the pay period.

     

    4.1.2 
       True-Up
      Matching Contributions. 

     

    (a) 
       True-Up
      for Quarter Ending September 30, 2006.
      In addition to the Matching Contributions set forth in Section 4.1.1,
      the Employer will make additional Matching Contributions for the 2006 Plan
      Year,
      to be allocated as of September 29, 2006 (the Valuation Date immediately
      preceding the last day of the calendar quarter ending September 30, 2006) to
      eligible Active Participants as an adjustment to take into account any changes
      in Compensation or Participant Salary Deferral elections which may have occurred
      during the period from January 1, 2006 through September 29, 2006. The amount
      of
      the additional Matching Contributions for each eligible Active Participant
      shall
      be equal to the difference, if any, between (i) the Matching Contributions
      allocated to the eligible Active Participant pursuant to Section 4.1.1
      for the period from January 1, 2006 through September 29, 2006, and (ii) a
      Matching Contribution equal to 100% of the eligible Active Participant’s Salary
      Deferrals but not to exceed 5% of the eligible Active Participant’s Compensation
      for the period from January 1, 2006 through September 29, 2006. Notwithstanding
      the foregoing, the only Compensation that shall be taken into account for
      purposes of this additional Matching Contribution shall be Compensation paid
      (or
      payable if deferred under Section 3)
      to the eligible Active Participant (a) for payroll periods for which he or
      she
      made Salary Deferrals or after which the Section 401(k) Ceiling took effect,
      and
      (b) as an Eligible Bonus. In order to be eligible for this additional Matching
      Contribution, a Participant must be an Eligible Employee on September 29, 2006,
      or his or her employment with the Employer must have been terminated during
      the
      period from January 1, 2006 through September 29, 2006 due to Disability or
      death.

     

    (b) 
       2006
      Year-End True-Up.
      In addition to the Matching Contributions set forth in Sections 4.1.1
      and 4.1.2(a),
      the Employers will make additional Matching Contributions for the 2006 Plan
      Year, to be allocated as of December 29, 2006 (the last Valuation Date in the
      2006 Plan Year) to eligible Active Participants as an adjustment to take into
      account any changes in 

     

     

    
      
        
        

      

      
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      Compensation
        or Participant Salary Deferral elections which may have occurred during the
        period from October 1, 2006 through December 29, 2006. The amount of the
        additional Matching Contributions for each eligible Active Participant shall
        be
        equal to the difference, if any, between (i) the Matching Contributions
        allocated to the eligible Active Participant pursuant to Sections 4.1.1
        and 4.1.2(a)
        for the Plan Year, and (ii) a Matching Contribution equal to 100% of the
        eligible Active Participant’s Salary Deferrals for the Plan Year but not to
        exceed 5% of the eligible Active Participant’s Compensation for the Plan Year.
        Notwithstanding the foregoing, the only Compensation that shall be taken
        into
        account for purposes of this additional Matching Contribution shall be
        Compensation paid (or payable if deferred under Section 3)
        to the eligible Active Participant (a) for payroll periods for which he or
        she
        made Salary Deferrals or after which the Section 401(k) Ceiling took effect,
        and
        (b) as an Eligible Bonus. In order to be eligible for this additional Matching
        Contribution, a Participant must be an Eligible Employee on December 29,
        2006,
        or his or her employment with the Employer must have been terminated during
        the
        Plan Year due to Disability or death.

    

     

    (c) 
       True-Up
      for Plan Years Beginning January 1, 2007 and After.
      In addition to the Matching Contributions set forth in Section 4.1.1,
      the Employers will make additional Matching Contributions for the Plan Year,
      to
      be allocated as of the last Valuation Date of the Plan Year to eligible Active
      Participants as an adjustment to take into account any changes in Compensation
      or Participant Salary Deferral elections which may have occurred during the
      Plan
      Year. The amount of the additional Matching Contributions for each eligible
      Active Participant shall be equal to the difference, if any, between
      (i) the Matching Contributions allocated to the eligible Active Participant
      pursuant to Section 4.1.1
      for the Plan Year, and (ii) a Matching Contribution equal to 100% of the
      eligible Active Participant’s Salary Deferrals for the Plan Year but not to
      exceed 5% of the eligible Active Participant’s Compensation for the Plan Year.
      Notwithstanding the foregoing, the only Compensation that shall be taken into
      account for purposes of this additional Matching Contribution shall be
      Compensation paid (or payable if deferred under Section 3)
      to the eligible Active Participant (a) for payroll periods for which he or
      she
      made Salary Deferrals or after which the Section 401(k) Ceiling took effect,
      and
      (b) as an Eligible Bonus. In order to be eligible for this additional Employer
      Matching Contribution, a Participant must be an Eligible Employee on the last
      Valuation Date of the Plan Year, or his or her employment with the Employer
      must
      have been terminated during the Plan Year due to Disability or
      death.

     

    4.1.3 
       Calculation
      Rules.
      Only those Salary Deferrals which are made pursuant to
      Sections 3.1
      and 3.3)
      shall be taken into account in calculating the amount of the Matching
      Contribution (if any) to be made in respect of the Participant’s Salary
      Deferrals for any payroll period. In no event shall the amount of any Catch-Up
      Contributions contributed to any Participant’s Catch-Up Contribution Account, be
      taken into account in determining the amount of Matching Contributions to be
      made to the Trust Fund and/or allocated to his or her Matching
      Account.

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

     

    4.1.4 
       Limitations
      on HCE Participants.
      For any Plan Year, the Committee (in its discretion) may limit the Matching
      Contributions to be made on behalf of HCE Participants (as defined in
      Section 3.1.4)
      in such manner as may be necessary or appropriate in order to assure that the
      limitation described in Section 4.1.5
      will be satisfied.

     

    4.1.5 
       Contribution
      Percentage Limitation.
      In no event shall the actual contribution percentage, determined in accordance
      with Section 4.1.6
      (the “ACP”),
      for the HCE Participants for a Plan Year exceed the maximum ACP, as determined
      by reference to the ACP for the Non-HCE Participants (as defined in
      Section 3.1.4),
      in accordance with the following table:

     

    
      	
              If
                the ACP for the Non-HCE 

              Participants
                (“NHCEs’ ACP”) is:

            	
              Then
                the Maximum ACP for 

              the
                HCE Participants is

            
	
               

              Less
                than 2%

            	
               

              2.0
                x NHCEs’ ACP

            
	
              2%
                to 8%

            	
              NHCEs’
                ACP + 2%

            
	
              More
                than 8%

            	
              1.25
                x NHCEs’ ACP

            

    

     

    4.1.6 
       Actual
      Contribution Percentage.
      The actual contribution percentage for the HCE or Non-HCE Participants for
      a
      Plan Year shall be calculated by computing the average of the percentages
      (calculated separately for each HCE or Non-HCE Participant) (the “Contribution
      Rates”)
      determined by dividing (a) the total of all Matching Contributions made on
      behalf of the Participant and credited to his or her Matching Account for the
      Plan Year, by (b) the Participant’s Testing Compensation (as defined in
      Section 3.1.7)
      for the Plan Year. The special testing and aggregation rules set forth in
      Section 3.1.6
      with respect to calculation of the Participants’ Deferral Rates shall also apply
      to the calculation of their Contribution Rates.

     

    4.1.7 
       Potential
      Excess ACP.
      In the event that (but for the application of this Section 4.1.7)
      the Committee determines that the ACP for the HCE Participants would exceed
      the
      maximum permitted under Section 4.1.5
      for a Plan Year (the “ACP
      Maximum”),
      then the Committee 

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

       

       

      (in
        its discretion) may reduce, in accordance with Section 4.1.4,
        the percentages or amounts of Matching Contributions subsequently to be made
        on
        behalf of the HCE Participants by such percentages or amounts as, and for
        as
        long as, the Committee (in its discretion) may determine is necessary or
        appropriate in the circumstances then prevailing.

    

     

    4.1.8 
       Actual
      Excess ACP.
      In the event that the Committee determines that the ACP for the HCE Participants
      exceeds the ACP Maximum for any Plan Year, then the amount of any excess
      aggregate contributions (within the meaning of Section 401(m)(6)(B) of the
      Code) contributed on behalf of any HCE Participant shall be distributed,
      together with any income allocable thereto for the Plan Year to which the excess
      aggregate contributions relate, as well as for the Gap Period (as defined in
      Section 3.1.2(b)),
      to the HCE Participant before the close of the Plan Year that next follows
      that
      Plan Year.

     

    (a) 
       Determination
      and Allocation of Excess Aggregate Contributions.
      The amount of excess aggregate contributions for HCE Participants for the Plan
      Year shall be determined and allocated among HCE Participants in the manner
      provided in Section 3.3.4
      with respect to excess contributions.

     

    (b) 
       Determination
      of Allocable Income.
      The income allocable to any excess aggregate contributions for the Plan Year
      shall be determined in the manner provided in Section 3.3.4
      with respect to excess contributions.

     

    (c) 
       Incorporation
      By Reference.
      The foregoing provisions of this Section 4.1
      are intended to satisfy the requirements of Section 401(m) of the Code and,
      to the extent not otherwise stated above, the provisions of
      Section 401(m)(2) of the Code, Treas. Reg. §1.401(m)-1(b) (to the extent
      not inconsistent with amendments to the Code), and subsequent Internal Revenue
      Service guidance under Section 401(m)(2) of the Code are incorporated
      herein by reference.

     

    4.2 
       Nonelective
      Contributions. 
      Subject to the provisions of Sections 5.3
      and Section 11,
      for any Plan Year each Employer shall also contribute to the Trust Fund such
      amount (if any) as the Board of Directors (in its discretion) may direct be
      contributed (a “Nonelective
      Contribution”)
      on 

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

       

       

      behalf
        of those Participants who are eligible to share in the allocation of the
        Nonelective Contribution pursuant to Section 5.3.

    

     

    4.3 
       Timing. 
      Subject to the foregoing provisions of this Section 4,
      Section 10.3
      and Section 11,
      Employer Contributions shall be paid to the Trust Fund within the time
      prescribed by law (including extensions) for filing the Company’s federal income
      tax return for its taxable year that ends with or within the Plan Year for
      which
      the Contributions are made.

     

    4.4 
       Periodic
      Contributions. 
      Subject to the foregoing provisions of this Section 4,
      Sections 5.4
      and Section 11,
      any Employer Contributions to be made for a Plan Year may be paid in
      installments from time to time during or after the Plan Year for which they
      are
      made. The Employers shall specify, as to each Employer Contribution payment
      made
      to the Trust Fund, the Plan Year to which the payment relates. The Employers
      intend the Plan to be permanent, but the Employers do not obligate themselves
      to
      make any Employer Contributions under the Plan whatsoever.

     

    4.5 
       Reinstatements. 
      The Employers shall also contribute to the Trust Fund any amount necessary
      to
      reinstate closed Accounts pursuant to Section 7.8.

     

    4.6 
       Profits
      Not Required. 
      Each Employer shall make any contributions otherwise required to be made for
      a
      Plan Year without regard to its current or accumulated earnings or profits
      for
      the taxable year that ends with or within the Plan Year for which the
      contributions are made. Notwithstanding the foregoing, the Plan is designed
      to
      constitute a qualified profit-sharing plan as described in Section 401(a)
      of the Code.

     

    4.7 
       No
      After-Tax Contributions. 
      In no event shall any Participant be permitted to make contributions to the
      Plan
      or Trust Fund on an after-tax basis.

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

     

    SECTION 5

     

    ALLOCATION
      OF CONTRIBUTIONS AND INVESTMENTS

     

    5.1 
       Salary
      Deferrals and Catch-Up Contributions. 
      Except as provided in Sections 3.1.2
      and 3.3.4,
      the Salary Deferrals and/or Catch-Up Contributions made on behalf of an Active
      Participant for any period shall be allocated to his or her Salary Deferral
      Account and/or Catch-Up Contribution Account, as applicable, on the business
      day
      that coincides with or next follows the date on which such Salary Deferrals
      or
      Catch-Up Contributions are received by the Trust Fund.

     

    5.2 
       Matching
      Contributions. 
      Except as provided in Section 4.1.8,
      the Matching Contributions made on behalf of an Active Participant for a Plan
      Year shall be allocated to his or her Matching Account on the business day
      that
      coincides with or next follows the date on which such Matching Contributions
      are
      received by the Trust Fund.

     

    5.3 
       Nonelective
      Contributions. 
      Any Nonelective Contribution made by an Employer for a Plan Year shall be
      allocated, on the business day that coincides with or next follows the date
      on
      which such Nonelective Contribution is received by the Trust Fund, to the
      Nonelective Contribution Accounts of:

     

    (a) 
       All
      Active or Inactive Participants (as determined under Section 2)
      who are Eligible Employees as of the last Valuation Date of the Plan Year for
      which the Nonelective Contribution was made; and

     

    (b)   Those
      Participants who, during such Plan Year, ceased to be Employees on account
      of
      death or Disability.

     

    The
      portion of the Employer’s Nonelective Contribution to be allocated to the
      Nonelective Contribution Account of each Participant who is eligible to share
      in
      the allocation pursuant to the preceding sentence shall be determined by
      multiplying the total amount of the Nonelective Contribution by a fraction,
      of
      which (1) the numerator is the total Compensation received by the 

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

     

    Participant
      while employed by the Employer during the Plan Year, and (2) the denominator
      is
      the aggregate total Compensation of all such Participants eligible to share
      in
      the allocation for such Plan Year.

     

    5.4 
       Investment. 
      Each Participant (or, if deceased, his or her Beneficiary) shall elect, in
      such
      manner and at such times as the Committee (in its discretion) shall specify,
      the
      percentages of all amounts allocated to his or her Accounts that are to be
      invested in each of the Investment Funds. A Participant (or Beneficiary) may
      specify as to any Investment Fund any percentage that is a whole multiple of
      1%,
provided
      that
      the total of the percentages specified shall not exceed 100%.

     

    5.4.1 
       Changes.
      The elections of a Participant (or Beneficiary) concerning the investment of
      the
      amounts allocated to his or her Accounts may be changed in accordance with
      such
      procedures as the Committee (in its discretion) shall designate from time to
      time. The designated procedures may include such rules and limitations
      (e.g.,
      with respect to the timing and frequency of elections) as the Committee may
      specify from time to time, but at all times shall permit Participants (and
      Beneficiaries) to make investment changes in a manner designed to permit the
      Plan to qualify as a 404(c) plan (within the meaning of Section 404(c) of
      ERISA).

     

    5.4.2 
       Failure
      to Elect.
      If a Participant (or Beneficiary) fails to direct the manner in which the
      amounts allocated (or to be allocated) to his or her Accounts are to be
      invested, such amounts shall be invested in the Investment Fund designated
      by
      the Committee for such purpose. Whenever the Committee discontinues an
      Investment Fund and the Participant (or Beneficiary) does not make a new
      election with respect to amounts allocated (or to be allocated) to the
      discontinued Investment Fund, such amounts shall be invested in the Investment
      Fund designated by the Committee for such purpose.

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

     

    5.4.3 
       Participant
      Loans.
      In the event a loan is to be made to a Participant in accordance with
      Section 8.4,
      the Committee shall direct that an amount, in cash, equal to the amount of
      the
      loan be reallocated, as directed by the Committee (in its discretion), from
      the
      portions of the Participant’s Accounts that are invested in one or more of the
      other Investment Funds to a separate subaccount within the Participant’s
      Accounts (the “Loan
      Account”),
      which shall be maintained for the purpose of accounting for any loans made
      to
      the Participant from his or her Accounts. Interest and principal payments on
      loans made under the Plan to any Participant shall be allocated to his or her
      Loan Account as received by the Trustee and, after appropriate adjustments
      have
      been made to the Loan Account to reflect such payments, shall be reallocated
      to
      the Investment Funds in the same percentages as specified by the Participant
      pursuant to the introductory paragraph of this Section 5.4,
      or if there is no such designation currently in force, as the Committee (in
      its
      discretion) shall determine.

     

    5.5 
       Limitations
      on Allocations.

     

    5.5.1 
       Annual
      Addition Limitation.
      Notwithstanding any contrary Plan provision, in no event shall the Annual
      Addition to any Participant’s Accounts for any Plan Year exceed (a) the Defined
      Contribution Dollar Limit, or (b) 100% of the Participant’s Total
      Compensation for the Plan Year; provided,
      however,
      that clause (b) above shall not apply to any Annual Additions described in
      clauses (5) and (6) of Section 5.5.2(c).

     

    5.5.2 
       Definitions.
      For purposes of this Section 5.5, the following definitions shall
      apply:

     

    (a) 
       “Affiliate”
      means a corporation, trade or business which is, together with any Employer,
      a
      member of a controlled group of corporations or an affiliated service group
      or
      under common control (within the meaning of Section 414(b), (c), (m) or (o)
      of the Code, as modified by Section 415(h) of the Code), but only for the
      period during which such other entity is so affiliated with any
      Employer.

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

     

    (b) 
       “Aggregated
      Plan”
      means any defined contribution plan that is aggregated with this Plan pursuant
      to Section 5.5.3.

     

    (c) 
       “Annual
      Addition”
      means with respect to each Participant the sum for a Plan Year of (1) the
      Participant’s Salary Deferrals to be credited to the Participant’s Salary
      Deferral Account; (2) the share of any Matching Contributions and/or
      Nonelective Contributions to be credited to the Participant’s Matching Account
      and/or Nonelective Contribution Account (as applicable); (3) the share of
      all contributions made by all Employers and Affiliates (including salary
      reduction contributions made pursuant to Section 401(k) of the Code) and
      any forfeitures to be credited to the Participant’s account under any Aggregated
      Plan; (4) any after-tax employee contributions made by the Participant for
      the Plan Year under any Aggregated Plan; (5) any amount allocated to the
      Participant’s individual medical account (within the meaning of
      Section 415(l) of the Code) under a defined benefit plan maintained by an
      Employer or Affiliate; and (6) any amount attributable to post-retirement
      medical benefits that is allocated pursuant to Section 419A of the Code to
      the Participant’s separate account under a welfare benefits fund (within the
      meaning of Section 419(e) of the Code) maintained by an Employer or
      Affiliate.

     

    (d) 
       “Defined
      Contribution Dollar Limit” means
      the dollar limit prescribed in Section 415(c)(1)(A) of the Code, as adjusted
      in
      accordance with Section 415(d) of the Code (e.g.,
      $44,000 for 2006).

     

    (e) 
       “Total
      Compensation”
      means the amount of an Employee’s:

     

    (1) 
       Wages
      (within the meaning of Section 3401(a) of the Code) and all other payments
      of compensation which an Employer or Affiliate is required to report in
      Box 1 (“wages, tips, other compensation”) of IRS Form W-2 (or its
      successor):

     

    (A) 
       Including
      the aggregate of his or her elective deferrals (within the meaning of Section
      402(g)(3) of the Code) and any other amounts that are (i) contributed by
      any Employer or Affiliate at his or her election, and (ii) not includible
      in his or her gross income under Section 125, 132(f)(4) or 457 of the Code;
      but

     

    (B) 
       Excluding
      amounts paid or reimbursed by the Employer or Affiliate for moving expenses
      incurred by the Participant, to the extent that at the time of payment it is
      reasonable to believe that such amounts qualify as a “qualified moving expense
      reimbursement” (within the meaning of Section 132(a)(6) of the Code);
      and

     

    (C) 
       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 agricultural labor exception); or

     

    (2) 
       Compensation
      calculated by the Committee in a manner which satisfies applicable requirements
      of Section 415(c)(3) of the Code and Treas. Reg. §1.415-2(d).

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

     

    5.5.3 
       Other
      Defined Contribution Plans.
      All defined contribution plans (terminated or not) maintained by any Employer
      or
      Affiliate shall be aggregated with this Plan, and all plans so aggregated shall
      be considered as one plan in applying the limitations of this
      Section 5.5,
      provided
      that
      the special limitation applicable to employee stock ownership plans under
      Section 415(c)(6) of the Code shall be taken into account with respect to a
      Participant who participates in any such plan.

     

    5.5.4 
       Adjustments.
      If, as a result of (1) a reasonable error in estimating a Participant’s
      Total Compensation, allocating forfeitures under any Aggregated Plan or other
      circumstances which permit the application of the rules stated in this
      Section 5.5.4,
      or (2) a reasonable error in determining the amount of Salary Deferrals
      that may be made or contributed under the limits of this
      Section 5.5,
      any of the limitations of this Section 5.5
      otherwise would be exceeded with respect to any Participant for any Plan Year,
      then the following actions, but only to the extent necessary to avoid exceeding
      such limitations, shall be taken in the following order:

     

    (a) 
       Any
      after-tax employee contributions made by the Participant under any Aggregated
      Plan for the Plan Year shall be returned to him or her;

     

    (b) 
       In
      the circumstances described in clause (2) above, Salary Deferrals made on
      the Participant’s behalf for the Plan Year shall be distributed to the
      Participant to the extent required to reduce the excess Annual Addition to
      the
      Participant’s Accounts attributable to that circumstance;

     

    (c) 
       Any
      Matching Contributions allocated to the Participant’s Matching Account under
      this Plan and/or any employer matching contributions allocated to his or her
      account under any Aggregated Plan shall be reallocated to a suspense account,
      and the balance credited to that account shall be applied to reduce the Matching
      Contributions or other employer matching contributions (of the same class)
      otherwise to be made for and allocated to all eligible Participants or
      participants in the Aggregated Plan for succeeding Plan Years in order of
      time;

     

    (d) 
       Any
      Nonelective Contributions allocated to the Participant’s Nonelective
      Contribution Account under this Plan and/or any employer nonelective
      contributions allocated to his or her account under any Aggregated Plan shall
      be
      reallocated to a suspense account, and the balance credited to that account
      shall be applied to reduce the Nonelective Contributions or other employer
      nonelective contributions (of the same class) otherwise to be made for and
      allocated 

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        
to
        all eligible Participants or participants in the Aggregated Plan for succeeding
        Plan Years in order of time; and

    

     

    (e) 
       The
      Participant’s Salary Deferrals and any salary reduction contributions made at
      the Participant’s election pursuant to Section 401(k) of the Code under any
      Aggregated Plan shall be reallocated to a suspense account and applied to reduce
      such Salary Deferrals or other salary reduction contributions as otherwise
      are
      to be made thereafter at his or her election under this or any Aggregated
      Plan.

     

    5.5.5 
       Suspense
      Accounts.
      If a suspense account is created under Section 5.5.4
      and exists in a later Plan Year, the amount allocated to the suspense account
      shall be reallocated to the Participant’s Accounts before any amount may be
      contributed to this or any Aggregated Plan on behalf of the Participant for
      that
      Plan Year. If the Participant for whom a suspense account is maintained
      terminates employment with all Employers and Affiliates before the suspense
      account balance has been reallocated pursuant to Section 5.5.4,
      that balance shall be reallocated among the Accounts of all Participants who
      remain Employees on the first day of the next following Plan Year, in direct
      proportion to each such Participant’s share of the aggregate Total Compensation
      paid to all such Participants for the Plan Year of termination (subject to
      the
      limitations of this Section 5.5),
      before any amount may be contributed to this or any Aggregated Plan for the
      Plan
      Year of reallocation. Suspense accounts shall not
      share in allocations of earnings and gains (or losses) of the Trust Fund. The
      balances credited to all suspense accounts shall be returned to the Employers
      upon termination of the Plan.

     

    5.5.6 
       Limitation
      Year.
      For purposes of applying the limitations of Section 415 of the Code, the
      limitation year shall be the Plan Year.

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

     

    SECTION 6

     

    ACCOUNTS
      AND INVESTMENT FUNDS

     

    6.1 
       Participants’
      Accounts. 
      At the direction of the Committee, there shall be established and maintained
      for
      each Participant, as appropriate:

     

    (a) 
       A
      Catch-Up Contribution Account, to which shall be credited all Catch-Up
      Contributions paid to the Trust Fund at his or her election under Section 3;

     

    (b) 
       A
      GenenFlex Account, which shall continue to hold any Prior Excess Flex Credit
      Contributions (as defined in Section 1.33.2);
      

     

    (c) 
       A
      Loan Account, to which shall be credited (pursuant to Section 5.4.3)
      any amounts loaned to the Participant in accordance with
      Section 8.4;

     

    (d) 
       A
      Matching Account, to which shall be credited all Matching Contributions paid
      to
      the Trust Fund on his or her behalf under Section 4;

     

    (e) 
       A
      Nonelective Contribution Account, to which shall be credited all Nonelective
      Contributions paid to the Trust Fund on his or her behalf under Section 4;

     

    (f) 
       A
      Rollover Account, to which shall be credited all transfers made to the Trust
      Fund by or on behalf of the Participant under Section 10.5;
      

     

    (g) 
       A
      Salary Deferral Account, to which shall be credited all Salary Deferrals paid
      to
      the Trust Fund at his or her election under Section 3;
      and

     

    (h) 
       Such
      other Account(s) as the Committee shall deem necessary or appropriate, from
      time
      to time.

     

    Each
      Participant’s Account also shall reflect the total value of its proportionate
      interest in each of the Investment Funds as of each Valuation Date. The
      maintenance of a separate Account for each Participant shall not be deemed
      to
      segregate for the Participant, nor to give the Participant any ownership
      interest in, any specific assets of the Trust Fund.

     

    6.2 
       Trust
      Fund Assets. 
      The Trust Fund shall consist of the Participants’ Salary Deferrals, Catch-Up
      Contributions, Matching Contributions, Nonelective Contributions, Prior Excess
      Flex Credit Contributions (as defined in Section 1.33.2),
      rollovers or transfers made pursuant to 

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

       

       

      Section 10.5,
        all investments and reinvestments made therewith, and all earnings and gains
        (less any losses) thereon. The Trustee shall hold and administer all assets
        of
        the Trust Fund in the Investment Funds, and each Participant and his or her
        Account shall have only an undivided interest in any of the Investment
        Funds.

       

    

    6.3 
       Investment
      Funds. 
      The Trustee shall establish three or more Investment Funds which shall be
      maintained for the purpose of investing such portions of Participants’ Accounts
      as are properly allocable to each such Fund pursuant to
      Section 5.4.
      At least three of the Investment Funds shall (a) be diversified,
      (b) have materially different risk and return characteristics, and
      (c) be designed to satisfy the broad range of investment alternatives
      requirement of 29 C.F.R. § 2550.404c-1(b)(3), all in a manner designed to
      permit the Plan to qualify as a 404(c) plan (within the meaning of Section
      404(c) of ERISA).

     

    6.3.1 
       Investment
      Media.
      Except to the extent that such investment responsibility has been transferred
      to
      the Trustee or an Investment Manager in accordance with
      Section 9.6,
      the Committee (in its discretion) shall direct the Trustee to invest each
      Investment Fund in (a) units, shares or other interests in one or more common,
      pooled, collective or other investment media that are (1) designated by the
      Committee, and (2) either (A) maintained by any person described in
      Section 3(38)(B) of ERISA or an affiliate of such person, or
      (B) registered under the Investment Company Act of 1940, as amended, or (b)
      prior to October 1, 2006, shares of Company Stock and, if applicable, short-term
      investments (as described in clause (a) above).

     

    6.3.2 
       Changes.
      The Committee may from time to time change the number, identity or composition
      of the Investment Funds made available under this Section 6.3.
      Except to the extent that such investment responsibility has been transferred
      to
      the Trustee or an Investment Manager in 

     

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

       

       

      accordance
        with Section 9.6,
        the Committee also may select different investment media for the investment
        of
        any Investment Fund.

       

    

    6.3.3 
       Reinvestments
      and Cash.
      All interest, dividends or other income realized from the investments of any
      of
      the Investment Funds shall be reinvested in the Investment Fund that realized
      such income. Temporary cash balances arising in any of the Investment Funds
      shall be invested in a manner that produces a reasonable rate of return and
      is
      consistent with the liquidity needs of the Fund.

     

    6.3.4 
       Company
      Stock Fund.
      Effective as of October 1, 2006, and notwithstanding the foregoing provisions
      of
      this Section 6.3,
      one of the Investment Funds shall be a Company Stock Fund.

     

    6.3.5 
       Limitation
      on Investment in Company Stock Fund.
      Effective as of October 1, 2006, and notwithstanding anything in the Plan to
      the
      contrary, the following restrictions on investment in the Company Stock Fund
      shall apply:

     

    (a) 
       Investment
      of future contributions (Salary Deferrals, Matching Contributions, Nonelective
      Contributions and Rollovers) in the Company Stock Fund shall be limited to
      30%
      of new money invested;

     

    (b) 
       No
      Participant will be permitted to direct the transfer of assets invested in
      any
      other investment option under the Plan from that other investment option to
      the
      Company Stock Fund; and

     

    (c) 
       Existing
      investments in the Company Stock Fund may be sold at any time (subject to any
      applicable trading restrictions) but once sold, may not be reinvested in the
      Company Stock Fund.

     

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

     

    6.4 
       Valuation
      of Participants’ Accounts. 
      The Trustee shall determine the fair market values of the assets of the
      Investment Funds, and the Committee shall determine the fair market value of
      each Participant’s Account, as of each Valuation Date. In making such
      determinations and in crediting net earnings and gains (or losses) in the
      Investment Funds to the Participants’ Accounts, the Committee (in its
      discretion) may employ, and may direct the Trustee to employ, such accounting
      methods as the Committee (in its discretion) deems appropriate in order fairly
      to reflect the fair market values of the Investment Funds and each Participant’s
      Account. For this purpose the Trustee and the Committee (as appropriate) may
      rely upon information provided by the Committee, the Trustee or other persons
      believed by the Trustee or the Committee to be competent. The value of the
      interest of any Participant’s Accounts in the Common Stock Fund may be measured
      in units (rather than shares of Common Stock) in such manner as the Committee
      (in its discretion) shall specify.

     

    6.5 
       Valuation
      of Shares. 
      For all purposes of the Plan, the Trustee shall determine the fair market value
      of a share of Common Stock, which, as of any date, shall be (except as set
      forth
      below) the closing price of the Common Stock on the New York Stock Exchange
      on
      that date, as published in The
      Wall Street Journal
      or, if no report is available for that date, on the next preceding date for
      which a report is available, except that in the case of a transaction involving
      the purchase or sale of share(s) of Common Stock, the fair market value of
      any
      share of Common Stock shall be the purchase or sale price of such share on
      the
      New York Stock Exchange.

     

    6.6 
       Statements
      of Participants’ Accounts. 
      Each Participant shall be furnished with periodic statements reflecting his
      or
      her interest in the Plan at least annually. Within sixty (60) days of receipt
      of
      any such statement, each Participant must notify the Committee (or its designee)
      of any 

     

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

       

       

      error
        in the statement and provide any documents and/or information as the Committee
        (or its designee) may require.

    

     

    6.7 
       Vesting
      of Participants’ Accounts. 
      Each Participant shall at all times be 100% vested in his or her Accounts under
      the Plan.

     

    SECTION 7

     

    DISTRIBUTIONS

     

    7.1 
       Events
      Permitting Distribution. 
      Subject to Section 7.3,
      the balance credited to a Participant’s Accounts shall become distributable only
      in the following circumstances:

     

    (a) 
       Upon
      the Participant’s severance from employment with all Employers and Affiliates at
      or after Normal Retirement Age;

     

    (b) 
       Upon
      the Participant’s severance from employment with all Employers and Affiliates by
      reason of Disability or death;

     

    (c) 
       Upon
      the Participant’s severance from employment with all Employers and Affiliates in
      any circumstances other than those specified in subsection (a) or (b)
      above;

     

    (d) 
       If
      the Participant is a 5-percent owner within the meaning of
      Section 416(i)(1)(B) of the Code (a “5-Percent
      Owner”),
      at any time during (and no later than) the April 1 that next follows the
      calendar year in which the Participant attains age 701⁄2;

     

    (e) 
       If
      and to the extent permitted by Section 401(k)(10) of the Code in connection
      with
      an Employer’s or Affiliate’s disposition of corporate assets or a
      subsidiary;

     

    (f) 
       Upon
      the Committee’s approval of the Participant’s application for a withdrawal from
      his or her Account, but only to the limited extent provided in Section 8;

     

    (g) 
       In
      accordance with and to the limited extent provided in Sections 3.1.2,
      3.3.4,
      4.1.8
      or 5.5.4;
      or 

     

    (h) 
       Upon
      the creation or recognition of an Alternate Payee’s right to all or a portion of
      a Participant’s Account under a domestic relations order which the Committee
      determines is a QDRO (as defined in Section 8.5),
      but only as to the portion of the Participant’s Account that the QDRO states is
      payable to the Alternate Payee.

    

    For
      purposes of determining whether a Participant has met the foregoing
      requirements, if a Participant experiences a change in employment status to
      that
      of a Leased Employee (as defined in 

     

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

     

    Section
      1.26)
      and he or she continues to work for the Employer or any Affiliate, such change
      will not be treated as a severance from employment with all Employers and
      Affiliates for purposes of receiving a distribution under the Plan.

     

    7.2 
       Times
      for Distribution.

     
      

    7.2.1 
       General
      Rule. Subject
      to the consent requirements of Section 7.3
      and except as provided in Section 8.5
      (relating to QDROs), distributions from a Participant’s Accounts shall normally
      be made or commenced as soon as practicable after the Valuation Date that
      coincides with or next follows the later of (a) the date on which the event
      permitting the distribution occurs, or (b) the date on which any consent
      required under Section 7.3
      is granted in such manner and within such advance notice period as the Committee
      (in its discretion) shall specify.

     

    7.2.2 
       Distribution
      Deadline.
      Subject to all other provisions of this Section 7,
      all distributions not made sooner pursuant to the first sentence of
      Section 7.2.1
      shall be made no later than sixty (60) days after the end of the Plan Year
      in
      which a distribution event described in Sections 7.1(a)
      through 7.1(c)
      occurs with respect to the Participant, or the Participant attains Normal
      Retirement Age (whichever is later), subject also to the following:

     

    (a) 
       A
      Participant’s failure to consent to a distribution (if such consent is required
      under Section 7.3)
      shall be deemed to be an election to defer distribution of his or her Accounts;
      provided,
      however,
      that the Participant’s Accounts shall be distributed no later than his or her
      Deadline Date (as defined in Section 7.2.3).

     

    (b) 
       If
      the amount of the distribution or the location of the Participant or his or
      her
      Beneficiary (after a reasonable search) cannot be ascertained by the deadline
      described above, distribution shall be made no later than sixty (60) days after
      the earliest date on which the amount or location (as appropriate) is
      ascertained, subject to the other provisions of this Section 7.

     

    (c) 
       Distributions
      permitted by reason of the Participant’s death shall be made within five (5)
      years after his or her death.

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

     

    7.2.3 
       For
      purposes of applying this Section 7.2,
      “Deadline
      Date”
      means:

     

    (a) 
       With
      respect to a Participant who is a 5-Percent Owner (as defined in
      Section 7.1(d)),
      the April 1 that next follows the calendar year in which the Participant
      attains age 701⁄2.

     

    (b) 
       With
      respect to a Participant who is not a 5-Percent Owner, the April 1 that
      next follows the
      later of
      (i) the calendar year in which the Participant attains age 701⁄2, or
      (ii) the calendar year in which the Participant’s employment with all
      Employers and Affiliates terminates.

     

    7.2.4 
       Age
      701⁄2 Rule for 5-Percent Owners.
      If the Accounts of a Participant who continues in employment after attaining
      Normal Retirement Age become distributable pursuant to Section 7.1(d),
      the Accounts shall be distributed no later than the Deadline Date, and any
      subsequent allocations to the Account shall be distributed by the April 1
      that next follows the Plan Year to which those allocations pertain.

     

    7.3 
       Consent
      Requirement
      and Immediate Distributions. 
      

     

    7.3.1 
       Consent
      Required Over Threshold Amount. If
      the balance credited to a Participant’s Accounts exceeds $5,000 (the
“Threshold
      Amount”)
      as of the Valuation Date that next precedes the date of distribution from the
      Accounts, then no portion of the Participant’s Accounts shall be distributed to
      the Participant until he or she attains age 62, unless the Participant (or,
      if
      deceased, his or her Beneficiary) has consented to an earlier distribution
      in
      such manner and within such advance notice period as the Committee (in its
      discretion) shall specify. The Threshold Amount (as defined in this Section
      7.3.1)
      shall be adjusted periodically pursuant to Section 411(a)(11)(A) of the
      Code.

     

    7.3.2 
       Immediate
      Distributions of Small Accounts Permitted.
      Notwithstanding any contrary Plan provision:

     

    (a) 
       Subject
      to paragraph (b) below, if the balance credited to a Participant’s Accounts does
      not exceed the Threshold Amount (as defined in Section 7.3.1)
      as of the

     

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

       

       

      Valuation
        Date that next precedes the date of distribution from the Accounts, and if
        the
        Participant does not elect to have such distribution paid directly to an
        eligible retirement plan specified by the Participant in a direct rollover
        or to
        receive the distribution directly in accordance with this Section 7,
        then the distribution shall be paid in a single lump sum as soon as
        administratively practicable in accordance with the procedures prescribed
        by the
        Committee.

    

     

    (b) 
       If
      a mandatory distribution that exceeds $1,000 is to be made to a Participant
      in
      accordance with the provisions of paragraph (a) above, then the Committee shall
      pay such distribution in cash (or its equivalent) in a direct rollover to an
      individual retirement plan (as defined in Section 7701(a)(37) of the Code)
      designated by the Committee for such purpose.

     

    7.4 
       Form
      of Distribution. 

     

    7.4.1 
       Cash.
      With respect to any portion of a Participant’s Accounts as is not invested in
      the Common Stock Fund, any distribution from such portion of the Accounts shall
      be made in the form of a single lump sum payment of cash (or its equivalent)
      equal to the balance credited to such portion of the Accounts as of the relevant
      Valuation Date, except to the extent that the distributee elects, in accordance
      with such procedures as the Committee (in its discretion) shall specify, to
      have
      such portion of the Accounts distributed in the form of the unliquidated assets
      credited to such portion of the Accounts as of that Valuation Date.

     

    7.4.2 
       Common
      Stock.
      Any distribution from such portion of a Participant’s Accounts as is invested in
      the Common Stock Fund as of the Valuation Date shall be made in the form of
      a
      single lump sum payment, as elected by the distributee, in -

     

    (a) 
       Such
      whole number of shares of Common Stock as is equivalent to the full value of
      the
      units of the Common Stock Fund then credited to such portion of the
      Accounts;

     

    (b) 
       Cash
      (or its equivalent) equal to the full value of the units of the Common Stock
      Fund then credited to such portion of the Accounts; or

     

    (c) 
       A
      combination of both.

     

    7.4.3 
       Fractional
      Shares.
      If shares of Common Stock are to be distributed, only full shares shall be
      distributed and cash (or its equivalent) shall be distributed in lieu of any
      fractional share.

     

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

     

    7.4.4 
       No
      Annuities.
      In no event shall any distribution from a Participant’s Accounts be made in the
      form of a life annuity.

     

    7.4.5 
       Direct
      Rollovers.
      Notwithstanding any contrary Plan provision:

     

    (a) 
       If
      a Distributee of any Eligible Rollover Distribution (1) elects to have at
      least $500 of such Distribution or, if less, the entire Distribution, paid
      directly to an individual retirement account (“IRA”),
      an annuity contract described in Section 403(b) of the Code, an eligible
      plan under Section 457(b) of the Code maintained by a state, political
      subdivision of a state, or any agency or instrumentality of a state or political
      subdivision of a state or an eligible defined contribution plan (within the
      meaning of Section 401(a)(31)(D) of the Code), and (2) specifies such
      IRA, 403(b) plan, 457 plan or eligible defined contribution plan and the elected
      amount in such manner and within such advance notice period as the Committee
      (in
      its discretion) may specify, such Distribution (or elected portion thereof)
      shall be made in the form of a direct rollover to such IRA, 403(b) plan, 457
      plan or eligible defined contribution plan, in accordance with and subject
      to
      the conditions and limitations of Section 401(a)(31) and related provisions
      of the Code; and

     

    (b) 
       Such
      Distribution may commence less than 30 days after the notice required under
      Treas. Reg. § 1.411(a)-11(c) is given to the Distributee, provided
      that
      (1) the Distributee is clearly informed that he or she has a right to
      consider, for a period of at least 30 days after receiving the notice, a
      decision on whether to elect a distribution (and, if applicable, a particular
      distribution option), and (2) the Distributee, after receiving the notice,
      affirmatively elects a distribution.

     

    (c) 
       “Distributee”
      means a Participant, a Beneficiary (if the surviving spouse of a Participant),
      or an Alternate Payee (if the spouse or former spouse of a Participant under
      a
      QDRO (as defined in Section 8.5)).

     

    (d) 
       “Eligible
      Rollover Distribution”
      means a distribution of any portion of the balance credited to the Accounts
      of a
      Participant which is not: 

     

    (1) 
       One
      of a series of substantially equal periodic payments made over (A) a
      specified period of ten years or more, or (B) the life (or life expectancy)
      of the Distributee or the joint lives (or joint life expectancies) of the
      Distributee and the Distributee’s designated Beneficiary; 

     

    (2) 
       Any
      distribution to the extent such distribution is required under
      Section 401(a)(9) of the Code;

     

    (3) 
       Any
      hardship distribution described in Section 410(k)(2)(B)(i)(IV) of the Code;
      and

     

    (4) 
       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),

     

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

     

    to
      the extent that it constitutes an eligible rollover distribution (within the
      meaning of Section 401(a)(31)(C) of the Code).

     

    7.5 
       Common
      Stock Restrictions. 
      Any Participant or other prospective Distributee who is to receive a
      distribution of Common Stock may be required to execute an appropriate stock
      transfer agreement, implementing and evidencing such restrictions on
      transferability as may be imposed by applicable federal and state securities
      laws, prior to receiving a distribution of the Common Stock. Any shares of
      Common Stock held or distributed by the Trustee may include such legend
      restrictions on transferability as the Company may reasonably require in order
      to assure compliance with applicable federal and state securities
      laws.

     

    7.6 
       Beneficiary
      Designations. 
      Each Participant may designate one or more Beneficiaries in such manner as
      the
      Committee (in its discretion) shall specify. No such designation shall become
      effective until its receipt by the Company (as the Committee’s delegate under
      Section 9.4(u)) in the manner specified.

     

    7.6.1 
       Spousal
      Consent.
      If a Participant designates any a person other than his or her spouse as a
      primary Beneficiary, the designation shall be ineffective unless the
      Participant’s spouse consents to the designation. Any spousal consent required
      under this Section 7.6.1
      shall be void unless it (a) is set forth in writing, (b) acknowledges
      the effect of the Participant’s designation of another person as his or her
      Beneficiary under the Plan, and (c) is signed by the spouse and witnessed
      by an authorized agent of the Committee or a notary public. Notwithstanding
      the
      foregoing, if the Participant establishes to the satisfaction of the Committee
      that written spousal consent may not be obtained because there is no spouse
      or
      the spouse cannot be located, or because of other circumstances specified under
      Section 417(a)(2) of the Code, his or her designation shall be effective
      without spousal consent. Any spousal consent required under this
      Section 7.6.1
      shall 

     

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

       

       

      be
        irrevocable and valid only with respect to the spouse who signs the consent.
        A
        Participant may revoke his or her Beneficiary designation at any time,
        regardless of his or her spouse’s previous consent to the revoked designation,
        and any such revoked designation shall be void.

    

     

    7.6.2 
       Changes
      and Failed Designations.
      A Participant may designate different Beneficiaries (or revoke a prior
      Beneficiary designation) at any time by making a new designation (or a
      revocation of a prior designation) in such manner as the Committee (in its
      discretion) shall specify. No such designation shall become effective until
      its
      receipt by the Company (as the Committee’s delegate under
      Section 9.4(u))
      in the manner specified, and the last effective designation received by the
      Company shall supersede all prior designations. If a Participant dies without
      having effectively designated a Beneficiary, or if no Beneficiary survives
      the
      Participant, the Participant’s Accounts shall be payable to his or her surviving
      spouse or, if the Participant is not survived by his or her spouse, the Accounts
      shall be paid to the
      individual representative of the Participant’s estate.

     

    7.7 
       Payments
      to Minors or Incompetents. 
      If any individual to whom a benefit is payable under the Plan is a minor, or
      if
      the Committee (in its discretion) determines that any individual to whom a
      benefit is payable under the Plan is physically or mentally incompetent to
      receive such payment or to give a valid release therefore, payment shall be
      made
      to the guardian, committee or other representative of the estate of such
      individual which has been duly appointed by a court of competent jurisdiction.
      If no guardian, committee or other representative has been appointed,
      payment:

     

    (a) 
       May
      be made to any person as custodian for the minor or incompetent under the
      California Uniform Transfers to Minors Act (or comparable law of another state),
      or

     

    (b) 
       May
      be made to or applied to or for the benefit of the minor or incompetent, his
      or
      her spouse, children or other dependents, the institution or persons maintaining
      him or her, or 

     

     

    
      
        
        

      

      
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      any
        of them, in such proportions as the Committee (in its discretion) from time
        to
        time shall determine.

    

     

    (c) 
       The
      release of the person or institution receiving the payment shall be a valid
      and
      complete discharge of any liability of the Plan with respect to any benefit
      so
      paid.

     

    7.8 
       Undistributable
      Accounts. 
      Each Participant and (in the event of death) his or her Beneficiary shall keep
      the Committee advised of his or her current address. If the Committee is unable
      to locate the Participant or Beneficiary to whom a Participant’s Accounts are
      payable under this Section 7,
      (a) the Participant’s Accounts may be closed after 24 months have passed
      since the date the Account first became distributable to such Participant or
      Beneficiary, and (b) the balance credited to any Accounts so closed shall
      be credited as an offset against future Employer Contribution payments. If
      the
      Participant or Beneficiary whose Accounts were closed under the preceding
      sentence subsequently files a claim for distribution of his or her Accounts,
      and
      if the Committee (in its discretion) determines that such claim is valid, then
      the balance previously removed upon closure of the Accounts shall be restored
      to
      the Accounts by means of a special contribution which shall be made to the
      Trust
      Fund by the Employers.

     

    SECTION 8

     

    WITHDRAWALS,
      LOANS AND QUALIFIED DOMESTIC RELATIONS ORDERS

     

    8.1 
       General
      Rules. 
      In accordance with Sections 8.2
      and 8.3,
      a Participant who is an Employee may make a withdrawal from his or her Accounts
      in cash (or its equivalent). Any application for a withdrawal shall be submitted
      to such person, in such manner and within such advance notice period as the
      Committee (in its discretion) shall specify. No Participant shall be permitted
      to make a withdrawal under Section 8.2
      more often than once in any calendar year, and no Participant shall be permitted
      to make a withdrawal under Section 8.3
      more often than once in any calendar year.

     

     

    
      
        
        

      

      
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    8.2 
       Hardship
      Withdrawal. 
      The Committee shall authorize a withdrawal under this Section 8.2
      (subject to the provisions of Section 8.1)
      if the Participant provides evidence that is sufficient to enable
      the Committee to determine that the withdrawal satisfies the conditions of
      this
      Section 8.2.

     

    8.2.1 
       Permissible
      Financial Obligations.
      A Participant may make a withdrawal under this Section 8.2
      only to meet a financial obligation for:

     

    (a) 
       For
      hardship withdrawal requests made prior to October 1, 2006:

     

    (1) 
       Unreimbursed
      expenses for medical care (as defined in Section 213(d) of the Code)
      incurred by the Participant or his or her spouse or dependents as defined in
      Section 152 of the Code (“Dependents”),
      or necessary to enable any such person to obtain such care;

     

    (2) 
       Down
      payment and closing costs (excluding mortgage payments) directly related to
      the
      purchase of the Participant’s principal residence;

     

    (3) 
       Payment
      of tuition, room and board and related educational expenses for up to the next
      12 months of post-secondary education for the Participant or his or her spouse,
      children or Dependents;

     

    (4) 
       Prevention
      of the eviction of the Participant from his or her principal residence or
      foreclosure on the mortgage or deed of trust on the Participant’s principal
      residence; or

     

    (5) 
       Such
      other expenses as may be permitted under published documents of general
      applicability as provided under Treas. Reg. §
1.401(k)-1(d)(2)(iv)(C).

     

    (b) 
       For
      hardship withdrawal requests made on or after October 1, 2006:

     

    (1) 
       Expenses
      incurred for medical care that would be deductible under Section 213(d) of
      the Code (determined without regard to whether the expenses exceed 71⁄2% of
      adjusted gross income);

     

    (2) 
       Costs
      (excluding mortgage payments) relating to the purchase of a principal residence
      for the Participant;

     

    (3) 
       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, his or her
      Spouse, children or dependents (as defined in Section 152 of the Code,
      without regard to Section 152(b)(1), (b)(2) and (d)(1)(B) of the Code);

     

     

    
      
        
        

      

      
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    (4) 
       Payments
      necessary to prevent the eviction of the Participant from his or her principal
      residence or foreclosure on the mortgage or deed of trust on that principal
      residence;

     

    (5) 
       Payments
      for burial or funeral expenses for the Participant’s deceased parent, Spouse,
      children or dependents (as defined in Section 152 of the Code, without
      regard to Section 152(d)(1)(B) of the Code); or

     

    (6) 
       Expenses
      for the repair of damage to the Participant’s principal residence that would
      qualify for the casualty deduction under Section 165 of the Code (determined
      without regard to whether the loss exceeds 10% of adjusted gross
      income).

     

    8.2.2 
       Withdrawal
      Necessary to Meet Financial Obligation.
      No withdrawal shall be made under this Section 8.2
      unless the Participant has elected to receive all distributions, withdrawals
      and
      loans available under this Plan and all other qualified plans maintained by
      the
      Employers and Affiliates.

     

    8.2.3 
       Mandatory
      Suspension and Contribution Limitations.
      To the extent required by regulations, no withdrawal shall be made under this
      Section 8.2
      unless the Participant irrevocably agrees, evidenced in such manner as the
      Committee (in its discretion) may specify, in his or her hardship withdrawal
      application that during the period beginning on the Entry Date that next follows
      the withdrawal approval date and ending six (6) months after that date, the
      Participant shall not make contributions to, compensation deferrals under or
      payments in connection with the exercise of any rights granted under this Plan
      or any other qualified plan or any nonqualified stock option, stock purchase,
      deferred compensation or similar plan (but not any health or welfare plan)
      maintained by any Employer or Affiliate. The Participant may elect to resume
      his
      or her active participation in the Plan as of any Entry Date coinciding with
      or
      following the end of the suspension period described above, provided that he
      or
      she elects to become an Active Participant in accordance with
      Section 2.3.1.

     

     

    
      
        
        

      

      
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    8.2.4 
       Limit
      on Withdrawal.
      No withdrawal under this Section 8.2
      shall exceed the lesser of:

     

    (a) 
       The
      amount which the Committee (in its discretion) determines is necessary to
      satisfy the financial obligation meeting the conditions of
      Section 8.2.1
      (net of income or penalty taxes reasonably anticipated to result from the
      withdrawal); or

     

    (b) 
       The
      excess of (1) the value of the Participant’s Accounts as of the Valuation
      Date that occurs on the withdrawal date reduced by amounts allocated pursuant
      to
      Section 8.5
      to any subaccount of the Participant’s Account for any Alternate Payee under a
      QDRO (as defined in Section 8.5),
      over (2) the total amount due (including both principal and interest) under
      all outstanding loans made to the Participant pursuant to
      Section 8.4.

     

    (c) 
       Notwithstanding
      the foregoing, the maximum amount that may be withdrawn from a Participant’s
      Salary Deferral Account, Catch-Up Contribution Account and GenenFlex Account
      for
      this purpose shall be equal to the excess of (1) the sum of all Salary
      Deferrals, Catch-Up Contributions and Prior Excess Flex Credit Contributions
      (as
      defined in Section 1.33.2)
      allocated to the Participant’s Salary Deferral Account, Catch-Up Contribution
      Account and/or GenenFlex Account (as applicable) on the date of the withdrawal
      plus the amount of any earnings credited to his or her Salary Deferral Account
      as of December 31, 1988, over (2) the sum of all amounts previously
      withdrawn or distributed from the Participant’s Salary Deferral Account,
      Catch-Up Contribution Account and GenenFlex Account.

     

    8.2.5 
       Order
      of Withdrawal From Accounts.
      Any amount withdrawn under this Section 8.2
      shall be deducted from the Participant’s Accounts in such order as may be
      determined by the Committee from time to time.

     

    8.3 
       Age
      591⁄2 Withdrawal. 
      At any time after a Participant attains age 591⁄2, the Participant (subject to the
      provisions of Section 8.1)
      may withdraw any amount up to the excess of (a) the value of his or her
      Accounts as of the Valuation Date that occurs on the withdrawal date, reduced
      by
      amounts allocated pursuant to Section 8.5
      to any subaccount of the Participant’s Accounts for any Alternate Payee under a
      QDRO (as defined in Section 8.5),
      over (b) the total amount due (including both principal and interest) under
      all outstanding loans made to the Participant pursuant to
      Section 8.4.
      Any amount withdrawn under this Section 8.3
      shall be deducted from the Participant’s Accounts in such order as may be
      determined by the Committee from time to time.

     

     

    
      
        
        

      

      
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    8.4 Loans
      to Participants. 

     

    8.4.1 
       General
      Loan Rules.
      A Participant who is an Employee may, upon application to such person, in such
      manner and within such advance notice period as the Committee (in its
      discretion) shall specify, obtain a loan from the portion of the Trust Fund
      allocated to the Participant’s Accounts in accordance with the provisions of
      this Section 8.4.
      Loans shall be available to all Participants who are Employees, and to parties
      in interest (within the meaning of Section 3(14) of ERISA) with respect to
      the Plan who are non-Employee Participants or Beneficiaries of deceased
      Participants, on a reasonably equivalent basis.

     

    (a) 
       
      Amount.
      The amount of the loan shall be neither less than $1,000 nor more than the
      excess of (1) 50% of the Participant’s Available Balance (as defined
      below), determined as of the Valuation Date that occurs on the date the loan
      is
      processed, over (2) the sum of the outstanding balances (including both
      principal and accrued interest) on all prior outstanding loans to the
      Participant under this Plan.

     

    (b) 
       “Available
      Balance”
      means the total balance credited to the Participant’s Accounts as of the
      applicable date, reduced by amounts allocated pursuant to Section 8.5 to
      any subaccount of the Participant’s Accounts for any Alternate Payee under a
      QDRO (as defined in Section 8.5).

     

    (c) 
       Additional
      Limits.
      The amount borrowed under this Section 8.4 shall not cause the sum of
      (i) the amount of the loan, plus (ii) the aggregate outstanding
      balance (including both principal and accrued interest) on all prior loans
      to
      the Participant under this Plan or any other qualified plan maintained by any
      Employer or Affiliate (an “Other
      Plan”),
      to exceed an amount equal to $50,000, reduced by the excess (if any) of
      (1) the highest aggregate outstanding balance on all loans under this Plan
      and all Other Plans during the one-year period ending on the day before the
      date
      the loan is to be made, over (2) the aggregate outstanding balance on all
      such loans on the date the loan is made.

     

    (d) 
       Maximum
      Number of Loans.
      No Participant shall be permitted to borrow under this Section 8.4 if the
      borrowing would result in his or her having more than three (3) loans
      outstanding.

     

    (e) 
       Twelve
      Months Required Between Loans.
      Notwithstanding the foregoing, no additional loan may be made to a Participant
      under this Section 8.4 until at least 12 months after the next earliest
      loan was made.

     

    (f) 
       Unpaid
      Leave of Absence.
      If a Participant is granted an unpaid Leave of Absence and remains an Employee,
      he or she may elect to have his or her loan payments be

     

     

    
      
        
        

      

      
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      suspended
        for the lesser of the duration of the approved Leave of Absence or one year.
        If
        the Participant’s loan payments are so suspended and he or she returns to active
        employment with an Employer or Affiliate, the Committee shall recompute the
        monthly loan payment amount and the recomputed amount shall be payable for
        the
        balance of the original term of the loan in accordance with this
        Section 8.4.
        If the Participant fails to return to active employment with an Employer
        or
        Affiliate or terminates his or her employment with all Employers and Affiliates,
        the provisions of Sections 8.4.2(e)(2),
        8.4.2(g),
        8.4.2(h),
        8.4.2(i),
        8.4.3
        and 8.4.4
        shall apply; provided,
        however,
        that the Committee shall recompute the monthly loan payment amount and the
        recomputed amount shall be payable for the balance of the original term of
        the
        loan if the Participant authorizes an automatic payment method described
        in
        Section 8.4.2(e)(2)
        for such remaining loan payments. 

    

     

    8.4.2 
       Minimum
      Requirements of Each Loan.
      Any loan made under this Section 8.4
      shall be evidenced by a loan agreement and promissory note, and the Participant
      must evidence his or her agreement to the terms thereof in writing. Such terms
      shall satisfy the following minimum requirements:

     

    (a) 
       Separate
      Accounting.
      Each loan shall be considered as a separate, earmarked investment of the
      Participant’s Loan Account and shall be accounted for as provided in
      Section 5.4.3.

     

    (b) 
       Term.
      The term of the loan shall not exceed five years. The Participant may elect
      a
      term of either three or five years for each loan. However, the term of the
      loan
      may be fifteen years, provided
      that
      the Participant (1) certifies in writing that the loan proceeds will be
      used to purchase a dwelling unit which (within a reasonable period of time
      after
      the loan is made) will be the Participant’s principal residence, and
      (2) submits such certification to the Committee together with such
      supporting documentary evidence (e.g.,
      a
      copy of the signed sale contract) as the Committee (in its discretion) may
      request.

     

    (c) 
       Interest
      Rate.
      Each loan shall bear a reasonable rate of interest, as determined by the
      Committee (in its discretion), which shall be comparable to the interest rates
      charged under similar circumstances by persons in the business of lending
      money.

     

    (d) 
       Payment
      Schedule.
      A definite payment schedule shall be established for each loan which shall
      require level and monthly payments of both principal and interest over the
      agreed term of the loan in accordance with the provisions of this
      Section 8.4.
      A Participant may prepay at any time the entire amount remaining due under
      the
      loan, but no partial prepayments shall be permitted.

     

    (e) 
       Withholding
      Payments.
      No loan shall be made unless the Participant agrees to make principal and
      interest payments on each loan, together with any and all reasonable charges
      imposed by the Trustee at the direction of the Committee in connection with
      the
      loan:

     

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

     

    (1) 
       By
      payroll withholding, in the case of a Participant who is receiving periodic
      wage
      payments from an Employer or Affiliate; or

     

    (2) 
       By
      an automatic payment method which the Committee (in its discretion) determines
      will provide security comparable to that of payroll withholding, in the case
      of
      a Participant who is not receiving periodic wage payments from an Employer
      or
      Affiliate.

     

    (f) 
       On
      Payroll.
      If during the term of the loan, a Participant who has been making payments
      by
      the automatic payment method described in Section 8.4.2(e)(2)
      begins receiving periodic wage payments from an Employer or Affiliate, the
      Participant shall authorize in writing payroll withholding for the remaining
      loan payments.

     

    (g) 
       Off
      Payroll.
      Subject to Section 8.4.1(f),
      if during the term of the loan, a Participant who has been making loan payments
      by payroll withholding ceases to receive periodic wage payments from an Employer
      or Affiliate (and distribution of the Participant’s Account has not begun), the
      Participant shall authorize in writing an automatic payment method described
      in
      Section 8.4.2(e)(2)
      for the remaining loan payments.

     

    (h) 
       Failure
      to Authorize.
      If any Participant fails to authorize any change in the method of payment
      required by Section 8.4.2(f)
      or (g),
      the outstanding balance (including unpaid principal and interest) on the loan
      shall become immediately due and payable.

     

    (i) 
       Security.
      Each loan shall be adequately secured by collateral of sufficient value to
      secure payment of the loan principal and interest. Notwithstanding the
      provisions of Section 13.2,
      the Participant shall pledge 50% of his or her Available Balance (as defined
      in
      Section 8.4.1(b)),
      and shall provide such other collateral as the Committee (in its discretion)
      may
      require, to secure his or her loan payment obligations.

     

    8.4.3 Default. 
       If a Participant defaults on his or her loan payment obligations and does
      not cure the default within thirty days of the date the Participant is notified
      of the default, the Committee shall take, or direct the Trustee to take, such
      action as shall be necessary or appropriate in the circumstances
      prevailing:

     

    (a) 
       To
      realize upon the security interest of the Trust Fund in the collateral pledged
      to secure the loan, and/or

     

    (b) 
       To
      reduce the balance credited to the Participant’s Accounts by the amount required
      to cure the default.

     

    (c) 
       In
      applying the method of cure provided in subsection (a) above, if any losses
      are realized or expenses incurred, they shall be allocated only to the
      defaulting Accounts.

     

     

    
      
        
        

      

      
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    (d) 
       In
      applying the method of cure provided in subsection (b) above, the amount by
      which the Participant’s Accounts is to be reduced shall be credited to a
      separate suspense account for the Participant and shall be increased with
      interest, at the interest rate actually applicable to the loan pursuant to
      Section 8.4.2(c),
      for the period from the date of the default until the earlier of the date the
      Participant attains age 591⁄2 or the first date on which distributions from the
      Account can be made under Section 7.1;
      the balance credited to the Accounts as of that first date shall be reduced
      by
      the amount then credited to the suspense account; and only the remaining balance
      (if any) shall be available for distribution under Section 7.

     

    8.4.4 
       Effect
      of Distributions.
      If any amount remains outstanding as a loan obligation of a Participant when
      a
      distribution is made from his or her Account in connection with the
      Participant’s severance from employment with all Employers and Affiliates,
      (a) the outstanding loan balance (including both principal and accrued
      interest) shall then become immediately due and payable, and (b) the
      balance credited to the Participant’s Accounts shall be reduced to the extent
      necessary to discharge the obligation.

     

    8.4.5 
       Transferred
      participant Loans.
      Notwithstanding any contrary Plan provision, any Participant loans that are
      transferred to the Trust Fund pursuant to Section 10.5.3 shall be
      administered under this Plan in accordance with such loans’ terms and conditions
      in effect as of the date of the transfer or as may be otherwise modified to
      conform to the administrative and/or payroll procedures of the
      Employer.

     

    8.5 
       Qualified
      Domestic Relations Orders. 
      The Committee shall establish written procedures for determining whether a
      domestic relations order purporting to dispose of any portion of a Participant’s
      Account is a qualified domestic relations order (within the meaning of
      Section 414(p) of the Code) (a “QDRO”).

     

    8.5.1 
       No
      Payment Unless a QDRO.
      No payment shall be made to any Alternate Payee until the Committee (in its
      discretion), or a court of competent jurisdiction reversing an initial

     

     

    
      
        
        

      

      
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      adverse
        determination by the Committee, determines that the order is a QDRO. Payment
        shall be made to any Alternate Payee only as specified in the QDRO.

       

    

    8.5.2 
       Immediate
      Payment Required.
      Payment shall be made to an Alternate Payee, in accordance with a QDRO, as
      soon
      as practicable after the QDRO determination is made, regardless of whether
      the
      distribution, if made to a Participant at the time specified in the order,
      would
      be permitted under the terms of the Plan.

     

    8.5.3 
       Deferred
      Payment.
      If the QDRO does not provide for immediate payment to an Alternate Payee, the
      Committee shall establish a subaccount to record the Alternate Payee’s interest
      in the Participant’s Accounts. All investment decision with respect to amounts
      credited to the subaccount shall be made by the Alternate Payee in the manner
      provided in Section 5.4.
      Payment to the Alternate Payee shall not be deferred beyond the date of
      distribution to the Participant or (in the event of death) his or her
      Beneficiary is made or commenced.

     

    8.5.4 
       Hold
      Procedures.
      Notwithstanding any contrary Plan provision, at any time the Committee (in
      its
      discretion) may place a hold upon all or a portion of a Participant’s Accounts
      for a reasonable period of time (as determined by the Committee) if the
      Committee receives notice that (a) a domestic relations order is being
      sought by the Participant, his or her spouse, former spouse, child or other
      dependent and (b) the Participant’s Accounts are a source of payment under
      such order. For purposes of this Section 8.5.4,
      a “hold”
      means that no withdrawals, loans or distributions may be made from a
      Participant’s Accounts. The Committee shall notify the Participant if a hold is
      placed upon his or her Accounts pursuant to this Section 8.5.4.

     

     

    
      
        
        

      

      
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    SECTION 9

     

    ADMINISTRATION
      OF THE PLAN

     

    9.1 
       Plan
      Administrator. 
      The Company is hereby designated as the administrator of the Plan (within the
      meaning of Sections 414(g) and 3(16)(A) of the Code and ERISA,
      respectively).

     

    9.2 
       Committee. 
      The Plan shall be administered by a Committee consisting of at least three
      members, appointed by and holding office at the pleasure of the Board of
      Directors. The Committee shall have the authority to control and manage the
      operation and administration of the Plan as a named fiduciary under
      Section 402(a)(1) of ERISA. Any member of the Committee who is also an
      Employee shall serve as such without additional compensation. Any member of
      the
      Committee may resign at any time by notice in writing mailed or delivered to
      the
      Board of Directors. The Board of Directors may remove any member of the
      Committee at any time and may fill any vacancy that exists.

     

    9.3 
       Actions
      by Committee. 
      Each decision of a majority of the members of the Committee then in office
      shall
      constitute the final and binding act of the Committee. The Committee may act
      with or without a meeting being called or held and shall keep minutes of all
      meetings held and a record of all actions taken. Except as otherwise
      specifically or generally directed by the Committee, any action of the Committee
      may be evidenced by a writing signed by any two (2) members of the
      Committee.

     

    9.4 
       Powers
      of Committee. 
      The Committee shall have all powers necessary to supervise the administration
      of
      the Plan and to control its operation in accordance with its terms, including,
      but not by way of limitation, the following discretionary powers:

     

    (a) 
       To
      grant or deny benefits under the Plan;

     

     

    
      
        
        

      

      
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    (b) 
       To
      interpret the provisions of the Plan and to determine any question arising
      under, or in connection with the administration or operation of, the
      Plan;

     

    (c) 
       To
      determine all questions concerning the eligibility of any Employee to become
      or
      remain a Participant and/or an Active Participant in the Plan;

     

    (d) 
       To
      cause one or more separate Accounts to be maintained for each
      Participant;

     

    (e) 
       To
      establish and revise an accounting method or formula for the Plan, as provided
      in Section 6.4;

     

    (f) 
       To
      determine the manner and form, and to notify the Trustee, of any distribution
      to
      be made under the Plan;

     

    (g) 
       To
      grant or deny withdrawal and loan applications under Section 8;

     

    (h) 
       To
      determine the status and rights of Participants and their spouses, Beneficiaries
      or estates under this Plan;

     

    (i) 
       To
      instruct the Trustee with respect to matters within the jurisdiction of the
      Committee;

     

    (j) 
       To
      direct the Trustee, in accordance with Section 6.3,
      as to the establishment of Investment Funds and the investment of the Plan
      assets held in the Investment Funds;

     

    (k) 
       To
      employ such counsel, agents and advisors, and to obtain such legal, clerical
      and
      other services, as it may deem necessary or appropriate in carrying out the
      provisions of the Plan;

     

    (l) 
       To
      prescribe the form, manner and/or notice period in which any Participant, or
      his
      or her spouse or other Beneficiary, may make any election or designation
      provided under the Plan;

     

    (m) 
       To
      establish rules for the performance of its powers and duties and for the
      administration of the Plan;

     

    (n) 
       To
      arrange for annual distribution to each Participant of a statement of benefits
      accrued under the Plan;

     

    (o) 
       To
      establish rules, regulations and/or procedures by which requests for Plan
      information from Participants are processed expeditiously and
      completely;

     

    (p) 
       To
      provide to each terminated Participant notice of his or her vested interest
      under the Plan and to provide to each Participant in advance of the
      Participant’s receipt of an Eligible Rollover Distribution (as defined in
      Section 7.4.5(d))
      the explanation described in Section 402(f) of the Code;

     

     

    
      
        
        

      

      
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    (q) 
       To
      publish a claims and appeal procedure satisfying the minimum standards of
      Section 503 of ERISA pursuant to which Participants or their spouses,
      Beneficiaries or estates may claim Plan benefits and appeal any denials of
      such
      claims;

     

    (r) 
       To
      determine the liabilities of the Plan, to establish and communicate a funding
      policy to the Trustee and any Investment Manager appointed pursuant to
      Section 9.6,
      and in accordance with such funding policy, to coordinate the Plan’s investment
      policy with the Plan’s requirements for funds to pay expenses and benefits as
      they become due;

     

    (s) 
       To
      act as agent for the Company in keeping all records and assisting with the
      preparation of all reports and disclosures necessary for purpose of complying
      with the reporting and disclosure requirements of ERISA and the
      Code;

     

    (t) To
      arrange for the purchase of any bond required of the Committee members or others
      under Section 412 of ERISA; 

     

    (u) To
      delegate to the Trustee, the Company’s Payroll or Human Resources Department, or
      any other (including third-party) recordkeeper the authority, acting as an
      agent
      of the Committee, to give or receive notices, elections and other directions
      to
      or from Participants and Beneficiaries as provided in the Plan; and

     

    (v) To
      delegate to any one or more of its members or to any other person, severally
      or
      jointly, the authority to perform for and on behalf of the Committee one or
      more
      of the fiduciary and/or ministerial functions of the Committee under the
      Plan.

     

    9.5 
       Fiduciary
      Responsibilities. 
      To the extent permissible under ERISA, any person may serve in more than one
      fiduciary capacity with respect to the Plan. Except as required by specific
      provisions of ERISA, no person who is a fiduciary with respect to the Plan
      shall
      be under any obligation to perform any duty or responsibility with respect
      to
      the Plan which has been specifically allocated to another
      fiduciary.

     

    9.6 
       Investment
      Responsibilities. 
      The Committee shall direct the Trustee to invest the Investment Funds in the
      investment media specified in Section 6.3.1.
      Subject to the provisions of this Section 9.6
      and any contrary provision of the Plan or Trust Agreement, exclusive authority
      and discretion to manage and control the assets of the Trust Fund shall be
      vested in the Trustee, and the Trustee from time to time shall review the assets
      and make its determinations as to the investments of the Trust
      Fund.

     

     

    
      
        
        

      

      
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    9.6.1 
       Investment
      Manager Appointment.
      The Committee (in its discretion) may appoint, and thereafter may discharge,
      one
      or more investment managers (the “Investment
      Managers”)
      to manage the investment of one or more of the Investment Funds and/or other
      designated portions of the Trust Fund. In the event of any such appointment,
      the
      Trustee shall follow the instructions of the Investment Manager in investing
      and
      administering Trust Fund assets managed by the Investment Manager.
      Alternatively, the Committee (in its discretion) may delegate investment
      authority and responsibility with respect to any Investment Fund directly to
      any
      Investment Manager that has investment management responsibility for any
      collective investment fund in which the Investment Fund is
      invested.

     

    9.6.2 
       Eligibility.
      Any person, firm or corporation appointed as Investment Manager (a) shall
      be a person described in Section 3(38)(B) of ERISA, (b) shall make
      such representations from time to time as the Committee (in its discretion)
      may
      require in order to determine its qualifications to be appointed and to continue
      to serve in such capacity, and (c) shall acknowledge in writing its status
      as a fiduciary with respect to the Plan upon acceptance of its
      appointment.

     

    9.7
       Voting
      and Tender Offer Rights in Common Stock. 

     

    9.7.1 
       Pass-Through
      Issues.
      All Common Stock held in the Trust Fund shall be voted, tendered or exchanged,
      with respect to Pass-Through Issues, in accordance with
      Sections 9.7.3
      through 9.7.6.
      For purposes of this Section 9.7,
      a “Pass-Through
      Issue”
      with respect to Common Stock is an issue which concerns:

     

    (a) 
       The
      voting of shares of Common Stock with respect to the approval or disapproval
      of
      any corporate merger or consolidation, recapitalization, reclassification,
      liquidation, dissolution, sale of substantially all assets of a trade or
      business or any transaction which the Committee (in its discretion) determines
      to be similar to the foregoing;

     

    (b) 
       Any
      tender or exchange offer for Common Stock or any transaction that the Committee
      (in its discretion) determines to be similar to the foregoing;

     

     

    
      
        
        

      

      
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    (c) 
       Any
      proposal by a shareholder pursuant to Rule 14a-8 under the 1934
      Act;

     

    (d) 
       Any
      election contest governed by Rule 14a-11 under the 1934 Act;

     

    (e) 
       Any
      proposal with respect to which there is any solicitation in opposition (within
      the meaning of Rule 14a-6 under the 1934 Act); or

     

    (f) 
       Any
      such other event that the Committee (in its discretion) designates as a
      Pass-Through Issue. It is anticipated that generally the Committee will
      designate all but nonsubstantive issues as Pass-Through Issues. The Committee
      shall have the authority (in its discretion) to determine which issues are
      nonsubstantive issues.

     

    9.7.2 
       Voting
      On Issues Other Than Pass-Through Issues.
      Except with respect to Pass-Through Issues, Common Stock held in the Trust
      Fund
      shall be voted by the Trustee only in accordance with instructions received
      from
      the Committee. However, if with respect to some matter other than a Pass-Through
      Issue the Committee shall fail to give, or shall notify the Trustee in writing
      of its decision not to give, timely voting instructions to the Trustee, the
      Trustee (in its discretion) shall have the authority to vote such Common Stock
      in its sole discretion. The functions of the Committee and the Trustee
      with respect to other rights pertaining to such Common Stock on matters other
      than Pass-Through Issues shall be allocated between them in like
      manner.

     

    9.7.3 
       Named
      Fiduciary Status.
      For purposes of this Section 9.7,
      each Participant (or, if deceased, his or her Beneficiary) shall be a named
      fiduciary (within the meaning of, but not limited to, Sections 402(a) and
      403(a)(1) of ERISA) with respect to Pass-Through Issues for all shares of Common
      Stock as to which the Participant has the right of direction with respect to
      voting, tender and any other rights appurtenant to such Stock. That named
      fiduciary status shall apply with respect to Pass-Through Issues for such whole
      number of shares of Common Stock (if any) actually held for the benefit of
      any
      Participant (or Beneficiary) and allocable to his or her Account by reason
      of
      the Account’s investment (if any) in the Company Stock Fund (for purposes of
      this Section 9.7, “Allocable
      Shares”).

     

     

    
      
        
        

      

      
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    9.7.4 
       Confidentiality.
      In implementing this Section 9.7,
      each appropriate fiduciary shall take all steps necessary or appropriate to
      ensure that each Participant’s (or Beneficiary’s) instructions shall be kept in
      strictest confidence and shall not be divulged or released to any person, except
      as provided in the next sentence, including officers, directors or employees
      of
      the Company or any Affiliate. To the extent necessary for the operation of
      the
      Plan, however, the instructions may be provided to the Trustee and to a
      recordkeeper, auditor or other person providing services to the Plan if the
      person (a) is not the Company or an Affiliate, and (b) agrees not to
      divulge the instructions to any other person, including officers, directors
      or
      employees of the Company or any Affiliate.

     

    9.7.5 
       Directed
      Voting and Consents.

     

    (a) 
       Notwithstanding
      any contrary Plan provision, whenever any proxies or consents are solicited
      from
      the holders of Common Stock with respect to Pass-Through Issues, the Trustee
      shall exercise voting or other rights solely as directed in written instructions
      timely received from Participants (or if deceased, their Beneficiaries) and
      in
      accordance with this Section 9.7.

     

    (b) 
       Each
      Participant (or if deceased, his or her Beneficiary) shall have the right,
      with
      respect to Pass-Through Issues for Allocable Shares, to instruct the Trustee,
      in
      accordance with procedures established by the Committee (in its discretion),
      as
      to the manner in which to vote such Allocable Shares at any stockholders’
meeting of the Company, or the manner in which the Trustee shall give or
      withhold consent with respect to such Allocable Shares.

     

    (1) 
       The
      Trustee shall pool the results of instructions received from all Participants
      (and Beneficiaries) as to their Allocable Shares and shall vote or otherwise
      act
      accordingly on Pass-Through Issues with respect to such Allocable Shares and
      the
      aggregate of all fractional shares of Common Stock allocable to the
      Participants’ Accounts;

     

    (2) 
       In
      the case of a deceased Participant who has more than one Beneficiary, the
      Trustee shall vote or otherwise act on Pass-Through Issues in accordance with
      the instructions of the Participant’s Beneficiaries in respect of the deceased
      Participant’s Allocable Shares in proportion to the Beneficiaries’ respective
      interests in the Participant’s Account in accordance with rules established by
      the Committee (in its discretion).

     

    (3) 
       If
      and to the extent that no instructions are timely received from any Participant
      (or Beneficiary) with a right to instruct with respect to his or her Allocable
      Shares, (A) such person shall be deemed to have timely instructed the
      Trustee not to vote the 

     

     

    
      
        
        

      

      
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      relevant
        Allocable Shares, and (B) the Trustee shall not vote such Allocable Shares
        nor take any other actions under this Section 9.7
        with respect to such Allocable Shares on Pass-Through Issues.

    

     

    (c) 
       The
      Company shall use its best efforts to timely distribute or cause to be
      distributed to each Participant (or Beneficiary) such information concerning
      Pass-Through Issues as will be distributed to stockholders of the Company in
      connection with any stockholders’ meeting or any solicitation of voting or
      consents, together with a request for confidential instructions to the Trustee
      or its designee on how shares of Common Stock shall be voted on each such matter
      or how consents shall be given or withheld.

     

    9.7.6 
       Tender
      or Exchange Offers.

     

    (a) 
       Notwithstanding
      any contrary Plan provision, whenever (i) any tender or exchange offer is
      made for shares of Common Stock, or (ii) there occurs any transaction that
      the Committee (in its discretion) determines to be similar to the foregoing
      (as
      described in Section 9.7.1(b)), the Trustee shall tender or exchange (or
      refrain from tendering or exchanging) shares of Common Stock solely as directed
      in instructions timely received from Participants (or if deceased, their
      Beneficiaries) and in accordance with this Section 9.7.

     

    (b) 
       Each
      Participant (or, if deceased, his or her Beneficiary) shall have the right,
      with
      respect to his or her Allocable Shares, to instruct the Trustee, in accordance
      with procedures established by the Committee (in its discretion), as to the
      manner in which to respond to such tender or exchange offer with respect to
      such
      Allocable Shares.

     

    (1) 
       The
      Trustee shall pool the results of instructions received from all Participants
      (and Beneficiaries) as to their Allocable Shares and shall respond to such
      tender or exchange offer accordingly with respect to such Allocable Shares
      and
      the aggregate of all fractional shares of Common Stock allocable to the
      Participants’ Accounts.

     

    (2) 
       In
      the case of a deceased Participant who has more than one Beneficiary, the
      Trustee shall respond to such tender or exchange offer in accordance with the
      instructions of the Participant’s Beneficiaries in respect of the deceased
      Participant’s Allocable Shares in proportion to the Beneficiaries’ respective
      interests in the Participant’s Account in accordance with rules established by
      the Committee (in its discretion).

     

    (3) 
       If
      and to the extent that no instructions are timely received from any Participant
      (or Beneficiary) with a right to instruct with respect to his or her Allocable
      Shares, (A) such person shall be deemed to have timely instructed the
      Trustee not to tender or exchange the relevant Allocable Shares, and
      (B) the Trustee shall not tender or exchange such Allocable Shares nor take
      any other actions under this Section 9.7
      with respect to such Allocable Shares on the Pass-Through Issue qualifying
      as
      such under Section 9.7.1(b).

     

    (c) 
       The
      Company shall use its best efforts to timely distribute or cause to be
      distributed to each Participant (or Beneficiary) such information as will be
      distributed to stockholders of the Company in connection with any Pass-Through
      Issue qualifying as such under 

     

     

    
      
        
        

      

      
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      Section 9.7.1(b),
        together with a request for confidential instructions to the Trustee or its
        designee on how to respond to such Issue.

    

     

    9.8 
       Decisions
      of Committee. 
      All decisions of the Committee, and any action taken by it in respect of the
      Plan and within the powers granted to it under the Plan, and any interpretation
      of provision of the Plan or the Trust Agreement by the Committee, shall be
      conclusive and binding on all persons, and shall be given the maximum possible
      deference allowed by law.

     

    9.9 
       Administrative
      Expenses. 
      All reasonable expenses actually incurred in connection with the administration
      of the Plan by the Employers, the Committee or otherwise, including legal,
      Trustee’s and investment management fees and expenses (“Administrative
      Expenses”),
      shall be payable from the Trust Fund, except to the extent paid by the Employers
      under clause (a) below. Notwithstanding the foregoing, Administrative
      Expenses shall be paid from the Trust Fund only to the extent that such payments
      (to the extent prohibited by Section 406) are exempt under Section 408
      of ERISA. The Committee (in its discretion) shall determine which Administrative
      Expenses are not payable from the Trust Fund under the foregoing rules. The
      Company (in its discretion) may (a) direct the Employers to pay any or all
      Administrative Expenses, and/or (b) direct the Employers not to pay a
      greater share, portion or amount of such Expenses which would otherwise be
      allocable to the Accounts of Participants who are no longer employed by any
      Employer or Affiliate.

     

    9.10 
       Eligibility
      to Participate. 
      No member of the Committee, who is also an Eligible Employee and otherwise
      eligible under Section 2,
      shall be excluded from participating in the Plan, but he or she, as a member
      of
      the Committee, shall not act or pass upon any matters pertaining specifically
      to
      his or her own Accounts under the Plan.

     

    9.11 
       Indemnification. 
      Each of the Employers shall, and hereby does, indemnify and hold harmless any
      of
      its Employees, officers or directors who may be deemed to be a fiduciary of
      the

     

     

    
      
        
        

      

      
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      Plan,
        and the members of the Committee, from and against any and all losses, claims,
        damages, expenses and liabilities (including reasonable attorneys’ fees and
        amounts paid, with the approval of the Board of Directors, in settlement
        of any
        claim) arising out of or resulting from the implementation of a duty, act
        or
        decision with respect to the Plan, so long as such duty, act or decision
        does
        not involve gross negligence or willful misconduct on the part of any such
        individual.

    

     

    SECTION 10

     

    TRUST
      FUND AND ROLLOVER CONTRIBUTIONS

     

    10.1 
       Trust
      Fund. 
      The Company shall establish a Trust Agreement with the Trustee in order to
      provide for the safekeeping, administration and investment of all amounts
      contributed or transferred to the Plan and the payment of benefits as provided
      in the Plan. The Trustee shall receive and place in the Trust Fund all such
      contributions and shall hold, invest, reinvest and distribute the Trust Fund
      in
      accordance with provisions of the Plan and Trust Agreement. Assets of this
      Plan
      may be commingled with the assets of other qualified plans through one or more
      collective investment funds described in Section 6.3;
      provided,
      however,
      that the assets of this Plan shall not be available to provide any benefits
      under any other such plan. The benefits provided under the Plan shall be only
      such as can be provided by the assets of the Trust Fund, and no liability for
      payment of benefits shall be imposed upon the Employers or any of their
      shareholders, directors or Employees. The Trust Fund shall continue for such
      time as may be necessary to accomplish the purposes for which it is
      created.

     

    10.2 
       No
      Diversion of Assets. 
      Notwithstanding any contrary Plan provision, at no time shall any assets of
      the
      Plan be used for, or diverted to, purposes other than for the exclusive benefit
      of Eligible Employees, Participants, Beneficiaries and other persons receiving
      or entitled to receive 

     

     

    
      
        
        

      

      
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      benefits
        or payments under the Plan. Except to the limited extent permitted by
        Sections 5.5.5,
        7.8
        and 10.3,
        no assets of the Plan shall ever revert to or become the property of the
        Employers.

       

    

    10.3 
       Continuing
      Conditions. 
      Any obligation of the Employer to contribute Salary Deferrals, Catch-Up
      Contributions, Matching Contributions and/or Nonelective Contributions under
      the
      Plan is hereby conditioned upon the deductibility of such Salary Deferrals,
      Catch-Up Contributions, Matching Contributions and/or Nonelective Contributions
      under Section 404(a) of the Code. That portion of any Salary Deferral,
      Catch-Up Contribution, Matching Contribution or Nonelective Contribution that
      is
      contributed or made by reason of a good faith mistake of fact, or by reason
      of a
      good faith mistake in determining the deductibility of such portion, shall
      be
      returned to the Employers as promptly as practicable, but not later than one
      year after the contribution was made or the deduction was disallowed (as the
      case may be). The amount returned pursuant to the preceding sentence shall
      be an
      amount equal to the excess of the amount actually contributed over the amount
      that would have been contributed if the mistake had not been made; provided,
      however,
      that gains attributable to the returnable portion shall be retained in the
      Trust
      Fund; and provided,
      further,
      that the returnable portion shall be reduced (a) by any losses attributable
      thereto and (b) to avoid a reduction in the balance of any Participant’s
      Accounts below the balance that would have resulted if the mistake had not
      been
      made.

     

    10.4 
       Change
      of Investment Alternatives. 
      The Company reserves the right to change at any time the means through which
      the
      Plan is funded, including adding or substituting one or more contracts with
      an
      insurance company or companies, and thereupon may make suitable provision for
      the use of a designated portion of the assets of the Trust Fund to provide
      for
      the funding and/or payment of Plan benefits under any such insurance contract.
      No such change shall constitute a termination of the Plan or result in the
      diversion to the Employers of any portion of the Trust Fund. 

     

     

    
      
        
        

      

      
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      Notwithstanding
        the implementation of any such change of funding medium, all references in
        the
        Plan to the Trust Fund shall also refer to the Plan’s interest in or the assets
        held under any other such funding medium.

       

    

    10.5 
       Rollover
      Contributions. 
      Notwithstanding any contrary Plan provision, the Committee (in its discretion)
      may direct the Trustee to accept a transfer of assets to the Trust Fund for
      the
      benefit of a Participant or group of Participants. Such transfer may be in
      the
      form of a trust-to-trust transfer from the trustee of a tax-qualified plan
      under
      Section 401(a) of the Code and related tax-exempt trust under
      Section 501(a) of the Code that is not subject to the funding requirements
      of Section 412 of the Code, or in the form of a rollover by the Eligible
      Employee or a direct rollover from: (i) a qualified plan described in
      Section 401(a) or 403(a) of the Code (a “Qualified
      Plan”),
      excluding after-tax employee contributions; or (ii) an individual
      retirement account or annuity described in Section 408(a)or 408(b) of the
      Code that is eligible to be rolled over and would otherwise be includible in
      gross income, as described in Section 408(d)(3)(A)(ii), but only if no amount
      in
      the account and no part of the value of the annuity is attributable to any
      source other than a rollover contribution from a Qualified Plan, plus any
      earnings thereon.

     

    10.5.1 
       Rollover
      Account.
      Assets transferred to the Trust Fund pursuant to this Section 10.5 shall be
      credited to the Participant’s Rollover Account. A Participant’s interest in his
      or her Rollover Account shall be fully (100%) vested and nonforfeitable at
      all
      times. The Participant shall indicate, in such manner and within such advance
      notice period as the Committee (in its discretion) shall specify, the
      percentages of the amounts allocated to his or her Rollover Account that are
      to
      be invested in each of the Investment Funds. In all other respects Rollover
      Account investments shall be subject to Section 5.4.

     

     

    
      
        
        

      

      
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    10.5.2 
       Nonqualifying
      Rollovers.
      If it is later determined that a transfer to the Trust Fund made pursuant to
      this Section 10.5
      did not in fact qualify as an eligible rollover contribution as described in
      Section 10.5
      above, then the balance credited to the Participant’s Rollover Account shall
      immediately be (a) segregated from all other Plan assets, (b) treated
      as a nonqualified trust established by and for the benefit of the Participant,
      and (c) distributed to the Participant. Such a nonqualifying rollover shall
      be deemed never to have been a part of the Trust Fund.

     

    10.5.3 
       Rollover
      of Certain Participant Loans Permitted. At
      the direction of the Committee (in its discretion), in the case of a Participant
      who becomes an Eligible Employee by reason of the acquisition by the Company
      or
      its Affiliate of the assets and liabilities of, or the voting stock of, another
      corporation or other business entity, or another type of business transaction
      effected by the Company or its Affiliate, assets may be transferred to the
      Trust
      Fund pursuant to Section 10.5
      above in a direct rollover from the Qualified Plan maintained by the
      Participant’s prior employer (the “Prior Plan”) in the form of loan promissory
      notes, provided that the Participant elects to directly rollover his or her
      entire Prior Plan account balance that qualifies as an eligible rollover
      contribution to this Plan as described in Section 10.5.

     

    SECTION 11

     

    MODIFICATION
      OR TERMINATION OF PLAN

     

    11.1 
       Employers’
      Obligations Limited. 
      The Plan is voluntary on the part of the Employers, and the Employers shall
      have
      no responsibility to satisfy any liabilities under the Plan. Furthermore, the
      Employers do not guarantee to continue the Plan, and the Company may, by
      appropriate amendment of the Plan, discontinue contributions of Salary
      Deferrals, Catch-Up Contributions, Matching Contributions and/or Nonelective
      Contributions for any reason at any time. Complete 

     

     

    
      
        
        

      

      
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      discontinuance
        of all contributions of Salary Deferrals, Catch-Up Contributions, Matching
        Contributions and Nonelective Contributions shall be deemed a termination
        of the
        Plan.

       

    

    11.2 
       Right
      to Amend or Terminate. 
      The Company reserves the right to alter, amend or terminate the Plan, or any
      part thereof, in such manner as it may determine. Amendments which do not add
      materially to the Company’s cost under the Plan and which are (i) necessary
      to comply with the Code, ERISA or other applicable law, (ii) technical, or
      (iii) intended to ease administration may be adopted if approved in writing
      by any two members of the Committee, acting in their capacities as officers
      of
      the Company rather than as fiduciaries with respect to the Plan. All other
      amendments shall be approved by the Board of Directors. Any such alteration,
      amendment or termination shall take effect upon the date indicated in the
      document embodying such alteration, amendment or termination; provided,
      however,
      that:

     

    (a) 
       No
      such alteration or amendment shall (1) divest any portion of an Account
      that is then vested under the Plan, or (2) except as may be permitted by
      regulations or other IRS guidance, eliminate any optional form of benefit
      (within the meaning of Section 411(d)(6)(B)(ii) of the Code) with respect
      to benefits accrued prior to the adoption of the amendment; and

     

    (b) 
       Any
      alteration, amendment or termination of the Plan or any part thereof, shall
      be
      subject to the restrictions in Section 10.2
      which prohibit any diversion of the assets of the Plan.

     

    11.3 
       Effect
      of Termination. 
      If the Plan is terminated or partially terminated, or if there is a complete
      discontinuance of all contributions of Salary Deferrals, Catch-Up Contributions
      and Employer Contributions, the interests of all affected Participants in their
      Accounts shall remain fully (100%) vested and nonforfeitable. In the event
      the
      Plan is terminated, the balance credited to the Matching Accounts, Nonelective
      Contribution Account and Rollover Accounts and, to the extent permitted by
      Section 401(k)(2)(B) of the Code, the Salary Deferral Accounts, Catch-Up
      Contribution Accounts and/or GenenFlex Accounts, of any Participants who are
      affected by the 

     

     

    
      
        
        

      

      
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      termination
        may be distributed prior to the occurrence of a distribution event described
        in
        Section 7.1.

    

     

    SECTION 12

     

    TOP-HEAVY
      PLAN

     

    12.1 
       Top-Heavy
      Plan Status. 
      Notwithstanding any contrary Plan provision, the provisions of this Section 12
      shall apply with respect to any Plan Year for which the Plan is a top-heavy
      plan
      (within the meaning of Section 416(g) of the Code) (a “Top-Heavy
      Plan”).

     

    12.1.1 
       60%
      Rule.
      The Plan shall be a Top-Heavy Plan with respect to any Plan Year if, as of
      the
      Determination Date, the value of the aggregate of the Accounts under the Plan
      for key employees (within the meaning of Sections 416(i)(1) and (5) of the
      Code) exceeds 60% of the value of the aggregate of the Accounts under the Plan
      for all Participants. For purposes of determining the value of the Accounts,
      the
      provisions of Section 416(g)(4)(E) of the Code and Treas. Reg. § 1.416-1
      (Q&A T-1) are incorporated herein by reference.

     

    12.1.2 
       Top-Heavy
      Determinations.
      The Committee, acting on behalf of the Employers, shall determine as to each
      Plan Year whether or not the Plan is a Top-Heavy Plan for that Plan Year. For
      purposes of making that determination as to any Plan Year:

     

    (a) 
       “Determination
      Date”
      means the last day of the immediately preceding Plan Year;

     

    (b) 
       The
      Plan shall be aggregated with each other qualified plan of any Employer or
      any
      Affiliate (1) in which a key employee (within the meaning of
      Sections 416(i)(1) and (5) of the Code) participates, and/or (2) which
      enables the Plan or any plan described in clause (1) above to meet the
      requirements of Section 401(a)(4) or 410(b) of the Code;

     

    (c) 
       The
      Plan may be aggregated with any other qualified plan of any Employer or
      Affiliate, which plan is not required to be aggregated under subsection (b)
      (1) above, if the resulting group of plans would continue to meet the
      requirements of Sections 401(a)(4) and 410(b) of the Code; and

     

     

    
      
        
        

      

      
        66

        
          

        

      

      
        
        

      

    

     

     

    (d) In
      determining which Employees are key and non-key employees, an Employee’s
      compensation for the Plan Year shall be his or her Total Compensation (as
      defined in Section 5.5.2(e)
      and applied using the definition of “Affiliate” in Section 1.1
      rather than in Section 5.5.2(a)).

     

    12.2 
       Top-Heavy
      Plan Provisions. 
      For any Plan Year for which the Plan is a Top-Heavy Plan, the following
      provisions shall apply:

     

    12.2.1 
       Minimum
      Allocation.
      The Employers shall make an additional contribution to the Accounts of each
      Participant who is a non-key employee (within the meaning of
      Sections 416(i)(2) and (5) of the Code), and who is employed on the last
      day of the Plan Year, in an amount which equals 3% of his or her Top-Heavy
      Compensation for the Plan Year; provided,
      however,
      that if the Key Employee Percentage (as defined in subsection (a) below) is
      less than 3%, then the percentage rate at which that additional Employer
      contribution shall be made for that Plan Year shall be reduced from 3% to the
      Key Employee Percentage.
      Matching Contributions shall be taken into account for purposes of satisfying
      the minimum contribution requirements of Section 416(c)(2) of the Code and
      the
      Plan. Matching Contributions that are used to satisfy such minimum contribution
      requirements shall be treated as Matching Contributions for purposes of the
      actual contribution percentage limitation in Section 4.1.5
      and other requirements of Section 401(m) of the Code.

     

    (a) 
       The
      determination of who is a key employee will be made in accordance with Section
      416(i)(1) of the Code and the applicable regulations and other guidance of
      general applicability thereunder.

     

    (b) 
       “Key
      Employee Percentage”
      means the largest percentage computed by dividing (a) the total amount of
      all Employer contributions allocated for that Plan Year to the Accounts of
      each
      Participant who is a key employee (within the meaning of Sections 416(i)(1)
      and (5) of the Code), by (b) his or her Top-Heavy
      Compensation.

     

    (c) 
       The
      additional contribution required under this Section 12.2.1
      shall be made without regard to the level of the Participant’s Top-Heavy
      Compensation for the Plan Year.

     

     

    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    

     

     

    (d) Notwithstanding
      the foregoing, if a Participant is also covered under any Other Plan (as defined
      in Section 8.4.1(c)) and the minimum allocation of benefit requirement
      applicable to Top-Heavy Plans will be met under such Other Plan or Plans, no
      additional contribution will be made for the Participant under this
      Plan.

     

    12.2.2 
       “Top-Heavy
      Compensation”
      means, with respect to any Participant for a Plan Year, his or her Total
      Compensation (as defined in Section 5.5.2(e)
      and applied using the definition of “Affiliate” in Section 1.1
      rather than in Section 5.5.2(a))
      and except that, for this purpose, no amount in excess of the Compensation
      Limit
      shall be taken into account for any Plan Year.

     

    SECTION 13

     

    GENERAL
      PROVISIONS

     

    13.1 
       Plan
      Information. 
      Each Participant shall be advised of the general provisions of the Plan and,
      upon written request addressed to the Committee, shall be furnished with any
      information requested, to the extent required by applicable law, regarding
      his
      or her status, rights and privileges under the Plan.

     

    13.2 
       Inalienability. 
      Except to the extent otherwise provided in Sections 8.4
      and 8.5
      or mandated by Section 401(a)(13)(C) of the Code or other applicable law, in
      no
      event may any Participant, former Participant or his or her spouse, Beneficiary
      or estate sell, transfer, anticipate, assign, hypothecate, or otherwise dispose
      of any right or interest under the Plan; and such rights and interests shall
      not
      at any time be subject to the claims of creditors nor be liable to attachment,
      execution or other legal process.

     

    13.3 
       Rights
      and Duties. 
      No person shall have any rights in or to the Trust Fund or other assets of
      the
      Plan, or under the Plan, except as, and only to the extent, expressly provided
      for in the Plan. To the maximum extent permissible under Section 410 of
      ERISA, neither the Employers, the 

     

     

    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

       

       

      Trustee
        nor the Committee shall be subject to any liability or duty under the Plan
        except as expressly provided in the Plan, or for any other action taken,
        omitted
        or suffered in good faith.

    

     

    13.4 
       No
      Enlargement of Employment Rights. 
      Neither the establishment or maintenance of the Plan, the making of any
      contributions nor any action of any Employer, the Trustee or Committee, shall
      be
      held or construed to confer upon any individual any right to be continued as
      an
      Employee nor, upon dismissal, any right or interest in the Trust Fund or any
      other assets of the Plan other than as provided in the Plan. Each Employer
      expressly reserves the right to discharge any Employee at any time.

     

    13.5 
       Apportionment
      of Duties. 
      All acts required of the Employers under the Plan may be performed by the
      Company for itself and its Affiliates. Any costs incurred by the Company for
      itself or its Affiliates in connection with the Plan and the costs of the Plan,
      if not paid from the Trust Fund pursuant to Section 9.9,
      shall be equitably apportioned among the Company and the other Employers, as
      determined by the Committee (in its discretion). Whenever an Employer is
      permitted or required under the terms of the Plan to do or perform any act,
      matter or thing, it shall be done and performed by any officer or Employee
      of
      the Employer who is thereunto duly authorized by the board of directors of
      the
      Employer.

     

    13.6 
       Merger,
      Consolidation or Transfer. 
      This Plan shall not be merged or consolidated with any other plan, nor shall
      there be any transfer of any assets or liabilities from this Plan to any other
      plan, unless immediately after such merger, consolidation or transfer, each
      Participant’s accrued benefit, if such other plan were then to terminate, is at
      least equal to the accrued benefit to which the Participant would have been
      entitled if this Plan had been terminated immediately before such merger,
      consolidation or transfer. Subject to the foregoing, the Board of Directors
      shall have the power (in its discretion) to direct that this Plan shall
      participate in any such transaction.

     

     

    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

     

     

    13.7 
       Military
      Service. 
      Notwithstanding any contrary Plan provision, Salary Deferrals, Catch-Up
      Contributions and Employer Contributions with respect to the qualified military
      service of an Employee on a Leave of Absence pursuant to
      Section 1.27(b)
      will be provided in accordance with Section 414(u) of the Code. In
      addition, Participant loan repayments under Section 8.4.2
      shall be suspended as permitted under Section 414(u) of the Code, and
      interest on Participant loans shall be adjusted, if necessary, to conform to
      the
      requirements of the Servicemembers Civil Relief Act of 2003 or other applicable
      law.

     

    13.8 
       Applicable
      Law. 
      The provisions of the Plan shall be construed, administered and enforced in
      accordance with ERISA and, to the extent applicable, the laws of the State
      of
      California.

     

    13.9 
       Severability. 
      If any provision of the Plan is held invalid or unenforceable, its invalidity
      or
      unenforceability shall not affect any other provisions of the Plan, and the
      Plan
      shall be construed and enforced as if such provision had not been
      included.

     

    13.10 
       Captions. 
      The captions contained in and the table of contents prefixed to the Plan are
      inserted only as a matter of convenience and for reference and in no way define,
      limit, enlarge or describe the scope or intent of the Plan nor in any way shall
      affect the construction of any provision of the Plan.

    
 

    
      
        
        

      

      
        70

        
          

        

      

      
        
        

      

    

     

    EXECUTION

    In
      Witness Whereof,
      Genentech, Inc., by its duly authorized officers, has executed this restated
      Plan on the date indicated below.

     

    
      
        	 	
                GENENTECH,
                  INC.

              
	 	
                By

              	
                /s/
                  DAVID A. EBERSMAN

              
	 	 	
                David
                  A. Ebersman

              
	 	 	 
	 	
                Title

              	
                Executive
                  Vice President and Chief
                  Financial Office

              
	 	
                Date

              	
                September
                  1, 2006

              
	 	 	 
	 	 	 
	 	
                And
                  by

              	
                /s/
                  DENISE SMITH-HAMS

              
	 	 	
                Denise
                  Smith-Hams

              
	 	 	 
	 	
                Title

              	
                Vice
                  President, Human Resources

              
	 	
                Date

              	
                September
                  1, 2006

              

      

    

     

     

    
      
        
        

        
        

      

      
        71

        
          

        

      

      
        
        

        
        

      

    

    APPENDIX
      A

    PUERTO
      RICO SUPPLEMENT TO THE 

    GENENTECH,
      INC. TAX REDUCTION INVESTMENT PLAN

    

    This
      Puerto Rico Supplement (the “Supplement”) pertains only to Puerto Rico Employees
      who are Participants (“Puerto Rico Participants”) in the Genentech, Inc. Tax
      Reduction Investment Plan (the “Plan”). Except as otherwise specified in this
      Supplement, (1) the provisions of the Plan shall apply to Puerto Rico Employees,
      and (2) all defined terms used in this Supplement shall have the meaning set
      forth in the Plan.

     

    A. 
       Purpose.
      The
      purpose of this Supplement is to comply with the qualification requirements
      of
Section 1165(a)
      of the PR Code. Accordingly, to
      the extent inconsistent with the general provisions of the Plan, the following
      provisions shall apply to Puerto Rico Employees. In
      the event of an amendment to the PR Code or enactment of a successor statute
      that replaces or renumbers a section of the PR Code references in this
      Supplement, all such references shall automatically be renumbered or replaced,
      as applicable.

     

    B. 
       Applicable
      Trust.
      Plan
      assets attributable to Puerto Rico Participants shall be held by the Trustee
      and
      invested under the Plan in the Trust Fund. The Trust Fund, to the extent of
      assets attributable to Puerto Rico Participants, shall be exempt from Puerto
      Rico income taxes in accordance with PR Code Section 1165(a) and exempt from
      United States income taxes pursuant to Section 501(a) of the US Code and Section
      1022(i) of ERISA.

    
       

      C.   Definitions.

    

     

    1. 
       Affiliate.
      “Affiliate”
      and/or “member of a controlled group” means a related employer of the Company
      that belongs to the Company’s “controlled group” (as that term is defined by PR
      Code Section 1028).

     

    
      2.   Compensation.
        “Compensation” for a Puerto Rico Participant, shall:

    

     

     a. 
       for
      purposes of Salary Deferrals, Matching Contributions and Nonelective
      Contributions, have the same meaning as set forth in Section 1.11
      of the Plan, except that references to IRS Form W-2 shall mean Puerto Rico
      Form
      499R-2/W-2PR; and

    

    b. 
       for
      all other purposes, have the same meaning as set forth in Section 5.5.2(e)
      of the Plan, consistent with PR Code Section 1165(h)(9).

    

    3. 
       Direct
      Rollover.
      “Direct Rollover” means, with respect to a Puerto Rico Participant, a Direct
      Rollover as defined in Section 7.4.5
      of the Plan, but with the following applicable definitions:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    a. 
       Distributee:
      A Distributee includes a Puerto Rico Participant.

    

    b. 
       Eligible
      Retirement Plan:
      An Eligible Retirement Plan refers to an individual retirement account described
      in PR Code Section 1169(a), an annuity plan described in PR Code Section
      1165(a), or a qualified trust described in PR Code Section 1165(a), that accepts
      the Distributee’s Eligible Rollover Distribution.

    

    c. 
       Eligible
      Rollover Distribution:
      An Eligible Rollover Distribution includes any distribution of all of the
      balance to the credit of the Distributee, except that an Eligible Rollover
      Distribution does not include: any distribution that is one of a series of
      substantially-equal periodic payments (not less frequently than annually) made
      for the life (or life expectancy) of the Distributee or the joint lives (or
      joint life expectancies) of the Distributee and the Distributee’s designated
      beneficiary, or for a specified period of 10 years or more; and the portion
      of
      any distribution that is not includable in gross income (determined without
      regard to the exclusion for net unrealized appreciation with respect to employer
      securities).

    

    4. 
       Highly
      Compensated Puerto Rico Employees.
      “Highly Compensated Puerto Rico Employees” for each Plan Year means Puerto Rico
      Employees who have greater Compensation than two-thirds of all other Puerto
      Rico
      Employees for that Plan Year (as set forth in Section 1165(e)(3)(E)(iii) of
      the
      PR Code).

     

    5. 
       Non-Highly
      Compensated Puerto Rico Employees.
      “Non-Highly
      Compensated Puerto Rico Employees” for each Plan Year means Puerto
      Rico Employees
      who are not Highly Compensated Puerto Rico Employees.

     

    6. 
       PR
      Code.
      “PR Code” means the Puerto Rico Internal Revenue Code of 1994, as amended.
      Reference to any Section or Subsection of the PR Code and the regulations
      promulgated thereunder includes reference to any comparable or succeeding
      provisions of any legislation that amends, supplements, or replaces such section
      or subsection.

     

    7. 
       Puerto
      Rico Employee.
      “Puerto Rico Employee” means an Employee whose compensation is subject to Puerto
      Rico income tax and who is a bona fide resident of Puerto Rico.

     

    8. 
       Puerto
      Rico Participant.
      “Puerto Rico Participant” means a Puerto Rico Employee who is an Eligible
      Employee, who has become a Participant in the Plan pursuant to
      Section 2.1
      and who has not ceased to be a Participant pursuant to Section 2.7.
      

     

    8. Rollover
      Contribution.
      “Rollover Contribution” means, with respect to a Puerto Rico Participant, a
      Rollover contribution that fulfills the requirements of PR Code Section
      1165(b)(2).

     

    9. 
       US
      Code.
      “US Code” means the United States Internal Revenue Code of 1986, as
      amended.

     

     

    
      2

      
        

      

    

    
    

     

    D. 
       Effective
      Date.
      The
      provisions of this Supplement are amended effective as of January 1,
      2006.

     

    E. 
       Rollover
      Contributions.
      A
      Puerto Rico Participant may elect to make a Rollover Contribution into the
      Plan,
      subject to the requirements of Section 1165(b)(2) of the PR Code. In
      addition, if so directed by the Plan Administrator, the Trustee will accept
      a
      direct transfer from another retirement plan qualified under Section 1165
      of the PR Code on behalf of Puerto Rico Participants. Such transferred amounts
      will be treated as Rollover Contributions.

     

    F. 
       Salary
      Deferrals.

     

    1. 
       A
      Puerto Rico Participant may elect to defer a portion of his or her Compensation
      and to have the amounts of such Salary Deferrals contributed by his or her
      Employer to the Trust Fund. A
      Puerto Rico Participant may elect to defer an amount not less than 1% and not
      more than 10% (the maximum currently permissible under the PR Code), in whole
      increments of 1%.

     

    2. 
       In
      addition to the above, the Actual
      Deferral Percentage for any Highly Compensated Puerto Rico Employee for the
      Plan
      Year who is eligible to have Salary Deferrals allocated to his or her account
      under two or more plans or arrangements described in PR Code Section 1165(e)
      that are maintained by the Employer, shall be determined as if such Salary
      Deferrals were made under a single arrangement.

     

    G. 
       Annual
      Limitation on Salary Deferrals.

     

    1. 
       Notwithstanding
      Section 3.1 of the Plan, a Puerto Rico Participant’s Salary Deferrals are
      limited to the amount specified under the PR Code. As of the Effective Date,
      that is the lesser of 10% of his or her Compensation or $8,000. These limits
      may
      be adjusted from time to time in accordance with applicable Puerto Rico tax
      laws. 

     

    2. 
       Furthermore,
      and until further notice, no ‘catch-up contributions,’ as referenced in US Code
      Section 414(v), are currently allowed under the PR Code.

     

    H. 
       Minimum
      Coverage Requirements.
      In applying the statutory minimum coverage requirements to Puerto Rico
      Employees, which as to Employees other than Puerto Rico Employees are governed
      by US Code Section 410(b), the applicable provisions of the PR Code shall
      govern. In accordance with such provisions:

    

    1. 
       at
      least 70% or more of Non-Highly Compensated Puerto Rico Employees are covered
      or
      eligible to participate in the Plan;

    

    2. 
       the
      Plan shall benefit a percentage of Non-Highly Compensated Puerto Rico Employees
      that is at least 70% of the percentage of Highly Compensated Puerto Rico
      Employees who benefit under the Plan; or

     

    3. 
       the
      Plan shall pass the ‘average benefit test’ (as described in PR Code Section
      1165(a)(3)(B)).

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    I. 
       Nondiscrimination
      Testing Rules.
      Notwithstanding
      Section 3.1 of
      the Plan, which sets out the nondiscrimination provisions of the Plan with
      respect to Eligible Employees other than Puerto Rico Employees, the following
      nondiscrimination requirements shall apply to Puerto Rico
      Employees:

    

    1. 
       ‘Puerto
      Rico Actual Deferral Percentage Test’
      means the Puerto Rico Actual Deferral Percentage (as defined in subsection
      b
      below) of Highly Compensated Puerto Rico Employees for any Plan Year as compared
      to the Puerto Rico Actual Deferral Percentage for Non-Highly Compensated Puerto
      Rico Employees that must meet either of the following tests:

     

    a. 
       The
      Puerto Rico Actual Deferral Percentage of Highly Compensated Puerto Rico
      Employees shall not be more than the Puerto Rico Actual Deferral Percentage
      of
      Non-Highly Compensated Puerto Rico Employees multiplied by 1.25; or

     

    b. 
       The
      Puerto Rico Actual Deferral Percentage of Highly Compensated Puerto Rico
      Employees shall not be more than the Puerto Rico Actual Deferral Percentage
      of
      Non-Highly Compensated Puerto Rico Employees multiplied by 2.0 and the excess
      of
      the Puerto Rico Actual Deferral Percentage of Highly Compensated Puerto Rico
      Employees over the Actual Deferral Percentage for Non-Highly Compensated Puerto
      Rico Employees is not more than 2 percentage points.

     

    2. 
       ‘Puerto
      Rico Actual Deferral Percentage’
      means a percentage calculated separately for each of the following groups
      (i) Highly Compensated Puerto Rico Employees, and (ii) Non-Highly
      Compensated Puerto Rico Employees.

     

    3. 
       Determination
      of Puerto Rico Actual Deferral Percentage.
      For each group being tested, the Puerto Rico Actual Deferral Percentage shall
      be
      the average of the ‘Employer Contributions’ (as defined in subsection 4 below)
      actually deposited in the Trust on behalf of each Puerto Rico Participant for
      the Plan Year, divided by his or her Compensation for the Plan Year (calculated
      separately for each member of each group).

     

    4. 
       ‘Employer
      Contributions’
      mean Salary Deferrals and Qualified Nonelective Contributions (defined in
      subsection 5.b below) made on behalf of a Puerto Rico Participant with respect
      to the Plan Year being tested.

     

    5. 
       Corrective
      Procedures.
      If the Puerto Rico Actual Deferral Percentage Test is not met as of the end
      of
      the Plan Year, then the Committee may, in its sole and absolute discretion,
      take
      either of the following actions:

     

    a. 
       cause
      the Salary Deferrals for Highly Compensated Puerto Rico Employees to be reduced
      and refunded to Highly Compensated Puerto Rico Employees until the Puerto Rico
      Actual Deferral Percentage Test is satisfied. The sequence of such reductions
      and refunds shall begin with Highly Compensated Puerto Rico Employee(s) who
      deferred the greatest percentage starting with the unmatched Salary Deferrals,
      then the second greatest percentage, continuing until the Puerto Rico Actual
      Deferral Percentage Test is satisfied. This process shall continue through
      the
      remaining unmatched Salary Deferrals until all such applicable unmatched

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

       

      Salary
        Deferrals have been reduced. Next, the matched Salary Deferrals shall be
        reduced
        until the Puerto Rico Actual Deferral Percentage Test is satisfied. Once
        the
        Puerto Rico Actual Deferral Percentage Test is met, then the Committee shall
        direct the Trustee to distribute to each affected Highly Compensated Puerto
        Rico
        Employee the amount of the reduction of his or her Salary Deferrals, and
        to
        treat as forfeitures the proportionate amount of Matching Contributions,
        if any,
        together with the earnings (gains or losses) allocable thereto. The Committee
        shall designate such distribution and forfeiture as a distribution and
        forfeiture of excess contributions, determine the amount of the allocable
        earnings (gains or losses) to be distributed as it deems appropriate in it
        sole
        and absolute discretion, and cause such distributions and forfeitures to
        occur
        prior to the end of the Plan Year following the Plan Year in which the excess
        Salary Deferrals and related Matching Contributions were made;
        or

    

     

    b. 
       require
      the Employer to make “Qualified Nonelective Contributions” (as such amounts are
      contemplated in Article 1165-8(b)(3) of the Puerto Rico Tax Regulations) on
      behalf of each Non-Highly Compensated Puerto Rico Employee for the Plan Year
      in
      which the Puerto Rico Actual Deferral Percentage Test was not met. If made,
      a
      Qualified Nonelective Contribution shall be consistent with the provisions
      of
      Article 1165-8(b)(3) of the Puerto Rico Tax Regulations, and shall be in
      such amount as will cause the Puerto Rico Average Deferral Percentage Test
      to be
      met. Any such Qualified Nonelective Contributions will be allocated, in the
      sole
      discretion of the Committee, to the Account of Non-Highly Compensated Puerto
      Rico Employees (1) in an equal dollar amount based on the number of Non-Highly
      Compensated Puerto Rico Employees eligible to receive an allocation of the
      Qualified Nonelective Contributions, or (2) to such Non-Highly Compensated
      Puerto Rico Employees and in such amounts as are necessary to satisfy the Puerto
      Rico Actual Deferral Percentage Test.

     

    J. 
       Company
      Contributions.
      The Plan Administrator, in its discretion, may elect to have all or a portion
      of
      the Company contributions (that meet the requirements of the applicable Puerto
      Rico Treasury Regulations) for a calendar year taken into account in calculating
      the PR Code Section 1165(a)(3) tests for that year.

     

    K. 
       In-Service
      Withdrawals.
      In
      accordance with Sections 8.2
      and 8.3
      of the Plan, a Puerto Rico Participant who is an Employee may make a withdrawal
      from his or her Accounts in cash (or its equivalent). Any application for a
      withdrawal shall be submitted to such person, in such manner and within such
      advance notice period as the Committee (in its discretion) shall specify. The
      active membership of a Puerto Rico Participant who makes a withdrawal under
      Section 8.2
      shall be suspended, in the manner set forth in Section 8.2.3,
      for each payroll period that begins during the period starting on the withdrawal
      approval date and ending 12 months following that date. Following that
      suspension period, the Puerto Rico Participant may again become an Active
      Participant and resume his or her Salary Deferrals by again electing to become
      an Active Participant in the Plan.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    L. 
       Distributions.
      Notwithstanding
      anything in the Plan to the contrary, for Puerto Rico Participants the Threshold
      Amount, as defined in Section 7.3.1
      of the Plan, shall mean $1,000. Further, the provisions of Section 7.3.2(b)
      of the Plan shall not apply to Puerto Rico Participants.

     

    M. 
       Plan
      Provisions and Terms.
      All
      terms and provisions of the Plan shall apply to this Supplement, except that
      where the terms and provisions of the Plan and this Supplement conflict, the
      terms and provisions of this Supplement shall govern.

     

    N. 
       Miscellaneous

     

    1. 
       Information
      between Plan Administrator and Trustee.
      The Plan Administrator (or, as applicable, the Committee) and Trustee will
      furnish each other such information relating to the Plan and Trust as may be
      required under the PR Code and any regulations issued or forms adopted by the
      Puerto Rico Treasury Department thereunder or under ERISA and any regulations
      issued or forms adopted by the US Labor Department thereunder.

     

    2. 
       Governing
      Law.
      With respect to Puerto Rico Employees, the Plan will be construed, administered
      and enforced according to the laws of the Commonwealth of Puerto Rico to the
      extent such laws are not inconsistent with and preempted by ERISA and/or any
      applicable Section of the US Code. Notwithstanding any provision of this
      Supplement, to the extent that any provision described herein is modified by
      applicable Puerto Rico law, any such applicable modification shall be deemed
      to
      be incorporated herein by reference.

     

     

    
      
        
        

      

      
        6

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