Document:

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       6-9-2009

      

      

      

      

      

      

      

      

      

      

      

      

      MINNESOTA
POWER AND AFFILIATED COMPANIES

      RETIREMENT
SAVINGS AND STOCK OWNERSHIP PLAN

      

      

      

      (Amendment
and Restatement Effective January 1, 2009)

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      MINNESOTA
POWER AND AFFILIATED COMPANIES

      RETIREMENT
SAVINGS AND STOCK OWNERSHIP PLAN

      

      

      Table of
Contents

      

      
        	
                ARTICLE
      I

              	 
      	
                GENERAL

              	
                1

              
	
                Sec.
      1.1

              	 
      	
                Name
      of Plan

              	
                1

              
	
                Sec.
      1.2

              	 
      	
                Purpose

              	
                1

              
	
                Sec.
      1.3

              	 
      	
                Background
      and Effective Dates

              	
                1

              
	
                Sec.
      1.4

              	 
      	
                Company

              	
                1

              
	
                Sec.
      1.5

              	 
      	
                Construction
      and Applicable Law

              	
                1

              
	
                Sec.
      1.6

              	 
      	
                Transition
      Rules

              	
                2

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      II

              	 
      	
                DEFINITIONS

              	
                3

              
	
                Sec.
      2.1

              	 
      	
                Account

              	
                3

              
	
                Sec.
      2.2

              	 
      	
                Active
      Participant

              	
                3

              
	
                Sec.
      2.3

              	 
      	
                Administrative
      Delegate

              	
                3

              
	
                Sec.
      2.4

              	 
      	
                After
      Tax Contributions

              	
                3

              
	
                Sec.
      2.5

              	 
      	
                Aggregate
      Continuous Service

              	
                3

              
	
                Sec.
      2.6

              	 
      	
                Annual
      Pay

              	
                3

              
	
                Sec.
      2.7

              	 
      	
                Bargaining
      Unit Employee

              	
                4

              
	
                Sec.
      2.8

              	 
      	
                Before
      Tax Contributions

              	
                4

              
	
                Sec.
      2. 9

              	 
      	
                Beneficiary

              	
                4

              
	
                Sec.
      2.10

              	 
      	
                Code

              	
                4

              
	
                Sec.
      2.11

              	 
      	
                Committee

              	
                4

              
	
                Sec.
      2.12

              	 
      	
                Common
      Control

              	
                4

              
	
                Sec.
      2.13

              	 
      	
                Company
      Stock

              	
                4

              
	
                Sec.
      2.14

              	 
      	
                Employment
      Commencement Date

              	
                4

              
	
                Sec.
      2.15

              	 
      	
                ERISA

              	
                5

              
	
                Sec.
      2.16

              	 
      	
                ESOP

              	
                5

              
	
                Sec.
      2.17

              	 
      	
                Exempt
      Loan

              	
                5

              
	
                Sec.
      2.18

              	 
      	
                Flexible
      Compensation Program

              	
                6

              
	
                Sec.
      2.19

              	 
      	
                Fund

              	
                6

              
	
                Sec.
      2.20

              	 
      	
                Group
      I Participant

              	
                6

              
	
                Sec.
      2.21

              	 
      	
                Group
      II Participant

              	
                7

              
	
                Sec.
      2.22

              	 
      	
                Highly
      Compensated Employe

              	
                7

              
	
                Sec.
      2.23

              	 
      	
                Leased
      Employee

              	
                7

              
	
                Sec.
      2.24

              	 
      	
                Named
      Fiduciary

              	
                7

              
	
                Sec.
      2.25

              	 
      	
                Non-Bargaining
      Unit Employee

              	
                7

              
	
                Sec.
      2.26

              	 
      	
                Non-Highly
      Compensated Employee

              	
                8

              
	
                Sec.
      2.27

              	 
      	
                Normal
      Retirement Age

              	
                8

              
	
                Sec.
      2.28

              	 
      	
                Participant

              	
                8

              
	
                Sec.
      2.29

              	 
      	
                Participating
      Employer

              	
                8

              
	
                Sec.
      2.30

              	 
      	
                Partnership
      Allocation

              	
                8

              
	
                Sec.
      2.31

              	 
      	
                Period
      of Continuous Service

              	
                8

              
	
                Sec.
      2.32

              	 
      	
                Periodic
      Pay

              	
                8

              
	
                Sec.
      2.33

              	 
      	
                Plan
      Year

              	
                8

              
	
                Sec.
      2.34

              	 
      	
                Qualified
      Employee

              	
                8

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                Sec.
      2.35

              	 
      	
                Recognized
      Break in Service

              	
                9

              
	
                Sec.
      2.36

              	 
      	
                Results
      Sharing Award

              	
                9

              
	
                Sec.
      2.37

              	 
      	
                Retirement
      Plan A

              	
                9

              
	
                Sec.
      2.38

              	 
      	
                Retirement
      Plan B

              	
                9

              
	
                Sec.
      2.37

              	 
      	
                Rollover
      Contributions

              	
                9

              
	
                Sec.
      2.38

              	 
      	
                Roth
      401(k) Contributions

              	
                9

              
	
                Sec.
      2.39

              	 
      	
                Salary

              	
                9

              
	
                Sec.
      2.40

              	 
      	
                Supplemental
      Retirement Plan

              	
                10

              
	
                Sec.
      2.41

              	 
      	
                Termination
      of Employment

              	
                10

              
	
                Sec.
      2.42

              	 
      	
                Testing
      Wages

              	
                10

              
	
                Sec.
      2.43

              	 
      	
                Total
      Disability

              	
                10

              
	
                Sec.
      2.44

              	 
      	
                Trust
      Agreement

              	
                10

              
	
                Sec.
      2.45

              	 
      	
                Trustee

              	
                11

              
	
                Sec.
      2.48

              	 
      	
                Unallocated
      Reserve

              	
                11

              
	
                Sec.
      2.49

              	 
      	
                Valuation
      Date

              	
                11

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      III

              	 
      	
                PLAN
      PARTICIPATION

              	
                12

              
	
                Sec.
      3.1

              	 
      	
                Eligibility
      for Participation

              	
                12

              
	
                Sec.
      3.2

              	 
      	
                Duration
      of Participation

              	
                13

              
	
                Sec.
      3.3

              	 
      	
                Reemployment

              	
                13

              
	
                Sec.
      3.4

              	 
      	
                No
      Guarantee of Employment

              	
                13

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      IV

              	 
      	
                ESOP
      PROVISIONS

              	
                14

              
	
                Sec.
      4.1

              	 
      	
                Leveraged
      Stock Acquisitions

              	
                14

              
	
                Sec.
      4.2

              	 
      	
                Leveraged
      ESOP Contributions

              	
                14

              
	
                Sec.
      4.3

              	 
      	
                Application
      of Dividends

              	
                14

              
	
                Sec.
      4.4

              	 
      	
                Allocations

              	
                15

              
	
                Sec.
      4.5

              	 
      	
                Time
      of Contributions

              	
                21

              
	
                Sec.
      4.6

              	 
      	
                Long
      Term Disability Allocations

              	
                21

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      V

              	 
      	
                PARTICIPANT
      CONTRIBUTIONS

              	
                22

              
	
                Sec.
      5.1

              	 
      	
                Before
      Tax Contributions

              	
                22

              
	
                Sec.
      5.2

              	 
      	
                After
      Tax Contributions

              	
                23

              
	
                Sec.
      5.3

              	 
      	
                Rollover
      Contributions

              	
                23

              
	
                Sec.
      5.4

              	 
      	
                Roth
      401(k) Contributions

              	
                24

              
	
                Sec.
      5.5

              	 
      	
                Amounts
      Paid After Termination of Employment

              	
                24

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      VI

              	 
      	
                LIMITS
      ON ALLOCATIONS AND BENEFITS

              	
                25

              
	
                Sec.
      6.1

              	 
      	
                Limitation
      on Allocations

              	
                25

              
	
                Sec.
      6.2

              	 
      	
                Limit
      on Before Tax Contributions

              	
                26

              
	
                Sec.
      6.3

              	 
      	
                Return
      of Excess Deferrals

              	
                26

              
	
                Sec.
      6.4

              	 
      	
                Adjustment
      of Matching Allocations Required by Code § 401(m)

              	
                27

              
	
                Sec.
      6.5

              	 
      	
                Adjustment
      of Before Tax Contributions Required by Code § 401(k)

              	
                29

              
	
                Sec.
      6.6

              	 
      	
                Testing
      Arrangements If Employer Has More Than One Plan

              	
                32

              

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                ARTICLE
      VII

              	 
      	
                INDIVIDUAL
      ACCOUNTS

              	
                33

              
	
                Sec.
      7.1

              	 
      	
                Accounts
      for Participants

              	
                33

              
	
                Sec.
      7.2

              	 
      	
                Investment
      of Accounts

              	
                34

              
	
                Sec.
      7.3

              	 
      	
                Investment
      Funds

              	
                34

              
	
                Sec.
      7.4

              	 
      	
                Valuation
      of Accounts

              	
                35

              
	
                Sec.
      7.5

              	 
      	
                Provisions
      Regarding ADESA Spin-Off

              	
                35

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      VIII

              	 
      	
                DESIGNATION
      OF BENEFICIARY

              	
                37

              
	
                Sec.
      8.1

              	 
      	
                Persons
      Eligible to Designate

              	
                37

              
	
                Sec.
      8.2

              	 
      	
                Special
      Requirements for Married Participants

              	
                37

              
	
                Sec.
      8.3

              	 
      	
                Form
      and Method of Designation

              	
                37

              
	
                Sec.
      8.4

              	 
      	
                No
      Effective Designation

              	
                37

              
	
                Sec.
      8.5

              	 
      	
                Beneficiary
      May Designate

              	
                37

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      IX

              	 
      	
                BENEFIT
      REQUIREMENTS

              	
                38

              
	
                Sec.
      9.1

              	 
      	
                Benefit
      Upon Termination of Employment

              	
                38

              
	
                Sec.
      9.2

              	 
      	
                Death

              	
                38

              
	
                Sec.
      9.3

              	 
      	
                Termination
      of Employment Prior to July 1, 2001

              	
                38

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      X

              	 
      	
                DISTRIBUTION
      OF BENEFITS

              	
                39

              
	
                Sec.
      10.1

              	 
      	
                Distribution
      Following Termination of Employment

              	
                39

              
	
                Sec.
      10.2

              	 
      	
                Accounts
      Totaling $1,000 or Less

              	
                41

              
	
                Sec.
      10.3

              	 
      	
                Form
      of Distribution

              	
                41

              
	
                Sec.
      10.4

              	 
      	
                Accounting
      Following Termination of Employment

              	
                41

              
	
                Sec.
      10.5

              	 
      	
                Reemployment

              	
                41

              
	
                Sec.
      10.6

              	 
      	
                Source
      of Benefits

              	
                41

              
	
                Sec.
      10.7

              	 
      	
                Incompetent
      Payee

              	
                41

              
	
                Sec.
      10.8

              	 
      	
                Benefits
      May Not Be Assigned or Alienated

              	
                42

              
	
                Sec.
      10.9

              	 
      	
                Payment
      of Taxes

              	
                42

              
	
                Sec.
      10.10

              	 
      	
                Conditions
      Precedent

              	
                42

              
	
                Sec.
      10.11

              	 
      	
                Withdrawals
      Before Termination of Employment

              	
                42

              
	
                Sec.
      10.12

              	 
      	
                Dividend
      Withdrawals

              	
                43

              
	
                Sec.
      10.13

              	 
      	
                Rollovers
      to Other Qualified Plans

              	
                43

              
	
                Sec.
      10.14

              	 
      	
                Lost
      Participants

              	
                44

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      XI

              	 
      	
                LOANS
      TO PARTICIPANTS

              	
                45

              
	
                Sec.
      11.1

              	 
      	
                Loans
      to Participants

              	
                45

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      XII

              	 
      	
                FUND

              	
                47

              
	
                Sec.
      12.1

              	 
      	
                Composition

              	
                47

              
	
                Sec.
      12.2

              	 
      	
                Trustee

              	
                47

              
	
                Sec.
      12.3

              	 
      	
                Compensation
      and Expenses of Trustee

              	
                47

              
	
                Sec.
      12.4

              	 
      	
                Investment
      in Company Stock

              	
                47

              
	
                Sec.
      12.5

              	 
      	
                No
      Diversion

              	
                47

              
	
                Sec.
      12.6

              	 
      	
                Voting
      of Company Stock

              	
                48

              
	
                Sec.
      12.7

              	 
      	
                Tender
      or Exchange Offers Regarding Company Stock

              	
                49

              
	
                Sec.
      12.8

              	 
      	
                Nonterminable
      ESOP Protections

              	
                50

              
	
                Sec.
      12.9

              	 
      	
                Other
      ESOP Provisions

              	
                50

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                ARTICLE
      XIII

              	 
      	
                ADMINISTRATION
      OF PLAN

              	
                51

              
	
                Sec.
      13.1

              	 
      	
                Administration
      by Company

              	
                51

              
	
                Sec.
      13.2

              	 
      	
                Certain
      Fiduciary Provisions

              	
                51

              
	
                Sec.
      13.3

              	 
      	
                Evidence

              	
                52

              
	
                Sec.
      13.4

              	 
      	
                Correction
      of Errors

              	
                52

              
	
                Sec.
      13.5

              	 
      	
                Records

              	
                52

              
	
                Sec.
      13.6

              	 
      	
                Claims
      Procedure

              	
                52

              
	
                Sec.
      13.7

              	 
      	
                Bonding

              	
                52

              
	
                Sec.
      13.8

              	 
      	
                Waiver
      of Notice

              	
                53

              
	
                Sec.
      13.9

              	 
      	
                Agent
      for Legal Process

              	
                53

              
	
                Sec.
      13.10

              	 
      	
                Indemnification

              	
                53

              
	
                Sec.
      13.11

              	 
      	
                Benefits
      for Reemployed Veterans

              	
                53

              
	
                Sec.
      13.12

              	 
      	
                Application
      of Forfeitures

              	
                55

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      XIV

              	 
      	
                AMENDMENT,
      TERMINATION, MERGER

              	
                56

              
	
                Sec.
      14.1

              	 
      	
                Amendment

              	
                56

              
	
                Sec.
      14.2

              	 
      	
                Permanent
      Discontinuance of Contributions

              	
                56

              
	
                Sec.
      14.3

              	 
      	
                Termination

              	
                56

              
	
                Sec.
      14.4

              	 
      	
                Partial
      Termination

              	
                56

              
	
                Sec.
      14.5

              	 
      	
                Merger,
      Consolidation, or Transfer of Plan Assets

              	
                56

              
	
                Sec.
      14.6

              	 
      	
                Deferral
      of Distributions

              	
                56

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      XV

              	 
      	
                TOP-HEAVY
      PLAN PROVISIONS

              	
                58

              
	
                Sec.
      15.1

              	 
      	
                Key
      Employee Defined

              	
                58

              
	
                Sec.
      15.2

              	 
      	
                Determination
      of Top-Heavy Status

              	
                58

              
	
                Sec.
      15.3

              	 
      	
                Minimum
      Contribution Requirement

              	
                59

              
	
                Sec.
      15.4

              	 
      	
                Definition
      of Employer

              	
                60

              
	
                Sec.
      15.5

              	 
      	
                Exception
      for Collective Bargaining Unit

              	
                60

              
	 
      	 
      	 
      	 
      
	
                SCHEDULE
      1

              	 
      	
                PARTICIPATING
      EMPLOYERS

              	
                61

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      MINNESOTA
POWER AND AFFILIATED COMPANIES

      RETIREMENT
SAVINGS AND STOCK OWNERSHIP PLAN

      

      (Amendment
and Restatement Effective January 1, 2009)

      

      

      ARTICLE
I

      GENERAL

      

                   Sec.
1.1                      Name of
Plan.  The name of the
stock bonus and employee stock ownership plan set forth herein is “Minnesota
Power and Affiliated Companies Retirement Savings and Stock Ownership
Plan.”  It is sometimes herein referred to as the “Plan.”

      

      Sec.
1.2                      Purpose.  The purposes of
the Plan are to provide eligible employees with a means to acquire an ownership
interest in the Company, to share in the growth and prosperity of the Company
and its subsidiaries, and to supplement retirement income.

      

      Sec.
1.3                      Background
and Effective Dates.  The Plan is the
result of the January 1, 2002 merger of the Minnesota Power and Affiliated
Companies Supplemental Retirement Plan (the “Supplemental Retirement Plan”),
which was originally established effective January 1, 1970, and the Minnesota
Power and Affiliated Companies Employee Stock Ownership Plan (the “ESOP”), which
was originally established effective January 1, 1975.

      

      Sec.
1.4                      Company.  The “Company” is
ALLETE, Inc., a Minnesota corporation (formerly named “Minnesota Power,
Inc.”).

      

      Sec.
1.5                      Construction
and Applicable Law.  The Plan is
intended to meet the requirements for qualification as a stock bonus plan under
Code § 401(a) and as an employee stock ownership plan under Code §
4975(e)(7).  The Plan is designed to invest primarily in qualifying
employer securities meeting the requirements of Code §§ 4975(e)(8) and
409(1).  The Plan includes a qualified cash or deferred arrangement
intended to meet the requirements of Code § 401(k).  The Plan is
intended to be in full compliance with applicable requirements of
ERISA.  The Plan shall be administered and construed in a manner
consistent with said intent.  It shall also be construed and
administered according to the laws of the State of Minnesota to the extent that
such laws are not preempted by the laws of the United States of
America.  All controversies, disputes, and claims arising hereunder
shall be submitted to the United States District Court for the District of
Minnesota, except as otherwise provided in the Trust Agreement.  The
Plan shall be construed in accordance with the following rules:

      

      
        	
                 
      

              	
                (a)

              	
                Headings
      at the beginning of articles and sections hereof are for convenience of
      reference, shall not be considered a part of the text of the Plan, and
      shall not influence its
construction.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Capitalized
      terms used in the Plan shall have their meaning as defined in the Plan
      unless the context clearly indicates to the
  contrary.

              

      

      
        	
                 
      

              	
                (c)

              	
                Any
      reference to the masculine gender includes the feminine and vice
      versa.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Use
      of the words “hereof”, “herein”, “hereunder”, or similar compounds of the
      word “here” shall mean and refer to the entire Plan unless the context
      clearly indicates to the contrary.

              

      

      

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	
                (e)

              	
                The
      provisions of the Plan shall be construed as a whole in such manner as to
      carry out the purpose thereof and shall not be construed separately
      without relation to the context.

              

      

      

      Sec.
1.6                      Transition
Rules.  Certain
provisions of the Plan as amended and restated effective January 1, 2009 are
intended to have other effective dates. These include:

      

      
        	
                 
      

              	
                (a)

              	
                Sec.
      13.11 regarding military service is effective as of December 12,
      1994.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Certain
      provisions are intended to reflect and comply with the Small Business Job
      Protection Act of 1996, P.L. 104-88 (“SBJPA”) and the Taxpayer Relief Act
      of 1997, P.L. 105-34 (“TRA 97”), and other applicable legal
      requirements.  These provisions of the Plan will be effective as
      of the required date, and the Plan will be applied and interpreted in a
      manner that is consistent with a good faith interpretation of the
      applicable legal requirements.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Sec.
      4.4(d) regarding Bargaining Unit Allocations is effective April 1,
      2001.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                The
      Plan reflects the provisions of the Community Renewal Tax Relief Act of
      2000 regarding elective reductions for qualified transportation fringe
      benefits.  These provisions are effective January 1,
      2001.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                The
      Plan reflects the provisions of the Economic Growth and Tax Relief
      Reconciliation Act of 2002 (“EGTRRA”).  Unless otherwise
      required by EGTRRA, these provisions are effective January 1,
      2002.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                The
      Plan modifies the benefit provisions of the Supplemental Retirement Plan
      and ESOP in various ways.  Unless otherwise stated, these
      changes are effective January 1,
2002.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                Provisions
      required by the Code §401(k) regulations effective January 1, 2006 are
      effective as of said date.

              

      

      

      
        	
                 
      

              	
                (h)

              	
                Certain
      amendments effective October 1, 2006 were made by the amendment and
      restatement as of said date.

              

      

       

      
        	
                (i)  

              	
                Amendments
      related to Code §415 are effective January 1,
  2008.

              

      

      

      
        	
                 
      

              	
                (j)

              	
                The
      amendment to Sec. 6.3 requiring distribution of “gap period” earnings with
      respect to “excess deferrals” under Code §402(g) is effective January 1,
      2007.

              

      

      

      
        	
                 
      

              	
                (k)

              	
                The
      amendments to Sec. 6.3, Sec. 6.4(f) and 6.5(e) deleting the “gap period”
      income distribution requirement are effective January 1,
    2008.

              

      

      

      
        	
                 
      

              	
                (l)

              	
                Amendments
      required by the Pension Protection Act of 2006 (“PPA”) are effective as of
      the dates required by PPA.

              

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      ARTICLE
II

      DEFINITIONS

      

      Sec.
2.1                      Account.  “Account” means a
Participant’s, Beneficiary’s or alternate payee’s interest in the Fund of any of
the types described in Sec. 7.1.

      

      Sec.
2.2                      Active
Participant.  “Active
Participant” means an individual who is both a Participant and a Qualified
Employee.

      

      Sec.
2.3                      Administrative
Delegate.  “Administrative
Delegate” means any recordkeeper or other service provider to which the Company
has delegated administrative responsibilities under the Plan.

      

      Sec.
2.4                      After Tax
Contributions.  “After Tax
Contributions” are amounts contributed pursuant to Sec. 5.2.

      

      Sec.
2.5                      Aggregate
Continuous Service.  An employee’s
“Aggregate Continuous Service” is equal to the aggregate duration of his or her
Periods of Continuous Service.  However, except as follows, service
with an employer prior to the date it came under Common Control with the Company
shall be disregarded for purposes of determining Aggregate Continuous
Service:

      

      
        	
                 
      

              	
                (a)

              	
                Service
      with Enventis, Inc. prior to the date it was acquired by the Company shall
      be included in Aggregate Continuous
Service.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Service
      with Blandin Paper Company prior to March 1, 2000 shall be included in the
      Aggregate Continuous Service of employees at the generating facility
      purchased by the Company from Blandin Paper
  Company.

              

      

      

      Sec.
2.6                      Annual
Pay.  A
Participant’s “Annual Pay” for purposes of allocating the Partnership Allocation
for a Plan Year means his or her straight time pay received during that Plan
Year, subject to the following:

      

      
        	
                 
      

              	
                (a)

              	
                Annual
      Pay means the gross amount before any reduction pursuant to Code §§ 125,
      132(f)(4), or 401(k).

              

      

      

      (b)           Annual
Pay excludes all other payments such as:

      

      
        	
                (1)  

              	
                Overtime compensation, except
      when overtime is paid to employees on 12-hour shift schedules for the
      purpose of leveling their pay so that their aggregate pay is equivalent to
      pay for a 40-hour week.

              

      

      

      
        	
                (2)  

              	
                All bonuses and incentive
      pay;

              

      

      

      
        	
                (3)  

              	
                Expense
    allowances;

              

      

      

      
        	
                (4)  

              	
                Commission
    payments;

              

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      
        	
                (5)  

              	
                Employer contributions to the
      Plan or other employee benefit
plans;

              

      

      

      
        	
                (6)  

              	
                Results Sharing
      Awards;

              

      

      

      
        	
                (7)  

              	
                Any other payments of a nature
      similar to the foregoing.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Annual
      Pay shall not exceed the applicable limit under Code § 401(a)(17), which
      is $245,000 for 2009 and is subject to a cost of living adjustment for
      years after 2009.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Annual
      Pay excludes any amounts paid to an individual prior to the date he or she
      becomes a Participant under Sec.
3.1(b).

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Annual
      Pay excludes amounts paid for service as a Bargaining Unit
      Employee.

              

      

      

      Sec.
2.7                      Bargaining
Unit Employee.  “Bargaining Unit
Employee” means a Qualified Employee who is covered by the provisions of a
collective bargaining agreement between his or her collective bargaining
representative and a Participating Employer that provides for his or her
participation in the Plan.

      

      Sec.
2.8                      Before
Tax Contributions.  “Before Tax
Contributions” are amounts contributed pursuant to Sec. 5.1, including Salary
Reduction Contributions, Results Sharing Contributions, and Flexible Dollars
Contributions.

      

      Sec.
2.9                      Beneficiary.  “Beneficiary”
means the person or persons designated as such pursuant to Article VIII who
survive the Participant.

      

      Sec.
2.10                      Code.  “Code” means the
Internal Revenue Code of 1986 as from time to time amended.

      

      Sec.
2.11                      Committee.  “Committee” means
the committee appointed by the Company to administer the Plan.

      

      Sec.
2.12                      Common
Control.  An entity
(whether corporation, partnership, sole proprietorship, or otherwise) is under
“Common Control” with another entity (i) if both entities are corporations which
are members of a controlled group of corporations as defined in Code § 414(b),
or (ii) if both entities are trades or businesses (whether or not incorporated)
which are under common control as defined in regulations under Code § 414(c), or
(iii) if both entities are members of an “affiliated service group” as defined
in Code § 414(m), or (iv) to the extent both entities are required to be
aggregated pursuant to regulations under Code § 414(o).  In applying
the preceding sentence for purposes of Sec. 6.1, Code § 414(b) and (c) are
deemed to be modified as provided in Code § 415(h).

      

      Sec.
2.13                      Company
Stock.  “Company Stock”
means common stock of the Company.

      

      Sec.
2.14                      Employment
Commencement Date.  “Employment
Commencement Date” means the date on which an employee first performs service as
a common law employee of a Participating Employer or Affiliate.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      Sec.
2.15                      ERISA.  “ERISA” means the
Employee Retirement Income Security Act of 1974 as from time to time
amended.

      

      Sec.
2.16                      ESOP.  “ESOP” means the
Minnesota Power and Affiliated Companies Employee Stock Ownership Plan, a
predecessor to this Plan.

      

      Sec.
2.17                      Exempt
Loan.   “Exempt
Loan” means a direct or indirect extension of credit to the Plan that is not
prohibited by Code § 4975, subject to the following:

      

      
        	
                 
      

              	
                (a)

              	
                The
      Exempt Loan may be made or guaranteed by either a party in interest (as
      defined in § 3(14) of ERISA) or disqualified person (as defined in Code §
      4975).

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      proceeds of the Exempt Loan must be used solely, and within a reasonable
      time after their receipt, to acquire Company Stock for the Unallocated
      Reserve, or to repay such Exempt Loan, or to repay a prior Exempt Loan, or
      for any combination of the foregoing
purposes.

              

      

      

      (c)           The
Exempt Loan must be without recourse against the Fund except that:

      

      
        	
                 
      

              	
                (1)

              	
                The
      Company Stock acquired with the proceeds of the Exempt Loan may be pledged
      or otherwise used to secure repayment of the Exempt Loan,
    and

              

      

      

      
        	
                 
      

              	
                (2)

              	
                Any
      Company Stock which was acquired with the proceeds of a prior Exempt Loan
      which was repaid with the proceeds of the Exempt Loan may be pledged or
      otherwise used to secure repayment of the Exempt Loan,
  and

              

      

      

      
        	
                 
      

              	
                (3)

              	
                Any
      cash contributions made to the Plan that are made for the purpose of
      satisfying the Plan’s obligations under the Exempt Loan (and earnings
      thereon) may be pledged or otherwise used to secure repayment of the
      Exempt Loan, and

              

      

      

      
        	
                 
      

              	
                (4)

              	
                The
      unallocated earnings attributable to unallocated shares of Company Stock
      acquired with the proceeds of an Exempt Loan may be pledged or otherwise
      used as security for another Exempt
Loan.

              

      

      

      (d)           The
Exempt Loan must provide for principal and interest to be paid over aspecific term.

      

      (e)           The
number of shares which shall be so released from the Unallocated
Reserve

      for a
particular Plan Year shall equal the number of shares of Company Stock held in
the Unallocated Reserve immediately before the release of any shares for the
Plan Year multiplied by a fraction with a numerator equal to all principal and
interest payments made on the Exempt Loan for said Plan Year and a denominator
equal to the total principal and interest to be paid under the Exempt Loan for
the current Plan Year and all subsequent years.  The number of future
years for which principal and interest are payable under the Exempt Loan must be
definitely ascertainable and must be determined without taking into account any
possible extensions or renewal periods.  If the interest rate under
the loan is 

       

      
         

        
          5

        

        
          
          

        

      

      variable,
the amount of future interest payable shall be calculated by using the interest
rate in effect on the last day of the current Plan Year.  A separate
suspense account will be maintained for each Exempt Loan, and the foregoing
calculations will be made separately for each such loan and suspense
account.

      

      
        	
                 
      

              	
                (f)

              	
                The
      rate of interest (which may be fixed or variable) on the Exempt Loan must
      not be in excess of a reasonable rate of interest considering all relevant
      factors including (but not limited to) the amount and duration of the
      loan, the security given, the guarantees involved, the credit standing of
      the Plan, the Company, and the guarantors, and the generally prevailing
      rates of interest.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                In
      the event of default upon an Exempt Loan, the fair market value of Company
      Stock and other assets which can be transferred in satisfaction of the
      loan must not exceed the amount of the loan.  If the lender is a
      party in interest (as defined in ERISA) or disqualified person (as defined
      in the Code), the loan must provide for a transfer of Plan assets upon
      default only upon and to the extent of the failure of the Plan to satisfy
      the payment schedule of the Exempt
Loan.

              

      

      

      
        	
                 
      

              	
                (h)

              	
                For
      purposes of subsection (e), a loan payment shall be considered to be made
      for a Plan Year if the Company so determines and the loan payment is made
      within a reasonable time after the close of such Plan
  Year.

              

      

      

      
        	
                 
      

              	
                (i)

              	
                An
      exempt loan must be primarily for the benefit of Participants as provided
      in Treas. Reg. 54.4975-7(b)(3)(i).

              

      

      

      Sec.
2.18                      Flexible
Compensation Program.  “Flexible
Compensation Program” means the cafeteria plan established by the Company
pursuant to Code § 125.

      

      Sec.
2.19                      Fund.  “Fund” means the
aggregate of assets described in Sec. 12.1.

      

      Sec.
2.20                      Group I
Participant.  A Participant who
meets the requirements of (a), (b), or (c) is a Group I Participant during
periods after September 30, 2006 while he or she is a Non-Bargaining Unit
Employee:

      

      
        	
                 
      

              	
                (a)

              	
                A
      Participant meets the requirements of this subsection (a) if he or she is
      a Non-Bargaining Unit Employee on September 30,
  2006.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                A
      Participant meets the requirements of this subsection (b) if, on September
      30, 2006, he or she was employed by a Participating Employer or other
      entity under Common Control with the Company in a capacity other than as a
      Non-Bargaining Unit Employee.  For example, an individual
      satisfies the requirements of this subsection if he or she is a Bargaining
      Unit Employee on September 30,
2006.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                A
      Participant satisfies the requirements of this subsection (c) if, on
      September 30, 2006, he or she was on leave of absence from a Participating
      Employer or other entity under Common Control with the Company or was
      receiving benefits from a Participating Employer’s long-term disability
      program.

              

      

      

      However,
if a Participant described in (a), (b), or (c) has a Termination of Employment
after September 30, 2006 and is later rehired by a Participating Employer, he or
she is not a
Group I

       

      
         

        
          6

        

        
          
          

        

      

      Participant
during the period of reemployment.  Also, if a Participant had a
Termination of Employment prior to October 1, 2006 and is rehired on or after
said date, he or she is not a Group I
Participant.

      

      Sec.
2.21                      Group II
Participant.
“Group II Participant” means a Non-Bargaining Unit Employee who is not a
Group I Participant.

      

      Sec.
2.22                      Highly
Compensated Employee. “Highly Compensated
Employee” means an employee described in (a) or (b):

      

      (a)           The
employee at any time during the current or prior Plan Year was a 5% owneras defined in Code §
416(i)(1).

      

      
        	
                 
      

              	
                (b)

              	
                The
      employee received Testing Wages for the prior Plan Year equal to or
      greater than the applicable limit under Code § 414(q), which was $105,000
      for 2008 and $110,000 for 2009 and is subject to a cost-of-living
      adjustment after 2009.

              

      

      

      Sec.
2.23                      Leased
Employees. A
“Leased Employee” is a person who is a “leased employee” within the meaning of
Code §414(n) with respect to services that person provides to the Company and
other members of the Control Group.  Code §414(n) generally provides
that a “leased employee” is any person (other than an employee of the recipient)
who, pursuant to an agreement between the recipient and any other person (the
“leasing organization”), has performed services for the recipient (or for the
recipient and related persons determined in accordance with Code §414(n)(6)) on
a substantially full-time basis for a period of at least one year, and such
services are performed under the primary direction or control by the
recipient.  For purposes of determining Aggregate Continuous Service,
the term “Leased Employee” also includes a person who would meet the
requirements of Code §414(n) with respect to such services but for his or her
failure to complete a year of leased service.  Individuals may not
become Participants or accrue benefits under the Plan while they are Leased
Employees.  As provided in Code §414(n)(1)(B), contributions or
benefits provided a Leased Employee by the leasing organization which are
attributable to service performed for the recipient are treated as provided by
the recipient for purposes of the requirements listed in Code
§414(n)(3).

      

      Sec.
2.24                      Named
Fiduciary.  The Company is a
“Named Fiduciary” for purposes of ERISA.  Other persons are also Named
Fiduciaries under ERISA if so provided by said Act or if so identified by the
Company.  Such other person or persons shall have such authority to
control or manage the operation and administration of the Plan, including
control or management of the assets of the Plan, as may be provided by ERISA or
as may be delegated by the Company.

      

      Sec.
2.25                      Non-Bargaining
Unit Employee.  “Non-Bargaining
Unit Employee” means a Qualified Employee described in (1) or (2):

      

      (1)           An
employee who is not a member of any collective bargaining unit.

      

      
        	
                 
      

              	
                (2)

              	
                An
      employee who is a member of a collective bargaining unit but for whom
      there is no collective bargaining
agreement.

              

      

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      Sec.
2.26                      Non-Highly
Compensated Employee.  “Non-Highly
Compensated Employee” means an employee of a Participating Employer who is not a
Highly Compensated Employee.

      

      Sec.
2.27                      Normal
Retirement Age.  “Normal
Retirement Age” is age 65.

      

      Sec.
2.28                      Participant.  A “Participant”
is an individual described as such in Article III.

      

      Sec.
2.29                      Participating
Employer.  The Company is a
Participating Employer in the Plan.  Any other employer under Common
Control with the Company may also become a Participating Employer effective as
of a date specified by it in its adoption of the Plan. The Participating
Employers are listed on Schedule 1.

      

      Sec.
2.30                      Partnership
Allocation.
“Partnership Allocation” means an amount allocated pursuant to Sec.
4.4(c).

      

      Sec.
2.31                      Period of
Continuous Service.  A “Period of
Continuous Service” is the period beginning on an employee’s Employment
Commencement Date and ending on the day before the day on which the employee
begins a Recognized Break In Service.  The duration of a Period of
Continuous Service is measured in years and days.

      

      Sec.
2.32                      Periodic
Pay.  A
Participant’s “Periodic Pay” for a calendar quarter or other portion of a Plan
Year means straight time pay received during said period, subject to the
following:

      

      
        	
                 
      

              	
                (a)

              	
                Periodic
      Pay is the gross amount before any reduction pursuant to Code §§ 125,
      132(f)(4) or 401(k).

              

      

      

      (b)           Periodic
Pay excludes the amounts listed in Sec. 2.6(b)(1) through (7).

      

      (c)           Periodic
Pay for a Plan Year shall not exceed the limit under Code §
401(a)(17),

      which is
$245,000 for 2009 and is subject to a cost-of-living adjustment for Plan Years
after 2009.

      

      Sec.
2.33                      Plan
Year.  The “Plan Year”
is the 12-consecutive-month period commencing on January 1.

      

      Sec.
2.34                      Qualified
Employee.  “Qualified
Employee” means each common law employee of a Participating Employer, subject to
the following:

      

      
        	
                 
      

              	
                (a)

              	
                An
      employee is not a Qualified Employee prior to the date as of which his or
      her employer becomes a Participating
Employer.

              

      

      
 

      
        	
                 
      

              	
                (b)

              	
                During
      any period that an employee is covered by the provisions of a collective
      bargaining agreement between his or her collective bargaining
      representative and a Participating Employer, he or she shall be considered
      a Qualified Employee for purposes of this Plan if and only if such
      agreement expressly so provides.  For purposes of this section
      only, such an agreement shall be deemed to continue after its formal
      expiration during collective bargaining negotiations pending the execution
      of a new agreement.

              

      

       

      
         

        
          8

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (c)

              	
                An
      employee is a Qualified Employee during a period of absence from active
      service which does not result from his Termination of Employment, provided
      he or she is a Qualified Employee at the commencement of such period of
      absence.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                A
      nonresident alien while not receiving earned income (within the meaning of
      Code § 911(d)(2)) from a Participating Employer which constitutes income
      from sources within the United States (within the meaning of Code §
      861(a)(3)) is not a Qualified
Employee.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                An
      officer of Allete, Inc. whose primary employer is not a Participating
      Employer is not a Qualified
Employee.

              

      

      

      Sec.
2.35                      Recognized
Break in Service.  A “Recognized
Break In Service” is a period of at least a 12 consecutive month duration which
begins on the day on which an individual’s Termination of Employment
occurs.  A Recognized Break In Service ends, if ever, on the day on
which the individual again performs service as an employee of a Participating
Employer, an Affiliate or a Predecessor Employer.  However, if an
individual is absent from work for maternity or paternity reasons, the 12-month
period beginning with the first day of such absence shall not be included in a
Recognized Break In Service.  For purposes of this subsection, an
absence from work for maternity or paternity reasons means an absence (i) by
reason of the pregnancy of the individual, (ii) by reason of birth of a child of
the individual, (iii) by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual, or (iv) for
purposes of caring for such child for a period beginning immediately following
such birth or placement.

      

      Sec.
2.36                      Results
Sharing Award.  A Participant’s
“Results Sharing Award”, if any, is his or her annual bonus pursuant to the
Company’s results sharing (annual bonus) program.  Beginning with
2006, half of each Participant’s Results Sharing Award is automatically provided
through the Plan pursuant to Sec. 4.4(f), and the other half may be contributed
by the Participant pursuant to Sec. 5.1(b) or Sec. 5.4.

      

      Sec.
2.37                      Retirement
Plan A.
“Retirement Plan A” means Minnesota Power and Affiliated Companies
Retirement Plan A as amended from time to time.

      

      Sec.
2.38                      Retirement
Plan B.  “Retirement Plan
B” means Minnesota Power and Affiliates Companies Retirement Plan
B  as amended from time to time.

      

      Sec.
2.39                      Rollover
Contributions.  “Rollover
Contributions” are amounts rolled into this Plan from another Plan pursuant to
Sec. 5.3.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      Sec.
2.40                      Roth
401(k) Contributions.
“Roth 401(k) Contributions” are amounts contributed pursuant to Sec.
5.4.

      

      Sec.
2.41                      Salary.  “Salary” means a
Participant’s regular periodic salary.  This is the gross amount,
before any reduction under Code § 125, 132(f)(4), or 401(k).

      

      Sec.
2.42                      Supplemental
Retirement Plan.  “Supplemental
Retirement Plan” or “SRP” means the Minnesota Power and Affiliated Companies
Supplemental Retirement Plan, a predecessor to this Plan.

      

      Sec.
2.43                      Termination
of Employment.  The “Termination
of Employment” of an employee for purposes of the Plan shall be deemed to occur
upon his or her resignation, discharge, retirement, death, failure to return to
active work at the end of an authorized leave of absence or the authorized
extension or extensions thereof, failure to return to work when duly called
following a temporary layoff, or the happening of any other event or
circumstance which under the policy of his or her employer as in effect from
time to time, results in the termination of the employer-employee relationship;
provided, however, that a Termination of Employment shall not be deemed to occur
upon a transfer between any combination of Participating Employers and other
entities under Common Control with the Company.

      

      Sec.
2.44                      Testing
Wages.   “Testing
Wages” is used to determine which individuals are Highly Compensated Employees,
and to apply various limits required by the Code, including the Code § 401(m)
contribution percentage limit and the Code § 415 limit on annual
additions.  Testing Wages means a Participant’s total compensation
received from Participating Employers and other entities under Common Control
with the Company that is reported in Box 1 of Internal Revenue Service Form W-2,
subject to the following:

        
(a)           Testing
Wages means the gross amount before any reduction pursuant to Code
§§

      125,
132(f)(4) or 401(k).

      

      
        	
                (b)  

              	
                       A
      Participant’s Testing Wages for a Plan Year shall not exceed the limit
      under Code § 401(a)(17), which is $245,000 for 2009 and is subject to a
      cost of living adjustment for Plan Years after
  2009.

              

      

      

      
        	
                (c)  

              	
                       Testing
      Wages excludes severance pay and any other amounts paid after a
      Participant’s Termination of Employment.  However, a
      Participant’s final pay for service rendered while an employee is included
      in Testing Wages provided it is paid within 2 1⁄2 months after Termination
      of Employment or, if later, by the end of the Plan Year in which the
      Termination of Employment occurred.

              

      

      

      
        	
                (d)  

              	
                       Amounts
      such as fringe benefits, employer paid life insurance premiums, gains from
      stock option exercises or restricted stock, and moving expense
      reimbursements are included in Testing Wages to the extent such amounts
      are required to be reported in Box 1 of Form W-2, as are all other items
      which must be so reported.

              

      

      

      
        	
                (e)  

              	
                       In
      cases where a Participant has a Total Disability, Testing Wages includes
      an imputed amount equal to the Participant’s rate of pay immediately prior
      to the date he or she became
disabled.

              

      

      

       

      
         

        
          10

        

        
          
          

        

      

      Sec.
2.45                      Total
Disability.  “Total
Disability” means eligibility for a benefit under the Company’s long-term
disability plan.

      

      Sec.
2.46                      Trust
Agreement.  A “Trust
Agreement” or “Trust” is an agreement entered into between the Company and a
Trustee pursuant to Sec. 12.2.

      

      Sec.
2.47                      Trustee.  The “Trustee” is
the trustee or trustees appointed and acting from time to time for the purpose
of holding, investing, and disbursing all or a portion of the Fund.

      

      Sec.
2.48                      Unallocated
Reserve.
“Unallocated Reserve” means that portion of the Fund which consists of
shares of Company Stock (and dividends and any other earnings attributable
thereto) acquired with the proceeds of an Exempt Loan and which are held in
suspense pending allocation to Participants’ Accounts pursuant to Article
IV.

      

      Sec.
2.49                      Valuation
Date.  “Valuation Date”
means each date on which the Fund and Accounts are valued as provided in Article
VII.  Each business day of the Plan Year is a Valuation
Date.

      

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      ARTICLE
III

      PLAN
PARTICIPATION

      

      Sec.
3.1                      Eligibility
for Participation.  On and after
January 1, 2002, each Qualified Employee shall become a Participant as
follows:

      

      
        	
                 
      

              	
                (a)

              	
                For
      purposes of making Before Tax, After Tax, Rollover, and Roth 401(k)
      Contributions under Article V, and for purposes of sharing in Results
      Sharing allocations under Article IV, an individual shall become a
      Participant immediately upon becoming a Qualified
  Employee.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                For
      purposes of sharing in Partnership Allocations under Article IV, a
      Qualified Employee shall become a Participant on the first day of the
      month on which he or she satisfies both of the following
      requirements:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                He
      or she completed a year of Aggregate Continuous Service prior to said
      date.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                He
      or she is a Non-Bargaining Unit Employee on said
  date.

              

      

      

      An
employee who transfers to a position as a Non-Bargaining Unit Employee after he
or she completes a year of Aggregate Continuous Service will become a
Participant for purposes of sharing in Partnership Allocations on the first day
of the month coincident with or next following the transfer date.

      

      
        	
                 
      

              	
                (c)

              	
                For
      purposes of sharing in Matching Allocations under Article IV, a Qualified
      Employee shall become a Participant on the first day of the calendar
      quarter on which he or she satisfies both of the following
      requirements:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                He
      or she completed a year of Aggregate Continuous Service prior to said
      date.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                He
      or she is a Non-Bargaining Unit Employee on said
  date.

              

      

      

      An
employee who transfers to a position as a Non-Bargaining Unit Employee after he
or she completes a year of Aggregate Continuous Service shall become a
Participant for purposes of sharing in Matching Allocations on the first day of
the calendar quarter coincident with or next following the transfer
date.

      

      
        	
                 
      

              	
                (d)

              	
                For
      purposes of sharing in Bargaining Unit Allocations under Article IV, a
      Qualified Employee shall become a Participant on the first day of the
      calendar quarter on which he or she satisfies both of the following
      requirements:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                He
      or she completed a year of Aggregate Continuous Service prior to said
      date.

              

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (2)

              	
                He
      or she is a Bargaining Unit Employee on said
  date.

              

      

      

      An
employee who transfers to a position as a Bargaining Unit Employee after he or
she completes a year of Aggregate Continuous Service shall become a Participant
for purposes of sharing in Bargaining Unit Allocations on the first day of the
calendar quarter coincident with or next following the transfer
date.

      

      Sec.
3.2                      Duration
of Participation.  A Participant
shall continue to be such until the later of (i) the Participant’s Termination
of Employment, or (ii) the date all benefits, if any, to which he or she is
entitled hereunder have been distributed from the Fund.

      

      Sec.
3.3                      Reemployment.  If a former
employee is reemployed as a Qualified Employee:

      

      
        	
                 
      

              	
                (a)

              	
                If
      the individual was a Participant under Sec. 3.1(b), (c), or (d) (or any
      predecessor provision) during his or her previous period of employment, he
      or she will resume being a Participant
  immediately.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                If
      the individual had not yet qualified as a Participant under Sec. 3.1(b),
      (c) or (d) (or any predecessor provision) during his or her previous
      period of employment, the prior service will be recognized for purposes of
      Aggregate Continuous Service under Sec. 3.1(b), (c) and
    (d).

              

      

      

      Sec.
3.4                      No
Guarantee of Employment  Participation in the Plan does not
constitute a guarantee or contract of employment with a Participating
Employer.  Such participation shall in no way interfere with any
rights the Participating Employer would have in the absence of such
participation to determine the duration of the employee’s employment with the
Participating Employer.

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      ARTICLE
IV

      ESOP
PROVISIONS

      

      Sec.
4.1                      Leveraged
Stock Acquisitions.  Upon direction by
the Company, the Trustee is authorized to enter into one or more Exempt
Loans.  The proceeds of any Exempt Loan shall be used as provided in
Sec. 2.17.  All shares of Company Stock acquired with the proceeds of
any Exempt Loan shall be credited to the Unallocated Reserve until such time as
they are released pursuant to Sec. 2.17(e).

      

      Sec.
4.2                      Leveraged
ESOP Contributions.   The
Participating Employers shall make sufficient cash contributions to enable the
Trustee to pay any currently maturing obligations under an Exempt Loan, to the
extent those obligations have not been paid with dividends pursuant to Sec. 4.3
or with income on other assets held in the Unallocated Reserve.  The
Participating Employers may also make additional cash contributions for the
purpose of repaying the Exempt Loan more rapidly than is required under the
terms of that loan.  The decision whether to prepay the loan is
subject to the consent of the Company in its capacity as sponsor of the
Plan.  Payments on an ESOP loan with respect to a Plan Year may not
exceed the sum of contributions under this section and dividends available for
such loan payments under Sec. 4.3 (including contributions and dividends paid in
prior Plan Years) minus such payments for prior Plan Years.

      

      Sec.
4.3                      Application
of Dividends.  “Dividends” on
shares of Company Stock in the Unallocated Reserve and on shares of Company
Stock in Accounts shall be applied as follows:

      

      
        	
                 
      

              	
                (a)

              	
                Dividends on Shares
      Held in Basic Accounts.  Any Participant who has a Basic
      Pre-1989 or Basic Post-1989 Account may elect under Sec. 10.12 to receive
      a cash distribution of the dividends on the shares in said
      Account.  Any remaining dividends on shares in Basic Pre-1989
      Accounts will be used to make payments on the Exempt Loan.  Any
      remaining dividends on shares in Basic Post-1989 Accounts will remain in
      such Accounts.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Dividends on Shares
      Held In Unallocated Reserve And On Allocated Shares Acquired Through
      Leveraged Stock Acquisitions.   Dividends received
      on shares of Company Stock held in the Unallocated Reserve and on shares
      of Company Stock allocated to Accounts (other than Basic Pre-1989 or Basic
      Post-1989 Accounts) that were originally acquired with  the
      proceeds of an Exempt Loan will be used to pay principal and interest then
      due on the Exempt Loan used to acquire such shares.  If the
      amount of such dividends exceeds the amount needed to pay such principal
      and interest, the excess shall be held in the Unallocated Reserve until it
      is needed to pay principal and interest due on such Exempt Loan or, with
      the prior concurrence of the Company (in its capacity as sponsor of the
      Plan), the excess may be used to prepay principal on such Exempt
      Loan.  Once an Exempt Loan has been totally repaid, dividends on
      allocated shares acquired with that  loan shall remain in
      Participant Accounts unless withdrawn pursuant to Sec.
    10.12.

              

      

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      (c)           Dividends On Other
Shares.  Dividends on shares originally acquired by the
Plan

      from
sources other than tax credit contributions and leveraged stock acquisitions
(e.g. dividends or shares purchased by the Plan in non-leveraged transactions)
shall remain in the Accounts in which the shares are held.  Such
dividends shall be added to the Account balance on the dividend payment
date.  Under applicable law, such dividends may not be used for loan
payments.  Such dividends are available for withdrawal to the extent
provided under Sec. 10.12.

      

      
        	
                 
      

              	
                (d)

              	
                Dividends used to make
      loan payments will be applied first to principal.  To the
      extent possible, dividends used to make loan payments will be applied
      first to any principal payments that are being made on the loan, and any
      remaining portion will be applied to pay
  interest.

              

      

      

      Sec.
4.4                      Allocations.   Shares of
Company stock released from the Unallocated Reserve pursuant to Sec. 2.17(e)
shall be allocated among Accounts as provided in this section.  This
section provides for various types of allocations for various groups of
employees, and gives the rules for determining who is eligible to receive each
type of allocation and how much that allocation will be.  Allocations
under this section will be as follows:

      

      
        	
                 
      

              	
                (a)

              	
                Allocations To Replace
      Dividends.  If dividends paid on Company Stock held in
      Participants’ Accounts are used to make payments on the Exempt Loan, there
      shall be allocated to each such Account from the Unallocated Reserve
      Company Stock having a value equal to the amount of dividends so
      used.  “Value” for this purpose shall be determined according to
      the New York Stock Exchange closing price on the payment date for the
      particular dividend.  Beginning with the December 2004 dividend,
      such allocations will occur on the date the dividend is
      paid.  (Allocations with respect to the March, June, and
      September 2004 dividends occurred September 2,
  2004.)

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Tax Reduction
      Allocations.  Each Plan Year the Company will estimate
      the tax savings it will realize as a result of the tax deduction for
      dividends paid during the Plan Year on Company Stock held in Basic
      Pre-1989 and Basic Post-1989 Accounts.  This estimate will
      recognize both tax savings during the current Plan Year and the present
      worth of any future tax savings in the event the full deduction cannot be
      used currently.  Shares of Company Stock equivalent to the
      estimated tax savings will be allocated among Special Accounts as provided
      in this subsection.  The total number of shares to be allocated
      under this subsection will have an aggregate fair market value equivalent
      to the estimated tax savings.  “Fair market value” for this
      purpose means the average New York Stock Exchange closing price for the
      last 20 business days up to and including December 15 of the Plan
      Year.  These shares will be from the Unallocated
      Reserve.  A portion of these shares will be allocated as
      provided in paragraph (1), and the remainder of them will be allocated as
      provided in paragraph (2):

              

      

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      (1)           Allocations According to
Shares Held on December 31, 2006.  A

      portion
of the shares will be allocated among eligible Participants in proportion to the
number of shares of Company Stock they have credited to their Basic Pre-1989
Accounts as of December 31, 2006.  The number of shares allocated
under this paragraph (1) will be determined by the Company and will be set in a
way so that the allocation satisfies the requirements of Code §
401(a)(4).

      

      
        	
                 
      

              	
                (2)

              	
                Per Capita
      Allocations.  The remainder of the shares will be
      allocated among eligible Participants in equal amounts per
      capita.

              

      

      
        	
                 
      

              	
                (3)

              	
                If
      a Participant has a Termination of Employment during a Plan Year, the
      allocation under (1) and (2) will be prorated, and he or she will receive
      one fourth of the normal allocation for each dividend payment date on
      which he or she is an Active Participant.  No Tax Reduction
      Allocations will be made to the Participant for any Plan Year after the
      Plan Year in which the Termination of Employment
  occurred.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                If
      a Participant withdraws all or any portion of his or her Basic Pre-1989
      Account pursuant to Sec. 10.11 during 2007 or any subsequent Plan Year,
      the allocation under (1) and (2) for said Plan Year will be prorated, and
      he or she will receive one fourth of the normal allocation for each
      dividend payment date preceding the withdrawal.  No Tax
      Reduction Allocations will be made to the Participant for any Plan Year
      after the Plan Year in which the withdrawal
  occurred.

              

      

      

      
        	
                 
      

              	
                (5)

              	
                To
      share in such allocations, a Participant must have a Basic Pre-1989
      Account.  If such a Participant has a Termination of Employment
      or withdrawal after 2006 under Sec. 10.11, allocations will be limited as
      provided in (3) and (4).

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Partnership
      Allocations.  A Partnership Allocation will be made to
      the Partnership Account of each Non-Bargaining Unit Participant each Plan
      Year, subject to the following:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                A
      Participant will be eligible to share in the Partnership Allocation only
      if he or she is both an Active Participant and a Non-Bargaining Unit
      Employee at some time during the Plan
Year.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                Partnership
      Allocations with respect to the period January 1, 2006 – September 30,
      2006 will be equal to 3.5% of Annual Pay during said
    period.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                Partnership
      Allocations with respect to a Group I Participant’s Annual Pay during the
      period from October 1, 2006 through December 31, 2006 and during any Plan
      Year thereafter will be not less than the percentage of Annual Pay
      determined from the following
table:

              

      

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      

      
        	
                Participant’s
      attained age in whole years 

                on
      December 31 of the Plan Year

              	
                 

                Allocation
      percentage

              
	
                Under
      Age 30

              	
                6.0%

              
	
                Age
      30 to 39

              	
                6.5%

              
	
                Age
      40 to 44

              	
                7.5%

              
	
                Age
      45 to 54

              	
                8.5%

              
	
                Age
      55 or older

              	
                11.5%

              

      

      

      
        	
                 
      

              	
                (4)

              	
                However,
      if a Group I Participant is 59 or older on January 1, 2006, his or her
      allocation for the period from October 1, 2006 through December 31, 2006
      and during any Plan Year thereafter will be equal to not less than 12%
      of  Annual Pay.

              

      

      

      
        	
                 
      

              	
                (5)

              	
                For
      Group II Participants, the Partnership Allocation for the period October
      1, 2006 through December 31, 2006 and for each Plan Year thereafter will
      be equal to not less than 6% of Annual
Pay.

              

      

      

      
        	
                 
      

              	
                (6)

              	
                For
      purposes of determining Partnership Allocations for 2006, if a Participant
      was eligible for Partnership Allocations throughout 2006, three-fourths of
      his Annual Pay will be assigned to the period from January 1, 2006 through
      September 30, 2006, and one fourth to the period from October 1, 2006
      through December 31, 2006.  However, if a Participant was not
      eligible for Partnership Allocations for the entire year, his Annual Pay
      for the period through September 30, 2006 will be determined by
      multiplying his Annual Pay for all of 2006 by a fraction, the numerator of
      which is the calendar days he was eligible for Partnership Allocations
      during the period from January 1, 2006 through September 30, 2006 and the
      denominator of which is the total number of calendar days he was eligible
      for Partnership Allocations during 2006.  The remainder of his
      Annual Pay for 2006 will be assigned to the period from October 1, 2006
      through December 31, 2006.

              

      

      

      
        	
                 
      

              	
                (7)

              	
                A
      Participant’s Partnership Allocation will consist of shares of Company
      Stock with a fair market value sufficient to provide the percentage
      determined from (2), (3), (4), or (5), whichever is
      applicable.  “Fair market value” for this purpose will be
      determined as provided in subsection
(b).

              

      

      

      
        	
                 
      

              	
                (8)

              	
                For
      purposes of determining a Participant’s Annual Pay, pay for service in any
      job category other than as a Non-Bargaining Unit Employee and pay prior to
      the date an individual satisfied the eligibility requirements of Sec.
      3.1(b) will be disregarded.

              

      

      

      
        	
                 
      

              	
                (9)

              	
                Shares
      of Company Stock to provide Partnership Allocations will come from the
      Unallocated Reserve.

              

      

      

      
        	
                 
      

              	
                (10)

              	
                If
      the amount available for allocation for a Plan Year is greater than the
      amount necessary to make the minimum allocations required by (3), (4), and
      (5), the excess amount shall be allocated as
  follows:

              

      

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      
        	
                             

              	
                (A)

              	
                Any
      excess amount for 2006 will be allocated in proportion to Annual Pay for
      the period from October 1, 2006 through December 31, 2006, determined as
      provided in (6).

              

      

      

      
        	
                 
      

              	
                (B)

              	
                Any
      excess amount for a Plan Year after 2006 will be allocated in proportion
      to Annual Pay for that Plan Year.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Bargaining Unit
      Allocations.  A Bargaining Unit Allocation will be made
      to the Bargaining Unit Account of each eligible Bargaining Unit Employee
      for each calendar quarter beginning on or after April 1, 2001, subject to
      the following:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                A
      Participant will be eligible to share in the Bargaining Unit Allocation
      for a calendar quarter only if he or she is a Bargaining Unit Employee and
      Active Participant on the first day of that quarter.  If a
      Participant transfers to a job in which he or she is not a Bargaining Unit
      Employee after the first day of the quarter, he or she will nevertheless
      receive a Bargaining Unit Allocation based on his or her Periodic Pay for
      the entire quarter.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                The
      Bargaining Unit Allocation for a calendar quarter shall consist of shares
      of Company Stock having a fair market value equal to 1% multiplied by the
      Participant’s Periodic Pay for that calendar quarter.  For the
      calendar quarter ending March 31, 2004, the Bargaining Unit Allocation is
      .0075 (i.e. 3⁄4 of 1%) of January 2004 Periodic Pay plus 1% of February and
      March 2004 Periodic Pay.

              

      

      
        	
                 
      

              	 

      

      
        	
                 
      

              	
                (3)

              	
                The
      fair market value of shares of Company Stock for purposes of determining
      the Bargaining Unit Allocation for a quarter will be determined as
      follows:

              

      

      

      
        	
                 
      

              	
                (A)

              	
                For
      the first three calendar quarters of the Plan Year, the fair market value
      is the New York Stock Exchange closing price on the last business day of
      said quarter.

              

      

      

      
        	
                 
      

              	
                (B)

              	
                For
      the last calendar quarter of the Plan Year, the fair market value will be
      determined as provided in subsection
(b).

              

      

      

      
        	
                 
      

              	
                (4)

              	
                Bargaining
      Unit Allocations for a quarter will occur as of the end of that
      quarter.

              

      

      

      
        	
                 
      

              	
                (5)

              	
                Shares
      for the Bargaining Unit Allocation will come from the Unallocated
      Reserve.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Matching
      Allocations.  A Matching Allocation determined as follows
      will be made each calendar quarter to the Matching Account of each
      eligible Non-Bargaining Unit
Employee:

              

      

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      (1)           A
Participant will be eligible to share in the Matching Allocation for
a

      calendar
quarter only if he or she is a Non-Bargaining Unit Employee and Active
Participant on the first day of that quarter.  If a Participant
transfers to a job as a Bargaining Unit Employee after the first day of the
quarter, he or she will nevertheless receive a Matching Allocation based on his
or her Periodic Pay and Before Tax Contributions for the entire
quarter.  The first Matching Allocations will be for the calendar
quarter beginning July 1, 2001.

      

      
        	
                 
      

              	
                (2)

              	
                Matching
      Allocations for 2006 will be determined as
  follows:

              

      

      

      
        	
                 
      

              	
                (A)

              	
                For
      the first, second and third quarters of 2006, the Matching Allocation will
      consist of shares of Company Stock having fair market value equal to 50%
      of the Participant’s Before Tax Contributions during said quarter, but
      disregarding any Before Tax Contributions in excess of 4% of the
      Participant’s Periodic Pay for that
quarter.

              

      

      

      
        	
                 
      

              	
                (B)

              	
                For
      the fourth quarter of 2006:

              

      

      

      

      
        	
                 
      

              	
                (i)

              	
                The
      Matching Allocation for Group I Participants will consist of shares of
      Company Stock having a fair market value equal to 100% of the
      Participant’s Before Tax Contributions during said quarter, but
      disregarding any Before Tax Contributions in excess of 4% of the
      Participant’s Periodic Pay for the
quarter.

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                The
      Matching Allocation for Group II Participants will consist of shares of
      Company Stock having a fair market value equal to 100% of the
      Participant’s Before Tax Contributions during said quarter, but
      disregarding any Before Tax Contributions in excess of 5% of the
      Participant’s Periodic Pay for the
quarter.

              

      

      (C)           For
purposes of determining Matching Allocations for 2006, if a

      Participant
was eligible for Matching Allocations throughout 2006, three-fourths of her
Before Tax Contributions will be assigned to the period from January 1, 2006
through September 30, 2006, and one fourth to the period from October 1, 2006
through December 31, 2006.  However, if a Participant was not eligible
for Matching Allocations for the entire year, her Before Tax Contributions for
the period through September 30, 2006 will be determined by a fraction, the
numerator of which is the calendar days she was eligible for Matching
Allocations during the period from January 1, 2006 through September 30, 2006
and the denominator of which is the total number of calendar days she was
eligible for Matching Allocations during 2006.  The remainder of her
Before Tax Contributions for 2006 will be assigned to the period from October 1,
2006 through December 31, 2006.

      

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	
                (3)

              	
                Beginning
      with the first quarter of 2007:

              

      

      

      
        	
                 
      

              	
                (A)

              	
                The
      Matching Allocation for Group I Participants will consist of shares of
      Company Stock having a fair market value equal to 100% of the
      Participant’s Before Tax Contributions and Roth 401(k) Contributions
      during said quarter, but disregarding any Before Tax Contributions and
      Roth 401(k) Contributions in excess of 4% of the Participant’s Periodic
      Pay for the quarter.

              

      

      

      
        	
                 
      

              	
                (B)

              	
                The
      Matching Allocation for Group II Participants will consist of shares of
      Company Stock having a fair market value equal to 100% of the
      Participant’s Before Tax Contributions and Roth 401(k) Contributions
      during said quarter, but disregarding any Before Tax Contributions and
      Roth 401(k) Contributions in excess of 5% of the Participant’s Periodic
      Pay for the quarter.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                The
      fair market value of shares of Company Stock for purposes of determining
      the Matching Allocation for a quarter will be determined as
      follows:

              

      

      

      
        	
                 
      

              	
                (A)

              	
                For
      the first three calendar quarters of the Plan Year, the fair market value
      is the New York Stock Exchange closing price on the last business day of
      said quarter.

              

      

      

      
        	
                 
      

              	
                (B)

              	
                For
      the last calendar quarter of the Plan Year, the fair market value will be
      determined as provided in subsection
(b).

              

      

      

      (5)           Matching
Allocations for a quarter will occur as of the end of that quarter.

      

      
        	
                 
      

              	
                (6)

              	
                Shares
      for the Matching Allocation will come from the Unallocated
      Reserve.

              

      

      

      (7)           Matching
Allocations shall be trued up to the extent necessary so that

      aggregate
Matching Allocations for the Plan Year equals the applicable percentage under
paragraphs (2) and (3).  The fair market value of shares used to make
the true up allocation will be determined as provided in subsection
(b).

      

      
        	
                 
      

              	
                (f)

              	
                Results Sharing
      Allocations.  Beginning with any Results Sharing Award
      earned for 2006, half of a Participant’s Results Sharing Award will be
      provided in the form of an allocation of shares of Company Stock from the
      Unallocated Reserve, subject to the
following:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                For
      purposes of converting half of any Results Sharing Award earned for a Plan
      Year to shares allocated under this section, shares will be valued at
      their “fair market value”, which for this purpose, means the average New
      York Stock Exchange closing price for the last 20 days up to and including
      the date that is 15 calendar days prior to the date on which the cash
      portion of any Results Sharing Award is paid to
    Participants.

              

      

      

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	
                (2)

              	
                Shares
      earned for a Plan Year under this subsection will be credited to Results
      Sharing Accounts on a date determined by the Company.  Said date
      may be after the close of the Plan Year the shares are
    earned.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                Results
      Sharing Allocations are available to Participants who are Non-Bargaining
      Unit Employees (both Group I Participants and Group II Participants) and
      Participants who are Bargaining Unit
Employees.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                No
      allocation will be made under this subsection with respect to Results
      Sharing Awards attributable to compensation in excess of the limit under
      Code §401(a)(17).

              

      

      

      If the
value of Company Stock available for allocation is less than the amount required
to complete all allocations required under this Sec. 4.4, additional amounts of
Company Stock shall be released from the Unallocated Reserve in an amount
sufficient to complete allocations at the required level.  If such
advances occur, the Participating Employers shall make contributions such that
the Trustee can make subsequent loan payments in an amount sufficient so that
the aggregate number of shares required to be released from the Unallocated
Reserve for the entire Plan Year under Sec. 2.17(e) is equal to the aggregate
number of shares actually released for the entire Plan Year.

      

      Sec.
4.5                      Time of
Contributions.  Contributions by
a Participating Employer for a Plan Year shall be paid to the Fund no later than
the time (including extensions thereof) prescribed by law for filing the
employer’s federal income tax return for the tax year in which the Plan Year
ends.  Contributions with respect to a particular Plan Year generally
shall be made during that year or as soon as reasonably possible after the close
of said year.

      

      Sec.
4.6                      Long-Term
Disability Allocations  If a Participant has a Total
Disability:

      

      
        	
                 
      

              	
                (a)

              	
                He
      or she will be eligible for allocations under Sec. 4.4 during the period
      while he or she is receiving benefits under the Company’s long-term
      disability plan on the same basis as he or she was receiving allocations
      immediately before becoming disabled.  However, no Results
      Sharing Allocations will be provided while on long-term
      disability.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                For
      purposes of determining the amount of such allocations, the Participant
      will be deemed to continue having Annual Pay and Periodic Pay at the rate
      in effect immediately before he or she became disabled.  Said
      deemed pay will also be recognized as Testing Wages for purposes of
      applying the Code §415 limit under Sec.
  6.1(a)(2).

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Participants
      are free to make Salary Reduction Contributions from their long-term
      disability benefits.

              

      

       
 

      

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      ARTICLE
V

      PARTICIPANT
CONTRIBUTIONS

      

      

      Sec.
5.1                      Before
Tax Contributions.  Participants may
make the following types of contributions to the Plan on a before tax basis
pursuant to Code § 401(k):

      

      
        	
                (a)  

              	
                Salary Reduction
      Contributions.  Before-tax contributions may be made from
      salary as provided in the
subsection:

              

      

      

      
        	
                (1)  

              	
                On
      and after January 1, 2009, when an individual qualifies as a Participant
      under Sec. 3.1(a), he or she shall automatically be enrolled in Salary
      Reduction Contributions equal to 5% of the Participant’s
      Salary.  If a former Participant is rehired as a Qualified
      Employee, he or she will also be automatically enrolled in Salary
      Reduction Contributions equal to 5% of Salary.  Participants who
      are automatically enrolled  may modify said contribution rate as
      provided in paragraph (3).  Said automatic contributions will
      not commence until at least 30 days after an individual becomes a
      Participant.

              

      

      

      
        	
                (2)  

              	
                On
      January 1, 2009, each individual who is eligible to make Salary Reduction
      Contributions but has not made an affirmative election whether to
      contribute will automatically be enrolled in Salary Reduction
      Contributions equal to 5% of the Participant’s Salary.  Such a
      Participant may modify said contribution rate as provided in paragraph
      (3).

              

      

      

      
        	
                (3)  

              	
                A
      Participant may at any time modify his or her rate of Salary Reduction
      Contributions, discontinue making such Contributions, or resume making
      such Contributions.  If a Participant elects to make Salary
      Reduction Contributions, the contribution rate must be a whole percentage
      of Salary of at least 1%.

              

      

      

      
        	
                (4)  

              	
                A
      Participant who has not previously made Salary Reduction Contributions and
      who is automatically enrolled on or after January 1, 2009 may elect to
      withdraw all Salary Reduction Contributions made on his or her behalf,
      adjusted for investment gains or losses.  Any election under
      this subsection must be made within 90 days after the date of automatic
      enrollment.  (For this purpose, the 90 day election period
      begins the day after the first payday that automatic contributions were
      withheld from the individual’s taxable pay.)  A Participant who
      elects such a withdrawal will forfeit all Matching Allocations with
      respect to the Salary Reduction Contributions that are
      withdrawn.  Any such election must take effect not later than
      the earlier of (i) the pay date for the second payroll period that begins
      after the date the  election was made, or (ii) the first pay
      date that occurs at least 30 days after the date the election was
      made.  This paragraph only applies to (i) new Participants who
      are making Salary Reduction Contributions for the first time, and (ii)
      individuals who were eligible to contribute in the past but did not make
      any Salary Reduction Contributions.  Such withdrawals may not be
      made by individuals who made Salary Reduction Contributions in the
      past.

              

      

      

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      
        	
                (5)  

              	
                Each
      Participant who is affected by the Plan’s automatic enrollment provisions
      will be provided the notice required by Code
  §414(w)(4).

              

      

      

      
        	
                (6)  

              	
                The
      Participant’s Participating Employer will make a contribution to the Plan
      equal to the amount of the Salary
reduction.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Results Sharing
      Contributions.  Beginning with the Award earned for 2006,
      half of a Participant’s Results Sharing Award is provided in the form of
      an allocation of Company Stock pursuant to Sec. 4.4(f) and the other half
      is paid to the Participant in cash.  A Participant may elect to
      have the cash portion reduced by any whole percentage and contributed to
      the Plan on a before-tax basis.  His or her Participating
      Employer will make a Results Sharing Contribution to the Plan equal to the
      amount of the reduction.  Such elections must be made not later
      than a deadline established by the
Company.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Flexible Dollars
      Contributions.  Prior to 2005, a Participant could elect
      to have part or all of the amount credited under the Flexible Compensation
      Program contributed as a Flexible Dollars Contribution.  No
      Flexible Dollars Contributions shall be made after December 31, 2004,
      except to the extent necessary to complete such contributions for the Plan
      Year ending on that date.

              

      

      

      Sec.
5.2                      After Tax
Contributions.  A Participant may
elect to contribute any whole percentage (but not more than 25%) of his or her
Salary to the Plan as an After Tax Contribution.  The Participating
Employer of a Participant who makes such an election shall withhold the After
Tax Contribution from the Participant’s Salary and transmit it to the
Plan.  A Participant may modify, discontinue, or resume After Tax
Contributions at any time.  Such contributions do not reduce the
Participant’s taxable income and are not subject to Code § 401(k).

      

      Sec.
5.3                      Rollover
Contributions.  With the consent
of the Company, which shall be granted in its sole discretion and only if it
determines the amount to be transferred constitutes a Rollover Contribution, a
Participant may transfer to the Fund an amount that constitutes a Rollover
Contribution, subject to the following:

      

      
        	
                 
      

              	
                (a)

              	
                “Rollover
      Contribution” means a contribution of an amount from another qualified
      plan, qualified annuity plan, tax sheltered annuity, individual retirement
      account or annuity, or eligible deferred compensation plan of a state or
      local government or political division thereof, which may be rolled over
      to the Plan pursuant to any Code provision which permits such
      rollovers.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                A
      Rollover Account shall be established for each Participant who makes a
      Rollover Contribution.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                If
      a Rollover Contribution includes after-tax assets, said assets will be
      accepted only to the extent the rollover is made as a direct transfer from
      another plan qualified under Code § 401(a).  Such after-tax
      assets shall be separately accounted
for.

              

      

      

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	
                (d)

              	
                On
      and after January 1, 2007, a direct Rollover Contribution from another
      qualified plan may include amounts attributable to Roth 401(k)
      Contributions.  Such amounts will be accepted only in the form
      of a direct rollover from the other plan and not in the form of amounts
      distributed to the Participant and later rolled over.  Such
      amounts will be separately accounted
for.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                In
      no event will any hardship distributions (consisting of amounts deferred
      from taxation under Code § 401(k) or otherwise) be
    accepted.

              

      

      

      Sec.
5.4                      Roth
401(k) Contributions.  Participants may
make the following types of contributions to the Plan on an after tax basis in
the form of Roth 401(k) Contributions:

      

      
        	
                 
      

              	
                (a)

              	
                Roth Salary Reduction
      Contributions.  Effective January 1, 2007, a participant
      may elect to have his or her Salary reduced by any whole percentage and
      contributed to the Plan as a Roth 401(k) Contribution.  His or
      her Participating Employer will make a Roth Salary Reduction Contribution
      to the Plan equal to the amount of the reduction.  A Participant
      may modify, discontinue, or resume Roth Salary Reduction Contributions at
      any time.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Roth Results Sharing
      Contributions.  Beginning with the Award earned for 2007.
      a Participant may elect to have the cash portion of his or her Results
      Sharing Award reduced by any whole percentage and contributed to the Plan
      as a Roth 401(k) Contribution.  His or her Participating
      Employer will make a Roth Results Sharing Contribution to the Plan equal
      to the amount of the reduction.  Such elections must be made not
      later than a deadline established by the
  Company.

              

      

      

      Such
contributions are in lieu of part or all of the Before Tax Contributions the
Participant otherwise is eligible to make.  Roth 401(k) Contributions
are treated by the Participant’s Participating Employer as includible in the
Participant’s taxable income at the time the Participant would have received the
amount involved in cash but for the contribution election.

      

      Sec.
5.5                      Amounts
Paid After Termination of Employment. .  Participant
contributions under Sections 5.1 – 5.4 may not be made from severance pay or
other amounts paid after the Participant’s Termination of
Employment.  However, contributions may be made from the Participant’s
final pay for services rendered while an employee, provided it is paid within 2
1⁄2 months after Termination of Employment, or if later, by the end of Plan Year
in which Termination of Employment occurred.

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

      ARTICLE
VI

      LIMITS ON ALLOCATIONS AND
BENEFITS

      

      Sec.
6.1                      Limitation
on Allocations.  Notwithstanding
any provisions of the Plan to the contrary, allocations to Participants under
the Plan shall not exceed the maximum amount permitted under Code §
415.  For purposes of the preceding sentence, the following rules
shall apply unless otherwise provided in Code § 415:

      

      
        	
                 
      

              	
                (a)

              	
                The
      Annual Additions with respect to a Participant for any Plan Year shall not
      exceed the lesser of:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                The
      limit under Code § 415(c)(1)(A), which is $46,000 for 2008, and is subject
      to a cost of living adjustment for Plan Years after
  2008.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                100%
      of the Participant’s Testing Wages.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                If
      a Participant is also a participant in one or more other defined
      contribution plans maintained by a Participating Employer or other entity
      under Common Control with the Company, and if the amount of Employer
      contributions otherwise allocated to the Participant for a Plan Year must
      be reduced to comply with the limitations under Code § 415, such
      allocations under this Plan and each of such other plans shall be reduced
      to the extent necessary to comply with said
  limitations.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                If
      for any Plan Year the limitation described in subsection (a) would
      otherwise be exceeded with respect to any
  Participant:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                Excess
      Before Tax Contributions and any related investment earnings for any
      Participant who was age 50 or older on the last day of the Plan Year will
      be recharacterized as catch-up contributions, but only to the extent that
      the recharacterized amount, when added to any other catch-up contributions
      for the Participant, do not exceed the limit under Sec.
      6.2(b).

              

      

      

      
        	
                 
      

              	
                (2)

              	
                If
      there is any excess amount remaining after (1), it will be corrected as
      provided in the Employee Plans Compliance Resolution System (EPCRS) and
      any other applicable guidance from the U.S. Department of
      Treasury.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                For
      purposes of this section, “Annual Additions” means the sum of the
      following amounts allocated to a Participant for a Plan Year under this
      Plan and all other defined contribution plans maintained by the
      Participating Employers:

              

      

      

      (1)           Employer
contributions.  For this purpose, “employer
contributions”

      means the
sum of (i) contributions made under Sec. 4.2 and applied to make principal
payments on Exempt Loans to the extent such payments are attributable to shares
allocated to the Participant out of the Unallocated Reserve and (ii) other
employer contributions (including Before Tax Contributions) under this or any
other qualified defined contribution plan.  However, “catch-up”
contributions made pursuant to Code § 414(v) are not Annual
Additions.

      

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	
                (2)

              	
                Roth
      401(k) Contributions.

              

      

      

      (3)           After
Tax Contributions.

      

      
        	
                 
      

              	
                (4)

              	
                Forfeitures
      allocated in lieu of employer contributions; provided, however, that
      forfeitures attributable to Company Stock acquired with the proceeds of an
      Exempt Loan are Annual Additions only if the requirements of subsection
      (e) are not met.

              

      

      

      Interest
on an Exempt Loan shall be an Annual Addition for any Plan Year that the
requirements of subsection (e) are not met.  An Annual Addition with
respect to a Participant’s Accounts shall be deemed credited thereto with
respect to a Plan Year if it is allocated to the Participant’s Accounts under
the terms of the Plan as of any date within such Plan Year.

      

      
        	
                 
      

              	
                (e)

              	
                The
      requirements of this subsection (e) are met with respect to a particular
      Plan Year if no more than one-third of the shares released from the
      Unallocated Reserve as a result of leveraged ESOP contributions under Sec.
      4.2 are allocated to Highly Compensated
  Employees.

              

      

      

      Sec.
6.2                      Limit on
Before Tax Contributions.  Before Tax
Contributions for a Participant for a Plan Year (including Salary Reduction
Contributions, Results Sharing Contributions, and Flexible Dollars
Contributions) and Roth 401(k) Contributions shall not exceed the maximum annual
amount permitted for that Plan Year under subsection (a) plus any additional
amount permitted by subsection (b):

      

      
        	
                 
      

              	
                (a)

              	
                Except
      as provided in subsection (b), a Participant’s Before Tax Contributions
      and Roth 401(k) Contributions for 2009 may not exceed
      $16,500.  Said limit shall be adjusted for cost of living for
      years after 2009.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                If
      a Participant is 50 or older on the last day of a Plan Year, and has
      contributed the full amount permitted under subsection (a), he or she may
      make additional “catch-up” Before Tax Contributions and Roth 401(k)
      Contributions for 2009 not in excess of $5,500.  Said amount
      shall be adjusted for cost of living for years after
  2009.

              

      

      

      Sec.
6.3                      Return of
Excess Deferrals.  Notwithstanding
any other provisions of the Plan, Excess Deferrals for a calendar year and any
income allocable thereto may be distributed at any time after the Excess
Deferrals are received but in no case will the Excess Deferrals be distributed
later than the following April 15 to Participants who claim such Excess
Deferrals, subject to the following:

      

      
        	
                 
      

              	
                (a)

              	
                For
      purposes of this section, “Excess Deferrals” means the amount of Before
      Tax Contributions and Roth 401(k) Contributions for a calendar year that
      the Participant claims pursuant to the procedure in subsection (b) because
      the total amount deferred for the calendar year under this Plan and any
      other plan exceeds the limit under Code §
  402(g).

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      Participant’s written claim, specifying the Participant’s Excess Deferral
      for the preceding calendar year, shall be submitted to the Company no
      later than March
      1.  The claim shall include the Participant’s written statement
      that if such amounts are not distributed, such Excess Deferrals, when
      added to amounts deferred under other plans or arrangements described in
      Code §§ 401(k), 403(b), or 408(k), exceed the limit imposed on the
      Participant by Code § 402(g) for the year in which the deferral
      occurred.

              

      

      

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	
                (c)

              	
                Excess
      Deferrals distributed to a Participant with respect to a calendar year
      shall be adjusted to include income or losses allocable
      thereto.  The amount of income or loss shall be the pro-rata
      portion of the income or loss for the year for which the contributions
      were made, which is determined by the Company or Administrative Delegate
      to fairly reflect the portion of the Plan’s aggregate income or loss for
      said year properly attributable to the Excess Deferrals.  Any
      income or loss after the close of the year for which the contributions
      were made shall remain in the Fund and will not be
      distributed.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                No
      Matching Allocations will be provided with respect to Excess
      Deferrals.  Any Matching Allocations made with respect to Before
      Tax Contributions and Roth 401(k) Contributions which are later determined
      to be Excess Deferrals shall be forfeited and applied as provided in Sec.
      13.12.  The amount forfeited shall be adjusted for income or
      losses attributable thereto, determined as provided in subsection
      (c).

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Said
      distribution shall be made first from Roth 401(k) Contributions and then
      from Before Tax Contributions.

              

      

      

      Sec.
6.4                      Adjustment
of Matching Allocations Required by Code § 401(m).  If necessary to
satisfy the requirements of Code § 401(m), Matching Allocations for
Non-Bargaining Unit Participants will be adjusted as provided in this
section.  Under applicable regulations, Matching Allocations provided
to Bargaining Unit Participants automatically satisfy §401(m); such Participants
will be disregarded in applying this section.

      

      
        	
                 
      

              	
                (a)

              	
                If
      the requirements of either paragraph (1) or (2) are satisfied, then no
      further action is needed under this
section:

              

      

      

      (1)           The
average contribution percentage of Highly Compensated Employees

      for the
current Plan Year is not more than 1.25 times the average contribution
percentage of Non-Highly Compensated Employees for the immediately preceding
Plan Year.

      

      
        	
                 
      

              	
                (2)

              	
                The
      excess of the average contribution percentage of Highly Compensated
      Employees for the current Plan Year over the average contribution
      percentage of Non-Highly Compensated Employees for the immediately
      preceding Plan Year is not more than two percentage points, and the
      average contribution percentage of Highly Compensated Employees for the
      current Plan Year is not more than 2 times the average contribution
      percentage of Non-Highly Compensated Employees for the immediately
      preceding Plan Year.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      Company may elect to apply subsection (a) by using the average
      contribution percentage of Non-Highly Compensated Employees for the
      current Plan Year (rather than the preceding Plan Year).  Any
      such election shall be made in accordance with procedures prescribed by
      the Internal Revenue Service and will be irrevocable except in accordance
      with those procedures.

              

      

       

      
         

        
          27

        

        
          
          

        

      

      (c)           Average
contribution percentages will be determined as follows:

      

      
        	
                 
      

              	
                (1)

              	
                A
      Participant’s contribution percentage for a Plan Year is the amount in (A)
      divided by the amount in (B):

              

      

      

      
        	
                 
      

              	
                (A)

              	
                The
      Participant’s Matching Allocations under Sec. 4.4(e) and After Tax
      Contributions under Sec. 5.2.

              

      

      

      (B)           The
Participant’s Testing Wages for said Plan Year.

      

      
        	
                 
      

              	
                (2)

              	
                The
      average contribution percentage for Highly Compensated Employees or
      Non-Highly Compensated Employees for a Plan Year is the average of the
      individual percentages for all such employees who were Qualified Employees
      during that Plan Year.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                The
      average contribution percentage for Non-Highly Compensated Employees for
      the preceding Plan Year will take into account all Qualified Employees who
      were Non-Highly Compensated Employees during the preceding Plan Year,
      regardless of whether the individual is a Non-Highly Compensated Employee
      for the current Plan Year.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                The
      individual and average contribution percentages shall be calculated to the
      nearest one-hundredth of one
percent.

              

      

             
(d)           At any time
during the Plan Year, the Company may make an estimate of the

      amount of
Matching Allocations on behalf of Highly Compensated Employees that will be
permitted under this section for the year and may reduce the Matching
Allocations for Highly Compensated Employees to the extent the Company
determines in its sole discretion to be necessary to satisfy at least one of the
requirements in subsection (a).

      

      
        	
                 
      

              	
                 (e)

              	
                If
      neither of the requirements of subsection (a) is satisfied, then Matching
      Allocations with respect to Highly Compensated Employees shall be reduced
      as follows:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                Determine excess
      amount with respect to each Highly Compensated
      Employee.  The Company will determine the maximum
      individual contribution percentage which could be allowed and still
      satisfy (a)(1) or (a)(2).  For each Highly Compensated Employee
      whose actual contribution percentage was higher than the maximum
      individual percentage, the Company will determine the amount of excess
      contributions (i.e. the amount by
      which the individual’s actual After Tax Contributions and Matching
      Allocations exceeds what they would have been if limited to the maximum
      permitted contribution percentage).

              

      

       

      
         

        
          28

        

        
          
          

        

      

      
        	
                 
      

              	
                (2)

              	
                Add up excess amount
      for Highly Compensated Employees.  Rather than distribute
      amounts determined in (1) to the individuals whose After Tax Contributions
      and Matching Allocations exceeded the maximum permitted contribution
      percentage, these amounts will be added together to determine an aggregate
      amount of excess contributions.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                Reduce After Tax
      Contributions and Matching Allocations.  Reduce After Tax
      Contributions and Matching Allocations of Highly Compensated Employees who
      received the highest dollar amount by the amount required to cause After
      Tax Contributions and Matching Allocations to equal the amount received by
      the Highly Compensated Employee with the next highest dollar
      amount.  Continue making such reductions until the aggregate
      amount of reductions equals the total determined in
  (2).

              

      

      

      (f)           If
contributions with respect to a Highly Compensated Employee are
reduced

      pursuant
to subsection (e), the excess contributions (adjusted for income or losses
allocable thereto) shall be subtracted from the Participant’s After Tax Account
and Matching Account and distributed to the Participant no later than December
31 of the following Plan Year.  Furthermore, the Company shall attempt
to distribute such amount by March 15 of the following Plan Year to avoid the
imposition on the Company of an excise tax under Code §
4979.  (However, for distributions with respect to the 2009 Plan Year,
if such distributions are made by June 30, 2010, no excise tax will be
incurred.)  Income or losses allocable to excess amounts shall be the
pro-rata portion of the income or loss for the year for which the contributions
were made which is determined by the Company or Administrative Delegate to
fairly reflect the portion of the Plan’s aggregate income or loss for said year
properly attributable to the excess amounts.  Any income or loss after
the close of the year for which the contributions were made shall remain in the
Fund and will not be distributed.

      

      
        	
                 
      

              	
                (g)

              	
                The
      Company may direct that the test in this section will be run using the
      testing options in Treas. Reg. 1.401(m)-2(1)(iii)(A) or (B), which involve
      special testing provisions for Participants who have not yet attained age
      21 or have not yet completed a year of Aggregate Continuous
      Service.

              

      

      

      Sec.
6.5                      Adjustment
of Before Tax Contributions Required by Code § 401(k).  Under Sec.
4.4(c), this Plan provides Partnership Allocations to Non-Bargaining Unit
Participants in excess of 3% of Annual Pay.  As a result, this Plan is
a “safe-harbor plan” and the Code § 401(k) deferral percentage test is not
applicable with respect to such Participants.   To qualify as a
safe harbor plan, each year the Company must distribute a notice to each
Participant which includes the types of safe harbor contributions made, the plan
to which they are made, the type and amount of compensation which may be
deferred, how to make elections and the period for making elections, and the
Plan’s vesting and withdrawal provisions.  A supplemental notice must
be provided if the Plan changes its testing method.

      

      However,
Bargaining Unit Participants are not eligible to share in Partnership
Allocations and the Code § 401(k) deferral percentage test applies to such
Participants.  Therefore, if necessary to satisfy the requirements of
Code § 401(k), Before Tax Contributions with respect to Bargaining Unit
Participants shall be adjusted as follows.  For purposes of applying
this section, Non-Bargaining Unit Participants will be disregarded.

       

      
         

        
          29

        

        
          
          

        

      

      
        	
                 
      

              	
                (a)

              	
                If
      the requirements of either paragraph (1) or (2) are satisfied with respect
      to a Plan Year, then no further action is needed under this
      section:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                The
      average deferral percentage of Highly Compensated Employees for the
      current Plan Year is not more than 1.25 times the average deferral
      percentage of non-Highly Compensated Employees for the immediately
      preceding Plan Year.

              

      

      

      (2)           The
excess of the average deferral percentage of Highly Compensated

      Employees
for the current Plan Year over the average deferral percentage of non-Highly
Compensated Employees for the immediately preceding Plan Year is not more than
two percentage points, and the average deferral percentage of Highly Compensated
Employees for the current Plan Year is not more than 2 times the average
deferral percentage of non-Highly Compensated Employees for the immediately
preceding Plan Year.

      

      
        	
                 
      

              	
                (b)

              	
                The
      Company may elect to apply subsection (a) by using the average deferral
      percentage of non-Highly Compensated Employees for the current Plan Year
      (rather than the preceding Plan Year).  Any such election shall
      be made in accordance with procedures prescribed by the Internal Revenue
      Service and will be irrevocable except in accordance with those
      procedures.

              

      

      

      (c)           Average
deferral percentages will be determined as follows:

      

      
        	
                 
      

              	
                (1)

              	
                A
      Participant’s deferral percentage for a Plan Year is his Before Tax
      Contributions and Roth 401(k) Contributions for said Plan Year (including
      any Excess Deferrals distributed under Sec. 6.3 but excluding any
      “catch-up” contributions made pursuant to Sec. 6.2(b)), divided by his or
      her Testing Wages for said Plan
Year.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                The
      average deferral percentage for Highly Compensated Employees or non-Highly
      Compensated Employees for a Plan Year is the average of the individual
      percentages for all such employees who were eligible to make Before Tax
      Contributions or Roth 401(k) Contributions during that Plan
      Year.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                The
      average deferral percentage for non-Highly Compensated Employees for the
      preceding Plan Year will take into account all individuals who were
      eligible to make Before Tax Contributions or Roth 401(k) Contributions and
      were non-Highly Compensated Employees during the preceding Plan Year,
      regardless of whether the individual is eligible to make such
      contributions and/or is a non-Highly Compensated Employee for the current
      Plan Year.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                The
      individual and average deferral percentages shall be calculated to the
      nearest  one-hundredth of one
percent.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                If
      neither of the requirements of subsection (a) is satisfied, then the
      Before Tax Contributions and Roth 401(k) Contributions with respect to
      Highly Compensated Employees shall be reduced as
  follows:

              

      

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

      (1)           Determine excess amount with
respect to each Highly Compensated

      Employee.  The
Company will determine the maximum individual deferral percentage which could be
allowed and still satisfy (a)(1) or (a)(2).  For each Highly
Compensated Employee whose actual deferral percentage was higher than the
maximum individual percentage, the Company will determine the amount of excess
contributions (i.e. the
amount by which the individual’s actual Before Tax Contributions and Roth 401(k)
Contributions exceeds what such contributions would have been if he or she had
contributed the maximum permitted deferral percentage).

      

      
        	
                 
      

              	
                (2)

              	
                Add up excess amount
      for all Highly Compensated Employees.  Rather than
      distributing the amounts determined in (1) to the individuals whose Before
      Tax Contributions and Roth 401(k) Contributions exceeded the maximum
      permitted deferral percentage, these amounts will be added together to
      determine an aggregate amount of excess
  deferrals.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                Distribute excess
      deferrals.  Reduce Before Tax Contributions and Roth
      401(k) Contributions of the Highly Compensated Employee who contributed
      the highest dollar amount by the amount required to cause such
      contributions to equal the amount contributed by the Highly Compensated
      Employee with the next highest dollar amount.  Continue making
      such reductions until the aggregate amount of reductions equals the
      total  determined in (2).

              

      

      

      
        	
                 
      

              	
                (e)

              	
                The
      amount by which Before Tax Contributions and Roth 401(k) Contributions
      with respect to Highly Compensated Employees are reduced pursuant to
      subsection (d) shall be applied as
follows:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                Such
      reductions for Highly Compensated Employees who were age 50 or older by
      the last day of the Plan Year for which the contribution was made will be
      recharacterized as catch-up contributions, but only to the extent that the
      recharacterized amount, when added to any other catch-up contributions
      previously made by the Participant, do not exceed the applicable limit
      under Sec. 6.2(b).

              

      

      

      (2)           Any
remaining reduction amount for employees age 50 or older, and the

      full
reduction amount for employees younger than age 50 (in either case adjusted for
income or losses allocable thereto) shall be distributed to Participants on
whose behalf such excess contributions were made no later than December 31 of
the following Plan Year.  Furthermore, the Company shall attempt to
distribute such amount by March 15 of the following Plan Year to avoid the
imposition on the Company of an excise tax under Code '
4979.  (However, for distributions with respect to the 2009 Plan Year,
if said distributions are made by June 30, 2010, no excise tax will be
incurred.)  Income or losses allocable to contributions which are
being distributed shall be the pro-rata portion of the income or loss for the
year for which the contributions were made which is determined by the Company or
Administrative Delegate to fairly reflect the portion of the Plan's aggregate
income or loss for said year properly attributable to such
contributions.  Any income or loss after the close of the year for
which the contributions were made shall remain in the Fund and will not be
distributed.  The amount of excess contributions and income or losses
allocable thereto which would otherwise be distributed pursuant to this
subsection shall be reduced by the amount of Excess Deferrals and income or
losses allocable thereto previously distributed to the Participant pursuant to
Sec. 6.3 for the same Plan Year.

       

      
         

        
          31

        

        
          
          

        

      

      
        	
                 
      

              	
                (f)

              	
                No
      Matching Allocations will be provided with respect to excess
      contributions.  Any Matching Allocations made with respect to
      contributions which are later determined to exceed the limitations under
      this section shall be forfeited and applied as provided in Sec.
      13.12.  The amount forfeited shall be adjusted for income or
      losses attributable thereto, determined as provided in subsection
      (e).

              

      

      

      
        	
                 
      

              	
                (g)

              	
                Distributions
      under (d) and (e) shall be made first from the Participant’s Roth 401(k)
      Contributions and then from Before Tax
  Contributions.

              

      

      

      
        	
                 
      

              	
                (h)

              	
                The
      Company may direct that the test in this section will be run using the
      testing options in Treas. Reg. 1.401(k)-2(a)(1)(iii)(A) or (B), which
      involve special testing provisions for Participants who have not yet
      attained age 21 or have not yet completed a year of Aggregate Continuous
      Service.

              

      

      

      Sec.
6.6                      Testing
Arrangements If Employer Has More Than One Plan.   The
following requirements apply under Sec. 6.4 and Sec. 6.5 if a Participating
Employer has more than one plan subject to Code §§ 401(k) or
401(m):

      

      
        	
                (a)  

              	
                If
      the plans are mandatorily or permissively aggregated for purposes of
      determining whether they satisfy Code §§ 401(a)(4) and 410(b), they will
      be treated as a single plan for purposes of applying the Code §401(m)
      actual contribution percentage test in Sec. 6.4 and the Code § 401(k)
      actual deferral percentage test in Sec.
6.5.

              

      

      

      
        	
                (b)  

              	
                If
      a Participant who is a Highly Compensated Employee is eligible to
      participate in another plan that is subject to Code § 401(k) or (m), (i)
      his or her after-tax and matching contributions under that plan will be
      aggregated with such contributions under this Plan for purposes of
      applying the actual contribution percentage test under Sec. 6.4 and (ii)
      his or her 401(k) contributions under that plan will be aggregated with
      such contributions under this plan for purposes of applying the actual
      deferral percentage test in Sec.
6.5.

              

      

      
        
           

        

        
          32

          
            

          

        

        
           

        

      

      ARTICLE
VII

      INDIVIDUAL
ACCOUNTS

      

      Sec.
7.1                      Accounts
for Participants.  The following Accounts may be established
under the Plan for a Participant:

      

      
        	
                 
      

              	
                (a)

              	
                A
      Before Tax Account shall be established to receive any contributions made
      under Sec. 5.1.  Amounts from a Participant’s employer
      contribution account under the Supplemental Retirement Plan also are held
      in his or her Before Tax Account.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                An
      After Tax Account shall be established to receive any contributions made
      under Sec. 5.2.  Amounts from a Participant’s employee
      contribution account under the Supplemental Retirement Plan also are held
      in his or her After Tax Account.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                A
      Basic Account shall be established for each Participant for whom shares
      were allocated when the Plan was a tax credit ESOP.  Such
      Accounts include shares of Company Stock acquired with after tax
      contributions employees made to the tax credit ESOP from 1977 through
      1983.  No such allocations are currently being made to such
      Accounts.  Basic Accounts are comprised of the following
      sub-accounts:

              

      

      

      (1)           Basic
Pre-1989 Accounts;

      

      (2)           Basic
Post-1989 Accounts;

      

      (3)           Basic
Leveraged Accounts.

      

      
        	
                 
      

              	
                (d)

              	
                A
      Special Account shall be established to receive allocations under Sec.
      4.4(b) and to hold similar allocations from the
  ESOP.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                A
      Partnership Account shall be established to receive allocations under Sec.
      4.4(c) and to hold similar allocations from the
  ESOP.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                A
      Bargaining Unit Account shall be established to receive allocations under
      Sec. 4.4(d) and to hold similar allocations from the
  ESOP.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                A
      Matching Account shall be established to receive allocations under Sec.
      4.4(e) and to hold similar allocations from the
  ESOP.

              

      

      

      
        	
                 
      

              	
                (h)

              	
                A
      Results Sharing Account shall be established to receive allocations under
      Sec. 4.4(f).

              

      

      

      
        	
                 
      

              	
                (i)

              	
                A
      Rollover Account shall be established to receive any Rollover
      Contributions made under Sec. 5.3.

              

      

      

      
        
           

        

        
          33

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (j)

              	
                A
      Florida Water Account shall be established to hold amounts from the
      Florida Water Services Corporation Contributory Profit Sharing Plan, which
      was merged with this Plan in 2006.

              

      

      

      
        	
                 
      

              	
                (k)

              	
                A
      Roth 401(k) Account shall be established to receive any contributions made
      under Sec. 5.4.

              

      

      

      Except as
expressly provided herein to the contrary, the Fund shall be held and invested
on a commingled basis, Accounts shall be for bookkeeping purposes only, and the
establishment of Accounts shall not require any segregation of Fund
assets.

      

      Sec.
7.2                      Investment
of Accounts.  Accounts shall be
invested as follows:

      

      
        	
                 
      

              	
                (a)

              	
                A
      Participant=s
      Basic Pre-1989 Account, Basic Post-1989 Account, Basic Leveraged Account,
      Special Account, Partnership Account, Bargaining Unit Account, Matching
      Account, and Results Sharing Account shall be invested in Company Stock
      Fund A until such time as the Participant directs that all or any part of
      said Accounts be transferred to another Investment Fund.  A
      Participant may at any time direct that all or any part of said Accounts
      be transferred to any other Investment Fund.  Such Accounts may
      at any time be reinvested in Company Stock through Company Stock Fund B if
      so directed by the Participant.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                A
      Participant’s Before Tax Account, After Tax Account, Rollover Account, and
      Florida Water Account, and Roth 401(k) Account shall be invested as
      directed by the Participant in Company Stock Fund B or any other
      Investment Fund.  If a Participant fails to direct investment of
      said Accounts, the Company shall designate which Investment Fund will be
      used.  The Investment Fund used for this purpose will be one
      that is a “Qualified Default Investment Alternative” satisfying the
      requirements of applicable regulations of the U.S. Department of
      Labor.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                All
      investment directions shall be in accordance with rules established by the
      Company or Administrative Delegate.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                The
      foregoing provisions are intended to satisfy the diversification
      requirements of Code §§ 401(a)(28) and
  401(a)(35).

              

      

      

      Sec.
7.3                      Investment
Funds.  The following
Investment Funds may be established under the Plan:

      

      
        	
                 
      

              	
                (a)

              	
                Company Stock Fund A
      (formerly ESOP).  Company Stock Fund A shall be invested
      primarily in shares of Company Stock, but the Trustee may maintain a
      portion in cash, cash equivalents, or other
      investments.  Company Stock Fund A includes the shares acquired
      through leveraged transactions and tax credit
    contributions.

              

      

      
        
           

        

        
          34

          
            

          

        

        
           

        

      

      (b)           Company Stock Fund B
(formerly SRP).  Company Stock Fund B shall also be
invested
primarily in shares of Company Stock, but the Trustee may maintain a portion in
cash, cash equivalents, or other investments.  Shares held in Company
Stock Fund B were acquired through Company contributions or open market
purchases.

      

      
        	
                 
      

              	
                (c)

              	
                Other Investment
      Funds.  The Company shall determine the other Investment
      Funds available under the Plan.  The Company may add or delete
      Investment Funds from time to time.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Brokerage
      Accounts.  If permitted by the Company, one of the
      Investment Funds may be an individual brokerage account maintained by the
      Trustee or an affiliate of the Trustee, through which a Participant may
      direct investment of the assets held therein.  The Company or
      Trustee may establish rules limiting the types of investments that may be
      held in brokerage accounts.  Reasonable fees incurred in
      connection with a brokerage account may be charged to that
      account.

              

      

      

      Sec.
7.4                      Valuation
of Accounts.  As of each Valuation Date, each Account shall be
adjusted to reflect the effect of investment gains or losses, income,
contributions, distributions, transfers, loans and all other transactions with
respect to that Account since the next preceding Valuation Date.

      

      Sec.
7.5                      Provisions
Regarding ADESA Spin-Off.  On September 20,
2004, the Company spun-off its shares of ADESA, Inc. common stock to Company
shareholders.  The shares received by the Plan through the spin-off
are referred to as the “ADESA Shares”.  The Plan will dispose of the
ADESA Shares during a one year period following the spin-off, subject to the
following:

      

      
        	
                 
      

              	
                (a)

              	
                The
      ADESA Shares held in Basic Pre-1989 Accounts will be sold and the proceeds
      reinvested in Company Stock on a date or dates as determined by an
      independent fiduciary appointed by the
Company.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      following provisions apply to ADESA Shares in all Accounts other than
      Basic Pre-1989 Accounts:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                ADESA
      Shares received with respect to shares of Company Stock held in Company
      Stock Fund A shall be held in ADESA Stock Fund A.  ADESA Shares
      attributable to shares of Company Stock in Company Stock Fund B shall be
      held in ADESA Stock Fund B.  A portion of ADESA Stock Fund A or
      B may be maintained in cash or other short-term investments approved by
      the Company or by an independent fiduciary appointed by the
      Company.

              

      

      

      
        
           

        

        
          35

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (2)

              	
                A
      Participant may at any time direct that amounts be transferred from his or
      her Accounts in ADESA Stock Fund A or B to other available
      investments.  If the successor investment chosen by the
      Participant is Company Stock, amounts from ADESA Stock Fund A and B will
      be transferred to Company Stock Fund B.  Participants may not
      elect to transfer amounts from other Investment Funds into either ADESA
      Stock Fund.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                If
      the Plan distributes Company Stock in kind to a Participant during the
      period while ADESA Shares are held in his or her Accounts, the ADESA
      Shares also will be distributed in kind.  Except as provided in
      the preceding sentence, ADESA Shares may not be distributed in
      kind.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                On
      or about September 30, 2005, any ADESA Shares remaining in ADESA Stock
      Fund A and B shall be sold; the sale proceeds and any dividends received
      on the ADESA shares shall be invested in shares of Company Stock through
      Company Stock Fund A and B, respectively.  Said sales and
      reinvestments shall occur on a date or dates determined by an independent
      fiduciary appointed by the Company.

              

      

      

      
        	
                 
      

              	
                (5)

              	
                Participant
      contributions and loan payments made after the spin-off may not be
      invested in ADESA Shares.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Following
      the spin-off, the Unallocated Reserve will hold ADESA Shares received with
      respect to Company Stock held in the Unallocated Reserve, dividends on
      such shares, and proceeds received from selling such
      shares.  Such dividends and sale proceeds shall be invested in
      short-term investments approved by the Company (or by an independent
      fiduciary appointed by the Company) until such time as said amounts are
      reinvested in shares of Company Stock. (Amounts attributable to dividends
      may also be used for ESOP loan
payments.­)

              

      

      

      

      

      
        
           

        

        
          36

          
            

          

        

        
           

        

      

      ARTICLE
VIII

      DESIGNATION OF
BENEFICIARY

      

      Sec.
8.1                      Persons
Eligible to Designate.  Any Participant
may designate a Beneficiary to receive any amount payable from the Fund as a
result of the Participant’s death.  The Beneficiary may be one or more
persons, natural or otherwise.  By way of illustration, but not by way
of limitation, the Beneficiary may be an individual, trustee, executor, or
administrator.  A Participant may also change or revoke a designation
previously made, without the consent of any Beneficiary named
therein.

      

      Sec.
8.2                      Special
Requirements for Married Participants  Notwithstanding the
provisions of Sec. 8.1, if a Participant is married at the time of his death,
the Participant’s Beneficiary shall be his or her spouse unless the spouse has
consented in writing to the designation of a different Beneficiary, the spouse’s
consent acknowledges the effect of the designation, and the spouse’s consent is
witnessed by a representative of the Plan or a notary public.  The
previous sentence shall not apply if it is established to the satisfaction of
the Company that such consent cannot be obtained because there is no spouse, or
because the spouse cannot be located.  Any designation of a
Beneficiary or form of benefits which has received spousal consent may not be
changed (other than by being revoked) without spousal consent.  Any
such consent shall be valid only with respect to the spouse who signed the
consent.

      

      Sec.
8.3                      Form and
Method of Designation.  Any designation or revocation of a
prior designation of Beneficiary shall be in writing on a form acceptable to the
Company and shall be filed with the Company.  The Company and all
other parties involved in making payment to a Beneficiary may rely on the latest
Beneficiary designation on file with the Company at the time of payment or may
make payment pursuant to Sec. 8.4 if an effective designation is not on file,
shall be fully protected in doing so, and shall have no liability whatsoever to
any person making claim for such payment under a subsequently filed designation
of Beneficiary or for any other reason.

      

      Sec.
8.4                      No
Effective Designation.  If there is not on file with the
Company an effective designation of Beneficiary by a deceased Participant, the
Beneficiary shall be the person or persons surviving the Participant in the
first of the following classes in which there is a survivor, share and share
alike:

      

      (a)           The
Participant’s spouse.

      
        	
                 
      

              	
                (b)

              	
                The
      Participant’s children who survive the Participant in equal shares, except
      that if any children predecease the Participant but leave issue surviving
      the Participant, such issue shall take by right of representation the
      share their parent would have taken if
living.

              

      

      (c)           This
Participant’s personal representative (executor or administrator).

      

      Determination
of the identity of the Beneficiary in each case shall be made by the
Company.

      

      Sec.
8.5                      Beneficiary
May Designate.  A Beneficiary of
a deceased Participant may designate a successor Beneficiary to receive any
benefits payable after the Beneficiary’s death.  If no successor
Beneficiary is designated or if the successor Beneficiary does not survive the
original Beneficiary, any remaining benefits payable following the original
Beneficiary’s death will be paid to the original Beneficiary’s
estate.

      
        
           

        

        
          37

          
            

          

        

        
           

        

      

      ARTICLE
IX

      BENEFIT
REQUIREMENTS

      

      Sec.
9.1                      Benefit
Upon Termination of Employment.  Upon Termination of
Employment, a Participant’s Accounts are fully vested regardless of his or her
length of service.  A Participant’s benefit upon Termination of
Employment shall be paid as provided in Article X.

      

      Sec.
9.2                      Death.  If
a Participant’s Termination of Employment is the result of his or her death, the
Participant’s Beneficiary shall be entitled to a benefit equal to the value of
all of the  Participant’s Accounts.  Such benefit shall be
paid at the times and in the manner determined under Article X.  If a
Participant’s death occurs after Termination of Employment, a distribution of
the Account balance shall be made to the Beneficiary in accordance with the
provisions of Article X.

      

      Sec.
9.3                      Termination
of Employment Prior to July 1, 2001.  A Participant
whose Termination of Employment occurred prior to July 1, 2001 is subject to the
vesting rules as in effect at the time he or she terminated employment,
including any rules regarding reinstatement of Accounts upon
reemployment.  Any forfeitures with respect to such Participants will
be applied as provided in Sec. 13.12.

      
        
           

        

        
          38

          
            

          

        

        
           

        

      

      ARTICLE
X

      DISTRIBUTION OF
BENEFITS

      

      Sec.
10.1                      Distribution
Following Termination of Employment.   Except as provided
in Sec. 10.2, the benefit to which a Participant or Beneficiary may become
entitled under Article IX shall be distributed at such time and according to
such method as he or she elects, subject to the following:

      

      
        	
                 
      

              	
                (a)

              	
                Distribution
      from all Accounts may occur at any time after the Participant’s
      Termination of Employment.  As of any distribution date, a
      Participant may elect to receive the entire amount available for
      distribution or a portion thereof.  However, no more than one
      partial distribution may be elected in any one Plan Year.  As
      part of any distribution election, a Participant may elect to receive
      future distributions in a series of annual
  installments.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Distributions
      to a Participant must begin not later than the Participant’s “required
      beginning date”.  A Participant’s “required beginning date” is
      April 1 of the Plan Year following the later of (i) the Plan Year in which
      the Participant attains age 701⁄2 , or (ii) the Plan Year in which the
      Participant’s Termination of Employment occurs.  However, if the
      Participant is a 5% owner, as described in Code § 416, the required
      beginning date is April 1 following the Plan Year he or she reaches 701⁄2,
      regardless of whether he or she has had a Termination of
      Employment.

              

      

      

      
        	
                (c)  

              	
                Pursuant
      to Code § 401(a)(14), a Participant has the right to receive distributions
      from the Plan at age 65 (or at Termination of Employment, if
      later).  Such distributions will be made upon receipt of proper
      instructions from the Participant.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                For
      distributions made for calendar years beginning on or after January 1,
      2003, the Plan will apply the minimum distribution and incidental death
      benefit requirements of Code § 401(a)(9) in accordance with Treas. Reg.
      §1.401(a)(9)-1 through 1.401(a)(9)-9.  These requirements will
      override any distribution options in the Plan that are inconsistent with §
      401(a)(9).  (Distributions during 2002 were determined under
      Code § 401(a)(9) regulations proposed on January 17,
  2002.)

              

      

      

      
        	
                 
      

              	
                (e)

              	
                The
      amount distributed to a Participant for the calendar year preceding his or
      her required beginning date and for each subsequent calendar year shall
      not be less than the amount required by Treas. Reg.
      1.401(a)(9)-5.  The distribution for the calendar year preceding
      the individual’s required beginning date must be paid not later than the
      required beginning date.  The distribution for each subsequent
      year must be paid not later than December 31st
      of that year.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                If
      the Participant dies after his or her required beginning date and after
      beginning to receive payments in installments, the remaining payments
      shall be made to the Beneficiary in annual amounts at least equal to the
      minimum amount required by Treas. Reg.
  1.401(a)(9)-5.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                If
      the Participant dies before his or her required beginning date, the
      Participant’s Accounts shall be distributed to the Beneficiary not later
      than December 31 of the year containing the fifth anniversary of the
      Participant’s death, subject to the
following:

              

      

       

      
         

        
          39

        

        
          
          

        

      

      
        	
                 
      

              	
                (1)

              	
                Distributions
      to a Beneficiary may extend beyond five years from the death of the
      Participant if they are in the form of installment payments over a period
      not exceeding the Beneficiary’s life expectancy, provided such payments
      begin not later than December 31 of the year following the year in which
      the Participant’s death occurred.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                If
      a Beneficiary is the surviving spouse of the Participant, payments to that
      surviving spouse pursuant to paragraph (1) need not commence until
      December 31 of the year in which the Participant would have reached age
      701⁄2.

              

      

      

      
        	
                 
      

              	
                (h)

              	
                If
      a Beneficiary of a deceased Participant dies before receiving all benefits
      to which the Beneficiary is entitled under the Plan, any remaining amount
      shall be paid as provided in Sec.
8.5.

              

      

      

      
        	
                 
      

              	
                (i)

              	
                If
      more than one Beneficiary is entitled to benefits following the
      Participant’s death, the interest of each Beneficiary shall be segregated
      into a separate Account for purposes of applying this
    section.

              

      

      

      
        	
                 
      

              	
                (j)

              	
                If
      distributions are made in installments, the amount to be distributed each
      calendar year, beginning with the first calendar year for which payments
      are required pursuant to Code § 401(a)(9), must be at least equal to the
      quotient obtained by dividing the entire interest of the individual on the
      most recent Valuation Date preceding the calendar year (adjusted as may be
      required by Treasury regulations) by the applicable distribution period
      determined under Treas. Reg.
1.401(a)(9)-5.

              

      

      

      
        	
                 
      

              	
                (k)

              	
                Distributions
      shall be made in accordance with the requirements of Code § 401(a)(9),
      including the incidental death benefit requirements of Code § 401(a)(9)(G)
      and the regulations thereunder.  No distribution option
      otherwise permitted under this Plan will be available to a Participant or
      Beneficiary if such distribution option does not meet the requirements of
      Code § 401(a)(9), including paragraph (G)
  thereof.

              

      

      

      
        	
                 
      

              	
                (l)

              	
                A
      Participant or Beneficiary who is receiving a pension under Retirement
      Plan A or Retirement Plan B may elect to have all or any part of the
      taxable portion of his or her benefit rolled over to said
      Plan.  Any such transfer will be made in cash.  The
      transferred amount will either be converted to a life annuity or applied
      to pay monthly installments over a period of years, as elected by the
      Participant.  A Participant may elect to have a portion of the
      transferred amount paid as a life annuity and another portion applied to
      pay monthly installments over a period of years, or may choose to have the
      entire transferred amount paid exclusively in one form or the
      other.  A Participant will not be permitted to elect more than
      two forms of payment for the transferred amount.  After Tax
      Contributions and Roth 401(k) Contributions may not be transferred
      pursuant to this section.

              

      

      

      
        	
                 
      

              	
                (m)

              	
                If
      distributions are made in installments, amounts attributable to Roth
      401(k) Contributions or to rollovers of such contributions will be
      distributed after amounts from other
sources.

              

      

      
        	
                 
      

                 

              	
                (n)

              	
                Pursuant
      to the Worker, Retiree and Employer Recovery Act of 2008 (“WRERA”), the
      minimum distribution requirements of Code §401(a)(9) were waived for
      2009.  The Plan will be administered in accordance with WRERA
      and any applicable regulations or other guidance regarding such
      waiver.  While minimum distributions are not required for 2009,
      individual Participants and Beneficiaries who are eligible for
      distributions are free to take them even if such distributions are not
      required.

              

      

       

      
         

        
          40

        

        
          
          

        

      

      Sec.
10.2                      Accounts
Totaling $1,000 or Less.  If the total
value of the Accounts (including the value of any Rollover Account) of a
Participant, a Beneficiary of a deceased Participant, or an alternate payee
under a qualified domestic relations order, is $1,000 or less immediately prior
to the time distributions are to commence, a single-sum distribution of all of
such individual’s Accounts shall be made to the individual as soon as
administratively feasible following the Participant’s Termination of Employment
or death or the date the domestic relations order is determined to be
qualified.

      

      Sec.
10.3                      Form of
Distribution.  Distributions from Accounts invested in Company
Stock shall be made in cash or in shares of Company Stock (with cash in lieu of
any fractional share), as directed by the Participant.  Distributions
from individual brokerage accounts established pursuant to Sec. 7.3(d) shall be
in cash or in kind, as directed by the Participant.  Distributions
from other Accounts shall be made in cash.  (If a Participant wishes
to receive his or her entire distribution in the form of shares of Company
Stock, he or she must direct transfer of any portion of his or her Accounts not
invested in Company Stock to Company Stock Fund B prior to the
distribution.)  Any transfer to Retirement Plan A or B will be made in
cash.

      

      Sec.
10.4                      Accounting
Following Termination of Employment.  The Participant’s
Accounts shall continue to be invested and valued as provided in Article VII
until distributed.

      

      Sec.
10.5                      Reemployment  No
distribution shall be made to a Participant during any period prior to his or
her required beginning date while he or she is reemployed by a Participating
Employer or other entity under Common Control with the Company.

      

      Sec.
10.6                      Source of
Benefits  All benefits to which persons become entitled
hereunder shall be provided only out of the Fund and only to the extent that the
Fund is adequate therefor.  No benefits are provided under the Plan
except those expressly described herein.  Each Participant and
Beneficiary assumes all risk connected with any decrease in the market value of
any assets held under the Plan.  The Participating Employers do not in
any way guarantee the Fund against any loss or depreciation, or the payment of
any amount that may be or become due to any person from the Fund.

      

                 Sec.
10.7                      Incompetent
Payee.  If in the opinion of the Company a person entitled to
payments hereunder is disabled from caring for his or her affairs because of
physical or mental condition, payment due such person may be made to such
person’s guardian, conservator, or other legal personal representative upon
furnishing the Company with evidence satisfactory to the Company of such
status.  Prior to the furnishing of such evidence, the Company may
cause payment due the person under disability to be made, for such person’s use
and benefit, to any person or institution then in the opinion of the Company
caring for or maintaining the person under disability.  The Company
shall have no liability with respect to payments so made.  The Company
shall have no duty to make inquiry as to the competence of any person entitled
to receive payments hereunder.

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

      Sec.
10.8                      Benefits
May Not Be Assigned or Alienated  Except as otherwise expressly
permitted by the Plan or required by law, the interest of persons entitled to
benefits under the Plan may not in any manner whatsoever be assigned or
alienated, whether voluntarily or involuntarily, or directly or
indirectly.  However, the Plan shall comply with the provisions of any
court order which the Company determines is a qualified domestic relations order
as defined in Code § 414(p).  Subject to Sec 10.1(d) and Sec. 10.2, an
individual who is entitled to payments from the Plan as an “alternate payee”
pursuant to a qualified domestic relations order may elect to receive payments
from the Plan at any time after the Company’s determination that the order is a
qualified domestic relations order, unless the order specifically provides for
payment to be made at a particular time.  The Company may defer
distributions from an account subject to a domestic relations order pending
determination that the order is qualified.  Also, a Participant’s
Account may be offset as provided by Code § 401(a)(13)(C) by amounts the
Participant is required to pay the Plan due to commission of a crime, breach of
fiduciary duty, or the like.

      

      Sec.
10.9                      Payment
of Taxes  The Trustee may pay any estate, inheritance, income
or other tax, charge or assessment attributable to any benefit payable hereunder
which in the Trustee’s opinion it shall be or may be required to pay out of such
benefit.  The Trustee may require, before making any payment, such
release or other document from any taxing authority and such indemnity from the
intended payee as the Trustee shall deem necessary for its
protection.

      

      Sec.
10.10                      Conditions
Precedent  No person shall be entitled to a benefit hereunder
until his right thereto has been finally determined by the Company, nor until he
has submitted to the Company relevant data reasonably requested by the Company,
including, but not limited to, proof of birth or death.

      

      Sec.
10.11                      Withdrawals
Before Termination of Employment.  Withdrawals prior
to Termination of Employment are permitted as follows:

      

      
        	
                 
      

              	
                (a)

              	
                A
      Participant may at any time elect to withdraw all or any part of his or
      her Basic Pre-1989 Account and After Tax
  Account.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                A
      Participant who has attained age 59 1⁄2 may at any time elect to withdraw
      all or any part of any of his or her
Accounts.

              

      

      

      However,
a Participant may not make more than one such withdrawal in any one Plan
Year.  Any such withdrawal must be in an amount of at least
$1,000.  Except as provided in (a) and (b), or in Sec. 10.12, a
Participant may not make withdrawals from the Plan prior to Termination of
Employment.

      
        
           

        

        
          42

          
            

          

        

        
           

        

      

      Sec.
10.12                      Dividend
Withdrawals.  A Participant,
Beneficiary, or alternate payee may elect to withdraw dividends on Company Stock
held in his or her Basic Pre-1989 and Post-1989 Account, Special Post-1989
Account, Partnership Non-leveraged Account, Before Tax Account, Roth 401(k)
Account, After Tax Account, Rollover Account, and Florida Water
Account.  If shares of Company Stock held in other Accounts were
acquired through an Exempt Loan which has been paid in full, dividends received
after January 1, 2005 with respect to such shares also may be withdrawn pursuant
to this section.  Such withdrawals are subject to the
following:

      

      (a)           Elections
may be made at any time, and will remain in effect until modified.

      

      
        	
                 
      

              	
                (b)

              	
                If
      a Participant elects such withdrawals, the dividends will be distributed
      on (or shortly after) the dividend payment date.  Such
      distributions may be made by the Trustee or directly by the
      Company.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                If
      a Participant elects not to withdraw dividends (or does not make any
      election), dividends on shares in his or her Basic Account will be applied
      as provided in Sec. 4.3(a), and other dividends which were available for
      withdrawal will remain in the Trust where they will be reinvested in
      Company Stock.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Such
      elections may also be made by Participants who are former employees,
      Beneficiaries of deceased Participants, and alternate
    payees.

              

      

      

      Sec.
10.13                      Rollovers
to Other Qualified Plans.  Notwithstanding
any provision of the Plan to the contrary that would otherwise limit a
distributee’s election under this section, a distributee may elect, at the time
and in the manner prescribed by the Company, to have any portion of an eligible
rollover distribution paid directly to another eligible retirement plan
specified by the distributee in a direct rollover.  The following
definitions shall be used in administering the provisions of this
Section.

      

      
        	
                 
      

              	
                (a)

              	
                Eligible Rollover
      Distribution: An eligible rollover distribution is any distribution
      of all or any portion of the balance to the credit of the distributee,
      except that an eligible rollover distribution does not include: any
      distribution that is one of a series of substantially equal periodic
      payments (not less frequently than annually) made for the life (or life
      expectancy) of the distributee or the joint lives (or joint life
      expectancies) of the distributee and the distributee’s designated
      Beneficiary, or for a specified period of ten years or more; any
      distribution to the extent such distribution is required under Code §
      401(a)(9); and any hardship
withdrawal.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Eligible Retirement
      Plan:  An eligible retirement plan is an individual
      retirement account described in Code § 408(a), an individual retirement
      annuity described in Code § 408(b), an annuity plan described in Code §
      403(a), a qualified trust described in Code § 401(a), an eligible deferred
      compensation plan described in Code § 457(b) maintained by a governmental
      entity such as a state, political subdivision of a state, or agency or
      instrumentality of a state or political subdivision of a state which
      agrees to separately account for amounts transferred from this Plan, and a
      tax sheltered annuity contract described in Code § 403(b) that accepts the
      distributee’s eligible rollover
distribution.

              

      

      

      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

      

      
        	
                 
      

              	
                (c)

              	
                After Tax
      Distributions.  Notwithstanding (b), an eligible rollover
      distribution of After Tax Contributions can only be made to an individual
      retirement account or annuity, or to another defined contribution plan
      qualified under Code §§401(a) or 403(a) which separately accounts for the
      After Tax Contributions, in a direct trustee-to-trustee
      transfer.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Distributee: A
      distributee includes an employee or former employee.  In
      addition, the employee’s or former employee’s surviving spouse or former
      spouse who is the alternate payee under a qualified domestic relations
      order, as defined in Code § 414(p), are distributees with regard to the
      interest of the spouse or former spouse.  Effective as of
      September 1, 2008, a Beneficiary who is not the surviving spouse also is a
      distributee eligible to elect a direct rollover under this section, but
      such a rollover may only be made to the Beneficiary’s individual
      retirement account or individual retirement annuity, and not to any other
      type of Plan.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Direct
      Rollover: A direct rollover is a payment by the Trustee to the
      eligible retirement plan specified by the
  distributee.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                Transfers to Company
      Retirement Plan.  The Plan also permits a Participant or
      Beneficiary to elect rollover of his or her benefits under this Plan to
      the Company’s Retirement Plan A or B.  Such rollovers are
      subject to Sec. 10.1(l).

              

      

      

      
        	
                 
      

              	
                (g)

              	
                Roth 401(k)
      Distributions.  Notwithstanding subsection (b), an
      eligible rollover distribution of Roth 401(k) Contributions can only be
      made to a Roth IRA or to another defined contribution plan qualified under
      Code section 401(a) or 403(b), which separately accounts for the Roth
      401(k) Contributions following a Direct Rollover from this
      Plan.

              

      

      

      
        	
                 
      

              	
                (h)

              	
                Conversion Rollover to
      a Roth IRA.  Effective as of January 1, 2008, a
      distributee may elect to have all or any portion of an eligible rollover
      distribution paid to a Roth IRA.  That is, the rollover to the
      Roth IRA is not limited to amounts from the distributee’s Roth 401(k)
      Account, but can also include amounts from the distributee’s other
      Accounts.  In such cases, the distributee is responsible for
      assuring that he or she eligible to make a rollover to a Roth IRA, and the
      Company and Administrative Delegate have no responsibility with respect
      thereto.

              

      

      

      Sec.
10.14                      Lost
Participants.  If reasonable
efforts by the Company to locate a Participant or Beneficiary who is entitled to
a benefit under the Plan are unsuccessful, the Company may forfeit that
individual’s Accounts, without regard to any distribution obligation that might
otherwise exist under Sec. 10.2.  If a distribution check is issued to
a Participant or Beneficiary, the distribution check remains issued and
outstanding for more than 180 days, and reasonable efforts by the Company to
locate such Participant or Beneficiary are unsuccessful, the distribution will
be re-deposited into the Plan and treated as a forfeiture.  Any
forfeiture resulting from the application of this Sec. 10.14 will be applied as
provided in Sec. 13.12.  If an individual whose benefit was forfeited
later makes a claim for benefits, the forfeited amounts will be reinstated at
the same dollar amounts as the amounts forfeited, unadjusted for income, gains,
or losses occurring after the forfeiture.  Amounts required to
reinstate benefits will come from other forfeitures, to the extent possible, and
then from Company contributions.

      
        
           

        

        
          44

          
            

          

        

        
           

        

      

      ARTICLE
XI

      LOANS TO
PARTICIPANTS

      

      Sec.
11.1                      Loans to
Participants.  The Company may
authorize a loan to a Participant who makes application
therefor.  Each such loan shall be subject to the following
provisions:

      

      
        	
                 
      

              	
                (a)

              	
                In
      no event shall the Company authorize a loan to a Participant which,
      together with the unpaid principal and accrued interest of any other
      outstanding loan to such Participant, exceeds whichever of the following
      amounts is least:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                50%
      of the aggregate value of all of the Participant’s Accounts, to the extent
      vested.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                The
      value of the Participant’s Before Tax Account, After Tax Account, and
      Rollover Account, but not including the Roth 401(k) Rollover portion of
      the Rollover Account.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                $50,000,
      reduced by the excess, if any, of (i) the highest outstanding loan balance
      during the year ending the day before the loan is made over (ii) the
      outstanding loan balance on the date the loan is
  made.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                No
      loan may be for an amount less than $1,000.  If the amount
      available for a loan is limited under subsection (a) to an amount less
      than $1,000, then no loan may be
made.

              

      

      

      (c)           A
Participant may not have more than two loans outstanding at any point in
time.

      

      
        	
                 
      

              	
                (d)

              	
                Each
      loan to a Participant shall be supported by a promissory note payable to
      the Trustee.  Each such loan shall be adequately secured by the
      Participant’s Accounts.  A loan shall be considered adequately
      secured if the loan amount does not exceed one-half of the Participant’s
      vested balance in all Accounts on the date the loan is
    made.

              

      

      

      (e)           Each
loan shall bear a reasonable rate of interest as determined by the
Company.

      

      
        	
                 
      

              	
                (f)

              	
                Each
      loan shall provide for the payment of accrued interest and principal in
      substantially equal installments withheld from the Participant’s regular
      pay over a stated term not to exceed five years (ten years if the loan is
      used to purchase the Participant’s principal residence).  The
      Participant shall execute any documents required to authorize payroll
      deductions.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                A
      Participant may prepay a loan anytime by paying the Trustee the full
      remaining principal balance and any accrued interest.  Partial
      prepayments are not permitted.

              

      

      

      

      
        	
                 
      

              	
                (h)

              	
                In
      accordance with the foregoing standards and requirements, loans shall be
      available to all Participants on a reasonably equivalent
      basis.  All loans shall be governed by such rules and
      regulations as the Company may adopt, and applications for loans shall be
      made on such forms as the Company may provide or approve for such
      purpose.  The Company or Trustee shall cause to be furnished to
      any individual receiving a loan any information required to be furnished
      pursuant to the Federal Truth in Lending Act, if applicable, or pursuant
      to any other applicable law.

              

      

       

      
         

        
          45

        

        
          
          

        

      

      
        	
                 
      

              	
                (i)

              	
                Loans
      to a Participant will come from his or her Before Tax Account, After Tax
      Account, and/or Rollover Account, but not including the Roth 401(k)
      Rollover portion of the Rollover Account.  Interest the
      Participant pays on the loan will be credited to said Account, and the
      Account will be reduced to reflect any loss incurred due to the
      Participant’s failure to repay the
loan.

              

      

      

      
        	
                 
      

              	
                (j)

              	
                A
      $50 service fee will be subtracted from the Participant’s Account(s) at
      the time of each loan.

              

      

      

      
        	
                 
      

              	
                (k)

              	
                Failure
      to pay any installment of interest or principal on a loan by the end of
      the calendar quarter following the calendar quarter in which the payment
      was due, shall constitute a default on the unpaid balance of the
      loan.  Notwithstanding the foregoing, if a Participant is on an
      unpaid leave of absence, no default will occur for a period of up to one
      year (or until the end of the leave of absence, if
      shorter).  This grace period will not extend the original
      repayment period of the loan, however, and the unpaid loan balance must be
      reamortized over the remaining portion of the original repayment period
      following the end of the leave of absence.  If a Participant is
      performing military service for the United States, however, loan
      repayments shall be suspended as permitted under Code § 414(u)(4) and no
      reamortization will be required.  Events of a default shall also
      include any other events identified as such in the Participant’s
      Note.  Upon a default, the entire loan balance will be declared
      to be in default to the extent required by (and in accordance with)
      applicable Treasury Regulations.  In the event of a default on a
      loan, foreclosure on the Note and application of the Participant’s Account
      to satisfy the Note will not occur until the earliest date on which the
      Participant or Participant’s Beneficiary is eligible to receive payment of
      benefits under Article VIII.

              

      

      

      
        	
                 
      

              	
                (l)

              	
                Upon
      a Participant’s Termination of Employment, or at any time thereafter, any
      outstanding loan balance, including both principal and accrued interest,
      will become due and payable, and will be satisfied by a reduction of his
      or her Accounts.  However, if the Participant is receiving
      payments (i.e. severance pay) from a Participating Employer, he or she may
      elect to have loan installments withheld from such payments.  In
      addition, if the Termination of Employment is due to the Participant’s
      retirement, death, or Total Disability, the Participant (or Beneficiary of
      a deceased Participant) may submit manual loan payments for a period of up
      to 12 months from their Termination of Employment date or until such time
      as pension benefit payments begin, if earlier.  Also, if a
      Participant (or survivor of a deceased Participant) is receiving a pension
      under Retirement Plan A or Retirement Plan B, he or she may elect to have
      loan installments withheld from such pension.  In such cases,
      the payments may continue for the duration of the
  loan.

              

      

       

      
        	
                (m)  

              	
                No
      loan may be made to a former employee, Beneficiary, or alternate
      payee.

              

      

      
        
           

        

        
          46

          
            

          

        

        
           

        

      

      ARTICLE
XII

      FUND

      

      Sec.
12.1                      Composition  All
sums of money and all securities and other property received by the Trustee for
purposes of the Plan, together with all investments made therewith, the proceeds
thereof, and all earnings and accumulations thereon, and the part from time to
time remaining shall constitute the “Fund”.

      

      Sec.
12.2                      Trustee  The
Fund may be held and invested as one fund or may be divided into any number of
parts for investment purposes.  Each part of the Fund, or the entire
Fund if it is not divided into parts for investment purposes, shall be held and
invested by one or more Trustees.  The selection and appointment of
each Trustee shall be made by the Company.  The Company shall have the
right at any time to remove a Trustee and appoint a successor thereto, subject
only to the terms of any applicable Trust Agreement.  The Company
shall have the right to determine the form and substance of each Trust Agreement
under which any part of the Fund is held, subject only to the requirement that
they are not inconsistent with the provisions of the Plan.  Any such
Trust Agreement may contain provisions pursuant to which the Trustee will make
investments on direction of a third party.

      

      Sec.
12.3                      Compensation
and Expenses of Trustee.  The Trustee shall be entitled to
receive such reasonable compensation for its services as may be agreed upon with
the Company.  The Trustee shall also be entitled to reimbursement for
all reasonable and necessary costs, expenses, and disbursements incurred by it
in the performance of its services.  Such compensation and
reimbursements shall be paid from the Fund if not paid directly by the
Company.

      

      Sec.
12.4                      Investment
in Company Stock  All or part of the Fund may be invested in
Company Stock.  As required by Treas. Reg. 54.4975-11(b), at such
times as the Plan holds Company Stock acquired with the proceeds of an Exempt
Loan, the Plan shall invest primarily in Company Stock.  The Plan
permits Participants to diversify their Accounts into other
investments.  These diversification provisions are intended to satisfy
the diversification requirements of Code § 401(a)(28)(B), but they give
Participants more investment flexibility than is required by that Code
section.  If a Participant chooses to diversify investment of his or
her Accounts, he or she may at any time reinvest those Accounts in Company
Stock.  For purposes of satisfying the requirement of Treas. Reg.
54.4975-11(b) that the Plan be primarily invested in Company Stock, any Account
which (i) is subject to Participant investment direction and (ii) can be
invested in Company Stock if the Participant so directs, will be considered
fully invested in Company Stock even if the Participant has directed that part
or all of that Account be transferred to other investments.

      

      Sec.
12.5                      No
Diversion.  The Fund shall be for the exclusive purpose of
providing benefits to Participants and their beneficiaries and defraying
reasonable expenses of administering the Plan.  Such expenses may
include premiums for the bonding of Plan officials required by
ERISA.  No part of the corpus or income of the Fund may be used for,
or diverted to, purposes other than for the exclusive benefit of Participants
and Beneficiaries.  However:

      

      
        
           

        

        
          47

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (a)

              	
                If
      any contribution or portion thereof is made by a Participating Employer by
      mistake of fact, the Trustee shall, upon written request of the Company,
      return such contribution or portion thereof to the Participating Employer
      within one year after the payment of the contribution to the Trustee;
      however, earnings attributable to such contribution or portion thereof
      shall not be returned to the Participating Employer, but shall remain in
      the Fund, and the amount returned to the Participating Employer shall be
      reduced by any losses attributable to such contribution or portion
      thereof.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Contributions
      by the Participating Employers are conditioned upon the deductibility of
      each contribution under Code § 404.  To the extent the deduction
      is disallowed, the Trustee shall, upon written request of the Company,
      return such contribution to the Participating Employer within one year
      after the disallowance of the deduction; however, earnings attributable to
      such contribution (or disallowed portion thereof) shall not be returned to
      the Participating Employer, but shall remain in the Fund, and the amount
      returned to the Participating Employer shall be reduced by any losses
      attributable to such contribution (or disallowed portion
      thereof).

              

      

      

      In the
case of any such return of contribution the Company shall cause such adjustments
to be made to the Accounts of Participants as it considers fair and equitable
under the circumstances resulting in the return of such
contribution.

      

      Sec.
12.6                      Voting of
Company Stock.  Before each annual or special meeting of the
stockholders of the Company, the Company shall cause to be sent to each
Participant a copy of the proxy solicitation material, together with a form
requesting confidential instructions to the Trustee on how to vote the shares of
Company stock held in the Fund.  Instructions received from
Participants by the Trustee shall be held in the strictest confidence and shall
not be divulged or released to any person, including officers or employees of
the Company.  The Trustee shall vote all shares of Company Stock held
in Participant Accounts and the Unallocated Reserve, if any, in proportion to
“votes” cast by Participants, as follows:

      

      
        	
                 
      

              	
                (a)

              	
                The
      Trustee shall determine the aggregate number of votes which may be cast
      with respect to all shares of Company Stock held in such Accounts and in
      the Unallocated Reserve.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      Company shall determine each Participant’s portion of the shares of
      Company Stock allocated to Participant Accounts as a percentage of all of
      the shares of Company Stock so
allocated.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                The
      number of votes the Participant may cast shall be determined by applying
      the percentage in (b) to the aggregate number of shares in
      (a).

              

      

      

      
        	
                 
      

              	
                (d)

              	
                The
      Trustee shall determine the number of votes for and against each
      proposition and shall vote, in person or by proxy, all of the shares of
      Company Stock held in the Trust Fund in proportion to the votes
      received.

              

      

      
        
           

        

        
          48

          
            

          

        

        
           

        

      

      The
determinations in (a), (b) and (c) shall be as of a date selected by the Company
which is not more than 90 days preceding the record date for the
meeting.  It is intended that by reason of the foregoing provisions,
unallocated shares held in the Unallocated Reserve, and allocated shares held
for the benefit of Participants who do not give voting instructions, will be
voted by the Trustee in proportion of the instructions actually
received.  The rights extended to Participants by this section shall
also apply to the Beneficiaries of deceased Participants.  Each
Participant or Beneficiary who gives voting instructions shall be deemed a
“named fiduciary” (within the meaning of ERISA) with respect to such
instructions.

      

      If a plan
fiduciary determines that following a participant’s directions with regard to
voting would be imprudent or would violate the applicable requirements of ERISA,
the shares will not be voted in accordance with the participant’s directions,
but will instead be voted as the fiduciary deems prudent.

      

      Sec.
12.7                      Tender or
Exchange Offers Regarding Company Stock.  As soon as
practicable after the commencement of a tender or exchange offer (an “Offer”)
for shares of Company Stock, the Company shall use its best efforts to cause
each Participant to be advised in writing of the terms of the Offer, and to be
provided with forms by which the Participant may instruct the Trustee, or revoke
such instruction, to tender or exchange shares of Company Stock, to the extent
permitted under the terms of such Offer.  The Trustee shall follow the
instructions of each Participant.  In advising Participants of the
terms of the Offer, the Company may include statements from the Board setting
forth its position with respect to the Offer.  Participant
instructions to the Trustee shall be transmitted and held in the strictest
confidence and shall not be divulged or released to any person, including
officers or employees of the Company.  Instructions by Participants
pursuant to this section with respect to Company Stock shall apply both to
allocated shares held in the Accounts of Participants and to shares held in the
Unallocated Reserve.  The number of shares as to which a Participant
may provide instructions shall be determined as follows:

      

      
        	
                 
      

              	
                (a)

              	
                The
      Trustee shall determine the aggregate number of shares held in Participant
      Accounts and in the Unallocated
Reserve.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      Trustee shall determine each Participant’s portion of the shares of
      Company Stock allocated to Participant Accounts as a percentage of all of
      the shares of Company Stock so
allocated.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                The
      Participant may provide instructions with respect to a number of shares of
      Company Stock determined by applying the percentage in (b) to the
      aggregate number of shares in (a).  If the Participant directs
      tender or exchange of the shares for which he may provide instructions,
      the Trustee shall follow that instruction.  The Trustee shall
      not tender or exchange the shares for which a Participant may provide
      instructions if the Participant (i) directs against their tender or
      exchange, or (ii) gives no
direction.

              

      

      

      
        
           

        

        
          49

          
            

          

        

        
           

        

      

      Said
determination shall be as of the close of business on the day preceding the date
on which the Offer is commenced or such earlier date as shall be designated by
the Company as the Company, in its sole discretion, deems appropriate for
reasons of administrative convenience.  Any securities received by the
Trustee as a result of a tender or exchange of shares of Company Stock shall be
held, and any cash so received shall be invested in short-term investments
pending any reinvestment by the Trustee, as it may deem appropriate, consistent
with the purposes of the Plan.

      

      If a
tender or exchange offer is limited so that all of the shares that the Trustee
has been directed to tender or exchange cannot be sold or exchanged, the shares
that each Participant directed be tendered or exchanged shall be deemed to have
been sold or exchanged in the same ratio that the number of shares actually sold
or exchanged bears to the total number of shares that the Trustee was directed
to tender or exchange.  Shares sold or exchanged at the direction of a
Participant shall be deemed to come first out of the shares allocated to the
Participant’s Accounts and only after all of those shares have been sold or
exchanged, out of the Unallocated Reserve.

      

      The
rights extended to Participants by this section shall also apply to the
Beneficiaries of deceased Participants.  Each Participant or
Beneficiary who is entitled to give such instructions shall be deemed a “named
fiduciary” (within the meaning of ERISA) with respect to such
instructions.

      

      If a plan
fiduciary determines that following a participant’s directions would be
imprudent or would violate the applicable requirements of ERISA, the shares will
not be tendered or exchanged in accordance with the participant’s directions,
but will instead be tendered or exchanged as the fiduciary deems
prudent.

      

      Sec.
12.8                      Nonterminable
ESOP Protections.  Because Company
Stock is readily tradable on an established market, the put provisions referred
to in Code § 409(h) are not applicable to such stock.  If such stock
ceases to be readily tradable on an established market, said provisions shall
become and remain applicable until such time as such stock resumes being readily
tradable on an established market.

      

      Sec.
12.9                      Other
ESOP Provisions.  The Plan and
related Trust may not obligate themselves to acquire securities from a
particular security holder at an indefinite time determined upon the happening
of an event (such as the death of a shareholder).  If a portion of an
Account is forfeited, Company Stock may be forfeited only after other
assets.

      
        
           

        

        
          50

          
            

          

        

        
           

        

      

      ARTICLE
XIII

      ADMINISTRATION OF
PLAN

      

      Sec.
13.1                      Administration
by Company  The Company is the “Administrator” of the Plan for
purposes of ERISA.  Except as expressly otherwise provided herein, the
Company shall control and manage the operation and administration of the Plan
and make all decisions and determinations incident thereto.  In
carrying out its Plan responsibilities, the Company shall have final
discretionary authority to construe the terms of the Plan.  Action on
behalf of the Company may be taken by the Committee or by any person or persons
to whom such authority has been delegated by the Committee.

      

      Sec.
13.2                      Certain
Fiduciary Provisions  For purposes of the Plan:

      

      
        	
                 
      

              	
                (a)

              	
                Any
      person or group of persons may serve in more than one fiduciary capacity
      with respect to the Plan.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                A
      Named Fiduciary, or a fiduciary designated by a Named Fiduciary pursuant
      to the provisions of the Plan, may employ one or more persons to render
      advice with regard to any responsibility such fiduciary has under the
      Plan.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                To
      the extent permitted by any applicable trust agreement, a Named Fiduciary
      with respect to control of management of the assets of the Plan may
      appoint an investment manager or managers, as defined in ERISA, to manage
      (including the power to acquire and dispose of) any assets of the
      Plan.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                At
      any time the Plan has more than one Named Fiduciary, if the Plan does not
      already allocate fiduciary responsibilities among such Named Fiduciaries,
      the Company may provide for such allocation; except that such allocation
      shall not include any responsibility, if any, in a trust agreement to
      manage or control the assets of the Plan other than a power under the
      trust agreement to appoint an investment manager as defined in
      ERISA.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Unless
      expressly prohibited in the appointment of a Named Fiduciary which is not
      the Company acting as provided in Sec. 13.1, such Named Fiduciary by
      written instrument may designate a person or persons other than such Named
      Fiduciary to carry out any or all of the fiduciary responsibilities under
      the Plan for such Named Fiduciary; except that such designation shall not
      include any responsibility, if any, in a trust agreement to manage or
      control the assets of the Plan other than a power under the trust
      agreement to appoint an investment manager as defined in
      ERISA.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                A
      person who is a fiduciary with respect to the Plan, including a Named
      Fiduciary, shall be recognized and treated as a fiduciary only with
      respect to the particular fiduciary functions as to which such person has
      responsibility.

              

      

      

      Each
Named Fiduciary (other than the Company), each other fiduciary, each person
employed pursuant to (b) above, and each investment manager shall be entitled to
receive reasonable compensation for services rendered, or for the reimbursement
of expenses properly and actually incurred in the performance of their duties
with the Plan and to payment therefore from the Fund if not paid directly by the
Participating Employers in such proportions as the Company shall
determine.  However, no person so serving who already receives
full-time pay from any employer whose employees are Participants, or from an
employee organization whose members are Participants, shall receive compensation
from the Plan, except for reimbursement of expenses properly and actually
incurred.

       

      
         

        
          51

        

        
          
          

        

      

      Sec.
13.3                      Evidence.  Evidence required
of anyone under this Plan may be by certificate, affidavit, document, or other
instrument which the person acting in reliance thereon considers to be pertinent
and reliable and to be signed, made, or presented to the proper
party.

      

      Sec.
13.4                      Correction
of Errors.  It is recognized that in the operation and
administration of the Plan certain mathematical and accounting errors may be
made or mistakes may arise by reason of factual errors in information supplied
to the Company or Trustee.  The Company shall have power to cause such
equitable adjustments to be made to correct for such errors as the Company, in
its discretion, considers appropriate.  Such adjustments shall be
final and binding on all persons.  Any return of a contribution due to
a mistake of fact will be subject to Sec. 12.5.

      

      Sec.
13.5                      Records.  Each
Participating Employer, each fiduciary with respect to the Plan, and each other
person performing any functions in the operation or administration of the Plan
or the management or control of the assets of the Plan shall keep such records
as may be necessary or appropriate in the discharge of their respective
functions hereunder, including records required by ERISA or any other applicable
law.  Records shall be retained as long as necessary for the proper
administration of the Plan and at least for any period required by ERISA or
other applicable law.

      

      Sec.
13.6                      Claims
Procedure.  The Company shall
establish a claims procedure consistent with the requirements of
ERISA.  Such claims procedure shall provide adequate notice in writing
to any Participant or Beneficiary whose claim for benefits under the Plan has
been denied, setting forth the specific reasons for such denial, written in a
manner calculated to be understood by the claimant and shall afford a reasonable
opportunity to a claimant whose claim for benefits has been denied for a full
and fair review by the appropriate Named Fiduciary of the decision denying the
claim.  Claims must be submitted in writing within one year after the
claimant first knew or should have known the facts essential to the
claim.  A person claiming a benefit under the Plan may not initiate a
civil action regarding the claim unless:  (a) a claim was timely
submitted; (b) all steps under the claims procedure (including appeals) were
completed; and (c) the civil action is commenced less than one year after
completion of the claims procedure.

      

      Undisputed
benefit payments and other routine administrative matters normally are processed
without requiring the Participant or Beneficiary to file a formal claim pursuant
to this section.  However, if a Participant or Beneficiary wishes to
have an issue reviewed pursuant to the claims procedure established under this
section, he or she must begin by submitting a claim to the Company’s Employee
Benefit Plans Committee.  Any decision regarding the claim (or
regarding any subsequent appeal) will be made by said Committee (or by a person
or persons to whom the Committee has delegated such authority).

      

      Sec.
13.7                      Bonding.  Plan personnel
shall be bonded to the extent required by ERISA.  Premiums for such
bonding may, in the sole discretion of the Company, be paid in whole or in part
from the Fund.  Such premiums may also be paid in whole or in part by
the Participating Employers in such proportions as the Company shall
determine.  The Company may provide by agreement with any person that
the premiums or required bonding shall be paid by such person.

       

      
         

        
          52

        

        
          
          

        

      

      Sec.
13.8                      Waiver of
Notice.  Any notice
required hereunder may be waived by the person entitled thereto.

      

      Sec.
13.9                      Agent for
Legal Process.  The Company shall
be the agent for service of legal process with respect to any matter concerning
the Plan, unless and until the Company designates some other person as such
agent.

      

      Sec.
13.10                      Indemnification.  In addition to
any other applicable provisions for indemnification, the Participating Employers
jointly and severally agree to indemnify and hold harmless, to the extent
permitted by law, each director, officer, and employee (collectively referred to
herein as “Indemnitee”) of the Participating Employers against any and all
liabilities, losses, costs, or expenses (including legal fees) of whatsoever
kind and nature which may be imposed on, incurred by, or asserted against such
person at any time by reason of such person’s services as a fiduciary in
connection with the Plan, but only if such person did not act dishonestly, or in
bad faith, or in willful violation of the law or regulations under which such
liability, loss, cost, or expense arises.  The Participating Employers
shall have the right, but not the obligation, to select counsel and control the
defense and settlement of any action against the Indemnitee for which the
Indemnitee may be entitled to indemnification under this provision.

      

      Sec.
13.11                      Benefits
for Reemployed Veterans.  Notwithstanding
any provision of this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with Code § 414(u).  For this purpose:

      

      
        	
                 
      

              	
                (a)

              	
                As
      provided by Code §414(u), “Qualified Military Service” means service in
      the uniformed services (as defined in Chapter 43 of Title 38, United
      States Code) by an individual if he or she is qualified under such chapter
      to reemployment rights with a Participating Employer following such
      military service.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                “USERRA”
      means the Uniformed Services Employment and Reemployment Rights Act of
      1994 as amended.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                If
      an individual returns to employment with a Participating Employer
      following a period of Qualified Military Service under circumstances such
      that he or she has reemployment rights under USERRA, and the individual
      reports for said reemployment within the time frame required by USERRA,
      the following provisions shall
apply:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                The
      Qualified Military Service shall be recognized as Aggregate Continuous
      Service to the same extent as it would have been if the employee had
      remained continuously employed with a Participating Employer rather than
      going in the military.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                The
      individual may make Before Tax Contributions and Roth 401(k) Contributions
      in an amount equivalent to the contributions that would have been
      permitted if he or she had remained at the Participating Employer during
      the period of Qualified Military Service.  Any such
      contributions must be made not later than five years after the
      individual’s reemployment date.  If the individual returns to a
      Participating Employer and has a subsequent Termination of Employment
      before making part or all of the contributions permitted by this
      subsection, he or she may make the remaining contributions on an after tax
      basis.

              

      

       

      
         

        
          53

        

        
          
          

        

      

      
        	
                 
      

              	
                (3)

              	
                The
      Participating Employers will match contributions made under paragraph (2)
      on the same basis as if the individual had made them during the period
      while he or she was in the
military.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                The
      Participating Employers will make Tax Reduction Allocations, Partnership
      Allocations, Bargaining Unit Allocations, and Results Sharing Allocations
      under Sec. 4.4 on the same basis as if the individual had remained with a
      Participating Employer rather than going in the
  military.

              

      

      

      
        	
                 
      

              	
                (5)

              	
                Allocations
      under (3) and (4) shall be determined on the basis of the earnings the
      individual would have received (including reasonable cost of living
      adjustments) during the period of Qualified Military
    Service.

              

      

      

      
        	
                 
      

              	
                (6)

              	
                If
      the individual had an outstanding loan from the Plan at the time he or she
      entered military service:

              

      

      

      
        	
                 
      

              	
                (A)

              	
                Loan
      payments are not required during the period of Qualified Military
      Service.

              

      

      

      
        	
                 
      

              	
                (B)

              	
                Upon
      reemployment, loan payments resume at the rate effect before the Qualified
      Military Service.

              

      

      

      
        	
                 
      

              	
                (C)

              	
                The
      loan term is extended, so that it is equal to the original loan term plus
      the period of Qualified Military
Service.

              

      

      

      
        	
                 
      

              	
                (D)

              	
                If
      the Participant so requests, the interest rate on the loan during the
      period of Qualified Military Service will be limited to
  6%.

              

      

      

      
        	
                (d)  

              	
                Regardless
      of whether the individual returns to employment with a Participating
      Employer following the military service, any “differential pay” paid to
      the Participant by a Participating Employer on or after January 1, 2009
      will be recognized by the Plan to the extent required by the Heroes
      Earnings Assistance and Tax Relief Act (“Heart Act”) of
    2008.

              

      

      

      
        	
                (e)  

              	
                Effective
      January 1, 2009, an individual serving in the military on active duty for
      at least 30 days will be treated as having severed from service for
      purposes of withdrawing amounts from his or her Before Tax and Roth 401(k)
      Accounts.  An individual who makes such a withdrawal may not
      resume making Salary Reduction Contributions or Roth 401(k) Contributions
      until six months after the date of the
  withdrawal.

              

      

       

      
         

        
          54

        

        
          
          

        

      

      Sec.
13.12                      Application
of Forfeitures.  Any amounts
forfeited from a Participant’s Account(s) will be applied as a credit against
allocations under Article IV or V, to pay administrative expenses of the Plan,
or to reinstate forfeitures to the extent required under Sec. 9.3 or Sec.
10.14.  Such amounts may include:

      

      
        	
                 
      

              	
                (a)

              	
                Forfeitures
      due to a Participant’s Termination of Employment prior to July 1, 2001 and
      before meeting the vesting requirements then in
  effect.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Forfeiture
      of Matching Allocations with respect to Excess Deferrals under Sec. 6.3 or
      with respect to Before Tax Contributions and Roth 401(k) Contributions
      that are returned to Participants under Sec. 6.1 or
  6.5.

              

      

      

      (c)           Forfeitures
from Accounts of lost Participants as provided in Sec. 10.14.

      

      (d)           Any
other forfeitures arising under the Plan.

      
        
           

        

        
          55

          
            

          

        

        
           

        

      

      ARTICLE
XIV

      AMENDMENT, TERMINATION,
MERGER

      

      Sec.
14.1                      Amendment.  Subject
to the non-diversion provisions of Sec. 12.5, the Company, by action of the
Committee, may amend the Plan at any time and from time to time.  No
amendment shall divest a Participant or Beneficiary of any Account balance
accrued prior to the amendment.

      

      Sec.
14.2                      Permanent
Discontinuance of Contributions. The Company, by action of
the Committee, may direct the complete discontinuance of all contributions by
all Participating Employers under the Plan.  In such event,
notwithstanding any provisions of the Plan to the contrary, (i) no employee
shall become a Participant after such discontinuance, and (ii) each Participant
in the employ of a Participating Employer at the time of such discontinuance
shall continue to be 100% vested in his or her Accounts.  Subject to
the foregoing, all of the provisions of the Plan shall continue in effect, and
upon entitlement thereto distributions shall be made in accordance with the
provisions of Article X.  This section is not applicable if one
Participating Employer discontinues its contributions while one or more other
Participating Employers continue contributing.

      

      Sec.
14.3                      Termination.  The Company, by
action of the Committee, may terminate the Plan as applicable to all
Participating Employers and their employees.  After such termination,
no employee shall become a Participant, and no contributions shall be
made.  Each Participant who has an Account balance at the time of the
Plan termination will be fully vested in such Account, regardless of whether he
or she is then employed by a Participating
Employer.    Distributions shall be made promptly after the
Plan termination.  The Plan shall continue in force for the purpose of
making such distributions.

      

      Sec.
14.4                      Partial
Termination.  If there is a
partial termination of the Plan by operation of law, by amendment of the Plan,
or for any other reason, which partial termination shall be confirmed by the
Committee, each Participant with respect to whom the partial termination applies
shall continue to be 100% vested in his or her Accounts.  Subject to
the foregoing, all of the provisions of the Plan shall continue in effect as to
each such Participant, and upon entitlement thereto distributions shall be made
in accordance with the provisions of Article X.

      

      Sec.
14.5                      Merger,
Consolidation, or Transfer of Plan Assets.  In the case of
any merger or consolidation of the Plan with any other plan, or in the case of
the transfer of assets or liabilities of the Plan to any other plan, provision
shall be made so that each Participant and Beneficiary would (if such other plan
then terminated) receive a benefit immediately after the merger, consolidation,
or transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation, or transfer
(if the Plan had then terminated).  No such merger, consolidation, or
transfer shall be effected until such statements with respect thereto, if any,
required by ERISA to be filed in advance thereof have been filed.

      

      Sec.
14.6                      Deferral
of Distributions.  Notwithstanding
any provisions of the Plan to the contrary, in the case of a complete
discontinuance of contributions to the Plan or of a complete or partial
termination of the Plan, the Company or the Trustee may defer any distribution
of benefit payments to Participants and Beneficiaries with respect to whom such
discontinuance or termination applies until after the following have
occurred:

      

      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	
                (a)

              	
                Receipt
      of a final determination from the Treasury Department or any court of
      competent jurisdiction regarding the effect of such discontinuance or
      termination on the qualified status of the Plan under Code §
      401(a).

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Appropriate
      adjustments of Accounts to reflect taxes, costs, and expenses, if any,
      incident to such discontinuance or
termination.

              

      

      
        
           

        

        
          57

          
            

          

        

        
           

        

      

      ARTICLE
XV

      TOP-HEAVY PLAN
PROVISIONS

      

      Sec.
15.1                      Key
Employee Defined  “Key Employee” means any employee or former
employee (including any deceased employee) who at any time during the Plan Year
that includes the determination date was an officer of the Company or an
Affiliate having Testing Wages greater than $160,000 (as adjusted under Code §
416(i)(1) for Plan Years beginning after 2009), a five-percent owner of the
Company or an Affiliate, or a one-percent owner having Testing Wages of more
than $150,000.  The determination of who is a Key Employee will be
made in accordance with Code § 416(i)(1) and the applicable regulations and
other guidance of general applicability issued thereunder.

      

      Sec.
15.2                      Determination
of Top-Heavy Status.  The top-heavy status of the Plan shall be
determined according to the following standards and definitions:

      

      
        	
                 
      

              	
                (a)

              	
                The
      Plan is a Top-Heavy Plan for a Plan Year if either of the following
      applies: (1) if this Plan is not part of a required aggregation Group and
      the top-heavy ratio for this Plan exceeds 60%, or (2) if this Plan is part
      of a required aggregation group of plans and the top-heavy ratio for the
      group of plans exceeds 60%.  However, the Plan is not a
      Top-Heavy Plan with respect to a Plan Year if it is part of a permissive
      aggregation group of plans for which the top-heavy ratio does not exceed
      60%.

              

      

      

      (b)           The
“top-heavy ratio” shall be determined as follows:

      

      
        	
                 
      

              	
                (1)

              	
                If
      the ratio is being determined only for this Plan or if the aggregation
      group includes only defined contribution plans, the top-heavy ratio is a
      fraction, the numerator of which is the sum of the account balances of all
      Key Employees under the defined contribution plans as of the determination
      date (including any part of any account balance distributed in the
      one-year period ending on the determination date), and the denominator of
      which is the sum of all account balances (including any part of any
      account balance distributed in the one-year period ending on the
      determination date) of all employees under the defined contribution plans
      as of the determination date.  Both the numerator and
      denominator of the top-heavy ratio shall be adjusted to reflect any
      contribution which is due but unpaid as of the determination
      date.  In the case of a distribution made for a reason other
      than severance from employment, death or disability, the one-year period
      referred to above shall be applied by substituting “five-year period” for
      “one-year period”.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                If
      the ratio is being determined for a required or permissive aggregation
      group which includes one or more defined benefit plans, the top-heavy
      ratio is a fraction, the numerator of which is the sum of account balances
      of all Key Employees under the defined contribution plans and the present
      value of accrued benefits under the defined benefit plans for all Key
      Employees as of the determination date (including any part of any account
      balance or accrued benefit distributed in the one-year period ending on
      the determination date), and the denominator of which is the sum of the
      account balances under the defined contribution plans for all employees
      and the present value of accrued benefits under the defined benefit plans
      for all employees as of the determination date (including any part of any
      account balance or accrued benefit distributed in the one-year period
      ending on the determination date).  Both the numerator and
      denominator of the top-heavy ratio shall be adjusted to reflect any
      contribution due but unpaid as of the determination
  date.

              

      

       

      
         

        
          58

        

        
          
          

        

      

      
        	
                 
      

              	
                (3)

              	
                For
      purposes of paragraphs (1) and (2), the value of account balances and the
      present value of accrued benefits will be determined as of the most recent
      valuation date that falls within the 12-month period ending on the
      determination date.  The account balances and accrued benefits
      of an employee who is not a Key Employee but who was a Key Employee in a
      prior year will be disregarded.  The calculation of the
      top-heavy ratio and the extent to which distributions, rollovers, and
      transfers are taken into account will be made in accordance with Code §
      416 and the regulations thereunder.  When aggregating plans, the
      value of account balances and accrued benefits will be calculated with
      reference to the determination dates that fall within the same calendar
      year.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                “Required
      aggregation group” means (i) each qualified plan of the Employer in which
      at least one Key Employee participates, and (ii) any other qualified plan
      of the Employer that enables a plan described in (i) to meet the
      requirements of Code §§  401(a)(4) or
  410.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                “Permissive
      aggregation group” means the required aggregation group of plans plus any
      other plan or plans of the employer which, when consolidated as a group
      with the required aggregation group, would continue to satisfy the
      requirements of Code §§ 401(a)(4) and
410.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                “Determination
      date” for any Plan Year means the last day of the preceding Plan
      Year.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                The
      “valuation date” is the last day of each Plan Year and is the date as of
      which account balances or accrued benefits are valued for purposes of
      calculating the top-heavy ratio.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                For
      purposes of establishing the “present value” of benefits under a defined
      benefit plan to compute the top-heavy ratio, any benefit shall be
      discounted only for mortality and interest based on the interest rate and
      mortality table specified in the defined benefit plan for this
      purpose.

              

      

      

      
        	
                 
      

              	
                (h)

              	
                If
      an individual has not received any compensation from the employer during
      the one-year period ending on the determination date with respect to a
      Plan Year, any account balance or accrued benefit for such individual
      shall not be taken into account for such Plan
  Year.

              

      

      

      Sec.
15.3                      Minimum
Contribution Requirement.  For any Plan Year with respect to
which the Plan is a Top-Heavy Plan, the employer contributions (including
matching allocations) allocated to each Active Participant who is not a Key
Employee and whose Termination of Employment has not occurred prior to the end
of such Plan Year shall not be less than the minimum amount determined in
accordance with the following:

       

      
         

        
          59

        

        
          
          

        

      

      
        	
                 
      

              	
                (a)

              	
                The
      minimum amount shall be the amount equal to that percentage of the
      Participant's Testing Wages for the Plan Year which is the smaller
      of:

              

      

      

      (1)           3
percent.

      

      
        	
                 
      

              	
                (2)

              	
                The
      percentage which is the largest percentage of Testing Wages allocated to
      any Key Employee from employer contributions (including matching
      allocations) and Forfeitures for such Plan
Year.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                For
      purposes of this section, any employer contribution attributable to a
      salary reduction or similar arrangement shall be taken into account with
      respect to Key Employees but not with respect to other
      employees.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                This
      section shall not apply to any Participant who is covered under any other
      plan of the employer under which the minimum contribution or minimum
      benefit requirement applicable to Top-Heavy Plans will be
      satisfied.

              

      

      

      Sec.
15.4                      Definition
of Employer.  For purposes of this Article, the term “employer”
means all Participating Employers and other entities under Common Control with
the Company.

      

      Sec.
15.5                      Exception
for Collective Bargaining Unit.  Sec. 15.3 shall
not apply with respect to any employee included in a unit of employees covered
by an agreement which the Secretary of Labor finds to be a collective bargaining
agreement between employee representatives and one or more employers if there is
evidence that retirement benefits were the subject of good faith bargaining
between such employee representative and such employer or
employers.

      

      

      IN
WITNESS WHEREOF, ALLETE, Inc. has caused these presents to be signed and its
corporate seal to be hereunto affixed by its duly authorized
officers.

      

      

      ALLETE, Inc.

      

      

      By:____________________________________

         Its:___________________________________

      

      Date Signed:
____________________________

      ATTEST

      

      By:______________________________

          Its:____________________________

      

      
        
           

        

        
          60

          
            

          

        

        
           

        

      

      SCHEDULE
1

      PARTICIPATING
EMPLOYERS

      

      

      The
following entities are Participating Employers on October 1, 2006:

      

      
        	
                1.

              	
                ALLETE,
      Inc.  (E.I.N. 41-0418150), including Minnesota Power, a division
      of ALLETE, Inc.

              

      

      

      
        	
                2.

              	
                MP
      Affiliate Resources, Inc.  (E.I.N.
  41-1884136)

              

      

      

      
        	
                3.

              	
                Superior
      Water, Light and Power Company.  (E.I.N.
    39-0646970)

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      61

      

      I:\DATA\Allete
(268)\RSOP (268-2)\2009-06-09 Savings and
ESOP.docexhibit4_1.htm

 

SOUTHERN UNION SAVINGS PLAN

(Restatement Effective Date:  January 1, 2008)

  

  

  

TABLE OF CONTENTS

Page

PREAMBLE 1.................................................................................................................................................................................................................................................................................................................................................................................................1

 

	
ARTICLE 1  
	
NAME AND PURPOSE OF THE PLAN ....................................................................................................................................................................................................................................................................................................................1

	
  
	
1.1
	
Name ............................................................................................................................................................................................................................................................................................................................................................................. 
	
1

	
  
	
1.2
	
Effective Date ................................................................................................................................................................................................................................................................................................................................................................1
	
 

	
  
	
1.3
	
Purposes of the Plan ....................................................................................................................................................................................................................................................................................................................................................1
	
 

	
  
	
1.4
	
Intent ..............................................................................................................................................................................................................................................................................................................................................................................2
	
 

	
  
	
1.5
	
Exclusive Benefit of Employees .................................................................................................................................................................................................................................................................................................................................2
	
 

 

	
ARTICLE 2  
	
DEFINITIONS ...............................................................................................................................................................................................................................................................................................................................................................2

	
  
	
2.1
	
415 Compensation ........................................................................................................................................................................................................................................................................................................................................................2
	
 

	
  
	
2.2
	
Accounts .......................................................................................................................................................................................................................................................................................................................................................................3
	
 

	
  
	
(a)
	
Deposit Account ..........................................................................................................................................................................................................................................................................................................................................3
	
 

	
  
	
(b)
	
Employer Contributions Account ..............................................................................................................................................................................................................................................................................................................3
	
 

	
  
	
(c)
	
Prior Employer Contributions Account ....................................................................................................................................................................................................................................................................................................4
	
 

	
  
	
(d)
	
Prior Plan Account .......................................................................................................................................................................................................................................................................................................................................4
	
 

	
  
	
(1)
	
After-Tax Employee Contribution Subaccount .......................................................................................................................................................................................................................................................................4
	
 

	
  
	
(2)
	
Employer Contribution Subaccount ..........................................................................................................................................................................................................................................................................................4
	
 

	
  
	
(e)
	
Retirement Power Account .........................................................................................................................................................................................................................................................................................................................4
	
 

	
  
	
(f)
	
Rollover Contribution Account .................................................................................................................................................................................................................................................................................................................4
	
 

	
  
	
(1)
	
Tax-Deferred Rollover Contribution Subaccount ....................................................................................................................................................................................................................................................................4
	
 

	
  
	
(2)
	
Roth Rollover Contribution Subaccount ..................................................................................................................................................................................................................................................................................4
	
 

	
  
	
(3)
	
After-Tax Rollover Contribution Subaccount ..........................................................................................................................................................................................................................................................................5
	
 

	
  
	
(g)
	
Roth Account ...............................................................................................................................................................................................................................................................................................................................................5
	
 

	
  
	
(h)
	
Sid Richardson Pre-July 1, 2001 Employer Contributions Account .....................................................................................................................................................................................................................................................5

	
  
	
(i)
	
Sid Richardson Safe Harbor Matching Contributions Account ...........................................................................................................................................................................................................................................................5
	
 

	
  
	
(j)
	
Tax-Deferred Account .................................................................................................................................................................................................................................................................................................................................5
	
 

	
  
	
2.3
	
Annual Additions ........................................................................................................................................................................................................................................................................................................................................................5
	
 

	
  
	
2.4
	
Authorized Leave of Absence ...................................................................................................................................................................................................................................................................................................................................5
	
 

	
  
	
2.5
	
Bass Plan .......................................................................................................................................................................................................................................................................................................................................................................6
	
 

	
  
	
2.6
	
Beneficiary ....................................................................................................................................................................................................................................................................................................................................................................6
	
 

	
  
	
2.7
	
Board ..............................................................................................................................................................................................................................................................................................................................................................................6
	
 

	
  
	
2.8
	
Break in Service ............................................................................................................................................................................................................................................................................................................................................................6
	
 

	
  
	
2.9
	
Code ...............................................................................................................................................................................................................................................................................................................................................................................6
	
 

	
  
	
2.10
	
Committee ......................................................................................................................................................................................................................................................................................................................................................................6
	
 

	
  
	
2.11
	
Company ........................................................................................................................................................................................................................................................................................................................................................................6
	
 

	
  
	
2.12
	
Compensation ...............................................................................................................................................................................................................................................................................................................................................................6
	
 

	
  
	
2.13
	
Designated Investment Alternatives ........................................................................................................................................................................................................................................................................................................................7
	
 

	
  
	
2.14
	
Disability ........................................................................................................................................................................................................................................................................................................................................................................7
	
 

	
  
	
2.15
	
DOL .................................................................................................................................................................................................................................................................................................................................................................................7
	
 

  

i

  

        2.16         Early Retirement Age ...................................................................................................................................................................................................................................................................................................................................................7

	
  
	
2.17
	
Eligible Spouse .............................................................................................................................................................................................................................................................................................................................................................7
	
 

	
  
	
2.18
	
Employee .......................................................................................................................................................................................................................................................................................................................................................................7
	
 

	
  
	
2.19
	
Employee Company Stock Fund ................................................................................................................................................................................................................................................................................................................................7
	
 

	
  
	
2.20
	
Employer ........................................................................................................................................................................................................................................................................................................................................................................8
	
 

	
  
	
2.21
	
Employer Company Stock Fund .................................................................................................................................................................................................................................................................................................................................8
	
 

	
  
	
2.22
	
Employer Securities Acquisition Loan ......................................................................................................................................................................................................................................................................................................................8
	
 

	
  
	
2.23
	
ERISA .............................................................................................................................................................................................................................................................................................................................................................................8
	
 

	
  
	
2.24
	
ESOP Contributions .....................................................................................................................................................................................................................................................................................................................................................8
	
 

	
  
	
2.25
	
Fall River Plans .............................................................................................................................................................................................................................................................................................................................................................8
	
 

	
  
	
2.26
	
Five Percent Owner ......................................................................................................................................................................................................................................................................................................................................................8
	
 

	
  
	
2.27
	
Forfeiture .......................................................................................................................................................................................................................................................................................................................................................................8
	
 

	
  
	
2.28
	
Highly Compensated Participant ...............................................................................................................................................................................................................................................................................................................................9
	
 

	
  
	
2.29
	
Hours of Service ...........................................................................................................................................................................................................................................................................................................................................................9
	
 

	
  
	
2.30
	
Income ..........................................................................................................................................................................................................................................................................................................................................................................10
	
 

	
  
	
2.31
	
IRA ...............................................................................................................................................................................................................................................................................................................................................................................10
	
 

	
  
	
2.32
	
MGE Division ..............................................................................................................................................................................................................................................................................................................................................................10
	
 

	
  
	
2.33
	
Non-ESOP Contributions ..........................................................................................................................................................................................................................................................................................................................................10
	
 

	
  
	
2.34
	
Normal Retirement Age .............................................................................................................................................................................................................................................................................................................................................10
	
 

	
  
	
2.35
	
Participant ....................................................................................................................................................................................................................................................................................................................................................................10
	
 

	
  
	
(a)
	
Affected Corporate Participants ..............................................................................................................................................................................................................................................................................................................10
	
 

	
  
	
(b)
	
Affected Pennsylvania Participants ........................................................................................................................................................................................................................................................................................................11
	
 

	
  
	
(c)
	
Affected Plan A Participants ....................................................................................................................................................................................................................................................................................................................11
	
 

	
  
	
(d)
	
Corporate Participants ...............................................................................................................................................................................................................................................................................................................................11
	
 

	
  
	
(e)
	
Fall River Non-Union Participants ...........................................................................................................................................................................................................................................................................................................11
	
 

	
  
	
(f)
	
Fall River Participants ................................................................................................................................................................................................................................................................................................................................11
	
 

	
  
	
(g)
	
Fall River Union Participants ................................................................................................................................................................................................................................................................................................................... 11
	
 

	
  
	
(h)
	
Keystone Participants ...............................................................................................................................................................................................................................................................................................................................11
	
 

	
  
	
(i)
	
MGE Non-Union Participants ...................................................................................................................................................................................................................................................................................................................11
	
 

	
  
	
(j)
	
MGE Participants ........................................................................................................................................................................................................................................................................................................................................11
	
 

	
  
	
(k)
	
MGE Union Participants ............................................................................................................................................................................................................................................................................................................................12
	
 

	
  
	
(l)
	
Panhandle Energy Participants ................................................................................................................................................................................................................................................................................................................12
	
 

	
  
	
(m)
	
PG Energy IBEW Participants ..................................................................................................................................................................................................................................................................................................................12
	
 

	
  
	
(n)
	
PG Energy Non-Union Participants .........................................................................................................................................................................................................................................................................................................12
	
 

	
  
	
(o)
	
PG Energy Participants ..............................................................................................................................................................................................................................................................................................................................12
	
 

	
  
	
(p)
	
PG Energy UWUA Participants ...............................................................................................................................................................................................................................................................................................................12
	
 

	
  
	
(q)
	
Providence Participants .............................................................................................................................................................................................................................................................................................................................12
	
 

	
  
	
(r)
	
SUG Participants .........................................................................................................................................................................................................................................................................................................................................12
	
 

	
  
	
(s)
	
SU Gas Participants ....................................................................................................................................................................................................................................................................................................................................12
	
 

	
  
	
(t)
	
Valley Participants, Valley Non-Union Participants and Valley Union Participants ........................................................................................................................................................................................................................12
	
 

	
  
	
2.36
	
Pennsylvania Division Plan ......................................................................................................................................................................................................................................................................................................................................13
	
 

	
  
	
2.37
	
Plan ...............................................................................................................................................................................................................................................................................................................................................................................13
	
 

	
  
	
2.38
	
Plan A ...........................................................................................................................................................................................................................................................................................................................................................................13
	
 

	
  
	
2.39
	
Plan B ...........................................................................................................................................................................................................................................................................................................................................................................13
	
 

	
  
	
2.40
	
Plan Year ......................................................................................................................................................................................................................................................................................................................................................................13
	
 

  

ii

  

        2.41         Providence Plan ..........................................................................................................................................................................................................................................................................................................................................................13

	
  
	
2.42
	
Retirement Power Contributions ..............................................................................................................................................................................................................................................................................................................................13
	
 

	
  
	
(a)
	
Participant-Directed Retirement Power Contributions ..........................................................................................................................................................................................................................................................................13
	
 

	
  
	
(b)
	
Other Retirement Power Contributions ...................................................................................................................................................................................................................................................................................................13
	
 

	
  
	
2.43
	
Trust (or Trust Fund) .................................................................................................................................................................................................................................................................................................................................................13
	
 

	
  
	
2.44
	
Trust Agreement ........................................................................................................................................................................................................................................................................................................................................................13
	
 

	
  
	
2.45
	
Trustee .........................................................................................................................................................................................................................................................................................................................................................................13
	
 

	
  
	
2.46
	
Valley Plan ...................................................................................................................................................................................................................................................................................................................................................................13
	
 

	
  
	
2.47
	
Valuation Dates ..........................................................................................................................................................................................................................................................................................................................................................14
	
 

	
  
	
2.48
	
Vesting Service ...........................................................................................................................................................................................................................................................................................................................................................14
	
 

 

	
ARTICLE 3  
	
ELIGIBILITY, PARTICIPATION AND SERVICE ..................................................................................................................................................................................................................................................................................................14

	
  
	
3.1
	
Eligibility and Participation .......................................................................................................................................................................................................................................................................................................................................14
	
 

	
  
	
3.2
	
Vesting Service ...........................................................................................................................................................................................................................................................................................................................................................14
	
 

	
  
	
(a)
	
General Rule ................................................................................................................................................................................................................................................................................................................................................15
	
 

	
  
	
(1)
	
Employment Commencement (or Recommencement) Before January 1, 2003 ...................................................................................................................................................................................................................15
	
 

	
  
	
(2)
	
Employment Commencement (or Recommencement) On or After January 1, 2003 ..........................................................................................................................................................................................................15
	
 

	
  
	
(b)
	
PG Energy Participants ..............................................................................................................................................................................................................................................................................................................................15
	
 

	
  
	
(c)
	
Valley Participants ......................................................................................................................................................................................................................................................................................................................................16
	
 

	
  
	
(d)
	
Fall River Participants and Providence Participants .............................................................................................................................................................................................................................................................................16
	
 

	
  
	
(e)
	
Panhandle Energy Participants ................................................................................................................................................................................................................................................................................................................16
	
 

	
  
	
(f)
	
SU Gas Participants ....................................................................................................................................................................................................................................................................................................................................16
	
 

	
  
	
3.3
	
Cessation of Participation and Service ...................................................................................................................................................................................................................................................................................................................17
	
 

	
  
	
3.4
	
Participation Upon Reemployment ..........................................................................................................................................................................................................................................................................................................................17
	
 

	
  
	
3.5
	
Service Upon Reemployment ...................................................................................................................................................................................................................................................................................................................................17
	
 

	
  
	
3.6
	
Veterans’ Reemployment Rights ..............................................................................................................................................................................................................................................................................................................................18
	
 

 

	
ARTICLE 4  
	
CONTRIBUTIONS AND FORFEITURES ...............................................................................................................................................................................................................................................................................................................18

	
  
	
4.1
	
Employer Contributions ............................................................................................................................................................................................................................................................................................................................................18
	
 

	
  
	
(a)
	
Salary Reduction Contributions ...............................................................................................................................................................................................................................................................................................................18
	
 

	
  
	
(b)
	
Employer Matching Contributions ..........................................................................................................................................................................................................................................................................................................18
	
 

	
  
	
(1)
	
Corporate Participants and MGE Non-Union Participants ..................................................................................................................................................................................................................................................18
	
 

	
  
	
(2)
	
Fall River Participants and PG Energy Participants ...............................................................................................................................................................................................................................................................18
	
 

	
  
	
(3)
	
MGE Union Participants ............................................................................................................................................................................................................................................................................................................19
	
 

	
  
	
(4)
	
Panhandle Energy Participants ................................................................................................................................................................................................................................................................................................19
	
 

	
  
	
(5)
	
SU Gas Participants ....................................................................................................................................................................................................................................................................................................................19
	
 

	
  
	
(c)
	
Retirement Power Contributions ..............................................................................................................................................................................................................................................................................................................19
	
 

	
  
	
(d)
	
Contributions and Profits ..........................................................................................................................................................................................................................................................................................................................20
	
 

	
  
	
4.2
	
Participant Salary Reduction Agreements ..............................................................................................................................................................................................................................................................................................................20
	
 

	
  
	
(a)
	
Salary Reduction Agreements ..................................................................................................................................................................................................................................................................................................................20
	
 

	
  
	
(b)
	
Terms Governing Salary Reduction Agreements ..................................................................................................................................................................................................................................................................................21
	
 

	
  
	
4.3
	
Employee After-Tax Contributions ..........................................................................................................................................................................................................................................................................................................................22
	
 

	
  
	
4.4
	
Disposition of Forfeitures .........................................................................................................................................................................................................................................................................................................................................22
	
 

	
  
	
4.5
	
Rollover Amount From Other Plans ........................................................................................................................................................................................................................................................................................................................23
	
 

  

iii

  

        4.6           Limitation on Salary Reduction Contributions ......................................................................................................................................................................................................................................................................................................24 

	
  
	
4.7
	
Limitation on Employer Matching and Employee After-Tax Contributions .....................................................................................................................................................................................................................................................25
	
 

	
  
	
4.8
	
Employer Securities Acquisition Loans .................................................................................................................................................................................................................................................................................................................26
	
 

	
  
	
(a)
	
Employer Securities Acquisition Loan Provisons ................................................................................................................................................................................................................................................................................26
	
 

	
  
	
(b)
	
Terms Governing Employer Securities Acquisition Loans .................................................................................................................................................................................................................................................................27
	
 

	
  
	
4.9
	
Dividends on Shares of Southern Union Company Common Stock .................................................................................................................................................................................................................................................................28
	
 

	
  
	
4.10
	
Construction ..............................................................................................................................................................................................................................................................................................................................................................28
	
 

 

	
ARTICLE 5  
	
ALLOCATIONS TO PARTICIPANTS’ ACCOUNTS ..........................................................................................................................................................................................................................................................................................28

	
  
	
5.1
	
Individual Accounts .................................................................................................................................................................................................................................................................................................................................................28
	
 

	
  
	
5.2
	
Account Adjustments ..............................................................................................................................................................................................................................................................................................................................................29
	
 

	
  
	
(a)
	
Income .........................................................................................................................................................................................................................................................................................................................................................29
	
 

	
  
	
(b)
	
Salary Reduction Contributions ..............................................................................................................................................................................................................................................................................................................29
	
 

	
  
	
(c)
	
Employer Matching Contributions and Forfeitures .............................................................................................................................................................................................................................................................................29
	
 

	
  
	
(d)
	
Employee After-Tax Contributions .........................................................................................................................................................................................................................................................................................................29
	
 

	
  
	
5.3
	
Maximum Additions ..................................................................................................................................................................................................................................................................................................................................................29
	
 

	
  
	
5.4
	
Top-Heavy Provisions ..............................................................................................................................................................................................................................................................................................................................................31
	
 

	
  
	
(a)
	
Determination of Top-Heavy Status .......................................................................................................................................................................................................................................................................................................31
	
 

	
  
	
(b)
	
Minimum Allocations ................................................................................................................................................................................................................................................................................................................................31
	
 

	
  
	
(c)
	
Nonduplication of Minimum Allocations ..............................................................................................................................................................................................................................................................................................32
	
 

	
  
	
(d)
	
Definitions ..................................................................................................................................................................................................................................................................................................................................................32
	
 

	
  
	
(1)
	
Aggregate Account ..................................................................................................................................................................................................................................................................................................................32
	
 

	
  
	
(2)
	
Aggregation Group ...................................................................................................................................................................................................................................................................................................................33
	
 

	
  
	
(3)
	
Determination Date ...................................................................................................................................................................................................................................................................................................................33
	
 

	
  
	
(4)
	
Key Employee ............................................................................................................................................................................................................................................................................................................................33
	
 

	
  
	
(5)
	
Non-Key Employee ...................................................................................................................................................................................................................................................................................................................34
	
 

	
  
	
(6)
	
Present Value of Accrued Benefits .........................................................................................................................................................................................................................................................................................34
	
 

	
  
	
(7)
	
Top-Heavy Group .....................................................................................................................................................................................................................................................................................................................34
	
 

	
  
	
5.5
	
Investment of Contributions ...................................................................................................................................................................................................................................................................................................................................34
	
 

	
  
	
(a)
	
Designated Investment Alternatives .....................................................................................................................................................................................................................................................................................................34
	
 

	
  
	
(b)
	
Information about Designated Investment Alternatives ....................................................................................................................................................................................................................................................................35
	
 

	
  
	
(c)
	
Investment Instructions ...........................................................................................................................................................................................................................................................................................................................35
	
 

	
  
	
(d)
	
Employee Company Stock Fund and Employer Company Stock Fund ............................................................................................................................................................................................................................................35
	
 

	
  
	
(e)
	
Diversification ...........................................................................................................................................................................................................................................................................................................................................36
	
 

	
  
	
(f)
	
Procedures .................................................................................................................................................................................................................................................................................................................................................36
	
 

 

	
ARTICLE 6  
	
BENEFITS ..................................................................................................................................................................................................................................................................................................................................................................36

	
  
	
6.1
	
Retirement or Disability ............................................................................................................................................................................................................................................................................................................................................37
	
 

	
  
	
6.2
	
Death ...........................................................................................................................................................................................................................................................................................................................................................................37
	
 

	
  
	
6.3
	
Termination for Other Reasons ...............................................................................................................................................................................................................................................................................................................................37
	
 

	
  
	
6.4
	
Payment of Benefits ..................................................................................................................................................................................................................................................................................................................................................39
	
 

	
  
	
(a)
	
Election .......................................................................................................................................................................................................................................................................................................................................................39
	
 

	
  
	
(b)
	
Form of Payment .......................................................................................................................................................................................................................................................................................................................................39
	
 

	
  
	
(c)
	
Time of Payment ........................................................................................................................................................................................................................................................................................................................................40
	
 

	
  
	
(1)
	
General ........................................................................................................................................................................................................................................................................................................................................40
	
 

  

iv

  

           (2)           Election for Earlier Payment .......................................................................................................................................................................................................................................................................................................40

	
  
	
(3)
	
Election for Deferred Payment .................................................................................................................................................................................................................................................................................................40
	
 

	
  
	
(d)
	
Latest Distribution Dates .........................................................................................................................................................................................................................................................................................................................40
	
 

	
  
	
(e)
	
Cashout Distributions ...............................................................................................................................................................................................................................................................................................................................41
	
 

	
  
	
6.5
	
Designation of Beneficiary .......................................................................................................................................................................................................................................................................................................................................41
	
 

	
  
	
(a)
	
Designation Procedure ..............................................................................................................................................................................................................................................................................................................................41
	
 

	
  
	
(b)
	
Spousal Consent ........................................................................................................................................................................................................................................................................................................................................41
	
 

	
  
	
(c)
	
Lack of Designation ..................................................................................................................................................................................................................................................................................................................................42
	
 

	
  
	
6.6
	
Loans to Participants ................................................................................................................................................................................................................................................................................................................................................42
	
 

	
  
	
(a)
	
Administration ...........................................................................................................................................................................................................................................................................................................................................42
	
 

	
  
	
(b)
	
Eligibility .....................................................................................................................................................................................................................................................................................................................................................42
	
 

	
  
	
(c)
	
Loan Application Procedure ....................................................................................................................................................................................................................................................................................................................42 
	
 

	
  
	
(d)
	
Loan Approval ...........................................................................................................................................................................................................................................................................................................................................43
	
 

	
  
	
(e)
	
Loan Repayment ........................................................................................................................................................................................................................................................................................................................................43
	
 

	
  
	
(f)
	
Loan Purpose .............................................................................................................................................................................................................................................................................................................................................43
	
 

	
  
	
(g)
	
Minimum Amount .....................................................................................................................................................................................................................................................................................................................................43
	
 

	
  
	
(h)
	
Maximum Number and Amount ..............................................................................................................................................................................................................................................................................................................43
	
 

	
  
	
(i)
	
Interest Rate ...............................................................................................................................................................................................................................................................................................................................................43
	
 

	
  
	
(j)
	
Security ......................................................................................................................................................................................................................................................................................................................................................44
	
 

	
  
	
(k)
	
Spousal Consent .................................................................................................................................................................................................................................................................................................................................. ....44
	
 

	
  
	
(l)
	
Events of Default ......................................................................................................................................................................................................................................................................................................................................44
	
 

	
  
	
(m)
	
Effects of Default ......................................................................................................................................................................................................................................................................................................................................44
	
 

	
  
	
(n)
	
Distributions to Participant and Beneficiaries ......................................................................................................................................................................................................................................................................................44
	
 

	
  
	
(o)
	
Prohibited Preconditions .........................................................................................................................................................................................................................................................................................................................45
	
 

	
  
	
(p)
	
Directed Investments ...............................................................................................................................................................................................................................................................................................................................45
	
 

	
  
	
(q)
	
Expenses .....................................................................................................................................................................................................................................................................................................................................................45
	
 

	
  
	
(r)
	
Modifications ............................................................................................................................................................................................................................................................................................................................................45
	
 

	
  
	
6.7
	
Withdrawals During Active Employment .............................................................................................................................................................................................................................................................................................................45
	
 

	
  
	
(a)
	
Hardship .....................................................................................................................................................................................................................................................................................................................................................45
	
 

	
  
	
(b)
	
Age 591⁄2 .....................................................................................................................................................................................................................................................................................................................................................46
	
 

	
  
	
(c)
	
Deposit Account ......................................................................................................................................................................................................................................................................................................................................46
	
 

	
  
	
(d)
	
May 31, 1987 Employer Contributions Account ..................................................................................................................................................................................................................................................................................46
	
 

	
  
	
(e)
	
Rollover Account ......................................................................................................................................................................................................................................................................................................................................47
	
 

	
  
	
(f)
	
Prior Plan Account ....................................................................................................................................................................................................................................................................................................................................47
	
 

	
  
	
(g)
	
Vesting Rule ...............................................................................................................................................................................................................................................................................................................................................47
	
 

	
  
	
6.8
	
Rollover Distributions ..............................................................................................................................................................................................................................................................................................................................................48
	
 

	
  
	
(a)
	
Rollover Distributions ..............................................................................................................................................................................................................................................................................................................................48
	
 

	
  
	
(b)
	
Definitions ..................................................................................................................................................................................................................................................................................................................................................48
	
 

	
  
	
(1)
	
Eligible Rollover Distribution ..................................................................................................................................................................................................................................................................................................48
	
 

	
  
	
(2)
	
Eligible Retirement Plan ............................................................................................................................................................................................................................................................................................................49
	
 

	
  
	
(3)
	
Distributee ..................................................................................................................................................................................................................................................................................................................................49
	
 

	
  
	
(4)
	
Direct Rollover ...........................................................................................................................................................................................................................................................................................................................49
	
 

	
  
	
6.9
	
Other Benefits ............................................................................................................................................................................................................................................................................................................................................................49
	
 

 

	
ARTICLE 7  
	
TRUST AGREEMENT AND TRUST FUND .........................................................................................................................................................................................................................................................................................................49

	
  
	
7.1
	
Trust Agreement .......................................................................................................................................................................................................................................................................................................................................................49
	
 

  

v

  

        7.2           Exclusive Benefit of Participants and Beneficiaries .............................................................................................................................................................................................................................................................................................49

	
  
	
7.3
	
Refunds to Employer ................................................................................................................................................................................................................................................................................................................................................49
	
 

 

	
ARTICLE 8  
	
FIDUCIARY RESPONSIBILITIES ...........................................................................................................................................................................................................................................................................................................................50

	
  
	
8.1
	
Basic Responsibilities ...............................................................................................................................................................................................................................................................................................................................................50
	
 

	
  
	
8.2
	
Ineligible Persons ......................................................................................................................................................................................................................................................................................................................................................50
	
 

	
  
	
8.3
	
Liability .......................................................................................................................................................................................................................................................................................................................................................................50
	
 

	
  
	
8.4
	
Prohibited Transactions ...........................................................................................................................................................................................................................................................................................................................................50
	
 

	
  
	
8.5
	
Indemnification ..........................................................................................................................................................................................................................................................................................................................................................51
	
 

	
  
	
8.6
	
Insulation of Fiduciary from Liability for Losses Resulting from a Participant’s Exercise of Control ..........................................................................................................................................................................................................51
	
 

 

	
ARTICLE 9  
	
ADMINISTRATION OF THE PLAN ......................................................................................................................................................................................................................................................................................................................51

	
  
	
9.1
	
Appointment of Committee ......................................................................................................................................................................................................................................................................................................................................51
	
 

	
  
	
9.2
	
Meetings .....................................................................................................................................................................................................................................................................................................................................................................51
	
 

	
  
	
9.3
	
Quorum ........................................................................................................................................................................................................................................................................................................................................................................51
	
 

	
  
	
9.4
	
Powers, Duties and Responsibilities of the Committee .......................................................................................................................................................................................................................................................................................52
	
 

	
  
	
9.5
	
Expenses .....................................................................................................................................................................................................................................................................................................................................................................53
	
 

	
  
	
9.6
	
Liability of Committee Members .............................................................................................................................................................................................................................................................................................................................53
	
 

	
  
	
9.7
	
Benefit Claims and Review Procedures .................................................................................................................................................................................................................................................................................................................53
	
 

	
  
	
(a)
	
Claim for Benefits ......................................................................................................................................................................................................................................................................................................................................53
	
 

	
  
	
(b)
	
Time to Give Notice of Benefit Determination ......................................................................................................................................................................................................................................................................................53
	
 

	
  
	
(1)
	
Disability Benefits .....................................................................................................................................................................................................................................................................................................................53
	
 

	
  
	
(2)
	
Benefits Other Than Disability Benefits ................................................................................................................................................................................................................................................................................54
	
 

	
  
	
(c)
	
Manner and Content of Notice of Benefit Determination ...................................................................................................................................................................................................................................................................54
	
 

	
  
	
(1)
	
Disability Benefits .....................................................................................................................................................................................................................................................................................................................54
	
 

	
  
	
(2)
	
Benefits Other Than Disability Benefits ................................................................................................................................................................................................................................................................................54
	
 

	
  
	
(d)
	
Request for Review of Adverse Benefit Determination ......................................................................................................................................................................................................................................................................55
	
 

	
  
	
(1)
	
Disability Benefits .....................................................................................................................................................................................................................................................................................................................55
	
 

	
  
	
(2)
	
Benefits Other Than Disability Benefits ................................................................................................................................................................................................................................................................................55
	
 

	
  
	
(e)
	
Time to Give Notice of Decision on Review ..........................................................................................................................................................................................................................................................................................56
	
 

	
  
	
(1)
	
Disability Benefits .....................................................................................................................................................................................................................................................................................................................56
	
 

	
  
	
(2)
	
Benefits Other Than Disability Benefits ................................................................................................................................................................................................................................................................................56
	
 

	
  
	
(f)
	
Manner and Content of Notice of Decision on Review ......................................................................................................................................................................................................................................................................56
	
 

	
  
	
(1)
	
Disability Benefits .....................................................................................................................................................................................................................................................................................................................57
	
 

	
  
	
(2)
	
Benefits Other Than Disability Benefits ................................................................................................................................................................................................................................................................................57
	
 

	
  
	
9.8
	
Reliance on Reports and Certificates .....................................................................................................................................................................................................................................................................................................................57
	
 

	
  
	
9.9
	
Committee Member’s Own Benefits .......................................................................................................................................................................................................................................................................................................................57
	
 

 

	
ARTICLE 10  
	
AMENDMENT OR TERMINATION .....................................................................................................................................................................................................................................................................................................................57

	
  
	
10.1
	
Amendment or Termination .....................................................................................................................................................................................................................................................................................................................................57
	
 

	
  
	
10.2
	
Mergers, Consolidations and Transfers ................................................................................................................................................................................................................................................................................................................58
	
 

	
  
	
10.3
	
Discontinuance of Contributions ...........................................................................................................................................................................................................................................................................................................................58
	
 

	
  
	
10.4
	
Vesting Upon Termination, Partial Termination or Discontinuance of Contributions ...................................................................................................................................................................................................................................58
	
 

	
  
	
10.5
	
Option To Distribute Assets ...................................................................................................................................................................................................................................................................................................................................59
	
 

  

vi

  

ARTICLE 11    GENERAL PROVISIONS ..........................................................................................................................................................................................................................................................................................................................................59 

	
  
	
11.1
	
No Guarantee of Employment .................................................................................................................................................................................................................................................................................................................................59
	
 

	
  
	
11.2
	
Payments to Minors and Incompetents ................................................................................................................................................................................................................................................................................................................59
	
 

	
  
	
11.3
	
Non-Alienation of Benefits .....................................................................................................................................................................................................................................................................................................................................59
	
 

	
  
	
11.4
	
Evidence of Survivor ................................................................................................................................................................................................................................................................................................................................................60
	
 

	
  
	
11.5
	
Governing Law ..........................................................................................................................................................................................................................................................................................................................................................60
	
 

	
  
	
11.6
	
Uniform Administration ...........................................................................................................................................................................................................................................................................................................................................60
	
 

	
  
	
11.7
	
Source of Payments ..................................................................................................................................................................................................................................................................................................................................................60
	
 

	
  
	
11.8
	
Construction ..............................................................................................................................................................................................................................................................................................................................................................60
	
 

 

ARTICLE 12          SUBSIDIARIES..........................................................................................................................................................................................................................................................................................................................................................60

	
  
	
12.1
	
Termination of Participation by Other Employers ................................................................................................................................................................................................................................................................................................60
	
 

	
  
	
12.2
	
Termination Rights of Other Employers ................................................................................................................................................................................................................................................................................................................61
	
 

 

	
ARTICLE 13  
	
RETIREMENT POWER CONTRIBUTIONS IMPLEMENTED JANUARY 1, 1999 .........................................................................................................................................................................................................................................61

	
  
	
13.1
	
Retirement Power Contributions Implemented January 1, 1999 .........................................................................................................................................................................................................................................................................61
	
 

	
  
	
13.2
	
Eligibility for Retirement Power Contributions .....................................................................................................................................................................................................................................................................................................61
	
 

	
  
	
(a)
	
MGE Union Employees ............................................................................................................................................................................................................................................................................................................................61
	
 

	
  
	
(b)
	
New Employees .........................................................................................................................................................................................................................................................................................................................................62
	
 

	
  
	
(c)
	
Other Employees .......................................................................................................................................................................................................................................................................................................................................62
	
 

	
  
	
13.3
	
Level of Retirement Power Contributions .............................................................................................................................................................................................................................................................................................................62
	
 

	
  
	
(a)
	
Participant-Directed Retirement Power Contributions ........................................................................................................................................................................................................................................................................62
	
 

	
  
	
(b)
	
Other Retirement Power Contributions .................................................................................................................................................................................................................................................................................................63
	
 

	
  
	
(c)
	
Definitions .................................................................................................................................................................................................................................................................................................................................................63
	
 

	
  
	
(1)
	
Age .............................................................................................................................................................................................................................................................................................................................................63
	
 

	
  
	
(2)
	
Years of Service for MGE Employees ....................................................................................................................................................................................................................................................................................63
	
 

	
  
	
(3)
	
Years of Service for Other Employees ...................................................................................................................................................................................................................................................................................64
	
 

	
  
	
(4)
	
Compensation for MGE Employees .......................................................................................................................................................................................................................................................................................64
	
 

	
  
	
(5)
	
Compensation for Other Employees ......................................................................................................................................................................................................................................................................................64
	
 

 

	
ARTICLE 14  
	
RETIREMENT POWER CONTRIBUTIONS IMPLEMENTED AFTER JANUARY 1, 1999 ...........................................................................................................................................................................................................................64

	
  
	
14.1
	
Retirement Power Contributions Implemented After January 1, 1999 ...............................................................................................................................................................................................................................................................64
	
 

	
  
	
14.2
	
Affected Pennsylvania Participants .......................................................................................................................................................................................................................................................................................................................65
	
 

	
  
	
(a)
	
Eligibility for Retirement Power Contributions .....................................................................................................................................................................................................................................................................................65
	
 

	
  
	
(b)
	
Level of Retirement Power Contributions ..............................................................................................................................................................................................................................................................................................65
	
 

	
  
	
(1)
	
Participant-Directed Retirement Power Contributions .........................................................................................................................................................................................................................................................65
	
 

	
  
	
(2)
	
Other Retirement Power Contributions ..................................................................................................................................................................................................................................................................................65
	
 

	
  
	
14.3
	
Affected Plan A Participants ...................................................................................................................................................................................................................................................................................................................................66
	
 

	
  
	
(a)
	
Eligibility for Participant-Directed Retirement Power Contributions .................................................................................................................................................................................................................................................66
	
 

	
  
	
(b)
	
Level of Participant-Directed Retirement Power Contributions .........................................................................................................................................................................................................................................................66
	
 

	
  
	
14.4
	
Affected Corporate Participants .............................................................................................................................................................................................................................................................................................................................66
	
 

	
  
	
(a)
	
Eligibility for Retirement Power Contributions .....................................................................................................................................................................................................................................................................................66
	
 

	
  
	
(b)
	
Level of Retirement Power Contributions .............................................................................................................................................................................................................................................................................................66
	
 

  

vii

  

          (1)           Participant-Directed Retirement Power Contributions ..........................................................................................................................................................................................................................................................66

	
  
	
(2)
	
Other Retirement Power Contributions ..................................................................................................................................................................................................................................................................................67
	
 

	
  
	
(3)
	
Definitions ..................................................................................................................................................................................................................................................................................................................................67
	
 

	
  
	
(A)
	
Age ..............................................................................................................................................................................................................................................................................................................................67
	
 

	
  
	
(B)
	
Years of Service .........................................................................................................................................................................................................................................................................................................67
	
 

	
  
	
14.5
	
Panhandle Energy Participants ...............................................................................................................................................................................................................................................................................................................................68
	
 

	
  
	
(a)
	
Eligibility for Retirement Power Contributions .....................................................................................................................................................................................................................................................................................68
	
 

	
  
	
(b)
	
Level of Retirement Power Contributions .............................................................................................................................................................................................................................................................................................68
	
 

	
  
	
(1)
	
Calculation of Retirement Power Contributions ...................................................................................................................................................................................................................................................................68
	
 

	
  
	
(2)
	
Participant-Directed Retirement Power Contributions .........................................................................................................................................................................................................................................................68
	
 

	
  
	
(3)
	
Other Retirement Power Contributions ..................................................................................................................................................................................................................................................................................69
	
 

	
  
	
(4)
	
Definitions ..................................................................................................................................................................................................................................................................................................................................69
	
 

	
  
	
(A)
	
Age ..............................................................................................................................................................................................................................................................................................................................69
	
 

	
  
	
(B)
	
Years of Service .........................................................................................................................................................................................................................................................................................................69
	
 

	
  
	
14.6
	
SU Gas Participants ...................................................................................................................................................................................................................................................................................................................................................69
	
 

	
  
	
(a)
	
Eligibility for Participant-Directed Retirement Power Contributions .................................................................................................................................................................................................................................................69
	
 

	
  
	
(b)
	
Level of Participant-Directed Retirement Power Contributions ..........................................................................................................................................................................................................................................................69
	
 

 

	
ARTICLE 15  
	
EFFECT OF TRANSFERS ON RETIREMENT POWER CONTRIBUTIONS .....................................................................................................................................................................................................................................................70

	
  
	
15.1
	
Transfer to a Position Covered by a Defined Benefit Plan ..................................................................................................................................................................................................................................................................................70
	
 

	
  
	
15.2
	
Transfer to a Position not Covered by a Defined Benefit Plan ...........................................................................................................................................................................................................................................................................70
	
 

 

Appendix A          Minimum Required Distributions .............................................................................................................................................................................................................................................................................................................................72

 

Appendix B           Employees of Pennsylvania-American Water Company .....................................................................................................................................................................................................................................................................................77

  

viii

  

SOUTHERN UNION SAVINGS PLAN

PREAMBLE

WHEREAS, Southern Union Company (the “Company”) established a profit sharing plan known as the Southern Union Savings Plan (the “Plan”), which was first effective November 1, 1970 and which now covers certain divisions and subsidiaries of the Company, in recognition
of the contribution made by eligible employees and for the exclusive benefit of eligible employees;

WHEREAS, under the terms of the Plan, the Company has the ability to amend the Plan;

WHEREAS, effective January 1, 2004 (except as provided in such amendment and restatement), the Company amended and restated the Plan;

WHEREAS, since the date that such amended and restated Plan was executed, the Plan has been amended four times, on December 30, 2005, on August 22, 2006, on December 28, 2006 and on December 31, 2007;

WHEREAS, the Company desires to amend and restate the Plan in this document, primarily to reflect the current provisions of the Plan, as previously amended, and to reflect in this document only the matching contribution formulas that apply to designated groups of eligible employees as of
the effective date of this amendment and restatement; and

WHEREAS, as amended and restated, the Plan continues to set forth the rights and benefits of designated groups of Plan participants who continue to have account balances under the Plan, but who are no longer considered eligible employees and who are no longer eligible for contributions under
the Plan;

NOW, THEREFORE, effective January 1, 2008 (except as provided herein), the Company hereby amends and restates the Plan as set forth in this document.

ARTICLE 1

NAME AND PURPOSE OF THE PLAN

1.1           Name.  This Plan is known as the Southern Union Savings Plan.

1.2           Effective Date.  Except as provided herein, the provisions of this amendment and restatement of the Plan are effective January 1, 2008.

1.3           Purposes of the Plan.  The basic purposes of the Plan are

  

1

  

(a)           To attract, motivate and retain eligible employees by allowing them to share in the profits of the Company and its subsidiaries; and

(b)           To enable eligible employees to accumulate funds in a tax-advantageous manner for their retirement needs.

1.4           Intent.  It is the intention of the Company and its subsidiaries that this Plan and the Trust (as hereinafter defined) meet the requirements of the
Employee Retirement Income Security Act of 1974, qualify under Code Section 401(a) and be exempt from federal income taxation under Code Section 501(a).  It is also the intention of the Company and its subsidiaries that this Plan and the related portions of the Trust be an employee stock ownership plan described in Code Section 4975(e)(7) with respect to ESOP Contributions (as such term is hereinafter defined) and adjustments relating thereto.

1.5           Exclusive Benefit of Employees.  This Plan and the Trust shall be maintained for the exclusive benefit of the eligible employees of the Company and
its subsidiaries.  Except as provided in Section 7.3, the assets of the Trust shall never inure to the benefit of the Company and its subsidiaries and shall be held for the exclusive purposes of providing benefits to eligible employees who are participants in the Plan, and their beneficiaries, and defraying reasonable expenses of administering the Plan.

ARTICLE 2

DEFINITIONS

As used in the Plan, the words set forth below shall have the meanings indicated, unless the context clearly requires a different meaning.  Definitions relating to top-heavy provisions, rollover distributions, the calculation of Retirement Power Contributions implemented January
1, 1999, the calculation of Retirement Power Contributions for Affected Corporate Participants, and the calculation of Retirement Power Contributions for Panhandle Energy Participants are set forth in Sections 5.4(e), 6.8(b), 13.3(c), 14.4(b)(3) and 14.5(b)(4), respectively.  In addition to these definitions and the definitions set forth below, there are additional definitions set forth in other sections of the Plan.

2.1           415 Compensation.  All wages, salaries, fees for professional services and other amounts paid by the Employer to a Participant during the Plan Year
under consideration (including commissions paid to salesmen or on insurance contracts, tips, bonuses, compensation based on percentages of profits, amounts described in Code Sections 104(a)(3), 105(a) and 105(h) that are includable in the Participant’s gross income, a Participant’s moving expenses paid or reimbursed by the Employer to the extent that such amounts are not deductible under Code Section 217, the value of a nonqualified stock option granted by the Employer to a Participant to the extent
that such value is includable in the Participant’s gross income in the year granted, amounts includable in a Participant’s gross income upon making a Code Section 83(b)

  

2

  

election, amounts received under an unfunded nonqualified plan to the extent such amounts are includable in the Participant’s gross income, fringe benefits, any elective deferral (as defined in Code Section 402(g)(3)), and any amount that is contributed or deferred by the Employer at the election of the Participant and that is not
includable in the gross income of the Participant by reason of Code Section 125, 132(f)(4) or 457), whether or not such 415 Compensation is earned inside or outside the United States, and whether or not such 415 Compensation is excludable from gross income under Code Section 911 or deductible under Code Section 913.  415 Compensation does not include

(a)           Employer contributions to a plan of deferred compensation that are not included in the Employee’s gross income for the taxable year in which contributed or Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the Employee, or any distributions from a plan of deferred compensation;

(b)           Amounts realized from the exercise of a nonqualified stock option, or when restricted stock (or property) held by the Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
and

(c)           Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option.

415 Compensation, as determined under this Section 2.1, in excess of $200,000 (as adjusted for cost-of-living increases in accordance with the Code) shall be disregarded.

2.2           Accounts.  The Accounts, consisting of those described in Sections 2.2(a) through 2.2(j), that are maintained under the Plan.

(a)           Deposit Account.           The Account maintained for a Participant to record the balance of his post-tax
contributions held under the Plan as of May 31, 1987, his Employee after-tax contributions made to the Plan on or after January 1, 1994, and an SU Gas Participant’s employee after-tax contributions made to the Bass Plan prior to the plan-to-plan transfer of SU Gas Participants’ account balances under the Bass Plan to the Plan, and adjustments to such amounts.

(b)           Employer Contributions Account.           The Account maintained for a Participant to record Employer matching
contributions (other than Employer matching contributions credited to the Participant’s Prior Employer Contributions Account) made to the Plan on his behalf by an Employer (and including, with respect only to an SU Gas Participant, amounts transferred from the Bass Plan attributable to employer contributions (including both matching and other employer contributions) made on behalf of the SU Gas Participant on or after July 1, 2001 through December 31, 2003), and adjustments relating thereto.  Except
as provided in Section 5.5(e), portions of the Employer Contributions Accounts of Participants attributable to ESOP Contributions, and adjustments relating thereto, shall be invested primarily in the Employer Company Stock Fund.    The Plan is intended to be an employee stock ownership plan described in Code Section 4975(e)(7) with respect to the portions of Participants’ Employer

  

3

  

Contributions Accounts attributable to ESOP Contributions, and adjustments relating thereto, and with respect to the Employer Company Stock Fund.

(c)           Prior Employer Contributions Account.        An Account maintained for a Corporate Participant, an MGE Participant or a
SUG Participant to record those Employer matching contributions that were made to the Plan before such time that Employer matching contributions were invested in shares of Southern Union Company common stock and to record profit sharing and profit incentive contributions, if any, that may have been made to the Plan prior to the time that the Plan was amended to eliminate future profit sharing and profit incentive contributions, and adjustments relating to all such contributions.

 

(d)           Prior Plan Account.        The Account maintained for a PG Energy Participant to record amounts transferred from the Employee
Stock Ownership Plan of Pennsylvania Gas & Water Company to the Pennsylvania Division Plan upon the termination of the Employee Stock Ownership Plan of Pennsylvania Gas & Water Company, and adjustments relating thereto, which consist of the following subaccounts:

(1)           After-Tax Employee Contribution Subaccount.    The subaccount maintained for a PG Energy Participant to record amounts within such Participant’s
Prior Plan Account that are attributable to after-tax contributions made by the PG Energy Participant and adjustments relating thereto.

(2)           Employer Contribution Subaccount.    The subaccount maintained for a PG Energy Participant to record amounts within such Participant’s
Prior Plan Account that are attributable to employer contributions made on behalf of the PG Energy Participant and adjustments relating thereto.

(e)           Retirement Power Account.          The Account maintained for a Participant to record Retirement Power Contributions
made to the Plan on his behalf by an Employer pursuant to the provisions of Articles 13 and 14 and adjustments relating thereto.

(f)           Rollover Contribution Account.         The Account maintained for a Participant to record amounts transferred
to the Trust Fund on his behalf from other plans, in accordance with applicable legal requirements, and adjustments relating thereto, consisting of the following subaccounts:

(1)           Tax-Deferred Rollover Contribution Subaccount.    The subaccount maintained for a Participant to record amounts within the Participant’s
Rollover Contribution Account attributable to tax-deferred amounts transferred from another qualified plan, either directly from the qualified plan or from a conduit IRA, a traditional IRA, a 457 plan of a governmental employer or a 403(b) plan and, in each case, adjustments relating thereto.

 

(2)           Roth Rollover Contribution Subaccount.    The subaccount maintained for a Participant to record amounts within the Participant’s Rollover
Contribution Account attributable to Roth elective deferrals under an applicable retirement plan described in

  

4

  

Code Section 402A(e)(1) to the extent the rollover is permitted under the rules of Code Section 402(c), and adjustments relating thereto.

(3)           After-Tax Rollover Contribution Subaccount.    The subaccount maintained for a Participant to record amounts within the Participant’s
Rollover Contribution Account that are attributable to after-tax amounts, other than Roth elective deferrals, transferred from another qualified plan, and adjustments relating thereto.

(g)           Roth Account.         An Account maintained for a Participant to record the balance of his after-tax Roth elective
deferral contributions made to the Plan on or after January 1, 2007, and adjustments relating thereto.

(h)           Sid Richardson Pre-July 1, 2001 Employer Contributions Account.        The Account maintained for an SU Gas Participant
to record employer contributions (including both matching and other employer contributions) to the Bass Plan prior to July 1, 2001, and adjustments relating thereto.

(i)           Sid Richardson Safe Harbor Matching Contributions Account.         The Account maintained for an SU Gas Participant
to record employer safe harbor matching contributions to the Bass Plan with respect to periods beginning on or after January 1, 2004 and ending upon the plan-to-plan transfer of SU Gas Participants’ account balances under the Bass Plan to the Plan, and adjustments relating thereto.

(j)           Tax-Deferred Account.         The Account maintained for a Participant to record tax-deferred salary reduction
contributions made to the Plan on his behalf by an Employer pursuant to a salary reduction agreement (and including, with respect only to an SU Gas Participant, amounts transferred from the Bass Plan attributable to tax-deferred salary reduction contributions made to the Bass Plan on behalf of the SU Gas Participant by an employer), and adjustments relating thereto.

2.3           Annual Additions.   The sum credited to a Participant’s Accounts with respect to a Plan Year for any of (a) salary reduction contributions,
(b) Employer matching contributions, (c) Retirement Power Contributions, (d) Forfeitures and (e) Employee post-tax contributions.  The following are not Annual Additions: (a) transfer of funds from one qualified plan to another, (b) rollover contributions to the Plan, (c) repayments of loans made to a Participant from the Plan and (d) repayments of distributions received by an Employee from the Plan.

2.4           Authorized Leave of Absence.   Any absence authorized under an Employer’s absence management practices.  An absence due to service
in the Armed Forces of the United States shall be considered an Authorized Leave of Absence provided that the Employee complies with all of the requirements of federal law in order to be entitled to reemployment and provided further that the Employee returns to employment with the Employer within the period provided by such law.  A maternity or paternity leave of absence from work for any period of time by reason of the Employee’s pregnancy, birth or adoption of the Employee’s child, or
absence for

  

5

  

the purpose of caring for the child immediately after birth or adoption, shall be considered an Authorized Leave of Absence.

2.5           Bass Plan.  The Bass Thrift/401(k) Plan and Trust.

2.6           Beneficiary.  The person or persons designated by a Participant in accordance with the provisions of Section 6.5 to receive any death benefits payable
under this Plan.

2.7           Board.  The Board of Directors of the Company.

2.8           Break in Service.  A Plan Year during which the Employee completes not more than 500 Hours of Service.

2.9           Code.  The Internal Revenue Code, as amended from time to time, and the applicable regulations and other guidance of general applicability issued
thereunder.

2.10         Committee.  The Southern Union Company Benefits Committee, as appointed by the Board pursuant to Section 9.1.

2.11         Company.  Southern Union Company, a corporation organized and existing under the laws of the State of Delaware and its successor or successors.

2.12         Compensation.  Compensation, as determined pursuant to paragraph (a) or (b) below, as applicable, shall be recognized as of the Employee’s effective date
of participation pursuant to Section 3.1.  Compensation, as determined pursuant to paragraph (a) or (b) below, as applicable, in excess of $200,000 (as adjusted for cost-of-living increases in accordance with the Code) shall be disregarded.

(a)           For PG Energy IBEW Participants and PG Energy UWUA Participants, the term Compensation refers to the Participant’s base hourly rate multiplied by the number of hours (not in excess of 40 hours per week) worked by such
Participant each week (including any hours attributable to paid vacation, holiday or sick leave).

(b)           For Participants who are not PG Energy IBEW Participants or PG Energy UWUA Participants, the term Compensation refers to the Participant’s W-2 earnings, but excluding taxable fringe benefits (such as car allowances
and moving expenses), excluding amounts realized in connection with stock options and restricted stock or premiums for group term life insurance, and excluding any benefits (whether such benefits consist of fringe benefits, cash, tax gross-up benefits or any other benefits) that the Participant receives from the Company under its perquisite program.  Notwithstanding the foregoing, Compensation shall include any amount that is contributed by an Employer pursuant to a salary reduction agreement and that
is not includable in the gross income of the Participant under Code Section 125, 132(f), 401(k), 402(e)(3), 402(h), 403(b), 414(h)(2) or 457(b).  Notwithstanding the foregoing, in applying the provisions of this paragraph (b) to Fall River Participants, Compensation shall exclude bonuses and overtime.  For SU Gas Participants, and for the avoidance of doubt, Compensation shall

  

6

  

exclude any retention payments that SU Gas Participants receive or are entitled to receive from Sid Richardson Energy Services, Ltd., Richardson Energy Marketing, Ltd., Leapartners, L.P. or BEPCO, L.P., or any party that was related to such entities, by ownership or management, prior to March 1, 2006.

                2.13          Designated Investment Alternatives.  The separate investment funds established by the Committee within the Trust
Fund which are described in Section 5.5 and in which all or any portion of a Participant’s Accounts, other than those portions of a Participant’s Accounts attributable to ESOP Contributions and adjustments relating thereto (except as provided in Section 5.5(e)) may be invested, at the direction of the Participant in accordance with Section 5.5.  One of the Designated Investment Alternatives established by the Committee shall be the Employee Company Stock Fund.  In addition, one
of the Designated Investment Alternatives shall be a self-directed brokerage option, allowing investment among additional investment alternatives.

2.14           Disability.  Disability means a physical or mental condition, either occupational or nonoccupational in cause, that renders the Employee disabled
under the provisions of the Company’s long-term disability insurance program.  An Employee must be receiving long-term disability payments in order to be considered to have a Disability under the Plan.

2.15           DOL.  The Department of Labor.

2.16           Early Retirement Age.  The age at which a Participant has both attained age 55 and completed ten years of Vesting Service.

2.17           Eligible Spouse.  The spouse to whom a Participant is married on the date benefit payments commence pursuant to Section 6.4, or if benefit payments
have not so commenced, the spouse to whom the Participant is married on the date of his death.

2.18           Employee.  Any person who (a) is employed by an Employer and is receiving remuneration for personal services rendered to an Employer (or who would
be receiving such remuneration except for an Authorized Leave of Absence), and (b) is included on the payroll of his Employer for a location in one of the states of the United States of America.  The term shall include any person holding one or more of the elective offices provided for in his Employer’s by-laws, except that services solely as a director of an Employer shall not qualify an individual as an Employee.  The preceding provisions of this Section 2.18 notwithstanding, for purposes
of Section 3.1, the term Employee shall exclude those individuals who are designated on an Employer’s books as “temporary employees” or as “interns”.

2.19           Employee Company Stock Fund.  The investment fund established by the Committee within the Trust Fund in which all or any portion of a Participant’s
Accounts, other than any portion attributable to ESOP Contributions and adjustments relating thereto (except as provided in Section 5.5(e)), may be invested, with any income therefrom reinvested, at the direction of a Participant in accordance with Section 5.5, in shares of Southern Union Company common stock.

  

7

  

2.20           Employer.  The Company and each of the following subsidiaries of the Company:

Panhandle Eastern Pipe Line Company, LP

PEI Power Corporation

Southern Union Gas Services, Ltd.

Trunkline Gas Company, LLC

Trunkline LNG Company, LLC

In no event shall any other subsidiary of the Company (including any subsidiary that may, in the future, be acquired by the Company) be considered an Employer hereunder.

2.21           Employer Company Stock Fund.  The investment fund established by the Committee within the Trust Fund in which all ESOP Contributions made by the
Company on behalf of a Participant and adjustments relating thereto (except as provided in Section 5.5(e)), shall be invested, with any income therefrom reinvested, solely in shares of Southern Union Company common stock.  The Plan is intended to be an employee stock ownership plan described in Code Section 4975(e)(7) with respect to the Employer Company Stock Fund and with respect to any ESOP Contributions made on behalf of a Participant and
adjustments relating thereto.

2.22           Employer Securities Acquisition Loan.  Any loan that is made to the Plan, or to any plan that is merged into this Plan, for the purpose of acquiring
shares of common stock of Southern Union Company or shares of common stock of any predecessor in interest to Southern Union Company within a reasonable period of time after receipt of the loan proceeds or for the purpose of repaying a prior loan made for such acquisition, and that satisfies the requirements of Section 4.8.

2.23           ERISA.  Public Law 93-406, the Employee Retirement Income Security Act of 1974, as amended from time to time, and the applicable regulations and
other guidance of general applicability issued thereunder.

2.24           ESOP Contributions.  All Employer contributions made to the Plan on behalf of a Participant other than Non-ESOP Contributions.

2.25           Fall River Plans.  The Southern Union Company Fall River 401(k) Savings Plan and the Southern Union Company Fall River 401(k) Plan for Union Employees.

2.26           Five Percent Owner.  Any individual described in Code Section 416(i)(1)(B)(i).

2.27           Forfeiture.  The portion of a Participant’s Employer Contributions Account, Prior Employer Contributions Account or Retirement Power Account
that is forfeited prior to being fully vested.

  

8

  

2.28           Highly Compensated Participant.  Any Participant or former Participant who is a highly compensated employee as defined in Code Section 414(q).  Generally,
any Participant or former Participant is considered a Highly Compensated Participant if such Participant or former Participant

(a)           During the Plan Year or the preceding Plan Year, was at any time a Five Percent Owner; or

(b)           For the preceding Plan Year, received 415 Compensation from the Employer in excess of $80,000 (as adjusted in accordance with the Code).  In determining whether an individual has 415 Compensation of more than $80,000
(or the adjusted amount), 415 Compensation from each employer required to be aggregated under Code Section 414(b), (c) and (m) shall be taken into account.

2.29           Hours of Service.  Hours of Service shall include the following

(a)           Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for an Employer;

(b)           Up to 501 hours for any single continuous period during which the Employee performs no duties but is directly or indirectly paid or entitled to payment by an Employer (regardless of whether employment has terminated) due
to vacation, holiday, illness, incapacity including disability, layoff, jury duty, military duty or leave of absence, excluding, however, any period for which a payment is made or due under this Plan or under a plan maintained solely for the purpose of complying with workers’ compensation or unemployment compensation or disability insurance laws, or solely to reimburse the Employee for medical or medically-related expenses.  An Employee shall be deemed to be “directly or indirectly paid
or entitled to payment by an Employer” regardless of whether such payment is (1) made by or due from an Employer directly, or (2) made indirectly through a trust fund, insurer or other entity to which an Employer contributes or pays premiums;

(c)           Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by an Employer, without duplication of hours provided above, and subject to the 501-hour restriction for periods described
in paragraph (b) of this Section 2.29; and

(d)           Each hour for which an Employee normally would have been credited (if normal hours cannot be determined, then eight hours for each day) while the Employee is absent on a maternity or paternity leave.  A maternity
or paternity leave occurs when the Employee is absent due to the Employee’s pregnancy, the birth of the Employee’s child, the placement of a child in connection with its adoption by the Employee, or the caring for a child by the Employee during the period immediately following its birth or placement for adoption.  No more than 501 hours may be credited under this provision for any particular maternity or paternity leave.  All the hours shall be credited (under this provision) in
the Plan Year the absence begins only if it is necessary to prevent a Break in Service in that Plan Year.  Otherwise, all the hours shall be

  

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credited in the following Plan Year.  An Employer may require certification, under reasonable and uniform rules, to establish the basis of the absence under this provision.

The provisions of this Section 2.29 shall be administered in accordance with DOL Regulation Section 2530.200b-2.  In addition to, but not in duplication of, the foregoing provisions, an Employee shall receive Hours of Service for any period of Authorized Leave of Absence.

2.30           Income.  The net gain or loss of the Trust Fund from investments, as reflected by interest payments, dividends, realized and unrealized gains and
losses on securities, other investment transactions, and expenses paid from the Trust Fund.

2.31           IRA.  An individual retirement account, as defined in Code Section 408(a).

2.32           MGE Division.  The Company’s Missouri Gas Energy Division.

2.33           Non-ESOP Contributions.  All Participant contributions (including salary reduction contributions) and in addition, all Employer contributions made
to the Plan on behalf of Fall River Participants, Providence Participants and SU Gas Participants, all Participant-Directed Retirement Power Contributions, all Employer contributions made to the Plan on behalf of Valley Union Participants after April 1, 2006, and all Employer contributions made to the Plan on behalf of Corporate Participants, MGE Participants, Panhandle Energy Participants and PG Energy Participants attributable to compensation paid on or after September 29, 2006.

2.34           Normal Retirement Age.  The Normal Retirement Age under the Plan shall be age 62.

2.35           Participant.  An Employee who is a Participant in the Plan pursuant to Article 3 and any Participant whose employment with the Employer has terminated,
but who has a vested Account balance under the Plan which has not been paid in full.  The various groups of Participants are defined and described below.  All of these groups of Participants, other than the Keystone Participants, the SUG Participants, the Providence Participants and the Valley Participants are covered by the Plan as of this January 1, 2008 amendment and restatement of the Plan.  The Keystone Participants were covered by the Plan until June 15, 2001; the SUG Participants
were covered by the Plan until December 31, 2002; and the Providence Participants and the Valley Participants were covered by the Plan until August 23, 2006.  The group of Corporate Participants defined and described below includes Affected Pennsylvania Participants, Affected Plan A Participants and Affected Corporate Participants, as well as certain Participants who are eligible for Retirement Power Contributions under Article 13.  The only PG Energy Participants who are covered by the Plan
as of this January 1, 2008 amendment and restatement of the Plan are employed by the Company’s subsidiary, PEI Power Corporation.

(a)           Affected Corporate Participants.  Those Corporate Participants who are not eligible for Retirement Power Contributions under Article 13, Section 14.2
or Section 14.3.

  

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(b)           Affected Pennsylvania Participants.  Those Corporate Participants who (1) were employed by the Company in its Pennsylvania Division, (2) as a result
of a transfer, are employed by the Company in its corporate headquarters, and (3) are named in Section 14.2(b)(1).

(c)           Affected Plan A Participants.  Those Corporate Participants who are named in Section 14.3(b).

(d)           Corporate Participants.  Participants who are employed by the Company and designated on the books of the Company as “corporate” employees.

(e)           Fall River Non-Union Participants.  Fall River Participants who are designated on the books of the Company as not being subject to a collective bargaining
agreement; provided, however, that the five Fall River Non-Union Participants who voted to become subject to a collective bargaining agreement on August 23, 2004 and whose retirement benefits were not negotiated until February 9, 2005, shall continue to be considered as Fall River Non-Union Participants until March 1, 2005.

(f)           Fall River Participants.  Participants who are employed by the Company and designated on the books of the Company as “Fall River” employees.  For
the avoidance of doubt, (1) a Providence Participant who, in connection with the Company’s August 24, 2006 sale of its Rhode Island operations to National Grid USA remains with the Company and is designated on the books of the Company as a “Fall River” employee shall after August 23, 2006 be considered a Fall River Participant for purposes of this Plan, and (2) likewise, a Valley Participant who, in connection with the Company’s August 24, 2006 sale of its Rhode Island operations to National
Grid USA remains with the Company and is designated on the books of the Company as a “Fall River” employee, shall after August 23, 2006 be considered a Fall River Participant for purposes of this Plan.

(g)           Fall River Union Participants.  Fall River Participants who are designated on the books of the Company as being subject to a collective bargaining
agreement; provided, however, that the five Fall River Non-Union Participants who voted to become subject to a collective bargaining agreement on August 23, 2004 and whose retirement benefits were not negotiated until February 9, 2005, shall not be considered as Fall River Union Participants until March 1, 2005.

(h)           Keystone Participants.  Participants who were employed by Keystone Pipeline Services, Inc. during the period of time that it was a subsidiary of
the Company.

(i)           MGE Non-Union Participants.  MGE Participants who are designated on the books of the Company as not being subject to a collective bargaining agreement.

(j)           MGE Participants.  Participants who are designated on the books of the Company as being employed in the Company’s MGE Division.

  

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(k)           MGE Union Participants.  MGE Participants who are designated on the books of the Company as being subject to a collective bargaining agreement.

(l)           Panhandle Energy Participants.  Participants who are employed by the Company’s subsidiary, Panhandle Eastern Pipe Line Company, LP, or by either
of Panhandle Eastern Pipe Line Company, LP’s subsidiaries, Trunkline Gas Company, LLC or Trunkline LNG Company, LLC, including those Participants employed by Panhandle Eastern Pipe Line Company, LP who were formerly employed by the Company’s subsidiary, CrossCountry Energy Services, LLC, and whose employment was transferred to Panhandle Eastern Pipe Line Company, LP effective September 23, 2007.

(m)           PG Energy IBEW Participants.  PG Energy Participants who are designated on the books of the Company as being subject to the collective bargaining
agreement with the International Brotherhood of Electrical Workers, AFL-CIO.

(n)           PG Energy Non-Union Participants.  PG Energy Participants who are designated on the books of the Company as not being subject to a collective bargaining
agreement.

(o)           PG Energy Participants.  Participants who are designated on the books of the Company as being employed in the Company’s Pennsylvania Division,
or who are employed by the Company’s subsidiary, PEI Power Corporation.

(p)           PG Energy UWUA Participants.  PG Energy Participants who are designated on the books of the Company as being subject to the collective bargaining
agreement with the Utility Workers Union of America, AFL-CIO.

(q)           Providence Participants.  Participants who are employed by the Company and designated on the books of the Company as “Providence” employees.

(r)           SUG Participants.  Participants who were employed by the Company, a subsidiary of the Company, or a predecessor of either, in connection with assets
that the Company sold to ONEOK, Inc. on January 1, 2003.

(s)           SU Gas Participants.  Participants who are employed by the Company’s subsidiary, Southern Union Gas Services, Ltd.

(t)           Valley Participants, Valley Non-Union Participants and Valley Union Participants.  “Valley Participants” are Participants who are employed
by the Company and designated on the books of the Company as “Valley” employees.  “Valley Non-Union Participants” are Valley Participants who are designated on the books of the Company as not being subject to a collective bargaining agreement.  “Valley Union Participants” are Valley Participants who are designated on the books of the Company as being subject to a collective bargaining agreement.

  

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2.36           Pennsylvania Division Plan.  The Southern Union Company Pennsylvania Division Employees’ Savings Plan, which was a single plan within the
meaning of Treasury Regulation Section 1.414(l), but which was maintained pursuant to two separate documents, the Southern Union Company Pennsylvania Division Employees’ Savings Plan (For Non-Bargaining Unit Employees) and the Southern Union Company Pennsylvania Division Employees’ Savings Plan (For Bargaining Unit Employees).

2.37           Plan.  The Southern Union Savings Plan, the terms and conditions of which are set forth herein, including any amendments hereto.

2.38           Plan A.  Plan A under the Southern Union Company Retirement Income Plan.

2.39           Plan B.  Plan B under the Southern Union Company Retirement Income Plan.

2.40           Plan Year.  The 12-month period commencing January 1 and ending December 31.

2.41           Providence Plan.  The Southern Union Company ProvEnergy Voluntary Investment Plan.

2.42           Retirement Power Contributions.  The Retirement Power Contributions, consisting of those types of Retirement Power Contributions described in Sections
2.42(a) and 2.42(b), that are made to the Plan pursuant to Articles 13 and 14.

(a)           Participant-Directed Retirement Power Contributions.  The Participant-Directed Retirement Power Contributions that are described in Sections 13.3(a),
14.2(b)(1), 14.3(b), 14.4(b)(1), 14.5(b)(2) and 14.6(b).

(b)           Other Retirement Power Contributions.  The Other Retirement Power Contributions that are described in Sections 13.3(b), 14.2(b)(2), 14.4(b)(2) and
14.5(b)(3).

2.43           Trust (or Trust Fund).  The trust fund established and maintained under the Plan, to which all contributions are paid and from which all benefits
are disbursed as provided for herein.

2.44           Trust Agreement.  The Trust instrument executed between the Company and the Trustee named in the Trust instrument created pursuant to Article 7
for the maintenance and investment of the Trust, which Trust Agreement forms a part of the Plan.

2.45           Trustee.  The bank, organization, individual or individuals designated by the Board to act at any time as Trustee under the Trust Agreement.

2.46           Valley Plan.  The Southern Union Company Valley Resources 401(k) Employee Stock Ownership Plan.

  

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2.47           Valuation Dates.  Each day of the calendar year, as of which the assets of the Trust Fund are valued.

2.48           Vesting Service.  A Participant’s period of employment with the Employer determined in accordance with Section 3.2.

ARTICLE 3

ELIGIBILITY, PARTICIPATION AND SERVICE

3.1           Eligibility and Participation.  Each Employee shall be eligible to become a Participant in the Plan on the date his employment with an Employer commences
(or recommences); provided, however, that in no event shall Employees of Panhandle Eastern Pipe Line Company, LLC, Trunkline Gas Company, LLC and Trunkline LNG Company, LLC become Participants under the Plan prior to June 11, 2003, the date that the Company acquired these three subsidiaries; and provided further, that in applying the provisions of this Section 3.1(a) following the merger –

(a)           of the Pennsylvania Division Plan into this Plan effective July 1, 2000, individuals who, at such time, were considered “Employees” under the Plan’s definition in effect July 1, 2000, and (A) were employed
by PEI Power Corporation, by PG Energy Services, Inc. or by Keystone Pipeline Services, Inc. or (B) were employed by the Company in its Pennsylvania Division, shall in no event become Participants under the Plan prior to July 1, 2000;

(b)           of the Valley Plan into this Plan effective March 1, 2001, individuals who, at such time, were considered “Employees” under the Plan’s definition in effect March 1, 2001, and (A) were employed by Alternate
Energy Corporation or by Morris Merchants, Inc. or (B) were employed by the Company at work sites previously owned and operated by Bristol and Warren Gas Company or by Valley Gas Company, shall in no event become Participants under the Plan prior to March 1, 2001; and

(c)           of the Fall River Plans and the Providence Plan into this Plan effective April 1, 2003, individuals who, at such time, were considered “Employees” under the Plan’s definition in effect April 1, 2003, and
were employed by the Company and designated on the books of the Company as “Fall River” employees or as “Providence” employees, shall in no event become Participants under the Plan prior to April 1, 2003.

As a further proviso, in applying the provisions of this Section 3.1 in connection with the merger of the CrossCountry Energy Savings Plan into this Plan effective December 3, 2007, following the transfer of CrossCountry Energy Services, LLC employees to Panhandle Eastern Pipe Line Company, LP effective September 23, 2007, the employees
who are so transferred shall in no event become Participants under the Plan prior to September 23, 2007.

3.2           Vesting Service.

  

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(a)           General Rule.  Effective January 1, 2004 and thereafter, in accordance with the following provisions of this Section 3.2(a), an Employee shall accrue
a year of Vesting Service for each Plan Year in which he completes 1,000 Hours of Service rather than, except as provided below, for each consecutive 12-month period that ends on an anniversary of his employment (or reemployment) with an Employer.

(1) Employment Commencement (or Recommencement) Before January 1, 2003.  An Employee who commenced (or recommenced) employment with an Employer before January 1, 2003 shall accrue a year of Vesting Service for the
consecutive 12-month period that ends in 2004 on the anniversary of the date that his employment with an Employer commenced (or recommenced) in which he completes 1,000 Hours of Service, and thereafter, for each Plan Year, beginning with the 2004 Plan Year, in which he completes 1,000 Hours of Service; provided, however, that an Employee who commenced (or recommenced) employment with an Employer before January 1, 2003 and who is credited with 1,000 Hours of Service for the consecutive 12-month period that ends
in 2004 on the anniversary of the date that his employment with an Employer commenced (or recommenced) and who is credited with 1,000 Hours of Service for the 2004 Plan Year, shall be credited with two years of Vesting Service for the period commencing in 2003 on the anniversary of the date that his employment with an Employer commenced (or recommenced) and ending on the last day of the 2004 Plan Year.

(2) Employment Commencement (or Recommencement) On or After January 1, 2003.  An Employee who commences (or recommences) employment with an Employer on or after January 1, 2003 shall accrue a year of Vesting Service
for the consecutive 12-month period following the date that his employment with an Employer commenced (or recommenced) in which he completes 1,000 Hours of Service and thereafter, for each Plan Year, beginning with the Plan Year that includes the first anniversary of the date that his employment with an Employer commenced (or recommenced) in which he completes 1,000 Hours of Service; provided, however, that an Employee who commences (or recommences) employment with an Employer on or after January 1, 2003 and
who is credited with 1,000 Hours of Service for the consecutive 12-month period following the date that his employment with an Employer commenced (or recommenced) and who is credited with 1,000 Hours of Service for the Plan Year that includes the first anniversary of the date that his employment with an Employer commenced (or recommenced), shall be credited with two years of Vesting Service for the period commencing on the date that his employment with an Employer commenced (or recommenced) and ending on the
last day of the Plan Year that includes the first anniversary of the date that his employment with an Employer commenced or (recommenced).

In no event shall an amendment to this Section 3.2 reduce the Vesting Service previously accrued by an Employee.  In construing the provisions of this Section 3.2, a Participant shall receive Vesting Service for employment with any organization that is a member of the controlled
group of employers of which the Employer is a part, as defined by ERISA.

(b)           PG Energy Participants.  In determining the Vesting Service of PG Energy Participants, the provisions of Section 3.2(a) shall apply with respect
to periods following the

  

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July 1, 2000 merger of the Pennsylvania Division Plan into this Plan and the provisions of the Pennsylvania Division Plan shall apply with respect to periods preceding such merger, in such a way that the Participant does not receive double credit for any one period of time.

(c)           Valley Participants.  In determining the Vesting Service of Valley Participants, the provisions of Section 3.2(a) shall apply with respect to periods
following the March 1, 2001 merger of the Valley Plan into this Plan and the provisions of the Valley Plan shall apply with respect to periods preceding such merger, in such a way that the Participant does not receive double credit for any one period of time.

 

(d)           Fall River Participants and Providence Participants.  In determining the Vesting Service of Fall River Participants and Providence Participants,
the provisions of Section 3.2(a) shall apply with respect to periods following the April 1, 2003 mergers of the Fall River Plans and the Providence Plan into this Plan and the provisions of the Fall River Plans and the Providence Plan shall apply to the Fall River Participants and the Providence Participants, respectively, with respect to periods preceding such mergers, in such a way that the Participant does not receive double credit for any one period of time.

(e)           Panhandle Energy Participants.  For purposes of determining Vesting Service for a Panhandle Energy Participant, a Panhandle Energy Participant shall
receive credit for his service working at least 1,000 hours per year, as reflected on the books of Panhandle Eastern Pipe Line Company, LLC, (1) with Panhandle Eastern Pipe Line Company, LLC and its predecessors, (2) with Trunkline Gas Company, LLC and its predecessors and (3) with Trunkline LNG Company, LLC and its predecessors, prior to June 11, 2003 when Panhandle Eastern Pipe Line Company, LLC, Trunkline Gas Company, LLC and Trunkline LNG Company, LLC became subsidiaries of the Company, and the provisions
of Section 3.2(a) shall apply with respect to periods beginning June 11, 2003 in such a way that the Participant does not receive double credit for any one period of time.  For purposes of determining vesting service for a Panhandle Energy Participant who, for periods preceding the September 23, 2007 transfer of the employees of CrossCountry Energy Services, LLC to Panhandle Eastern Pipe Line Company, LP, was an employee of CrossCountry Energy Services, LLC, the provisions of Section 3.2(a) shall apply
for periods after the September 23, 2007 transfers of employment, and the provisions of the CrossCountry Energy Savings Plan shall apply with respect to periods preceding September 23, 2007, in such a way that the Participant does not receive double credit for any one period of time.

(f)           SU Gas Participants.  For purposes of determining Vesting Service for an SU Gas Participant, an SU Gas Participant shall receive credit for his service
working at least 1,000 hours per year with Sid Richardson Energy Services, Ltd. and its predecessors (as reflected on the books of Sid Richardson Energy Services, Ltd.), with Richardson Energy Marketing, Ltd. and its predecessors (as reflected on the books of Richardson Energy Marketing, Ltd.), with Leapartners, L.P. and its predecessors (as reflected on the books of Leapartners, L.P.) and with BEPCO, L.P. and its predecessors (as reflected on the books of BEPCO, L.P.) prior to the date that the employees of
Sid Richardson Energy Services, Ltd.,  Richardson Energy Marketing, Ltd. and Leapartners, L.P., and certain employees of BEPCO, L.P. became employees of SU Gas

  

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Services Operating Company, Inc., and the provisions of Section 3.2(a) shall apply with respect to periods beginning March 1, 2006 in such a way that the Participant does not receive double credit for any one period of time.

3.3           Cessation of Participation and Service.  A Participant’s participation in the Plan shall cease upon termination of employment, and, except
as provided in the following sentence and in Sections 4.1 and 4.2 with respect to salary reduction contributions and Employer matching contributions for MGE Union Participants who are on workers’ compensation, the Participant shall no longer participate in the Employer contribution, salary reduction contribution and after-tax contribution provisions of the Plan; provided, however, that such Participant shall continue to participate only in Trust Fund Income.  Notwithstanding the preceding sentence,
a Participant’s participation in the Employer contribution, salary reduction contribution and after-tax contribution provisions of the Plan shall not cease upon termination of employment with respect to severance payments made, after his termination of employment, pursuant to a severance arrangement entered into prior to December 15, 2004.  Vesting Service under the Plan shall cease upon termination of employment, which may result from circumstances including unauthorized absence or failure to
return to active employment or to retire by the date on which an Authorized Leave of Absence expires.

3.4           Participation Upon Reemployment.  Each Employee who had been eligible to participate or had been a Participant prior to termination of employment
shall be eligible to participate in the Plan immediately upon his reemployment.

3.5           Service Upon Reemployment.  If an Employee is reemployed before incurring a one-year Break in Service, he shall continue to participate in the Plan
in the same manner as if such termination had not occurred.  If an Employee is reemployed after incurring a one-year Break in Service, Vesting Service shall include Vesting Service prior to his one-year Break in Service subject to the following rules:

(a)           If an Employee had a vested interest in his Employer Contributions Account, his Prior Employer Contributions Account and his Retirement Power Account at his termination of employment or if the number of his consecutive one-year
Breaks in Service is less than the greater of five or his total years of Vesting Service prior to his latest Break in Service, his prior Vesting Service will be credited to him upon reemployment.

(b)           If an Employee did not have a vested interest in his Employer Contributions Account, his Prior Employer Contributions Account and his Retirement Power Account at his termination of employment, all of his prior years of Vesting
Service shall no longer be credited to him as of the later of the date he has five consecutive one-year Breaks in Service or the date the number of his consecutive years of Breaks in Service equals or exceeds the total years of Vesting Service credited to him prior to his latest Break in Service.

(c)           If an Employee incurs five consecutive one-year Breaks in Service, the vested percentage of his Employer Contributions Account, his Prior Employer Contributions

  

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Account and his Retirement Power Account attributable to pre-break Vesting Service shall not be increased as a result of post-break Service.

3.6           Veterans’ Reemployment Rights.  Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with
respect to qualified military service shall be provided in accordance with Code Section 414(u).

ARTICLE 4

CONTRIBUTIONS AND FORFEITURES

4.1           Employer Contributions.

(a)           Salary Reduction Contributions.  For each Plan Year, the Employer shall contribute to the Plan an amount equal to the sum of the amounts determined
under the salary reduction agreements entered into between the Employer and the Participants for such Plan Year under Section 4.2.  Salary reduction contributions for a given Plan Year shall be deposited in the Trust Fund as soon as possible following the salary reduction and no later than the fifteenth business day of the month following the month in which such salary reduction would otherwise have been payable to the Participant in cash.  Salary reduction contributions made pursuant to automatic
enrollment procedures, as described in Section 4.2, shall be treated, for all other purposes, as salary reduction contributions made pursuant to a salary reduction agreement under the Plan.

(b)           Employer Matching Contributions.  Subject to the match true-up provisions set forth in Section 5.2(c), each Plan Year, the Employer shall make Employer
matching contributions for those groups of Participants described below that are equal to their percentages of matched salary reduction contributions set forth below.

(1)           Corporate Participants and MGE Non-Union Participants.  For Corporate Participants and MGE Non-Union Participants, the Employer matching contributions
shall equal (A) 50 percent of the first five percent of each such Participant’s Compensation that he elects to defer as salary reduction contributions under Section 4.1(a), and (B) 75 percent of each such Participant’s Compensation in excess of five percent up to a maximum of ten percent that he elects to defer as salary reduction contributions under Section 4.1(a).

(2)           Fall River Participants and PG Energy Participants.  For Fall River Participants and PG Energy Participants (consisting solely of employees of PEI
Power Corporation following the Company’s sale of its Pennsylvania operations to UGI Corporation on August 24, 2006), the Employer matching contributions shall equal 100 percent of the first four percent of each such Participant’s Compensation that he elects to defer as salary reduction contributions under Section 4.1(a).

  

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(3)           MGE Union Participants.  For MGE Union Participants, the Employer matching contributions shall equal (A) 50 percent of the first five percent of
each such Participant’s Compensation that he elects to defer as salary reduction contributions under Section 4.1(a), and (B) 75 percent of each such Participant’s Compensation in excess of five percent up to a maximum of seven percent that he elects to defer as salary reduction contributions under Section 4.1(a).  In the case of an MGE Union Participant who is on workers’ compensation, the matching contribution percentages (50 percent and 75 percent) shall be applied to such Participant’s
matched salary reduction contributions, as described under Section 4.2(a), during his period of workers’ compensation.

(4)           Panhandle Energy Participants.  For Panhandle Energy Participants, the Employer matching contributions shall equal (A) 100 percent of the first
two percent of each such Participant’s Compensation that he elects to defer as salary reduction contributions under Section 4.1(a), and (B) 50 percent of each such Participant’s Compensation in excess of two percent up to a maximum of five percent that he elects to defer as salary reduction contributions under Section 4.1(a).

(5)           SU Gas Participants.  For SU Gas Participants, the Employer matching contributions shall equal 50 percent of the first four percent of each such
Participant’s Compensation that he elects to defer as salary reduction contributions under Section 4.1(a).

To the extent not applied (1) to restore the accounts of terminated Participants who return to the employ of the Employer before incurring five consecutive one-year Breaks in Service, and who repay to the Plan the amount of the distributions, if any, such Participants received from their
Employer Contributions Accounts, Prior Employer Contributions Accounts and Retirement Power Accounts under Section 4.4 due to such Participants’ prior terminations of employment, or (2) to pay the reasonable expenses of the operation of the Plan, including the compensation of personnel employed pursuant to Section 9.4(f), Forfeitures are to be applied to off set the Employer’s Employer matching contributions under this Section 4.1(b).  A Participant shall be considered an eligible Participant
under the provisions of this Section 4.1(b) whether or not he is actively employed on the last day of the Plan Year.  All Employer matching contributions shall be deposited in the Trust Fund no later than the date the Employer files its federal income tax forms for the Plan Year with respect to which the matching contributions are made.  If the Plan, or any plan that is merged into this Plan, acquires shares of common stock of Southern Union Company or shares of common stock of any predecessor
in interest to Southern Union Company with the proceeds of an Employer Securities Acquisition Loan, the Employer’s obligation to make Employer matching contributions may be satisfied by crediting a Participant’s Employer Contributions Account with shares of Southern Union Company common stock equal in value to the Employer matching contributions.

(c)           Retirement Power Contributions.  Each Plan Year, the Employer shall make, in accordance with the provisions of Articles 13 and 14, Retirement Power
Contributions for those groups of Participants described in Articles 13 and 14.

  

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(d)           Contributions and Profits.  Contributions of the Employer need not be made from current or accumulated profits.  In no event, however,
shall the Employer contributions for any Plan Year exceed the amount deductible for such Plan Year for income tax purposes as a contribution to the Trust under the applicable provisions of the Code.

4.2           Participant Salary Reduction Agreements.

(a)           Salary Reduction Agreements.  An eligible Employee may elect, in accordance with procedures established by the Committee, to enter into a written
salary reduction agreement with the Employer specifying the amount and type of salary reduction contributions (either pre-tax salary reduction contributions, after-tax Roth elective deferral contributions or a specific combination), which will be applicable to all payroll periods thereafter until the election is amended or terminated.  (An after-tax Roth elective deferral contribution is an elective deferral that the Participant irrevocably designates at the time of the cash or deferred election as
a Roth elective deferral that is being made in lieu of all or a portion of the pre-tax elective deferrals the Participant is otherwise eligible to make under the Plan, and that the Employer treats as includable in the Participant’s income at the time the Participant would have received that amount in cash if the Participant had not made a cash or deferred election.)  The terms of any such salary reduction agreement shall provide that the Participant agrees to accept a pre-tax or after-tax reduction
in salary, as applicable, from the Employer equal to a percentage or portion of his Compensation per payroll period, in accordance with procedures established by the Committee (including the Committee’s procedure, consistent with applicable collective bargaining agreements, permitting an MGE Union Participant who is on workers’ compensation to continue to make, from his Compensation each payroll period, both a matched salary reduction contribution and an unmatched salary reduction contribution, each
in a dollar amount equal to his per payroll period salary reduction contributions immediately prior to his period of workers’ compensation).  Salary reduction contributions contributed to the Plan as one type, either pre-tax salary reduction contributions or after-tax Roth elective deferral contributions, may not later be reclassified as the other type.  In accordance with such salary reduction agreement, the Employer will make the appropriate contribution to the Participant’s
Tax-Deferred Account or Roth Account, as applicable, in the amount equal to the Participant’s salary reduction contributions made during the Plan Year.  Amounts credited to a Participant’s Tax-Deferred Account or Roth Account shall be 100 percent vested and nonforfeitable at all times.  Unless specifically stated otherwise, after-tax Roth elective deferral contributions will be treated as salary reduction contributions for all purposes under the Plan.

If, after being provided the notice described in the following paragraph, an individual who becomes an Employee for purposes of Section 3.1 on or after January 1, 2007 does not affirmatively elect otherwise in accordance with this paragraph (a), such Employee’s Compensation per payroll
period shall be reduced by three percent, which amount shall be contributed to the Plan on his behalf as a pre-tax salary reduction contribution, the Employee shall be deemed to have consented to such pre-tax salary deferral contribution, and the Employee shall be a Participant hereunder.  Such Employee’s Compensation shall continue to be reduced and such salary reduction contributions made to the Plan on his behalf until the Employee elects

  

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to change or discontinue the percentage by which his Compensation is reduced by notice to the Employer.

An Employee may affirmatively elect not to have his Compensation reduced in accordance with the preceding paragraph by notice filed with the Employer within a reasonable period ending no later than the date Compensation subject to reduction hereunder becomes available to the Employee.  Prior
to the date the Employee first receives Compensation that is subject to reduction hereunder, the Employer shall provide such Employee with a notice explaining the automatic reduction in his Compensation and his right to elect either a different reduction amount or no reduction.  The notice shall describe the procedures for making such an election and the period in which such an election must be made.  In addition, the Employer shall provide annual notices to Employees regarding the amount
by which their Compensation is being reduced, and their right to change such percentage or dollar amount by notice to the Employer.

(b)           Terms Governing Salary Reduction Agreements.  Salary reduction agreements shall be governed by the following terms:

(1)           A salary reduction agreement shall apply to each payroll period during which an effective salary reduction agreement is on file with the Employer.

(2)           A salary reduction agreement may be amended by a Participant at any time during the Plan Year to cease the Participant’s salary reduction entirely.  The amendment shall be effective and commence as of the
next payroll period after the amendment is executed by the Participant and the Employer or as soon as administratively practicable thereafter.  Prior payroll periods shall not be affected.

(3)           A salary reduction agreement may be amended by a Participant at any time to increase or decrease the amount of salary reduction.  The amendment shall be effective and commence as of the next payroll period after
the amendment is executed by the Participant and the Employer or as soon as administratively practicable thereafter.  Prior payroll periods shall not be affected.

(4)           Except as permitted by paragraph (8) of this Section 4.2(b) and Code Section 414(v), a Participant’s salary reduction contributions made pursuant to this Section shall not exceed the dollar limitation for the Plan
Year set forth in Code Section 402(g)(1), as it may be adjusted from time to time in accordance with the Code.

(5)           In the event that the dollar limitation provided for in paragraph (4) of this Section 4.2(b) is exceeded, the Committee shall direct the Trustee to distribute such excess amount and any income allocable to such amount to
the Participant not later than the first April 15 following the close of the Participant’s taxable year.  If there is a loss allocable to such excess amount, the distribution shall in no event be less than the lesser of the balance in the Participant’s Tax-Deferred Account or the Participant’s salary reduction contributions for the Plan Year.

  

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(6)           In the event that a Participant is also a participant in (A) another qualified cash or deferred arrangement (as defined in Code Section 401(k)), (B) a simplified employee pension (as defined in Code Section 408(k)), or
(C) a salary reduction arrangement (within the meaning of Code Section 3121(a)(5)(D)) and the elective deferrals, as defined in Code Section 402(g)(3), made under such other arrangement(s) and this Plan cumulatively exceed the limitations of paragraph (4) of this Section 4.2(b) for such Participant’s taxable year, the Participant may, not later than March 1 following the close of his taxable year, notify the Committee in writing of such excess and request that his salary reduction contributions under this
Plan be reduced by an amount specified by the Participant.  Such amount shall then be distributed in the same manner as provided in paragraph (5) of this Section 4.2(b).

(7)           The Employer may amend or revoke its salary reduction agreement with any Participant at any time if the Employer determines that such amendment or revocation is necessary to ensure that a Participant’s Annual Additions
for any Plan Year will not exceed the limitations of Section 5.3 or to ensure that the discrimination tests described in Sections 4.6 and 4.7 are met for such Plan Year.

(8)           A Participant who will attain age 50 before the end of a Plan Year may make catch-up salary reduction contributions in accordance with, and subject to the limitations of, Code Section 414(v) for such Plan Year and for each
subsequent Plan Year.  Catch-up salary reduction contributions made in accordance with this paragraph (8) and Code Section 414(v) shall not be taken into account for purposes of the Code Section 402(g) and 415 limitations.  Any provision of the Plan to the contrary notwithstanding, Employer matching contributions shall not be made with respect to catch-up salary reduction contributions.  The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the
requirements of Code Section 401(k)(3), 410(b) or 416 as a result of allowing catch-up salary reduction contributions to be made in accordance with this paragraph (8) and Code Section 414(v).

4.3           Employee After-Tax Contributions.  Subject to the limitations of Sections 4.7 and 5.3 and in accordance with procedures established by the Committee,
each Plan Year, a Participant may elect to make after-tax contributions to the Plan through payroll deductions.  Such contributions shall be deposited in the Trust as soon as administratively feasible following the payroll period with respect to which the contribution is made.

4.4           Disposition of Forfeitures.  Upon termination of employment, a Participant’s Employer Contributions Account, his Prior Employer Contributions
Account and his Retirement Power Account shall be divided into two portions, one representing his vested portion of such Accounts and the other his forfeitable portion of such Accounts.  The vested portion of his Accounts will be distributed pursuant to Section 6.4.  The forfeitable portion, if any, of his Employer Contributions Account, his Prior Employer Contributions Account and his Retirement Power Account shall be treated as a Forfeiture and shall become available for allocation to the
Employer Contributions Accounts of other eligible Participants as of the earlier of (a) the end of the Plan Year in which such Participant requests and receives a benefit distribution due to his termination of employment, or (b) the end of the Plan Year in which such Participant incurs five

  

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consecutive one-year Breaks in Service.  The Employer Contributions Account, the Prior Employer Contributions Account and the Retirement Power Account of a Participant who is not vested in such Accounts shall be considered to be fully distributed as of the Participant’s employment termination date.  Such available
Forfeitures shall be allocated in accordance with Section 4.1(b) as set forth in Section 5.2(c).  For the avoidance of doubt, Forfeitures are to be applied, first, to restore the Employer Contributions Accounts, the Prior Employer Contributions Accounts and the Retirement Power Accounts of terminated Participants in accordance with the following paragraph, second, to pay the reasonable expenses of the operation of the Plan, including the compensation of personnel employed pursuant to Section 9.4(f),
and, third, to off set Employer matching contributions under Section 4.1(b).

If a terminated Participant who received a voluntary distribution returns to the employ of the Employer before he has incurred five consecutive one-year Breaks in Service, any amounts forfeited pursuant to the preceding paragraph shall be restored to such Participant’s Employer Contributions
Account, his Prior Employer Contributions Account and his Retirement Power Account as of the last day of the Plan Year in which such Participant repays to the Plan the amount of the distribution, if any, he received from his Employer Contributions Account, his Prior Employer Contributions Account and his Retirement Power Account under Section 6.4 due to his previous termination of employment.  The Participant must make such repayment prior to the date on which the Participant incurs five consecutive
one-year Breaks in Service.  Repayment shall not be required from Participants who received distributions involuntarily or who were not at least partially vested in their Employer Contributions Accounts, their Prior Employer Contributions Accounts and their Retirement Power Accounts.  Restoration of Accounts shall first be made from available Forfeitures for that Plan Year.  To the extent that such Forfeitures are not sufficient to restore Accounts, the Employer shall contribute
the additional required amounts.  Such Employer contributions shall be made without regard to profits.

Forfeitures shall be determined solely by reference to Section 6.1, 6.2 or 6.3, whichever is applicable, and a Participant shall not forfeit any portion of his Accounts for any other reason or cause.

4.5           Rollover Amount From Other Plans.  An Employee may, in accordance with applicable legal requirements, including Code Section 402(c), transfer, or
have transferred, to the Trust Fund a rollover distribution from another qualified plan, either directly from the qualified plan or from a conduit IRA, a traditional IRA, a 457 plan of a governmental employer or a 403(b) plan, which may include, in accordance with applicable legal requirements, after-tax contributions and Roth elective deferrals (but only to the extent that the Roth elective deferrals are held in the Participant’s Roth Rollover Contribution Subaccount and are attributable to an applicable
retirement plan described in Code Section 402A(e)(1)).  The procedures approved by the Committee shall provide that such a transfer may be made only upon satisfying the following conditions:

(a)           The transfer occurs on or before the 60th day following the Employee’s receipt of the distribution from a plan which meets the requirements of Code Section 401(a) or 403(a); and

  

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(b)           The amount transferred is in cash and is equal to or less than the distribution the Employee received from such plan.

Notwithstanding the foregoing, if an Employee had deposited a distribution previously received from a plan which met the requirements of Code Section 401(a) into an IRA, he may transfer, or have transferred, the amount of such distribution in cash, plus earnings thereon from the IRA, to this
Plan, provided such rollover amount is deposited with the Trustee on or before the 60th day following the Employee’s receipt thereof from the IRA.

The Committee shall develop such procedures and may require such information from an Employee desiring to make such a transfer as it deems necessary or desirable to determine that the proposed transfer will meet the requirements of this Section 4.5.  Upon approval by the Committee,
the amount transferred shall be deposited in the Trust Fund and shall be credited to the Employee’s Rollover Contribution Account.  Such Account shall be 100 percent vested in the Employee and shall share only in Income allocations in accordance with Section 5.2(a).  Upon termination of employment, the total amount of the Rollover Contribution Account shall be distributed in accordance with Article 6.

4.6           Limitation on Salary Reduction Contributions.  Notwithstanding anything herein to the contrary, in no event may the salary reduction contributions
made on behalf of all Highly Compensated Participants who are eligible to participate in the Plan with respect to any Plan Year result in an Actual Deferral Percentage (as defined in the final paragraph of this Section 4.6) for such group of Highly Compensated Participants that exceeds the greater of (a) or (b) where

(a)           is an amount equal to 125 percent of the Actual Deferral Percentage for the immediately preceding Plan Year for all Participants eligible to participate in the Plan other than Highly Compensated Participants; and

(b)           is an amount equal to the sum of (1) two percent and (2) the Actual Deferral Percentage for the immediately preceding Plan Year for all Participants eligible to participate in the Plan other than Highly Compensated Participants,
provided that such amount does not exceed 200 percent of such Actual Deferral Percentage.

If, after taking into consideration the salary reduction contributions allocated to the Tax-Deferred Accounts of the Participants for the Plan Year, the initial allocation of salary reduction contributions does not satisfy one of the tests set forth under (a) and (b) of the first paragraph
of this Section 4.6 for the Plan Year, the salary reduction contributions of the Highly Compensated Participants shall be reduced to the extent required to meet one of such tests and the excess salary reduction contributions (plus allocable gains and losses as determined below) shall be distributed to the Highly Compensated Participants by March 15 of the following Plan Year, and if not by such March 15 by the last day of the following Plan Year.  In determining the amount of the excess salary reduction
contributions and the Highly Compensated Participants to whom the excess salary reduction contributions are to be distributed, the salary reduction

  

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contributions of the Highly Compensated Participants shall be reduced in the order of the amounts of their salary reduction contributions beginning with those having the greatest dollar amounts of such salary reduction contributions.  The allocable gains and losses to be distributed with the excess salary reduction contributions
shall equal the gains and losses that have been credited to the Participant’s Tax-Deferred Account with respect to such excess salary reduction contributions prior to the distribution of such excess salary reduction contributions.

For purposes of this Section 4.6, the term “Actual Deferral Percentage” with respect to any specified group of Employees for a Plan Year shall mean the average of the ratios (calculated separately for each Employee in such group) of (a) the amount of salary reduction contributions
paid to the Trust on behalf of each such Employee for such Plan Year, to (b) the Employee’s Compensation for such Plan Year.

4.7           Limitation on Employer Matching and Employee After-Tax Contributions.  Notwithstanding anything herein to the contrary, in no event may the sum of
the Employer matching contributions made on behalf of all Highly Compensated Participants who are eligible to participate in the Plan with respect to any Plan Year and Employee after-tax contributions made by all Highly Compensated Participants who are eligible to participate in the Plan with respect to any Plan Year result in a Contribution Percentage (as defined in the final paragraph of this Section 4.7) for such group of Highly Compensated Participants that exceeds the greater of (a) or (b) where

(a)           is an amount equal to 125 percent of the Contribution Percentage for the immediately preceding Plan Year for all Participants eligible to participate in the Plan other than Highly Compensated Participants; and

(b)           is an amount equal to the sum of (1) two percent and (2) the Contribution Percentage for the immediately preceding Plan Year for all Participants eligible to participate in the Plan other than Highly Compensated Participants,
provided that such amount does not exceed 200 percent of such Contribution Percentage.

If, after taking into consideration the Employer matching contributions and the Employee after-tax contributions allocated to the Employer Contributions Accounts and the Deposit Accounts of the Participants for the Plan Year, the initial allocation of the Employer matching contributions and
the Employee after-tax contributions does not satisfy one of the tests set forth under (a) and (b) of the first paragraph of this Section 4.7 for the Plan Year, the Employer matching contributions and the Employee after-tax contributions of the Highly Compensated Participants shall be reduced to the extent required to meet one of such tests and the excess Employer matching contributions that are vested in the Participants and the excess Employee after-tax contributions (plus allocable gains and losses as determined
below) shall be distributed to the Highly Compensated Participants by March 15 of the following Plan Year and if not by March 15 by the last day of the following Plan Year.  In determining the amount of the excess Employer matching contributions and the excess Employee after-tax contributions and the Highly Compensated Participants to whom such vested excess contributions are to be distributed, the Employer matching contributions and the Employee after-tax contributions of the Highly

  

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Compensated Participants shall be reduced in the order of the amounts of such Employer matching contributions and Employee after-tax contributions beginning with those having the greatest dollar amounts of such Employer matching contributions and Employee after-tax contributions.  The allocable gains and losses to be distributed
with the excess Employer matching contributions and the excess Employee after-tax contributions that are vested shall equal the gains and losses that have been credited to the Participant’s Accounts with respect to such excess contributions prior to the distribution of such excess contributions.  The excess Employer matching contributions of the Highly Compensated Participants that are not vested shall be forfeited and allocated as Forfeitures hereunder.  The preceding provisions of
this paragraph notwithstanding, the excess Employer matching contributions of the Highly Compensated Participants that are vested shall not be distributed to such Participants, but shall be forfeited and allocated as Forfeitures hereunder.

For purposes of this Section 4.7, the term “Contribution Percentage” with respect to any specified group of Employees for a Plan Year shall mean the average of the ratios (calculated separately for each Employee in such group) of (a) the sum of Employer matching contributions
and Employee after-tax contributions paid to the Trust on behalf of each such Employee for such Plan Year, to (b) the Employee’s Compensation for such Plan Year.

4.8           Employer Securities Acquisition Loans.

(a)           Employer Securities Acquisition Loan Provisions.  The Company may direct the Trustee to cause the Plan to enter into an Employer Securities Acquisition
Loan.  Any such Employer Securities Acquisition Loan shall satisfy all of the conditions set forth in Section 4.8(b).  Repayments of principal and interest on any such Employer Securities Acquisition Loan shall be made by the Trustee only from Employer matching contributions that are invested in the Employer Company Stock Fund, from earnings attributable to such Employer matching contributions and from any cash dividends received by the Trustee on shares of Southern Union Company common stock
held in the Participants’ Accounts.  If such Employer matching contributions, earnings and dividends are insufficient to pay the principal and interest due on an Employer Securities Acquisition Loan for a Plan Year, the Employer shall contribute such amount as is necessary to enable the Plan to pay the unpaid balance of principal and interest due for such year.  If dividends on shares of Southern Union Company common stock which are allocated to Participants’ Accounts are used
to repay an Employer Securities Acquisition Loan, shares of Southern Union Company common stock with a fair market value not less than the amount of such dividends shall be allocated to such Participants’ Accounts for the Plan Year in which the dividends would otherwise have been credited to their Accounts.  If shares of Southern Union Company common stock are pledged as collateral for such loan or cannot be allocated in the Plan Year in which it is acquired, there shall be a suspense account
in which such stock is held.  For each Plan Year during which there is stock in the suspense account, a number of shares shall be released from the suspense account at least equal to the number of shares held in the suspense account immediately before such release multiplied by a fraction, the numerator of which is the amount of principal and interest paid by the Trustee for the month with respect to the Employer Securities Acquisition Loan and the denominator of which is the sum of the numerator plus
the principal and interest to be paid on the Employer Securities Acquisition Loan

  

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for all future months (or such greater number as may be permitted under a security agreement pursuant to which the shares in the suspense account are pledged as collateral).  For purposes of the above fraction, no unexercised extension or renewal periods for the Employer Securities Acquisition Loan shall be taken into account.  Alternatively,
if the term of the Employer Securities Acquisition Loan does not exceed ten years, shares of Southern Union Company common stock may be released from the suspense account in proportion to principal payments on such Employer Securities Acquisition Loan during the Plan Year if (1) the Employer Securities Acquisition Loan provides for annual payments of principal and interest at a cumulative rate that is not less rapid at any time than level annual payments of such amounts for ten years, and (2) the interest which
is disregarded is no more than that which would be treated as interest under standard loan amortization tables.  An Employer Securities Acquisition Loan shall have a repayment period in accordance with Section 4.8(b).  Southern Union Company common stock released from the suspense account shall be allocated to the  Accounts of Participants at the end of the month in which they are released and the allocation shall be done on the basis of the value of the shares at the time of allocation.

(b)           Terms Governing Employer Securities Acquisition Loans.  An Employer Securities Acquisition Loan shall be subject to the following terms and conditions:

(1)           The Employer Securities Acquisition Loan shall be at a reasonable rate of interest and shall have a definitely ascertainable repayment period;

(2)           Any collateral pledged to the creditor by the Plan in connection with an Employer Securities Acquisition Loan shall consist only of the assets purchased with the borrowed funds, although in addition to such collateral,
the Employer may guarantee repayment of the Employer Securities Acquisition Loan;

(3)           Under the terms of the Employer Securities Acquisition Loan, the creditor shall have no recourse against the Plan except with respect to such collateral;

(4)           The Employer shall contribute to the Trust amounts sufficient to enable the Plan to pay each installment of principal and interest on the Employer Securities Acquisition Loan on or before the date such installment is due,
even if no tax benefit results from such contribution;

(5)           Upon the payment of any portion of the balance on the Employer Securities Acquisition Loan, the assets originally pledged as collateral or held in the suspense account for such portion shall be released from encumbrance;
provided, however, that if the assets pledged as collateral or held in the suspense account consist of shares of Southern Union Company common stock, such securities shall be released from the suspense account in accordance with Section 4.8(a); and

(6)           Any earnings on the collateral pledged to the creditor or to any guarantor of the Employer Securities Acquisition Loan by the Plan or held in the suspense account shall be used to repay the Employer Securities Acquisition
Loan.

  

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4.9           Dividends on Shares of Southern Union Company Common Stock.  Dividends on allocated and unallocated shares in the Employer Company Stock Fund may
be used to make payments on any outstanding Employer Securities Acquisition Loan to the extent required by the loan documents or as directed by the Committee.  The Committee, with respect to the dividends on shares of Southern Union Company common stock which are not used in the manner described in the preceding sentence, in its sole discretion, may retain dividends in the Employer Company Stock Fund, or reinvest such dividends in Southern Union Company common stock.

Any dividends received on unallocated shares of Southern Union Company common stock held in a suspense account pursuant to Section 4.8 or any economic benefits resulting from the application of such dividends, shall be allocated to the Employer Contributions Accounts of Participants (other
than Fall River Participants and Providence Participants) as of the last day of the Plan Year.  Such dividends, or any economic benefits resulting from the application of such dividends, shall be allocated as of the last day of the Plan Year according to the ratio that the Compensation of each such Participant (other than a Fall River Participant or a Providence Participant) for the Plan Year bears to the total Compensation of all such Participants (other than Fall River Participants and Providence
Participants) for the Plan Year.

Any dividends received on shares of Southern Union Company common stock that are allocated to Participants’ Accounts, or any economic benefits resulting from the application of such dividends, shall be allocated in proportion to the balances in the Participants’ Accounts.  However,
if dividends paid on shares of Southern Union Company common stock allocated to a Participant’s Account are used to make payments on an Employer Securities Acquisition Loan, such Participant shall be credited with a number of shares of Southern Union Company common stock released from the loan suspense account as determined under Section 4.8.

4.10           Construction.  This Article is intended to comply with, and shall be construed in all respects, in a manner consistent with the final regulations
to Code Sections 401(k) and 401(m).

ARTICLE 5

ALLOCATIONS TO PARTICIPANTS’ ACCOUNTS

5.1           Individual Accounts.  The Committee shall create and maintain adequate records to disclose the interest in the Trust of each Participant.  Such
records shall be in the form of individual Accounts, and credits and charges shall be made to such Accounts in the manner described herein.  When appropriate, a Participant shall have the separate Accounts described in Section 2.2.  The maintenance of individual Accounts is solely for accounting purposes, and a segregation of the assets of the Trust Fund to each Account shall not be required.

  

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5.2           Account Adjustments.  The Accounts of Participants shall be adjusted as follows:

(a)           Income.  As of each Valuation Date, the Income of each individual investment option within the Trust Fund shall be allocated to the Accounts of Participants
and Beneficiaries who have unpaid balances in their Accounts invested in such option on the Valuation Date in proportion to the balances in such Accounts invested in such option as of the prior Valuation Date but after first reducing each such Account balance by any distributions or withdrawals from the Accounts invested in such option since the prior Valuation Date, after increasing the balance in each Tax-Deferred Account invested in such option by the salary reduction contributions made to such investment
option since the prior Valuation Date, and after increasing the balance in each Deposit Account invested in such option by the after-tax contributions made to such investment option since the prior Valuation Date.  Each valuation shall be based on the fair market value of the assets of each individual investment option within the Trust Fund on the Valuation Date.

(b)           Salary Reduction Contributions.  The Employer contributions made pursuant to a salary reduction agreement between a Participant and the Employer
as provided under Section 4.2 shall be allocated to such Participant’s Tax-Deferred Account or Roth Account, as applicable, as of each Valuation Date.

(c)           Employer Matching Contributions and Forfeitures.  The Employer’s matching contributions made on behalf of eligible Participants under Section
4.1(b) shall be allocated in accordance with the provisions of Section 4.1(b).  In addition, the Employer’s matching contributions will be trued up with respect to each Participant who is employed by an Employer on the last day of the Plan Year by redetermining the matching contribution to which each such Participant is entitled by applying the applicable matching contribution formula set forth in Section 4.1(b) for such Participant to his annual Compensation, so that each such Participant’s
total salary reduction contributions reflected as a percentage of annual Compensation are matched in accordance with the matching contribution formula applicable to such Participant, as set forth in Section 4.1(b).  Forfeitures which have become available for allocation pursuant to Section 4.4 shall be allocated in accordance with the provisions of Section 4.4.

(d)           Employee After-Tax Contributions.  Employee after-tax contributions as provided under Section 4.3 shall be allocated to each affected Participant’s
Deposit Account as soon as administratively feasible following the payroll period with respect to which the contribution is made.

5.3           Maximum Additions.  Notwithstanding anything contained herein to the contrary, the total Annual Additions made to the Accounts of a Participant for
any Plan Year shall not exceed the lesser of $40,000 or 100 percent of the Participant’s 415 Compensation for such Plan Year, except that such $40,000 shall be increased as permitted by Treasury Regulations to reflect cost-of-living adjustments.

  

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Except as provided in the following paragraph, if the Annual Additions for a Participant exceed the limitations set forth in the first sentence of this Section 5.3, the Committee shall take the following actions, to the extent necessary to reduce the Annual Additions so as not to exceed such
limitations.  First, the Participant’s after-tax contributions, together with gains attributable to such contributions, shall be distributed to the Participant.  Second, the Participant’s unmatched salary reduction contributions, together with gains attributable to such contributions, shall be distributed to the Participant.  Third, the Participant’s matched salary reduction contributions, together with gains attributable to such contributions, shall be distributed
to the Participant, and in this case, Employer matching contributions attributable to such matched salary reduction contributions, together with gains attributable to such contributions, shall be transferred to the suspense account described in the second following paragraph.  Fourth, Retirement Power Contributions allocated to the Participant’s Retirement Power Account, together with gains attributable to such contributions, shall be transferred to the suspense account described in the second
following paragraph.

If the Company maintains a non-qualified supplemental retirement plan that off sets Retirement Power Contributions made to this Plan in arriving at an individual’s supplemental retirement plan benefit, in the case of any individual who is covered both under this Plan and the supplemental
retirement plan, if the Annual Additions for the Participant exceed the limitations set forth in the first sentence of this Section 5.3, the Committee shall take the following actions, to the extent necessary to reduce the Annual Additions so as not to exceed such limitations.  First, Retirement Power Contributions allocated to the Participant’s Retirement Power Account, together with gains attributable to such contributions, shall be transferred to the suspense account described in the following
paragraph.  Second, the Participant’s after-tax contributions, together, with gains attributable to such contributions, shall be distributed to the Participant.  Third, the Participant’s unmatched salary reduction contributions, together with gains attributable to such contributions, shall be distributed to the Participant.  Fourth, the Participant’s matched salary reduction contributions, together with gains attributable to such contributions, shall be distributed
to the Participant, and in this case, Employer matching contributions attributable to such matched salary reduction contributions, together with gains attributable to such contributions, shall be transferred to the suspense account described in the following paragraph.

Amounts transferred to the suspense account shall be applied to reduce Employer matching contributions and Retirement Power Contributions to the Plan before any Employer contributions may be made to the Plan for a particular Plan Year.

Notwithstanding the foregoing, the otherwise permissible Annual Additions for any Participant under this Plan may be further reduced to the extent necessary, as determined by the Committee, to prevent disqualification of the Plan under Code Section 415, which imposes the following additional
limitations on the benefits payable to Participants who also may be participating in another tax-qualified pension, profit sharing, savings or stock bonus plan maintained by the Employer or any of the members of the controlled group of employers of which the Employer is a part.

  

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The above limitations are intended to comply with the provisions of Code Section 415 so that the maximum benefits provided by plans of the Employers shall be exactly equal to the maximum amounts allowed under Code Section 415.  If there is any discrepancy between the provisions
of this Section 5.3 and the provisions of Code Section 415, the discrepancy shall be resolved in such a way as to give full effect to the provisions of Code Section 415.

5.4           Top-Heavy Provisions.  The following provisions shall become effective in any Plan Year in which the Plan is determined to be a top-heavy plan.

(a)           Determination of Top-Heavy Status.  This Plan shall be a top-heavy plan for any Plan Year in which, as of the Determination Date (as defined in Section
5.4(d)), the Present Value of Accrued Benefits (as defined in Section 5.4(d)) of Key Employees (as defined in Section 5.4(d)) and the sum of the Aggregate Accounts (as defined in Section 5.4(d)) of Key Employees under this Plan and all plans of an Aggregation Group (as defined in Section 5.4(d)), exceed 60 percent of the Present Value of Accrued Benefits and the Aggregate Accounts of all Key Employees and Non-Key Employees (as defined in Section 5.4(d)) under this Plan and all plans of an Aggregation Group.

If a Participant is a Non-Key Employee for a Plan Year, but such Participant was a Key Employee for any prior Plan Year, such Participant’s Present Value of Accrued Benefits and/or Aggregate Account balance shall not be taken into account for purposes of determining whether this Plan
is a top-heavy plan for such Plan Year (or whether any Aggregation Group which includes this Plan is a Top-Heavy Group (as defined in Section 5.4(d))).  In addition, if a Participant or former Participant has not performed any services for any Employer maintaining the Plan at any time during the one-year period ending on the Determination Date, any Aggregate Account balance for such Participant or former Participant shall not be taken into account for purposes of determining whether this Plan is a top-heavy
plan.

(b)           Minimum Allocations.  For any Plan Year during which the Plan is deemed a top-heavy plan, the following shall apply.

(1)           Except as otherwise provided below, the Employer contributions and Forfeitures allocated on behalf of any Employee who is eligible to participate in the Plan and who is not a Key Employee shall not be less than the lesser
of three percent of such Employee’s 415 Compensation, or the largest percentage of Employer contributions and Forfeitures, as a percentage of the Key Employee’s 415 Compensation, allocated on behalf of any Key Employee for that year.  For any top-heavy Plan Year, the minimum allocation set forth above shall be allocated to the Employer Contributions Accounts of all Non-Key Employees who are Participants and who are employed by an Employer on the last day of the Plan Year, including any Non-Key
Employee who has (A) failed to complete 1,000 Hours of Service during such Plan Year; (B) declined to make mandatory contributions (if required) to the Plan during such Plan Year; or (C) been excluded from participation because of his level of compensation.

(2)           The term “Employer contributions,” as used in Section 5.4(b)(1), shall include salary reduction contributions and all of an Employer’s contributions.

  

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(c)           Nonduplication of Minimum Allocations.  In lieu of Section 5.4(b) above, in any Plan Year in which a Non-Key Employee is a Participant in both this
Plan and a defined benefit pension plan included in a Required Aggregation Group which is top-heavy, the Employer shall not be required to provide such Non-Key Employee with both the full defined benefit plan minimum benefit and the full defined contribution plan minimum allocation.

(d)           Definitions.  For purposes of this Section 5.4, the following words shall have the meanings indicated.

(1)           Aggregate Account.  A Participant’s Aggregate Account as of the Determination Date shall include the following:

(A)           The Participant’s Account balances as of the most recent Valuation Date occurring within a 12-month period ending on the Determination Date;

(B)           An adjustment for any contributions due as of the Determination Date, such adjustment to be in the amount of any contributions actually made after the Valuation Date but on or before the Determination Date, except for the
first Plan Year when such adjustment shall also reflect the amount of any contributions made after the Determination Date that are allocated as of a date in that first Plan Year;

(C)           (i) Any Plan distributions made on account of separation from service, death or disability within the one-year period ending on the Determination Date, and (ii) any Plan distributions made for a reason other than separation
from service, death or disability within the Plan Year that includes the Determination Date or the four preceding Plan Years; however, in the case of distributions made after the Valuation Date and prior to the Determination Date, such distributions are not included as distributions for top-heavy purposes to the extent that such distributions are already included in the Participant’s Aggregate Account balance as of the Valuation Date;

(D)           Any Employee contributions, whether voluntary or mandatory; however, amounts attributable to tax deductible qualified deductible employee contributions shall not be considered to be a part of the Participant’s Aggregate
Account balance;

(E)           With respect to unrelated rollovers and plan-to-plan transfers (ones which are both initiated by the Employee and made from a plan maintained by one employer to a plan maintained by another employer), if this Plan provides
the rollovers or plan-to-plan transfers, it shall always consider such rollovers or plan-to-plan transfers as a distribution for the purposes of this Section 5.4(d)(1); if this Plan is the plan accepting such rollovers or plan-to-plan transfers, it shall not consider such rollovers or plan-to-plan transfers as part of the Participant’s Aggregate Account balance; and

(F)           With respect to related rollovers and plan-to-plan transfers (ones either not initiated by the Employee or made to a plan maintained by the same employer),

  

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if this Plan provides the rollover or plan-to-plan transfer, it shall not be counted as a distribution for purposes of this Section 5.4(d)(1); if this Plan is the plan accepting such rollover or plan-to-plan transfer, it shall consider such rollover or plan-to-plan transfer as part of the Participant’s Aggregate Account balance, irrespective
of the date on which such rollover or plan-to-plan transfer is accepted.

For purposes of determining whether two employers are to be treated as the same employer in Sections 5.4(d)(1)(E) and (F), all employers aggregated under Code Section 414(b), (c), or (m) are treated as the same employer.

(2)           Aggregation Group.  Aggregation Group means either a Required Aggregation Group or a Permissive Aggregation Group as hereinafter determined.

(A)           In determining a Required Aggregation Group hereunder, each plan of the Employer in which a Key Employee is a Participant during the Plan Year containing the Determination Date or any of the four preceding Plan Years, and
each other plan of the Employer which enables any plan in which a Key Employee participates to meet the requirements of Code Section 401(a)(4) or 410, will be required to be aggregated.  Such group shall be known as a Required Aggregation Group.  In the case of a Required Aggregation Group, each plan in the group will be considered a top-heavy plan if the Required Aggregation Group is a Top-Heavy Group.  No plan in the Required Aggregation Group will be considered a top-heavy plan
if the Required Aggregation Group is not a Top-Heavy Group.

(B)           The Employer may also include any other plan not required to be included in the Required Aggregation Group, provided the resulting group, taken as a whole, would continue to satisfy the provisions of Code Sections 401(a)(4)
and 410.  Such group shall be known as a Permissive Aggregation Group.  In the case of a Permissive Aggregation Group, only a plan that is part of the Required Aggregation Group will be considered a top-heavy plan if the Permissive Aggregation Group is a Top-Heavy Group.  No plan in the Permissive Aggregation Group will be considered a top-heavy plan if the Permissive Aggregation Group is not a Top-Heavy Group.

(C)           Only those plans of the Employer in which the Determination Dates fall within the same calendar year shall be aggregated in order to determine whether such plans are top-heavy plans.

(D)           An Aggregation Group shall include any terminated plan of the Employer if it was maintained within the last five years ending on the Determination Date.

(3)           Determination Date.  Determination Date means the last day of the preceding Plan Year, or in the case of the first Plan Year, the last day of such
Plan Year.

(4)           Key Employee.  Key Employee means any Employee or former Employee (including any deceased Employee) who, at any time during the Plan Year that includes
the Determination Date, was an officer of the Employer having annual 415

  

33

  

Compensation greater than $130,000 (as adjusted under Code Section 416(i)(1)), a Five Percent Owner of the Employer, or a one-percent owner (as defined in Code Section 416(i)(1)(B)(ii)) of the Employer having annual 415 Compensation of more than $150,000.  The determination of who is a Key Employee will be made in accordance with
Code Section 416(i)(1).

(5)           Non-Key Employee.  Non-Key Employee means any Employee or former Employee (and his Beneficiaries) who is not a Key Employee.

(6)           Present Value of Accrued Benefits.  In the case of a defined  benefit plan, a Participant’s Present Value of Accrued Benefits shall
be determined under the provisions of the applicable defined benefit plan.

(7)           Top-Heavy Group.  Top-Heavy Group means an Aggregation Group in which, as of the Determination Date, the sum of the Aggregate Accounts and Present
Value of Accrued Benefits of Key Employees under all plans included in the group, exceeds 60 percent of a similar sum determined for all Participants in the Aggregation Group.

5.5           Investment of Contributions.  The Trust Fund shall include the Employer Company Stock Fund and Designated Investment Alternatives, which shall include
the Employee Company Stock Fund and a self-directed brokerage option, allowing investment among additional investment alternatives.  Except as provided in paragraph (e) below, the ESOP Contributions attributable to a Participant and adjustments relating thereto, shall be invested in the Employer Company Stock Fund.  Under the conditions set forth in the following paragraphs of this Section 5.5, a Participant may direct the Committee to allocate the investment of all or any portion of the Participant’s
Accounts attributable to Non-ESOP Contributions, and adjustments relating thereto (except as provided in paragraph (e) below), among the Designated Investment Alternatives.  To the extent that a Participant elects to direct the Committee to invest all or any portion of the Participant’s Accounts attributable to Non-ESOP Contributions, and adjustments relating thereto (except as provided in paragraph (e) below), in shares of Southern Union Company common stock, such portion of the Participant’s
Accounts shall be invested in the Employee Company Stock Fund.

(a)           Designated Investment Alternatives.  The portion of the Plan, the assets of which are invested in Designated Investment Alternatives, is intended
to constitute a plan described in ERISA Section 404(c), and the fiduciaries of the Plan may be relieved from liability for losses that are the result of investment instructions given by a Participant.

The Plan will offer a broad range of Designated Investment Alternatives so that a Participant can, by allocating his Accounts that are subject to his direction among those alternatives, materially affect the potential return and degree of risk of his portfolio.  At least three
of the Designated Investment Alternatives (1) will be diversified; (2) will have materially different risk and return characteristics; (3) will, in the aggregate, enable a Participant by choosing among them to achieve a portfolio with aggregate risk and return characteristics at any point within the range normally appropriate for the Participant; and (4) in combination with each

  

34

  

other and with the other Designated Investment Alternatives, will tend, through diversification, to minimize the overall risk of the Participant’s portfolio.

(b)           Information about Designated Investment Alternatives.  Participants shall be provided with a description of the Designated Investment Alternatives
and any information regarding each Designated Investment Alternative that is required to be provided under ERISA Section 404(c).

(c)           Investment Instructions.  Each Participant may direct investment of the sums in his Accounts and subject to his direction (as determined in this
Section 5.5), or any portion thereof over which he wishes to exercise independent control, among the Designated Investment Alternatives in those percentage increments, and with the frequency (no less frequently than once within any three-month period), from time to time established by the Committee.  The Committee will honor the most recent affirmative election by the Participant as new funds are allocated to a Participant’s Accounts as provided in Section 5.2.

The Committee will not implement instructions that, if carried out, (1) would result in a prohibited transaction described in ERISA Section 406 or Code Section 4975; (2) would generate income that would be taxable to the Plan; (3) would contravene the terms of the Plan; (4) would cause a
fiduciary to exercise indicia of ownership of any assets of the Plan outside the jurisdiction of the district courts of the United States other than as permitted by ERISA Section 404(b); (5) would jeopardize the Plan’s tax-qualified status under the Code; (6) could result in a loss in excess of the balance in the Participant’s Accounts; or (7) would result directly or indirectly in a loan to the Company or an affiliate of the Company, or in the sale, exchange or lease of property between the Company
or an affiliate of the Company and the Plan (except as provided in Section 4.8 and except for the acquisition or disposition of any interest in a fund, subfund or portfolio managed by the Company or an affiliate of the Company, or the purchase or sale of an interest in the Employee Company Stock Fund or the Employer Company Stock Fund or other qualifying employer security as defined in ERISA Section 407(d)(5)).

(d)           Employee Company Stock Fund and Employer Company Stock Fund.  The Employee Company Stock Fund and the Employer Company Stock Fund shall be invested,
and any income therefrom reinvested, solely in shares of Southern Union Company common stock.  More than ten percent of the fair market value of the Trust Fund may be invested in the Employee Company Stock Fund and the Employer Company Stock Fund.  Moneys in the Employee Company Stock Fund and the Employer Company Stock Fund in amounts estimated by the Trustee to be needed for cash withdrawals or in amounts too small to be reasonably invested may be retained by the Trustee in cash.  Likewise,
moneys in the Employee Company Stock Fund and the Employer Company Stock Fund may be retained in cash or invested temporarily so as to provide a fixed return during periods when shares of Southern Union Company common stock are not reasonably available for purchase or as the Trustee deems to be for the best interests of the Participants.  Participants shall be entitled to exercise voting, tender and similar rights with respect to their interests in the Employee Company Stock Fund and the Employer Company
Stock Fund in accordance with rules and procedures established by the Committee.  Information relating to such matters as well as Participant purchases, holdings and

  

35

  

sales of interests in the Employee Company Stock Fund and the Employer Company Stock Fund shall be confidential.  The Trustee shall be responsible for monitoring matters pertaining to the Employee Company Stock Fund and the Employer Company Stock Fund.

(e)           Diversification.  Except as provided in the following paragraph, a Participant may not direct the investment of any portion of his Accounts attributable
to ESOP Contributions, and adjustments relating thereto, until the date on which the Participant attains age 55.  Once a Participant attains age 55, the Participant may transfer the investment of those portions of his Accounts attributable to ESOP Contributions, and adjustments relating thereto, from the Employer Company Stock Fund to Designated Investment Alternatives in accordance with procedures established by the Committee.

Notwithstanding the provisions of the immediately preceding paragraph, a PG Energy Participant shall have the right to direct the investment of that portion of his Employer Contributions Account that is attributable to the proceeds of his sale of Pennsylvania Enterprises, Inc. stock back
to Pennsylvania Enterprises, Inc. pursuant to its March 11, 1996 offer to purchase such stock.  Notwithstanding the provisions of the immediately preceding paragraph, a Keystone Participant shall have the right to direct the investment of that portion of his Employer Contributions Account that is attributable to matching contributions made on his behalf under the Pennsylvania Division Plan with respect to periods prior to its July 1, 2000 merger into this Plan; provided, however, that a Keystone Participant
may not, except as provided in the immediately preceding paragraph, direct the investment of that portion of his Employer Contributions Account that is attributable to Employer matching contributions made on his behalf under this Plan with respect to periods following the July 1, 2000 merger of the Pennsylvania Division Plan into this Plan.  Notwithstanding the provisions of the immediately preceding paragraph, a Valley Union Participant shall have the right to direct the investment of that portion
of his Employer Contributions Account that is attributable to Employer matching contributions made on his behalf, regardless of when contributed.  Notwithstanding the provisions of the immediately preceding paragraph, beginning January 1, 2007, a Participant shall have the right to direct the investment of 50 percent of his ESOP Contributions and adjustments relating thereto by transferring such amounts from the Employer Company Stock Fund to Designated Investment Alternatives in accordance with procedures
established by the Committee; and beginning January 1, 2008, a Participant shall have the right to direct the investment of 100 percent of his ESOP Contributions and adjustments relating thereto by transferring such amounts from the Employer Company Stock Fund to Designated Investment Alternatives in accordance with procedures established by the Committee.

(f)           Procedures.  The Committee shall adopt such rules and procedures as it deems advisable with respect to all matters relating to the selection and
use of Designated Investment Alternatives, provided that all Participants are treated uniformly.

ARTICLE 6

BENEFITS

  

36

  

6.1           Retirement or Disability.  Upon attainment of his Normal Retirement Age, the Participant shall have a fully vested and nonforfeitable right to the
entire amount in each of his Accounts.  If a Participant’s employment with the Employers is terminated on or after attaining his Normal Retirement Age, his Early Retirement Age, or at an earlier age because of Disability, he shall be 100 percent vested in, and entitled to receive, the entire amount in each of his Accounts.  Payment of benefits due under this Section 6.1 shall be made in accordance with Section 6.4.  Notwithstanding the preceding provisions of this Section 6.1,
a Providence Participant shall be entitled to a distribution of the vested balance, as of April 1, 2003, of all of his accounts under the Providence Plan that were transferred to this Plan effective April 1, 2003, upon attainment of age 65, without regard to whether his employment with the Employers has terminated at such time that he attains age 65.

6.2           Death.  In the event that the termination of a Participant’s employment is caused by his death, his Beneficiary shall be 100 percent vested
in, and entitled to receive, the entire amount in each of the Participant’s Accounts.  Payment of benefits due under this Section 6.2 shall be made in accordance with Section 6.4.

6.3           Termination for Other Reasons.  Upon severance from employment for any reason other than following attainment of Normal or Early Retirement Age,
Disability or death, and for Corporate Participants and MGE Participants who attain age 701⁄2 prior to January 1, 2000, and for PG Energy Participants and Keystone Participants who attain age 701⁄2 prior to January 1, 2001, and for Valley Participants who attain age 701⁄2 prior to January 1, 2002, and for Fall River Participants who attain age 701⁄2 prior to January 1, 2003, the Participant shall be entitled to receive

(a)           The entire amount credited to his Rollover Contribution Account, if any, plus

(b)           The entire amount credited to his Tax-Deferred Account, if any, and the entire amount credited to his Roth Account, if any, plus

(c)           The entire amount credited to his Deposit Account, if any, plus

(d)           The entire amount credited to his Prior Plan Account, if any, plus

(e)           With respect only to a Valley Participant who was a participant in the Valley Gas Employee Stock Ownership Plan on December 31, 1996, the amount credited to his Employer Contributions Account that is attributable to Employer
discretionary contributions under the Valley Plan or Employer profit sharing contributions, if any, under this Plan, plus

(f)           (1)           With respect only to a Providence Participant (because Providence Participants are 100 percent vested in their Employer Contributions Accounts at all times),
the entire amount credited to his Employer Contributions Account, if any, plus

  

37

  

(2)           With respect only to an SU Gas Participant, the amount credited to his Employer Contributions Account at the time of the plan-to-plan transfer of the Bass Plan to the Plan, and adjustments relating thereto, the entire amount
credited to his Sid Richardson Pre-July 1, 2001 Employer Contributions Account, if any, and the entire amount credited to his Sid Richardson Safe Harbor Matching Contributions Account, if any, plus

(g)           Subject to the provisions of Section 10.4, with respect to any Participant other than a Providence Participant, an amount equal to the balance of his Employer Contributions Account (excluding amounts in his Employer Contributions
Account in which he is 100 percent vested under Section 6.3(e) if he is a Valley Participant who was a participant in the Valley Gas Employee Stock Ownership Plan on December 31, 1996, and excluding amounts in his Employer Contributions Account in which he is 100 percent vested under Section 6.3(f)(2) if he is an SU Gas Participant), if any, plus the balance of his Prior Employer Contributions Account, if any, plus the balance of his Retirement Power Account, if any, multiplied by his vested percentage, as determined
below:

(1)           For Corporate Participants, Keystone Participants, MGE Non-Union Participants, Panhandle Energy Participants, PG Energy Participants, SU Gas Participants and SUG Participants, such percentage shall be determined according
to the following schedule:

	
Years of

Vesting Service
	
Vested Percentage

	
Less than 1
	
0%

	
1
	
20%

	
2
	
40%

	
3
	
60%

	
4
	
80%

	
5 or more
	
100%

(2)           For Fall River Participants who terminate employment on or after January 1, 2002 and MGE Union Participants, such percentage shall be determined according to the following schedule:

	
Years of

Vesting Service
	
Vested Percentage

	
Less than 2
	
0%

	
2
	
20%

	
3
	
40%

	
4
	
60%

	
5
	
80%

	
6 or more
	
100%

 

 

 

38

 

 

(3)           Except as provided in Section 6.3(e), for Valley Participants who terminate employment on or after January 1, 2002, such percentage shall be determined according to the following schedule:

	
Years of

Vesting Service
	
Vested Percentage

	
Less than 1
	
0%

	
1
	
10%

	
2
	
20%

	
3
	
40%

	
4
	
60%

	
5
	
80%

	
6
	
100%

Payment of benefits under this Section 6.3 shall be made in accordance with Section 6.4.

6.4           Payment of Benefits.

(a)           Election.  Upon a Participant’s or Beneficiary’s entitlement to payment of benefits under Section 6.1, 6.2 or 6.3, he shall file with
the Committee his written election on such form or forms, and subject to such conditions, as the Committee shall provide.  His election shall specify (1) the date he selects for commencement of benefit payments which may be as of the date of his entitlement to benefits or may be a date deferred to the extent provided below, and (2) his selection of the method of payment of his benefits.

(b)           Form of Payment.  Benefits from the Plan may be paid by either of the following methods or a combination thereof

(1)           Delivery of shares of Southern Union Company common stock no greater in number than the whole number of such shares to which the Participant is entitled by virtue of the investments made for his benefit in the Employee
Company Stock Fund and the Employer Company Stock Fund which are then being liquidated.

(2)           Payment of cash in a single lump sum.  However, at the election of the Participant or Beneficiary, benefits from the Plan may be paid in substantially equal monthly, quarterly, semiannual or annual payments.  If
the Participant’s entire interest is to be distributed in a form other than a lump sum, then the amount to be distributed each year must be at least an

  

39

  

amount equal to the quotient obtained by dividing the Participant’s entire interest by the life expectancy of the Participant or the joint and last survivor expectancy of the Participant and his designated Beneficiary.  If a Participant’s benefit is to be distributed to him and his Beneficiary over a period in excess
of the Participant’s then life expectancy, then the present value of the payments to be made over the period of the Participant’s then life expectancy must be more than 50 percent of the then present value of the total payments to be made to the Participant and his Beneficiary.  The preceding provisions of this paragraph (2) notwithstanding, no benefits shall be payable in installments if such benefits commence on or after January 1, 2007.

(c)           Time of Payment.

(1)           General.  Unless the Participant elects otherwise, in writing, payment of benefits to the Participant shall be made or commence no later than the
60th day after the end of the Plan Year in which occurs the latest of the following events: (A) the Participant attains Normal Retirement Age, (B) the tenth anniversary of the Participant’s participation in the Plan, or (C) the Participant terminates his service with the Employers.

(2)           Election for Earlier Payment.  The terminated Participant, or his Beneficiary, if applicable, may request payment of benefits prior to the date
specified in Section 6.4(c)(1).  Such request shall be made in writing to the Committee.  If such a request is made, the amount of the benefit to be paid shall be such Participant’s vested value of Accounts as of the Valuation Date coincident with or next preceding the date of distribution adjusted for any salary reduction contributions to be made pursuant to Section 4.2, for any after-tax contributions to be made pursuant to Section 4.3 and for any distributions or withdrawals
for the Plan Year of termination of employment but not yet allocated.  Payment shall be made within 60 days following the date on which a request for benefits is received by the Committee or as soon as possible thereafter.

(3)           Election for Deferred Payment.  The terminated Participant, or his Beneficiary, if applicable, may request to defer the payment of benefits to a
date subsequent to the date specified in Section 6.4(c)(1) but no later than the date specified in Section 6.4(d).  Such request shall be made in writing to the Committee.  If such a request is made, the amount of the benefit to be paid shall be such Participant’s vested value of Accounts as of the Valuation Date elected by the Participant or Beneficiary.  Payment shall be made within 60 days following such Valuation Date or as soon as possible thereafter.

(d)           Latest Distribution Dates.  Notwithstanding any contrary provision of the Plan, other than the final paragraph of this Section 6.4(d), a Participant’s
entire interest must be distributed to him no later than the April 1 of the calendar year following the later of (A) the calendar year in which the Participant attains age 701⁄2, or (B) the calendar year in which a Participant retires (provided (B) shall not apply, in the case of a Participant who is a Five Percent Owner).  If the Participant dies before his entire interest has been distributed to him, the entire interest must be distributed by December 31st of
the fifth calendar year following the Participant’s death; provided, however, that any portion of a Participant’s interest payable to a

  

40

  

Beneficiary other than the Participant’s surviving spouse must be paid no later than one year after the date of the Participant’s death.

Notwithstanding any contrary provision of the Plan, other than Section 6.4(b), which after January 1, 2007 limits distributions under the Plan to lump sum payments, the Plan will apply the minimum distribution requirements set forth in the Appendix A, which is entitled “Minimum Distribution
Requirements” and which is attached hereto.

(e)           Cashout Distributions.  Any other provision of the Plan to the contrary notwithstanding, the Committee may adopt a policy (1) that applies to each
Participant whose employment has terminated and whose vested balances in his Accounts do not exceed $5,000 in the aggregate (excluding amounts credited to the Participant’s Rollover Contribution Account), and (2) that provides that such vested balances are to be distributed to the Participant (whether or not the Participant consents to such distribution) as of the next distribution date (which distribution dates for account balances under $1,000 shall occur four times yearly).  Provided however,
that in the event of a mandatory distribution greater than $1,000 in accordance with the provisions of the preceding sentence, 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, then the Committee will pay the distribution, at the next distribution date (which distribution dates for account balances greater than $1,000 and less than $5,000 shall occur three times yearly)
in a direct rollover to an individual retirement plan designated by the Committee.  The preceding provisions of this paragraph (e) notwithstanding, eligible rollover distributions from a Participant’s Roth elective deferral account are taken into account in determining whether the total amount of the Participant’s account balances under the Plan exceeds $1,000 for purposes of mandatory distributions from the Plan.

6.5           Designation of Beneficiary.  Designation of a Beneficiary or Beneficiaries under the Plan shall be governed by the following rules:

(a)           Designation Procedure.  Subject to the provisions of Section 6.5(b), each Participant from time to time may designate any person or persons
(who may be designated primarily, contingently or successively, and who may be an entity other than a natural person) as his Beneficiary or Beneficiaries to whom his Plan benefits will be paid if he dies before receipt of all such benefits.  Each Beneficiary designation shall be in a form prescribed by the Committee, will be effective only when filed with the Committee during the Participant’s lifetime, and may include the Participant’s selection of the method of payment of his benefits
to the Beneficiary if the Beneficiary is his Eligible Spouse.  Each Beneficiary designation filed with the Committee will cancel all Beneficiary designations previously filed with the Committee.  The revocation of a Beneficiary designation no matter how effected shall not require the consent of any designated Beneficiary except as provided in Section 6.5(b).

(b)           Spousal Consent.  No Beneficiary designation shall be effective under the Plan unless the Participant’s Eligible Spouse consents in writing
to such designation, the Eligible Spouse’s consent acknowledges the effect of such designation, and the Eligible Spouse’s

  

41

  

signature is witnessed by a member of the Committee or a notary public.  Notwithstanding the foregoing, spousal consent to a Participant’s Beneficiary designation shall not be required if

(1)           The Eligible Spouse is designated as the only primary Beneficiary by the Participant; or

(2)           It is established to the satisfaction of the Committee that spousal consent cannot be obtained because there is no Eligible Spouse, because the Eligible Spouse cannot be located, or because of such other circumstances as
may be prescribed Treasury Regulations.

 

Any consent by an Eligible Spouse or any determination that the consent is not required pursuant to this Section 6.5(b) shall be effective only with respect to such spouse.

(c)           Lack of Designation.  If any Participant fails to designate a Beneficiary in the manner provided above, or if the Beneficiary designated by a deceased
Participant dies before him or before complete distribution of the Participant’s benefits, such Participant’s benefits shall be paid in accordance with the following order of priority:

(1)  to the Participant’s Eligible Spouse, or if there is not one surviving,

(2)  to the Participant’s surviving spouse, or if there is not one surviving,

(3)  to the Participant’s estate.

6.6           Loans to Participants.  The Committee may, at its sole discretion, implement a Participant loan program.  The preceding sentence notwithstanding,
the Committee is under no obligation to implement a Participant loan program and in the event such a program is implemented, the Committee may terminate such program at any time.  Any Participant loan program implemented hereunder shall be prudently administered for the exclusive purpose of providing benefits to the Participants and shall be governed by the following provisions, which are intended to satisfy the requirements of DOL Regulation Section 2550.408b-1.

(a)           Administration.  The Participant loan program shall be administered by the Committee.

(b)           Eligibility.  Loans shall be made available to all Participants who are parties in interest (as defined in ERISA Section 3(14)) without regard to
race, color, religion, sex, age or national origin.

(c)           Loan Application Procedure.  Any eligible Participant who desires to borrow money from the Plan must apply for a loan.  Such application
(whether written or oral) must specify (1) the name and social security number of the prospective borrower, (2) the amount of the proposed loan, (3) an authorization for the repayment of the loan through payroll

  

42

  

deductions, (4) a proposed repayment schedule, and (5) any other information that the Committee deems necessary or appropriate for the processing of the loan application.

(d)           Loan Approval.  The Committee shall see that loan applications are evaluated in a uniform and nondiscriminatory manner based only on those factors
considered in a normal commercial setting by an entity in the business of making similar types of loans.  Such factors may include the applicant’s creditworthiness and financial need.  Notwithstanding any other provision of this Section 6.6, the Committee shall ensure that loans are available to all Participants on a reasonably equivalent basis and that no aspect of the loan program, including the manner in which loan applications are evaluated, results in discrimination in availability,
percentage amount, or terms in favor of Highly Compensated Participants, or in the exclusion of large numbers of Participants from receiving loans under the program.  A loan application shall not be approved hereunder if there is good reason to believe that the applicant has no intention of repaying the loan.  Action in approving or denying a loan application hereunder shall be final.

(e)           Loan Repayment.  Each loan made hereunder shall be repaid in equal installments of principal and interest over a period to be determined by the Committee,
but such period shall not exceed five years unless the loan proceeds are used to purchase the principal residence of the Participant, in which case the repayment period shall not exceed 15 years.  All loan installment payments shall be made through payroll deductions with equal installments made each pay period; provided, however, that such installment payments must be made not less frequently than quarterly.

(f)           Loan Purpose.  The intended use of the loan proceeds shall not be considered by the Committee in determining whether the loan application is to be
approved or denied.

(g)           Minimum Amount.  No loan shall be made hereunder in an amount less than $1,000 unless the Committee determines that such restriction results in the
exclusion of specific Participants from the loan program.

(h)           Maximum Number and Amount. Except with respect to loans transferred to the Plan upon the merger of the Fall River Plans into this Plan, a Participant may have
no more than three outstanding loans at a given time.  No loan made hereunder shall exceed the lesser of (1) $50,000, reduced by the highest outstanding balance of the Participant’s loans from the Plan during the one-year period ending on the day before the loan is made, or (2) one-half of the Participant’s nonforfeitable Account balances under the Plan.

(i)           Interest Rate.  All loans made hereunder shall bear interest at a rate which, at the time the loan is approved or renewed, provides a return commensurate
with the interest rates charged by persons in the business of lending money for loans which would be made under similar circumstances in the same geographic region in which the Plan is administered.  In the event that the interest rate charged by the Plan is limited by state usury law at a time when rates charged on similar loans by commercial lenders are not so limited, the Committee shall suspend the granting of loans under the Plan until this situation changes.

  

43

  

(j)           Security.  All loans made hereunder shall be secured in a manner that reasonably anticipates that the Plan will not suffer a loss of principal and
interest in the event of a default in the loan.  The Plan shall accept no collateral other than a Participant’s nonforfeitable Account balances under the Plan (but not in excess of one-half of such nonforfeitable Account balances calculated at the time the loan is approved).  The funds pledged as security for a loan from the Plan will be drawn first from the Participant’s Rollover Contribution Account, if applicable, then from his Deposit Account, if applicable, then from his Tax-Deferred
Account, and finally, to the extent necessary, from the nonforfeitable balances of his Retirement Power Account and Employer Contributions Account, but in no event shall the aggregate amount of the loans to a Participant exceed one-half of his total nonforfeitable Account balances under the Plan.

(k)           Spousal Consent.  In the event a married Participant applies for a loan hereunder, the Committee may, on a uniform and nondiscriminatory basis, require
the Participant’s spouse, within the 90-day period before the loan is granted, to consent (in the manner required under Code Section 417(a)(2)(A)) to the loan and to the possible reduction in the Participant’s nonforfeitable Account balances under the Plan in the event of the Participant’s nonpayment of the loan.

(l)           Events of Default.  A loan will be considered to be in default if payment on the loan is delinquent for 90 days or more.

(m)         Effects of Default.  Upon the occurrence of an event of default, as set forth in Section 6.6(l), the Committee shall (1) offset the loan with the portion, if
any, of the Participant’s (i) Rollover Contribution Account, (ii) Deposit Account, (iii) Tax-Deferred Account and, to the extent necessary, (iv) the Participant’s nonforfeitable account balances in his Retirement Power Account and Employer Contributions Account pledged as security for the loan, if such benefit is immediately distributable to the Participant under the applicable provisions of the Plan and the Code; and (2) cause the Participant to be deemed to have received a taxable distribution in
accordance with Code Section 72(p).  To the extent that the Plan may not foreclose immediately on security held by the Plan upon the occurrence of an event of default, the Committee shall take whatever actions that it deems necessary or appropriate to protect the security pending a foreclosure to prevent a loss of principal or interest from occurring with respect to the loan.

(n)          Distributions to Participant and Beneficiaries.  In the event a Participant dies or terminates employment for another reason before a loan made hereunder
is completely repaid, his nonforfeitable Account balances under the Plan, reduced by that portion of such Account balance that is pledged as security for the outstanding loan balance, shall be paid to the Participant or his Beneficiary, as determined in accordance with the provisions of the Plan.  Notwithstanding the foregoing, if a Participant terminates employment with the Company in connection with the Company’s sale of business assets, and elects to make a direct rollover of 100 percent of
his account balance under the Plan, including outstanding loan balances, to a plan

  

44

  

maintained by the buyer of such business assets or an affiliate of the buyer, in accordance with established procedures, the preceding provisions of this paragraph shall not apply.

(o)           Prohibited Preconditions.  No loan made hereunder shall include as a precondition to its granting, either explicit or implied, any agreement by the
borrower to benefit any “party in interest” (as defined in ERISA Section 3(14)) other than the borrower.

(p)           Directed Investments.  Loans that are made under this Section 6.6 shall be considered a directed investment of the Participant.

(q)           Expenses.  All costs and expenses associated with the establishment and maintenance of the loan may be paid by the Company and if not paid by the
Company shall be paid by the Participant or deducted from the proceeds of the loan or the Participant’s Account balances under the Plan.

(r)            Modifications.  The Committee may at any time modify any provision contained in this Section 6.6 governing the administration of the loan program
by an amendment to this Section 6.6 or by another written document provided that such modification does not cause any loan to fail to meet the requirements of ERISA Section 408(b)(1).

6.7           Withdrawals During Active Employment.

(a)           Hardship.  At any time, a Participant may elect to withdraw, in cash (and to the extent of the investments held for his benefit under the Employee
Company Stock Fund and the Employer Company Stock Fund in the Accounts to be withdrawn, in shares of Southern Union Company common stock), up to an amount equal to the sum of his salary reduction contributions credited to his Tax-Deferred Account (less any prior withdrawals of such contributions), and the vested balance of his Employer Contributions Account, his Prior Employer Contributions Account and his Retirement Power Account as of the Valuation Date preceding date of distribution net of amounts used as
collateral for loans under Section 6.6; provided, however, that for the avoidance of doubt, at any time following the merger of the Bass Plan into this Plan, an SU Gas Participant may not withdraw amounts credited to his Sid Richardson Safe Harbor Matching Contributions Account.  If a Participant elects a withdrawal, such withdrawal will require the consent of the Committee and such consent shall be given only if, under uniform rules and regulations, the Committee determines that the purpose of the
withdrawal is to meet an immediate and heavy financial need of the Participant and the amount of the withdrawal is necessary to satisfy the financial need.  A withdrawal shall be considered necessary to meet an immediate and heavy financial need of the Participant only if it is for (1) expenses for medical care described in Code Section 213(d) previously incurred by the Participant, the Participant’s spouse or any dependents of the Participant (as defined in Code Section 152) or necessary for
these persons to obtain medical care described in Code Section 213(d), (2) costs directly related to the purchase of a principal residence for the Participant (excluding mortgage payments), (3) payment of tuition, related educational fees, and room and board expenses for the next 12 months of post-secondary education for the Participant, or the Participant’s spouse, children or dependents (as defined in Code Section 152), (4) payments

  

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necessary to prevent the eviction of the Participant from the Participant’s principal residence or foreclosure on the mortgage on that residence, (5) payments for burial or funeral expenses for the Participant’s deceased parent, spouse, children or dependents (as defined in Code Section 152, and, for taxable years beginning
on or after January 1, 2005, without regard to Code Section 152(d)(1)(B)), or (6) expenses for the repair of damage to the Participant’s principal residence that would qualify for the casualty deduction under Code Section 165 (determined without regard to whether the loss exceeds ten percent of adjusted gross income).  A withdrawal shall be considered to be necessary to satisfy the financial need only if (1) the withdrawal is not in excess of the amount of the immediate and heavy financial need
(including any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the withdrawal) of the Participant, and (2) the Participant has obtained all distributions other than hardship withdrawals and all non-taxable (at the time of the loan) loans currently available under all plans maintained by the Employers.  If a withdrawal is made on this basis, the Participant may not make salary reduction contributions or employee after-tax contributions
to the Plan, or to any other plan maintained by an Employer for a period of six months after receipt of the withdrawal.

(b)           Age 591⁄2.  At any time, if he has attained age 591⁄2, (i) any Participant may elect to withdraw up to an amount equal to the vested balance
of his Tax-Deferred Account as of the Valuation Date preceding date of distribution, (ii) a Fall River Participant may elect to withdraw up to an amount equal to the vested balance, as of April 1, 2003, of all of his accounts under the Fall River Plans that were transferred to this Plan effective April 1, 2003, (iii) a Valley Participant may elect to withdraw up to an amount equal to the vested balance, as of March 1, 2001, of all of his accounts under the Valley Plan that were transferred to this Plan effective
March 1, 2001, and (iv) an SU Gas Participant may elect to withdraw up to an amount equal to the vested balance, as of the Valuation Date preceding date of distribution, in each of (A) his Sid Richardson Pre-July 1, 2001 Employer Contributions Account, (B) his Sid Richardson Safe Harbor Matching Contributions Account, and (C) his Employer Contributions Account, with all such withdrawals being available without demonstration of financial hardship and without suspension of salary reduction contributions, and with
all such withdrawals being available to be made in cash (and to the extent of the investments held for the Participant’s benefit under the Employee Company Stock Fund and the Employer Company Stock Fund in the Accounts to be withdrawn, in shares of Southern Union Company common stock).

(c)           Deposit Account.  At any time, a Participant may elect to withdraw, in cash (and to the extent of the investments held for his benefit under the
Employee Company Stock Fund in his Deposit Account, in shares of Southern Union Company common stock), up to an amount equal to his entire Deposit Account balance as of the Valuation Date preceding date of distribution without demonstration of financial hardship and without suspension of salary reduction contributions.

(d)           May 31, 1987 Employer Contributions Account.  At any time, a Participant may elect to withdraw, in cash (and to the extent of the investments held
for his benefit under the Employee Company Stock Fund and the Employer Company Stock Fund in the Accounts to be withdrawn, in shares of Southern Union Company common stock), up to an

  

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amount equal to his Employer Contributions Account and his Prior Employer Contributions Account under this Plan as of May 31, 1987, plus Income since that date, net of such amounts previously withdrawn.  A Participant may make a withdrawal pursuant to this paragraph only if such Participant’s Employer Contributions Account
and his Prior Employer Contributions Account under this Plan were 100 percent vested as of May 31, 1987.

(e)           Rollover Account.  At any time, a Participant may elect to withdraw, in cash (and to the extent of the investments held for his benefit under the
Employee Company Stock Fund in his Rollover Account, in shares of Southern Union Company common stock), up to an amount equal to his entire Rollover Account balance without demonstration of financial hardship and without suspension of salary reduction contributions.

(f)           Prior Plan Account.  At any time, a Participant may elect to withdraw, in cash (and to the extent of the investments held for his benefit under the
Employee Company Stock Fund in his Prior Plan Account, in shares of Southern Union Company common stock), up to an amount equal to his entire Prior Plan Account balance without demonstration of financial hardship and without suspension of salary reduction contributions.

(g)           Vesting Rule.  If a Participant received a distribution from his Employer Contributions Account, his Prior Employer Contributions Account or his
Retirement Power Account at a time when he was less than 100 percent vested in such Accounts (and the Participant may increase the vested percentage of his Accounts by completing additional years of Vesting Service), then at any relevant time, the Participant’s vested portion of his Employer Contributions Account, his Prior Employer Contributions Account and his Retirement Power Account shall be equal to the amount ("X") determined by the formula:

X   =   P(AB+D) - D, where

P    = Vested percentage at the relevant time

AB = Account balance at the relevant time

D    = Amount of the previous distribution

(h)           Sid Richardson Pre-July 1, 2001 Employer Contributions Account.  At any time, an SU Gas Participant, who has completed a combined total of 60 months
of participation in the Bass Plan and in this Plan, may elect to withdraw, in cash (and to the extent of the investments held for his benefit under the Employee Company Stock Fund in his Sid Richardson Pre-July 1, 2001 Employer Contributions Account, in shares of Southern Union Company common stock), up to an amount equal to his entire Sid Richardson Pre-July 1, 2001 Employer Contributions Account balance without demonstration of financial hardship and without suspension of salary reduction contributions.  If
an SU Gas Participant has completed less than a combined total of 60 months of participation in the Bass Plan and in this Plan, then such Participant may withdraw only that portion of the amount enumerated in the preceding sentence that is attributable to amounts contributed and credited to such account more than 24 months prior to the date of such withdrawal election.

  

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           6.8           Rollover Distributions.

(a)           Rollover Distributions.  Notwithstanding any provision of the Plan to the contrary that would limit the election of a Distributee (as defined below)
under this Section 6.8, a Distributee may elect, at the time and in the manner prescribed by the Commmittee, to have any portion of an Eligible Rollover Distribution (as defined below) paid directly to an Eligible Retirement Plan (as defined below) specified by the Distributee in a Direct Rollover (as defined below).

(b)           Definitions.  For purposes of this Section 6.8, the following words shall have the meanings indicated.

(1)           Eligible Rollover Distribution.  An Eligible Rollover Distribution is any distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution does not include (A) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated Beneficiary, or for a specified period of ten years or more; (B) any distribution to the extent such distribution is required under Code Section 401(a)(9);
(C) any hardship distribution; or (D) except as provided in the following sentence, 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). The preceding provisions of this Section 6.8(b)(1) notwithstanding, a portion of a distribution shall not fail to be an Eligible Rollover Distribution merely because the portion consists of after-tax employee contributions that are not includable
in gross income; provided, however, that such portion may be transferred only to an IRA or to an individual retirement annuity described in Code Section 408(b), or to a  qualified defined contribution plan described in Code Section 401(a) or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution that is includable in gross income and the portion of such distribution that is not so includable.  For the avoidance
of doubt, an Eligible Rollover Distribution shall include outstanding loan balances of a Distributee who terminates employment in connection with the Company’s sale of business assets and elects to make a Direct Rollover of the Distributee’s loan balances under the Plan to a plan maintained by the buyer of such business assets or an affiliate of the buyer in accordance with established procedures.  Notwithstanding anything to the contrary herein, a direct rollover of a distribution from
a Roth elective deferral account under the Plan will only be made to another Roth elective deferral account under an applicable retirement plan described in Code Section 402A(e)(1) or to a Roth IRA described in Code Section 408A, and only to the extent the rollover is permitted under the rules of Code Section 402(c).  The Plan will not provide for a direct rollover (including an automatic rollover) for distributions from a Participant’s Roth elective deferral account if the amount of the distributions
that are eligible rollover distributions are reasonably expected to total less than $200 during a year.  In addition, any distribution from a Participant’s Roth elective deferral account is not taken into account in determining whether distributions from a Participant’s other accounts are reasonably expected to total less than $200 during a year.

  

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(2)           Eligible Retirement Plan.  An Eligible Retirement Plan is an IRA, an individual retirement annuity described in Code Section 408(b) (other than
an endowment contract), an annuity plan described in Code Section 403(a), a qualified trust described in Code Section 401(a), an annuity contract described in Code Section 403(b), or an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred from this Plan, that accepts the Distributee’s Eligible Rollover Distribution.  However,
in the case of an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement Plan is an IRA or individual retirement annuity.

(3)           Distributee.  A Distributee includes an employee or former employee.  In addition, the employee’s or former employee’s surviving
spouse and the employee’s or former employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are Distributees with regard to the interest of the spouse or former spouse.  Furthermore, in accordance with applicable legal requirements, a Distributee includes a non-spouse Beneficiary.

(4)           Direct Rollover.  A Direct Rollover is a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

6.9           Other Benefits.  The Plan shall provide those benefits described in Appendix B, which is entitled “Employees of Pennsylvania-American Water
Company,” which is attached hereto and which relates to protected benefits, previously provided under the Pennsylvania Division Plan, to the group of participants described in Appendix B.  In the event of a conflict between the provisions of Appendix B and the other provisions of the Plan, the provisions of Appendix B shall govern.

ARTICLE 7

TRUST AGREEMENT AND TRUST FUND

7.1           Trust Agreement.  The Company has adopted the Trust Agreement in connection with this Plan.  The Trust shall be part of this Plan.  The
Trustee shall control and manage the assets of this Plan in accordance with the Plan and Trust, and shall hold, invest and reinvest the same, together with the income thereof.

7.2           Exclusive Benefit of Participants and Beneficiaries.  Except as provided in Section 7.3, all Employer contributions, when made to the Trust Fund,
and all property of the Trust Fund, including income from investments and all other sources, shall be retained for the exclusive benefit of Participants or their Beneficiaries.

7.3           Refunds to Employer.  Once contributions are made to the Plan by the Employer on behalf of the Participants, they are not refundable to the Employer
unless a contribution

  

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(a)           Was made by mistake of fact; or

(b)           Was made conditioned upon the contribution being allowed as a deduction and such deduction was disallowed.

The permissible refund under (a) must be made within one year from the date the contribution was made to the Plan and under (b) must be made within one year from the date of review of the tax deduction.

ARTICLE 8

FIDUCIARY RESPONSIBILITIES

8.1           Basic Responsibilities.  In accordance with Title I, Section 404 of ERISA, any fiduciary under the Plan, whether specifically designated or not,
must

(a)           Discharge all duties solely in the interest of Participants and Beneficiaries and for the exclusive purpose of providing Plan benefits and defraying reasonable administrative expenses;

(b)           Discharge his responsibilities with the care, skill, prudence and diligence a prudent man would use in similar circumstances;

(c)           Except, in accordance with Title I, Section 404(a)(2) of ERISA with respect to portions of the Trust Fund attributable to ESOP Contributions and with respect to the Employer Company Stock Fund, diversify investments so as
to minimize the risk of large losses unless, under the circumstances, it is clearly not prudent to diversify; and

(d)           Conform with the provisions of the Plan which govern it.

8.2           Ineligible Persons.  No person who has been convicted of specified crimes enumerated in Title I, Section 411 of ERISA will be permitted to serve
as an administrator, officer, trustee, custodian, counsel, agent, employee or consultant to the Plan.

8.3           Liability.  A fiduciary shall be personally liable for losses resulting from a breach of duty, manipulation of Plan assets for personal profit, permitting
another person to serve the Plan in violation of Title I, Section 411 of ERISA, knowingly participating in or concealing a violation of another fiduciary if he has knowledge of a violation, or if by his own violation he enables another fiduciary to commit a violation.

8.4           Prohibited Transactions.  A fiduciary must also refrain from engaging in any prohibited transactions as specified in Code Section 4975.

  

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8.5           Indemnification.  The Company shall indemnify each Committee member, as well as any secretary of the Committee who may not be a Committee member,
against any liability or loss sustained by reason of any act or failure to act made in good faith, including, but not limited to, those in reliance on certificates, reports, tables, opinions or other communications from the Company, an Employer, agents chosen by the Committee or the Trustee.  Such indemnification shall include attorney’s fees and other costs and expenses reasonably incurred in defense of any action brought by reason of any such act or failure to act.

8.6           Insulation of Fiduciary from Liability for Losses Resulting from a Participant’s Exercise of Control.  This Plan is intended to constitute
a plan described by ERISA Section 404(c).  According to Section 404(c), when a Participant exercises control over his own Accounts by directing investment of his Accounts as authorized in Section 5.5 of the Plan, the fiduciary may be relieved of liability under Title I, Part 4 of ERISA for any loss that results from such exercise of control.

ARTICLE 9

ADMINISTRATION OF THE PLAN

9.1           Appointment of Committee.

(a)           The Committee consisting of at least two members shall have responsibility for the administration of the Plan and shall be the Plan Administrator under the Plan within the meaning of ERISA.  The members of the
Committee shall be appointed from time to time by the Board and shall signify their acceptance in writing.  Members of the Committee shall serve at the pleasure of the Board, except that a member may resign at any time.  The members of the Committee shall elect a chairman from among themselves.  They shall also elect a secretary who may, but need not be, one of the members of the Committee, and who shall be responsible for maintaining minutes of the Committee meetings and copies
of any reports prepared by the Committee.  No member of the Committee shall receive compensation for his service as a Committee member.

(b)           In lieu of appointing a Committee to administer the Plan, the Company may directly perform such function.  In such event, the Company shall be the Plan Administrator of the Plan and shall have all of the powers
and duties of the Plan Administrator hereunder.

9.2           Meetings.  The Committee shall hold meetings upon such notice, and at such place or places, and at such intervals as it may from time to time determine,
but not less frequently than once each calendar year.

9.3           Quorum.

(a)           A majority of the members of the Committee at any time in office shall constitute a quorum for the transaction of business.  All resolutions or other actions taken by the

  

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Committee shall be by vote of a majority of those present at the meeting of the Committee (including those participating by means of conference telephone or similar communications equipment), or without a meeting by instrument in writing signed by a majority of the members of the Committee.

(b)           A member of the Committee shall be entitled to note his dissent to any action of the Committee either by entry of his dissent in the minutes or by forwarding his written dissent to the secretary of the meeting at or immediately
after the meeting.  Such a member shall not be liable for any act or failure to act of the Committee with respect to the subject of such dissent.

9.4           Powers, Duties and Responsibilities of the Committee.  The Committee shall administer the Plan for the exclusive benefit of the Participants and
their Beneficiaries and shall have the power to determine all questions arising in connection with the administration, interpretation and application of the Plan.  Any such determination by the Committee shall be conclusive and binding upon all persons.  The Committee may correct any defect, supply any information or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan; provided, however, that any interpretation
or construction shall be made and applied in a nondiscriminatory manner and shall be consistent with the intent that the Plan shall continue to be a qualified plan under Code Section 401(a) and comply with ERISA.  The Committee shall have such powers and duties as may be necessary to discharge its duties hereunder, including, but not limited to, the power and duty to

(a)           Determine all questions relating to the eligibility of Employees to participate or remain a Participant hereunder;

(b)           Make and enforce such rules and regulations as it shall deem necessary or proper for the efficient administration of the Plan;

(c)           Interpret the Plan and decide any and all matters arising hereunder, including the right to remedy possible ambiguities, inconsistencies or omissions; provided, however, that all such interpretations and decisions shall
be applied in a uniform manner to all Employees similarly situated;

(d)           Compute or cause to be computed the amount of benefit which shall be payable to any Participant or Beneficiary in accordance with the provisions of the Plan;

(e)           Authorize disbursements from the Trust Fund;

 

(f)           Employ such advisors (including but not limited to attorneys and independent public accountants) and such other technical and clerical personnel as may be required in the Committee’s discretion for the proper administration
of the Plan;

  

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(g)           Designate, by written instrument maintained in the Company’s files, persons to carry out all or part of the responsibilities of the Committee, such persons to have such authority as may be delegated to them in such
instruments;

(h)           Maintain all necessary records for the administration of the Plan;

(i)             Prepare and file, or cause to be prepared and filed, all information and reports to the Internal Revenue Service and the DOL, and to supply such information and notices to Participants, Beneficiaries and others as
may be required by applicable federal and state law;

(j)             Assist any Participant regarding his rights, benefits or elections available under the Plan; and

(k)            Review the activities of any person designated to carry out the powers or duties of the Committee;

9.5           Expenses.  The reasonable expenses incident to the operation of the Plan, including the compensation of personnel employed pursuant to Section 9.4(f),
may be paid from the Trust Fund, but the Employer, in its discretion, may elect at any time to pay part or all thereof directly.  In the absence of such election, or to the extent that expenses exceed those that the Employer has elected to pay, the Trust Fund shall pay all expenses of the operation of the Plan.  Any such election shall not bind the Employer as to its right to elect, with respect to the same or other expenses at any other time, to have such expenses paid from the Trust Fund.

9.6           Liability of Committee Members.  No member of the Committee shall be liable for any act of omission or commission except as expressly provided by
ERISA.

9.7           Benefit Claims and Review Procedures.

(a)           Claim for Benefits.  The Committee shall make all determinations as to the right of any person to a benefit under the Plan.  Any Participant,
Beneficiary, or the authorized representative of either, may file a request for benefits under the Plan.  Such request shall be deemed filed when made in writing addressed or hand-delivered to the Committee in care of the Employer.

(b)           Time to Give Notice of Benefit Determination.

(1)           Disability Benefits.  The Committee shall determine the entitlement of each claimant to a benefit because of Disability within a reasonable period
of time, but not later than 45 days, after the request is received by the Plan.  This 45-day period may be extended for up to 30 days if the Committee determines that such an extension is necessary due to matters beyond the Plan’s control and if the Committee notifies the claimant before the end of the 45-day period of the circumstances requiring the extension and the date by which the Plan expects to render a decision.  If, prior to the end of the initial 30-day extension period, the
Committee determines that, due to matters beyond the control of the Plan, a decision cannot be

  

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rendered within that initial 30-day extension period, the period for making the determination may be extended for up to an additional 30 days, provided that the Committee notifies the claimant, prior to the expiration of the initial 30-day extension period, of the circumstances requiring the extension and the date as of which the Plan expects
to render a decision.  Any notice of extension shall specifically explain the standards upon which entitlement to a benefit because of Disability is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues, and the claimant shall be afforded at least 45 days within which to provide the specified information.

(2)           Benefits Other Than Disability Benefits.   The Committee shall determine the entitlement of each claimant to any benefit other than a benefit
because of Disability within a reasonable period of time, but not later than 90 days, after the request is received by the Plan unless the Committee determines that special circumstances require an extension of time for processing the claim. In such event, written notice of the extension shall be furnished to the claimant prior to the expiration of such 90-day period.  In no event may an extension exceed an additional 90 days from the expiration of the end of the initial 90-day period.  Any
such extension notice shall indicate the special circumstances requiring the extension of time and the date by which the Committee expects to render its decision.

(c)           Manner and Content of Notice of Benefit Determination.

(1)           Disability Benefits. In the event that a claimant’s request for benefits because of Disability is denied in whole or in part, such claimant shall be
furnished with a written notice of the Committee’s decision which sets forth (A) the specific reason or reasons for the adverse determination; (B) reference to the specific Plan provisions upon which the determination is based; (C) a description of any additional material or information necessary for the claimant to perfect his claim and an explanation of why any such material or information is necessary; (D) a description of the Plan’s review procedures and the time limits applicable to such procedures,
including a statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review; (E) if an internal rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline, protocol or other similar criterion; or a statement that such a rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination and that a copy of such rule,
guideline, protocol or other criterion will be provided, free of charge, to the claimant upon request; and (F) if the adverse determination was based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimant’s medical circumstances, or a statement that such explanation will be provided, free of charge, upon request.

(2)           Benefits Other Than Disability Benefits.  In the event that a claimant’s request for any benefit other than a benefit because of Disability
is denied in whole or in part, such claimant shall be furnished with a written notice of the Committee’s decision which sets forth (A) the specific reason or reasons for the adverse determination; (B) reference to the specific Plan provisions upon which the determination is based; (C) a description of any

  

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additional material or information necessary for the claimant to perfect his claim and an explanation of why any such material or information is necessary; and (D) a description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action
under ERISA Section 502(a) following an adverse benefit determination on review.

(d)           Request for Review of Adverse Benefit Determination.

(1)           Disability Benefits.  Any claimant whose request for a benefit because of Disability is denied in whole or in part by the Committee shall be entitled
to request the Committee to give further consideration to his claim by filing, within 180 days following the claimant’s receipt of notice of the adverse benefit determination, with the Committee (either by himself or through his authorized representative) a written request for a review.  The claimant desiring a review may submit written comments, documents, records and other information relating to the claim for benefits, regardless of whether such information was submitted or considered in the
initial benefit determination, to the Committee for its consideration; and shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.  The review shall not afford deference to the initial adverse benefit determination and shall be conducted by the Committee and not by any individual, or his subordinate, who made the initial adverse benefit determination.  If the adverse
benefit determination was based in whole or in part on a medical judgment, including determination with regard to whether a particular treatment, drug or other item is experimental, investigational, or not medically necessary or appropriate, in conducting the review, the Committee shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment.  Such health care professional shall not be the individual, or his subordinate,
who was consulted in connection with the initial adverse benefit determination.  If, in connection with the initial adverse benefit determination, the Plan obtained the advice of medical or vocational experts, the Committee shall identify such experts, regardless of whether such experts’ advice was relied upon in making the initial adverse benefit determination. The Committee, in its sole discretion, may request a meeting to clarify any matters which it deems appropriate.

(2)           Benefits Other Than Disability Benefits.  Any claimant whose request for any benefit other than a benefit because of Disability is denied in whole
or in part by the Committee shall be entitled to request the Committee to give further consideration to his claim by filing, within 60 days following the claimant’s receipt of notice of the adverse benefit determination, with the Committee (either by himself or through his authorized representative) a written request for a review.  The claimant desiring a review may submit written comments, documents, records and other information relating to the claim for benefits, regardless of whether such
information was submitted or considered in the initial benefit determination, to the Committee for its consideration; and shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.  The Committee, in its sole discretion, may request a meeting to clarify any matters which it deems appropriate.

  

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(e)           Time to Give Notice of Decision on Review.

(1)           Disability Benefits.  If a request for review is filed within the time period described in Section 9.7(d)(1), the Committee shall promptly consider
such request in accordance with Section 9.7(d)(1) and shall render its decision within a reasonable period of time, but not later than 45 days, after the Plan’s receipt of the request for review, unless the Committee determines that special circumstances (such as the need to hold a hearing) require an extension of time for processing.  If the Committee determines that an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the
termination of the initial 45-day period.  In no event shall such extension exceed a period of 45 days from the end of the initial 45-day period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review.

(2)           Benefits Other Than Disability Benefits.  Except as provided in the following paragraph, if a request for review is filed within the time period
described in Section 9.7(d)(2), the Committee shall promptly consider such request in accordance Section 9.7(d)(2) and shall render its decision within a reasonable period of time, but not later than 60 days, after the Plan’s receipt of the request for review, unless the Committee determines that special circumstances (such as the need to hold a hearing) require an extension of time for processing.  If the Committee determines that an extension of time for processing is required, written notice
of the extension shall be furnished to the claimant prior to the termination of the initial 60-day period.  In no event shall such extension exceed a period of 60 days from the end of the initial 60-day period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review.

In the event that at the time such a request for review is filed, the Committee has established a practice of holding regularly scheduled meetings on at least a quarterly basis, such decision shall be made at the next ensuing regular meeting unless the request for review is filed within 30
days preceding the date of such meeting.  In such event, a decision may be made by the Committee no later than the date of the second ensuing regularly scheduled meeting following the receipt of the request for review, unless special circumstances require a further extension of time for processing.  If special circumstances (such as the need to hold a hearing) require a further extension of time for processing, a benefit determination shall be rendered not later than the third meeting of the
Committee following the receipt of the request for review.  If special circumstances require an extension, the Committee shall provide the claimant with written notice of the extension, describing the special circumstances and the date as of which the benefit determination will be made, prior to the commencement of the extension.  The Committee shall notify the claimant, in accordance with Section 9.7(f)(2), of the benefit determination as soon as possible but no later than five days after
the benefit determination is made.

(f)           Manner and Content of Notice of Decision on Review.

  

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(1)           Disability Benefits.  The claimant shall be furnished with a written notice of the Committee’s benefit determination on review, within the
time periods set forth in Section 9.7(e)(1), which sets forth (A) the specific reason or reasons for adverse determination; (B) reference to the specific Plan provisions upon which the determination is based; (C) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his claim; (D) a statement of the claimant’s right to bring a civil action under ERISA Section 502(a); (E) if an internal
rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline, protocol, or other similar criterion; or a statement that such a rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination and that a copy of such rule, guideline, protocol or other criterion will be provided free of charge to the claimant upon request; (F)  if the adverse benefit determination was based on a medical
necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request; and (G) the following statement: “You and your plan may have other voluntary alternative dispute resolution options such as mediation.  One way to find out what may be available is to contact
your local U.S. Department of Labor Office and your state insurance regulatory agency.”

(2)           Benefits Other Than Disability Benefits.  The claimant shall be furnished with a written notice of the Committee’s benefit determination on
review, within the time periods set forth Section 9.7(e)(2), which sets forth (A) the specific reason or reasons for adverse determination; (B) reference to the specific Plan provisions upon which the determination is based; (C) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his claim; and (D) and a statement of the claimant’s right to bring a civil action under ERISA Section
502(a).

9.8           Reliance on Reports and Certificates.  The Committee shall be entitled to rely conclusively upon all valuations, certificates, opinions and reports
which may be furnished by an accountant, counsel, the Company, an Employer or other person who is employed or engaged for such purposes.

9.9           Committee Member’s Own Benefits.  No member of the Committee may act, vote or otherwise influence a decision of the Committee specifically
relating to his own benefits under the Plan.

ARTICLE 10

AMENDMENT OR TERMINATION

10.1           Amendment or Termination.  The Company hopes and expects to continue the Plan indefinitely.  Nevertheless, the Company reserves the right
to terminate, modify, alter or

  

57

  

amend the Plan, including the right to amend the Plan to ensure its continued qualification under applicable law.  No amendment shall have the effect of diverting the whole or any part of the principal or income of the Trust Fund to purposes other than the exclusive benefit of Participants or their Beneficiaries.  A
modification, alteration or amendment of the Plan may affect present and future Employees or Participants, but may not reduce the Accounts of any Participant.  The computation of a Participant’s nonforfeitable percentage of his interest under the Plan shall not be reduced as the result of any direct or indirect amendment to a vesting schedule under the Plan.

In the event a vesting schedule under the Plan is amended, any Participant who has been credited with three or more years of Vesting Service may elect to have his nonforfeitable percentage computed under the Plan without regard to such amendment.

10.2           Mergers, Consolidations and Transfers.  The Plan shall not be automatically terminated upon the Company’s acquisition by and/or merger into
any other company, but the Plan shall be continued after such merger provided the successor company agrees to continue the Plan.  All rights to amend, modify, suspend or terminate the Plan shall be transferred to the successor company, effective as of the date of the merger.

The merger or consolidation with, or transfer of assets and liabilities to, any other qualified plan shall be permitted only if the benefit each Plan Participant would receive if the Plan were terminated immediately after such merger or consolidation, or transfer of assets and liabilities,
would be at least as great as the benefit he would have received had the Plan been terminated immediately before any such transaction.

10.3           Discontinuance of Contributions.  The agreement to make contributions to the Plan may be terminated at any time by a resolution adopted by the Board.

10.4           Vesting Upon Termination, Partial Termination or Discontinuance of Contributions.  In the event of termination or partial termination of the Plan,
or in the event of a permanent discontinuance of contributions to the Plan by an Employer, the Accounts of all affected Participants as of the date of such termination, partial termination or discontinuance shall become 100 percent vested and nonforfeitable.  Upon such event, the assets of the Trust shall otherwise be held and administered by the Trustee for the benefit of the Participants in the same manner and with the same powers, rights, duties and privileges herein prescribed until the Trust has
been fully distributed pursuant to the provisions of Article 6.  In recognition of the partial termination provision set forth in this Section 10.4 and in accordance with agreements that the Company entered into with the purchaser of its Texas assets on October 16, 2002, with the purchaser of its Pennsylvania assets on January 26, 2006 and with the purchaser of its Rhode Island assets on February 15, 2006, affected Participants whose employment was transferred to the purchaser or one of its affiliates
became 100 percent vested in their Accounts at the time such transfer.  In addition, Panhandle Energy Participants whose employment was transferred to the Company’s affiliate, Transwestern Pipeline Company, LLC, in connection with the December 1, 2006 transaction that resulted in a change in ownership of Transwestern Pipeline Company, LLC, became fully vested in their Accounts effective December 1, 2006.

  

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10.5           Option To Distribute Assets.  The Board may, at the time of terminating the agreement of an Employer to make contributions hereunder, or at any
time thereafter, direct the Trustee to distribute all of the assets of the Plan attributable to the Participants and Beneficiaries of such Employer at the time given in the Board’s direction to the Trustee.

ARTICLE 11

GENERAL PROVISIONS

11.1           No Guarantee of Employment.  The Plan shall not be deemed to constitute a contract between an Employer and any Employee or to be consideration or
inducement for the employment of any Employee by an Employer.  Nothing contained in the Plan shall be deemed to give any Employee the right to be retained in the service of an Employer or to interfere with the rights of an Employer to discharge the Employee at any time.

11.2           Payments to Minors and Incompetents.  If the Committee determines that any person to whom a payment is due hereunder is unable to care for his affairs
because of physical or mental disability or because he is a minor, the Committee shall have the authority to cause the payments to be made to such person’s guardian or legal representative without responsibility of the Committee, the Employer or the Trustee to see to the application of such payments.  Payments made pursuant to such authority shall operate as a complete discharge of the obligations of the Committee, the Employer, the Trustee and the Trust.

11.3           Non-Alienation of Benefits.  Except as provided in Section 6.6 and except with respect to federal income tax withholding, benefits payable under
the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, garnishment, encumbrance, charge, execution, levy, or pledge of any kind, either voluntary or involuntary, including any such liability which is for alimony or other payments for the support of a spouse or former spouse or for any other relative of the Employee, prior to actually being received by the person entitled to the benefit under the terms of the Plan; and any attempt to anticipate, alienate, sell, transfer,
assign, garnish, encumber, charge, or otherwise dispose of any right to benefits payable hereunder, shall be void.  The Trust Fund shall not in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person entitled to benefits hereunder.

Notwithstanding the preceding paragraph, the Committee may direct the Trustee to comply with a qualified domestic relations order that satisfies the requirements of Code Section 414(p), and any provision of the Plan to the contrary notwithstanding, as permitted by Treasury Regulation Section
1.401(a)-13(g)(3), distributions from the Plan to an alternate payee under such an order may be made as soon as administratively feasible following the date on which a judgment, decree or order is determined to be a qualified domestic relations order.  Following such determination, to the extent that a distribution is not immediately made to the alternate payee, the Committee shall establish an account in the name of the alternate payee for the interest set aside to the alternate payee, and shall permit
the alternate payee to direct the

  

59

  

investment of the alternate payee’s account to the extent permitted under the provisions of Section 5.5.

11.4           Evidence of Survivor.  If the Committee or the Trustee with the assistance of the Committee cannot make payment of any amount to a Participant or
Beneficiary within five years after such amount becomes payable because the identity or whereabouts of such Participant or Beneficiary cannot be ascertained, the Committee, at the end of such five-year period, may direct that all unpaid amounts which would have been payable to such Participant or Beneficiary be treated as a Forfeiture as provided for in Section 4.4.

11.5           Governing Law.  The provisions of the Plan shall be construed and enforced according to the laws of the State of Texas, except to the extent that
such laws are preempted by applicable federal law.

11.6           Uniform Administration.  Whenever in the administration of the Plan any action by the Company, the Employer or the Committee is required with respect
to the eligibility or classification of Employees or the determination or payment of benefits, such action shall be uniformly applied to all persons similarly situated.

11.7           Source of Payments.  Benefits under this Plan shall be payable only out of the Trust, and the Employer shall not have any legal obligation, responsibility
or liability to make any direct payment of benefits due under the Plan.  Neither the Company, the Employer nor the Trustee makes any guarantee to Participants or Beneficiaries against the loss or depreciation in the value of the Trust or guarantees the payment of any benefits hereunder.  No person shall have any right under the Plan with respect to the Trust, or against the Trustee, the Company, the Employer, the Committee, or any employee, director or member of the Trustee, the Company,  the
Employer or the Committee, except as specifically provided herein.

11.8           Construction.  Any words herein used in the masculine shall be read and construed in the feminine where they would so apply.  Words in
the singular shall be read and construed as though used in the plural in all cases where they would so apply.  Words in the plural shall be read and construed as though used in the singular in all cases where they would so apply.

ARTICLE 12

SUBSIDIARIES

12.1           Termination of Participation by Other Employers.  Any participating Employer other than the Company (including a wholly owned subsidiary of the
Company) may withdraw from the Plan and Trust at any time without affecting any other Employer not withdrawing by complying with the provisions of Section 12.2.  In addition, the Company may, in its absolute discretion, terminate any Employer’s participation in the Plan at any time when, in the

  

60

  

Company’s judgment, such Employer is failing or refusing to discharge its obligations under the Plan.

12.2           Termination Rights of Other Employers.  Any Employer other than the Company shall have the right, by action of its Board of Directors, to terminate
this Plan at any time insofar as it relates to its own Employees; and from and after any such termination, the rights of all Participants who are Employees of such Employer shall be nonforfeitable.  Any such action shall be evidenced by written instrument executed in the name of the terminating Employer under its corporate seal by its proper officer or officers thereunto duly authorized and shall be effective upon delivery by such Employer of an executed copy of such instrument to the Company and to
the Trustee.  The rights of the Company to terminate this Plan are provided for in Article 10.

ARTICLE 13

RETIREMENT POWER CONTRIBUTIONS IMPLEMENTED JANUARY 1, 1999

13.1           Retirement Power Contributions Implemented January 1, 1999.  Beginning January 1, 1999, Retirement Power Contributions, consisting of Participant-Directed
Retirement Power Contributions described in Section 13.3(a) and Other Retirement Power Contributions described in Section 13.3(b), shall be made to the Plan in accordance with the provisions of Section 13.3.

13.2           Eligibility for Retirement Power Contributions.

(a)           MGE Union Employees.  An Employee who is designated on the books of the Company as being employed in the Company’s MGE Division and as being
subject to a collective bargaining agreement (hereinafter, in this Section 13.2(a), an “MGE Union Employee”) shall not receive Retirement Power Contributions under Section 13.3; provided, however, (1) that such an MGE Union Employee (A) who was an Employee of the Company (rather than an Employee of an Employer other than the Company) on December 31, 1998, (B) who ceases to be designated on the books of the Company as being employed in the Company’s MGE Division and as being subject to a collective
bargaining agreement, and (C) who is employed by the Company, shall receive Retirement Power Contributions under Section 13.3 with respect to the compensation (as determined under Section 13.3(c)(4) or 13.3(c)(5), as applicable) that is paid to him during the period of time that he is employed by the Company and is not designated on the books of the Company as being employed in the Company’s MGE Division and as being subject to a collective bargaining agreement; and (2) if such an MGE Union Employee who
becomes eligible for Retirement Power Contributions under clause (1) of this Section 13.2(a) terminates employment with the Company after December 31, 1998, and later returns to employment with the Company, upon his return to employment, such Employee shall receive Retirement Power Contributions under Section 13.3, based on the compensation (as determined under Section 13.3(c)(4) or 13.3(c)(5), as applicable) that is paid to him during the period of time that he is employed by the Company and is not designated
on the books of the Company as being employed in the Company’s MGE Division and as being subject to a

  

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collective bargaining agreement, only if (A) he was laid off by the Company, as reflected on the books of the Company, and (B) he returns to employment with the Company within 12 months of the date that he was laid off.

(b)           New Employees.  Except as provided in Article 14, an individual who, for the first time, becomes an Employee on or after January 1, 1999 shall not
receive Retirement Power Contributions under the Plan.

(c)           Other Employees.  Except as provided in the final sentence of this Section 13.2(c), an individual (1) who is not an Employee who is designated on
the books of the Company as being employed in the Company’s MGE Division and as being subject to a collective bargaining agreement, and (2) who is an Employee of the Company (rather than an Employee of an Employer other than the Company) on December 31, 1998 shall receive Retirement Power Contributions under Section 13.3; provided, however, if he terminates employment with the Company after December 31, 1998, and later returns to employment with the Company, upon his return to employment, such Employee
shall receive Retirement Power Contributions under Section 13.3 only if (1) he was laid off by the Company, as reflected on the books of the Company, and (2) he returns to employment with the Company within 12 months of the date that he was laid off.  Except as provided in the final sentence of this Section 13.2(c), an individual (1) who is not an Employee who is designated on the books of the Company as being employed in the Company’s MGE Division and as being subject to a collective bargaining
agreement, (2) who was an Employee of the Company (rather than an Employee of an Employer other than the Company) who was laid off by the Company, as reflected on the books of the Company, on or after January 2, 1998, and (3) who returns to employment with the Company within 12 months of the date that he was laid off shall receive Retirement Power Contributions under Section 13.3, and if such Employee later terminates employment with the Company and then returns to employment with the Company, upon his return
to employment with the Company, such Employee shall receive Retirement Power Contributions under Section 13.3 only if (1) he was laid off by the Company, as reflected on the books of the Company, and (2) he returns to employment with the Company within 12 months of the date that he was laid off.  The preceding provisions of this Section 13.2(c) notwithstanding, if an Employee who is eligible to receive Retirement Power Contributions under this Section 13.2(c) thereafter becomes an Employee who is designated
on the books of the Company as being employed in the Company’s MGE Division and as being subject to a collective bargaining agreement, he shall not receive Retirement Power Contributions under Section 13.3 with respect to the compensation (as determined under Section 13.3(c)(4) or 13.3(c)(5), as applicable) that is paid to him during the period of time that he is designated on the books of the Company as being employed in the Company’s MGE Division and as being subject to a collective bargaining agreement.

13.3           Level of Retirement Power Contributions.

(a)           Participant-Directed Retirement Power Contributions.  For each Plan Year beginning on or after January 1, 1999, the Company shall contribute to the
Plan, on behalf of each Employee who is eligible to receive Retirement Power Contributions under Section 13.2, Participant-Directed Retirement Power Contributions equal to the percentage of the Employee’s

  

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“compensation” that is determined under the following table, based on the definitions set forth in Section 13.3(c).

	
Sum of Eligible

Employee’s “Age”

Plus “Years of Service”
	
Percentage of

Eligible Employee’s

“Compensation” to be

Contributed to Plan

As Participant-Directed

Retirement Power Contributions

	  	  
	
0.000 - 39.999
	
2.5%

	
40.000 - 42.499
	
3.0%

	
42.500 - 44.999
	
3.5%

	
45.000 - 47.499
	
4.0%

	
47.500 - 49.999
	
4.5%

	
50.000 - 52.499
	
5.0%

	
52.500 - 54.999
	
5.5%

	
55.000 - 57.499
	
6.0%

	
57.500 - 59.999
	
6.5%

	
60.000 - 62.499
	
7.0%

	
62.500 or greater
	
7.5%

An eligible Employee’s Participant-Directed Retirement Power Contribution percentage determined under the preceding table shall not change from Plan Year to Plan Year.

(b)           Other Retirement Power Contributions.  For each Plan Year beginning on or after January 1, 1999, the Company shall contribute to the Plan, on behalf
of each Employee who is eligible to receive Retirement Power Contributions under Section 13.2, Other Retirement Power Contributions equal to one percent of the Employee’s “compensation,” as defined in Section 13.3(c), for the Plan Year.

(c)           Definitions.  For purposes of Sections 13.3(a) and 13.3(b), the following words shall have the meanings indicated.

(1)           Age.  The Employee’s age in years and partial years, rounded to the third decimal place, as of December 31, 1998.

(2)           Years of Service for MGE Employees.  With respect to Employees who, on December 31, 1998, are designated on the books of the Company as being employed
in the Company’s MGE Division, (A) the Employee’s years and partial years, rounded to the third decimal place, as of December 31, 1998, of “Credited Service,” as determined under the provisions of Plan B (specifically including the provisions of Section B4.2 thereof) that were in effect as of December 31, 1998, plus (B) 100 percent of the period equivalent to the Employee’s accumulated unused sick leave, expressed in years and partial years and rounded to the third decimal place,
reflected on the books of the Company as of August 1, 1998 (or in the case of an

  

63

  

Employee who, on December 31, 1998, was designated on the books of the Company as being employed in the Company’s MGE Division and as being subject to a collective bargaining agreement, and who later becomes eligible for Retirement Power Contributions under clause (1) of Section 13.2(a), 100 percent of the period equivalent to the
Employee’s accumulated unused sick leave, expressed in years and partial years and rounded to the third decimal place, reflected on the books of the Company as of December 31, 1998).

(3)           Years of Service for Other Employees.  With respect to Employees who, on December 31, 1998, are not designated on the books of the Company as being
employed in the Company’s MGE Division, (a) the Employee’s years and partial years, rounded to the third decimal place, as of December 31, 1998, of “Benefit Service,” as determined under the provisions of Plan A (specifically including the provisions of Section A3.2 thereof) that were in effect as of December 31, 1998, plus (b) 100 percent of the period equivalent to the Employee’s accumulated unused sick leave, expressed in years and partial years and rounded to the third decimal
place, reflected on the books of the Company as of August 1, 1998.

(4)           Compensation for MGE Employees.  With respect to Employees who are designated on the books of the Company as being employed in the Company’s
MGE Division, for each Plan Year, the Employee’s “Earnings,” as of the first day of the Plan Year, as determined under the provisions of Plan B (specifically including the provisions of Section B2.11 thereof) that were in effect as of December 31, 1998.

(5)           Compensation for Other Employees.  With respect to Employees who are not designated on the books of the Company as being employed in the Company’s
MGE Division, the Employee’s Compensation, as determined under the provisions of Section 2.11.

ARTICLE 14

RETIREMENT POWER CONTRIBUTIONS IMPLEMENTED AFTER JANUARY 1, 1999

14.1           Retirement Power Contributions Implemented After January 1, 1999.  Beginning January 1, 2002, Retirement Power Contributions, consisting of Participant-Directed
Retirement Power Contributions described in Section 14.2(b)(1) and Other Retirement Power Contributions described in Section 14.2(b)(2), shall be made to the Plan, on behalf of each Affected Pennsylvania Participant, in accordance with the provisions of Section 14.2.  Beginning January 1, 2003, Retirement Power Contributions, consisting entirely of Participant-Directed Retirement Power Contributions described in Section 14.3(b), shall be made to the Plan, on behalf of each Affected Plan A Participant,
in accordance with the provisions of Section 14.3.  Beginning January 1, 2003, Retirement Power Contributions, consisting of Participant-Directed Retirement Power Contributions described in Section 14.4(b)(1) and Other Retirement Power Contributions described in Section 14.4(b)(2), shall be made to the Plan, on behalf of each Affected Corporate Participant, in accordance with the provisions of Section 14.4. Beginning June 11, 2003, Retirement Power Contributions, consisting of Participant-Directed Retirement
Power Contributions described in Section 14.5(b)(2) and Other Retirement Power Contributions

  

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described in Section 14.5(b)(3), shall be made to the Plan, on behalf of each Panhandle Energy Participant, in accordance with the provisions of Section 14.5.  Beginning March 1, 2006, Retirement Power Contributions, consisting entirely of Participant-Directed Retirement Power Contributions described in Section 14.6(b), shall
be made to the Plan, on behalf of each SU Gas Participant, in accordance with the provisions of Section 14.6.

14.2           Affected Pennsylvania Participants.

(a)           Eligibility for Retirement Power Contributions .  In recognition of the fact that the Affected Pennsylvania Participants (1) are not eligible to
participate in or to accrue additional benefits under the Employees’ Retirement Plan of Southern Union Company Pennsylvania Division after December 31, 2001, and (2) will not receive the benefit of post-December 31, 2001 compensation increases with respect to their pre-January 1, 2002 service under the Employees’ Retirement Plan of Southern Union Company Pennsylvania Division, the Affected Pennsylvania Participants shall receive Retirement Power Contributions under this Section 14.2 beginning January
1, 2002.

(b)           Level of Retirement Power Contributions.

(1)           Participant-Directed Retirement Power Contributions.  For each Plan Year beginning on or after January 1, 2002, the Company shall contribute to
the Plan, on behalf of each Affected Pennsylvania Participant, Participant-Directed Retirement Power Contributions equal to the percentage of the Affected Pennsylvania Participant’s Compensation set forth below opposite his name.

	
     Affected Pennsylvania

    Participant
	
Percentage of Affected

Pennsylvania Participant’s

Compensation to be Contributed to

Plan as Participant-Directed

Retirement Power Contributions

	  	  
	
       Jennifer Cawley
	
2.95%

	
     Scott Gallagher
	
2.85%

	
    Thomas Karam
	
6.90%

	
    Mark Kashuda
	
10.25%

	
    Joyce Kormos
	
16.70%

	
        Richard Marshall
	
11.05%

	
               Michael McLaughlin
	
4.70%

	
James Ryan
	
4.35%

An Affected Pennsylvania Participant’s Participant-Directed Retirement Power Contribution percentage set forth under the preceding table shall not change from Plan Year to Plan Year.

(2)           Other Retirement Power Contributions.  For each Plan Year beginning on or after January 1, 2002, the Company shall contribute to the Plan, on behalf
of

  

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each Affected Pennsylvania Participant, Other Retirement Power Contributions equal to one percent of the Affected Pennsylvania Participant’s Compensation.

14.3           Affected Plan A Participants.

(a)           Eligibility for Participant-Directed Retirement Power Contributions.  In recognition of the fact that the Affected Plan A Participants participated
in Plan A until December 31, 2002 and are not eligible to participate in or to accrue additional benefits under Plan A after January 1, 2003, as a result of Plan A’s transfer to ONEOK, Inc. effective January 1, 2003, the Affected Plan A Participants shall receive Participant-Directed Retirement Power Contributions under this Section 14.3, which are in addition to the Retirement Power Contributions that they are eligible to receive under Article 13, beginning January 1, 2003.

(b)           Level of Participant-Directed Retirement Power Contributions.  For each Plan Year beginning on or after January 1, 2003, the Company shall contribute
to the Plan, on behalf of each Affected Plan A Participant, Participant-Directed Retirement Power Contributions equal to the percentage of the Affected Plan A Participant’s Compensation set forth below opposite his name.

	
Affected Plan A Participant
	
Percentage of Affected Plan A Participant’s

Compensation to be Contributed to Plan

as Participant-Directed

Retirement Power Contributions

	  	  
	
Dennis K. Morgan
	
1.00%

	
James C. Wells
	
3.00%

An Affected Plan A Participant’s Participant-Directed Retirement Power Contribution percentage set forth under the preceding table shall not change from Plan Year to Plan Year.

14.4           Affected Corporate Participants.

(a)           Eligibility for Retirement Power Contributions.  In recognition of the fact that Affected Corporate Participants are not eligible to participate
in or to accrue benefits under a defined benefit plan described in Code Section 401(a), the Affected Corporate Participants shall receive Retirement Power Contributions under this Section 14.4 beginning January 1, 2003.

(b)           Level of Retirement Power Contributions.

(1)           Participant-Directed Retirement Power Contributions.  For each Plan Year beginning on or after January 1, 2003, the Company shall contribute to
the Plan, on behalf of each Affected Corporate Participant, Participant-Directed Retirement Power Contributions equal to the percentage of the Affected Corporate Participant’s Compensation that is determined under the following table, based on the definitions set forth in Section 14.4(b)(3).

 

 

 

66

 

 

	
Sum of Affected Corporate Participant’s

“Age” Plus “Years of Service”
	
Percentage of

Affected Corporate Participant’s

Compensation to be Contributed to Plan

as Participant-Directed

Retirement Power Contributions

	  	  
	
00.000 – 39.999
	
2.50%

	
40.000 – 42.499
	
3.00%

	
42.500 – 44.999
	
3.50%

	
45.000 – 47.499
	
4.00%

	
47.500 – 49.999
	
4.50%

	
50.000 – 52.499
	
5.00%

	
52.500 - 54.999
	
5.50%

	
55.000 – 57.499
	
6.00%

	
57.500 – 59.999
	
6.50%

	
60.000 – 62.499
	
7.00%

	
62.500 – 64.999
	
7.50%

	
65.000 – 67.499
	
8.00%

	
67.500 – 69.999
	
8.50%

	
70.000 – 72.499
	
9.00%

	
72.500 – 74.999
	
9.50%

	
75.000 – 77.499
	
10.00%

	
77.500 – 79.999
	
10.50%

	
80.000 or greater
	
11.00%

An Affected Corporate Participant’s Participant-Directed Retirement Power Contribution percentage set forth under the preceding table shall not change from Plan Year to Plan Year.

(2)           Other Retirement Power Contributions.  For each Plan Year beginning on or after January 1, 2003, the Company shall contribute to the Plan, on behalf
of each Affected Corporate Participant, Other Retirement Power Contributions equal to one percent of the Affected Corporate Participant’s Compensation.

(3)           Definitions.  For purposes of Section 14.4(b)(1), the following words shall have the meanings indicated.

(A)           Age.  For any Participant who was an Affected Corporate Participant on December 31, 2002, his age in years and partial years, rounded to the third
decimal place, as of December 31, 2002; and for any Participant who first becomes an Affected Corporate Participant on or after January 1, 2003, his age in years and partial years, rounded to the third decimal place, as of the date that he first becomes an Affected Corporate Participant.

(B)           Years of Service.  For any Participant who was an Affected Corporate Participant on December 31, 2002, his Vesting Service, rounded to the third
decimal place, as of December 31, 2002; and for any Participant who first becomes an Affected Corporate Participant on or after January 1, 2003, zero.

  

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14.5           Panhandle Energy Participants.

(a)           Eligibility for Retirement Power Contributions.  Beginning June 11, 2003, the date of the Company’s acquisition of Panhandle Eastern Pipe Line
Company, LLC, Panhandle Energy Participants shall receive Retirement Power Contributions under this Section 14.5.

(b)           Level of Retirement Power Contributions.

(1)           Calculation of Retirement Power Contributions.  For the period beginning June 11, 2003 and ending December 31, 2003, and for each Plan Year beginning
on or after January 1, 2004, the Company shall contribute to the Plan, on behalf of each Panhandle Energy Participant, total Retirement Power Contributions (which shall consist in part of Participant-Directed Retirement Power Contributions and in part of Other Retirement Power Contributions, as described in Sections 14.5(b)(2) and 14.5(b)(3)) equal to the percentage of the Panhandle Energy Participant’s Compensation that is determined under the following table, based on the definitions set forth in Section
14.5(b)(4).

	
Sum of

Panhandle Energy Participant’s

“Age” Plus “Years of Service”
	
Percentage of

Panhandle Energy Participant’s

Compensation to be Contributed to Plan

as Total Retirement Power Contributions

	  	  
	
0.000 – 39.999
	
4.00%

	
40.000 – 49.999
	
4.50%

	
50.000 – 59.999
	
5.00%

	
60.000 – 69.999
	
5.50%

	
70.000 or greater
	
6.00%

A Panhandle Energy Participant’s Retirement Power Contribution percentage determined under the preceding table shall not change from Plan Year to Plan Year.  The preceding provisions of this paragraph (1) notwithstanding, for those Panhandle Energy Participants who were transferred from the Company’s subsidiary, CrossCountry
Energy Services, LLC, to Panhandle Eastern Pipe Line Company, LP effective September 23, 2007, consistent with communications to such transferred Panhandle Energy Participants and contribution levels under the CrossCountry Energy Savings Plan merged into this Plan, the Company shall contribute to the Plan, on behalf of each such transferred Panhandle Energy Participant, Participant-Directed Retirement Power Contributions equal to five percent of his Compensation.

(2)           Participant-Directed Retirement Power Contributions.  For purposes of the Plan, including Section 5.5, 75 percent of the Company’s total Retirement
Power Contributions to the Plan on behalf of a Panhandle Energy Participant under Section 14.5(b)(1)  shall constitute Participant-Directed Retirement Power Contributions.

  

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(3)           Other Retirement Power Contributions.  For purposes of the Plan, including Section 5.5, 25 percent of the Company’s total Retirement Power
Contributions to the Plan on behalf of a Panhandle Energy Participant under Section 14.5(b)(1) shall constitute Other Retirement Power Contributions.

(4)           Definitions.  For purposes of Section 14.5(b)(1), the following words shall have the meanings indicated.

(A)           Age.  For any Panhandle Energy Participant first employed by either of Panhandle Eastern Pipe Line Company, LLC or Trunkline Gas Company, LLC on
or before June 11, 2003, his age in years and partial years, rounded to the third decimal place, as of June 11, 2003; and for any Panhandle Energy Participant first employed by any of Panhandle Eastern Pipe Line Company, LLC, Trunkline Gas Company, LLC or Trunkline LNG Company, LLC after June 11, 2003, his age in years and partial years, rounded to the third decimal place, as of the date that he is first employed with Panhandle Eastern Pipe Line Company, LLC, Trunkline Gas Company, LLC or Trunkline LNG Company,
LLC.

(B)           Years of Service.  For any Panhandle Energy Participant first employed by either of Panhandle Eastern Pipe Line Company, LLC or Trunkline Gas Company,
LLC on or before June 11, 2003, his years of service working at least 1,000 hours per year (as reflected on the books of Panhandle Eastern Pipe Line Company, LLC) with Panhandle Eastern Pipe Line Company, LLC and its predecessors and Trunkline Gas Company, LLC and its predecessors, rounded to the third decimal place, as of June 11, 2003; and for any Panhandle Energy Participant first employed by any of Panhandle Eastern Pipe Line Company, LLC, Trunkline Gas Company, LLC or Trunkline LNG Company, LLC after June
11, 2003, zero.

14.6           SU Gas Participants.

(a)           Eligibility for Participant-Directed Retirement Power Contributions.  Beginning March 1, 2006, SU Gas Participants shall receive Participant-Directed
Retirement Power Contributions under this Section 14.6.

(b)           Level of Participant-Directed Retirement Power Contributions.  For the period beginning March 1, 2006 and ending December 31, 2006, and for each
Plan Year beginning on or after January 1, 2007, the Company shall contribute to the Plan, on behalf of each SU Gas Participant, Participant-Directed Retirement Power Contributions equal to five percent of the SU Gas Participant’s Compensation.  An SU Gas Participant’s Participant-Directed Retirement Power Contribution percentage set forth in the preceding sentence shall not change from Plan Year to Plan Year.

  

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ARTICLE 15

EFFECT OF TRANSFERS ON RETIREMENT POWER CONTRIBUTIONS

 

15.1           Transfer to a Position Covered by a Defined Benefit Plan.  The provisions of Articles 13 and 14 notwithstanding, if a Participant who is eligible
for Retirement Power Contributions under Article 13 and/or 14 transfers to a division of the Company whose new employees are eligible for current benefit accruals under a defined benefit plan described in Code Section 401(a), or if any such Participant transfers to a classification of employees of the Company in which new employees are eligible for current benefit accruals under a defined benefit plan described in Code Section 401(a), such Participant’s eligibility for Retirement Power Contributions under
the Plan shall terminate and Retirement Power Contributions to the Plan on his behalf shall cease.

15.2           Transfer to a Position not Covered by a Defined Benefit Plan.  The provisions of Articles 13 and 14 notwithstanding, if a Participant who is eligible
for Retirement Power Contributions under Article 13 and/or 14 transfers to a division of the Company whose new employees are not eligible for current benefit accruals under a defined benefit plan described in Code Section 401(a), or if any such Participant transfers to a classification of employees of the Company in which new employees are not eligible for current benefit accruals under a defined benefit plan described in Code Section 401(a), such Participant shall continue to receive Retirement Power Contributions
under the Plan that are equal to the  greater of (a) the percentage of his “compensation” that he was eligible to receive in Retirement Power Contributions immediately prior to his transfer, and (b) the percentage of his “compensation” that he would be eligible to receive, as a new employee of the division or classification to which he transfers (based on the transferring Participant’s age at the time of such transfer but not his service prior to the time of such transfer);
provided, however, that the Plan’s definition of “compensation” that is used to determine contributions to the Plan on behalf of the employees of the division or classification to which the Participant transfers shall be applied to such greater percentage in calculating the transferring Participant’s Retirement Power Contributions after his transfer.  If a Participant who is eligible to receive Retirement Power Contributions under this Section 15.2 becomes a Panhandle Energy
Participant after his transfer, 25 percent of the Retirement Power Contributions to which he is entitled under this Section 15.2 shall constitute Other Retirement Power Contributions and 75 percent of the Retirement Power Contributions to which he is entitled under this Section 15.2 shall constitute Participant-Directed Retirement Power Contributions.  If a Participant who is eligible to receive Retirement Power Contributions under this Section 15.2 is not a Panhandle Energy Participant after his transfer,
the first one percent of his “compensation” that he is entitled to receive as Retirement Power Contributions under this Section 15.2 shall constitute Other Retirement Power Contributions and the remainder of the Retirement Power Contributions to which he is entitled under this Section 15.2 shall constitute Participant-Directed Retirement Power Contributions.

  

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EXECUTED this 31st day of January, 2008.

SOUTHERN UNION COMPANY

By:  /s/ Dennis K. Morgan

                   Officer

  

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Appendix A

Minimum Distribution Requirements

SECTION 1.  GENERAL RULES.

1.1           Effective Date.  Unless an earlier effective date is specified in Section 6 of this Appendix, the provisions of this Appendix will apply for purposes
of determining required minimum distributions for calendar years beginning with the 2003 calendar year.

1.2           Coordination with Minimum Distribution Requirements Previously in Effect.  If Section 6 of this Appendix specifies an effective date of this Appendix
that is earlier than calendar years beginning with the 2003 calendar year, required minimum distributions for 2002 under this Appendix will be determined as follows.  If the total amount of 2002 required minimum distributions under the Plan made to the distributee prior to the effective date of this Appendix equals or exceeds the required minimum distributions determined under this Appendix, then no additional distributions will be required to be made for 2002 on or after such date to the distributee.  If
the total amount of 2002 required minimum distributions under the Plan made to the distributee prior to the effective date of this Appendix is less than the amount determined under this Appendix, then required minimum distributions for 2002 on and after such date will be determined so that the total amount of required minimum distributions for 2002 made to the distributee will be the amount determined under this Appendix.

1.3           Precedence.  The requirements of this Appendix will take precedence over any inconsistent provisions of the Plan.

1.4           Requirements of Treasury Regulations Incorporated.  All distributions required under this Appendix will be determined and made in accordance with
the Treasury Regulations under Code Section 401(a)(9).

1.5           TEFRA Section 242(b)(2) Elections.  Notwithstanding the other provisions of this Appendix, distributions may be made under a designation made before
January 1, 1984, in accordance with Tax Equity and Fiscal Responsibility Act (“TEFRA”) Section 242(b)(2) and the provisions of the Plan that relate to TEFRA Section 242(b)(2).

SECTION 2.  TIME AND MANNER OF DISTRIBUTION.

2.1           Required Beginning Date.  The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than
the Participant’s Required Beginning Date (as hereinafter defined).

2.2           Death of Participant Before Distributions Begin.  If the Participant dies before distributions begin, the Participant’s entire interest will
be distributed, or begin to be distributed, no later than as follows:

  

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

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

(c)  If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s
death.

(d)  If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 2.2, other than Section 2.2(a), will apply as if the surviving
spouse were the Participant.

For purposes of this Section 2.2 and Section 4, unless Section 2.2(d) applies, distributions are considered to begin on the Participant’s Required Beginning Date. If Section 2.2(d) applies, distributions are considered to begin on the date distributions are required to begin to the
surviving spouse under Section 2.2(a).  If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant’s Required Beginning Date (or to the Participant’s surviving spouse before the date distributions are required to begin to the surviving spouse under Section 2.2(a)), the date distributions are considered to begin is the date distributions actually commence.

2.3           Forms of Distribution.  Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in
a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year (as hereinafter defined) distributions will be made in accordance with Sections 3 and 4 of this Appendix.  If the Participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code Section 401(a)(9) and the Treasury Regulations.

SECTION 3.  REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT’S LIFETIME.

3.1           Amount of Required Minimum Distribution For Each Distribution Calendar Year.    During the Participant’s lifetime, the minimum amount
that will be distributed for each Distribution Calendar Year is the lesser of

  

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(a)     the quotient obtained by dividing the Participant’s Account Balance (as hereinafter defined) by the distribution period in the Uniform Lifetime Table set forth in Treasury Regulation Section 1.401(a)(9)-9, using the Participant’s age as of the
Participant’s birthday in the Distribution Calendar Year; or

(b)    if the Participant’s sole Designated Beneficiary for the Distribution Calendar Year is the Participant’s spouse, the quotient obtained by dividing the Participant’s Account Balance by the number in the Joint and Last Survivor Table set forth in
Treasury Regulation Section 1.401(a)(9)-9, using the Participant’s and spouse’s attained ages as of the Participant’s and spouse’s birthdays in the Distribution Calendar Year.

3.2           Lifetime Required Minimum Distributions Continue Through Year of Participant’s Death.  Required minimum distributions will be determined under
this Section 3 beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant’s date of death.

SECTION 4.  REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT’S DEATH.

4.1           Death On or After Date Distributions Begin.

(a)    Participant Survived by Designated Beneficiary.  If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed
for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the longer of the remaining Life Expectancy (as hereinafter defined) of the Participant or the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as follows:

(1)    The Participant’s remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(2)    If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar Year after the year of the Participant’s death using the
surviving spouse’s age as of the spouse’s birthday in that year.  For Distribution Calendar Years after the year of the surviving spouse’s death, the remaining Life Expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year.

(3)    If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using the age of the beneficiary in the year following the year of the Participant’s
death, reduced by one for each subsequent year.

(b)    No Designated Beneficiary.  If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after

  

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the year of the Participant’s death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the Participant’s remaining Life Expectancy calculated using the age of the Participant
in the year of death, reduced by one for each subsequent year.

4.2           Death Before Date Distributions Begin.

(a)  Participant Survived by Designated Beneficiary.  Except as provided in the Plan, if the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount
that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as provided in section 4.1.

(b)  No Designated Beneficiary.  If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s
death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(c)  Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin.  If the Participant dies before the date distributions begin, the Participant’s surviving spouse is the
Participant’s sole Designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 2.2(a), this Section 4.2 will apply as if the surviving spouse were the Participant.

SECTION 5.  DEFINITIONS.

5.1           Designated Beneficiary.  The individual who is designated as the beneficiary under Section 6.5 of the Plan and is the designated beneficiary under
Code Section 401(a)(9) and Treasury Regulation Section 1.401(a)(9)-1, Q&A-4.

5.2           Distribution Calendar Year.  A calendar year for which a minimum distribution is required.  For distributions beginning before the Participant’s
death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year which contains the Participant’s Required Beginning Date. For distributions beginning after the Participant’s death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin pursuant to Section 2.2.  The required minimum distribution for the Participant’s first Distribution Calendar Year will be made on or before the Participant’s
Required Beginning Date.  The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Participant’s Required Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar Year.

  

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

5.4           Participant’s Account Balance.  The account balance as of the last valuation date in the calendar year immediately preceding the Distribution
Calendar Year (“Valuation Calendar Year”) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of the dates in the Valuation Calendar Year after the valuation date and decreased by distributions made in the Valuation Calendar Year after the valuation date.  The account balance for the Valuation Calendar Year includes any amounts rolled over or transferred to the Plan either in the Valuation Calendar Year or in the Distribution
Calendar Year if distributed or transferred in the Valuation Calendar Year.

5.5           Required beginning date.  The date specified in section 6.4(d) of the Plan.

SECTION 6.  EFFECTIVE DATE OF PLAN AMENDMENT FOR CODE SECTION 401(a)(9) FINAL AND TEMPORARY TREASURY REGULATIONS.

This Appendix applies for purposes of determining required minimum distributions for Distribution Calendar Years beginning with the 2003 calendar year, as well as required minimum distributions for the 2002 Distribution Calendar Year that are made on or after January 1, 2002.

  

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Appendix B

Employees of Pennsylvania-American Water Company

This Appendix B applies to any Participant who transferred from employment with Pennsylvania Gas and Water Company (“PG&W”) to employment with Pennsylvania-American Water Company (“Pennsylvania American”) in connection with the sale of PG&W’s Water Business
to Pennsylvania American on February 16, 1996 and who elected not to have the portion of his Account Balance invested in Company Stock transferred to the Savings Plan for Employees of American Water Works Company, Inc. (“Pennsylvania-American Participant”).

 

Notwithstanding anything in this Plan to the contrary

 

	
  
	
1.
	
The Account Balance of any Pennsylvania-American Participant shall be 100% fully vested at all times.

	
  
	
2.
	
The Account Balance of any Pennsylvania-American Participant shall be invested in the same manner as are PEI Matching Contributions in accordance with Section 6.3(b).

	
  
	
3.
	
Distribution shall be permitted from the Account Balance of a Pennsylvania-American Participant only (i) upon severance from employment with Pennsylvania-American or (ii) from the Participant’s Prior Plan Account in accordance with the rules established by the Administration Committee; provided that any such distribution must be a complete distribution of the Participant’s Account Balance in the case
of a distribution under (i) or a complete distribution of the Participant’s Prior Plan Account in the case of a distribution under (ii).

  

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FIRST AMENDMENT

TO

SOUTHERN UNION SAVINGS PLAN

WHEREAS, Southern Union Company (the “Company”) maintains the Southern Union Savings Plan (the “Plan”) for the benefit of eligible employees;

WHEREAS, the Company wishes to revise the definition of “415 Compensation” under the Plan to reflect the provisions of the Internal Revenue Code (the “Code”) Section 415 final regulations, and also to revise the definition of “Compensation” to exclude vacation
payout;

WHEREAS, the Company wishes to move to current year testing of elective deferrals under Code Section 401(k) and employee after-tax and employer matching contributions under Code Section 401(m), and to revise the Plan’s provisions relating to distributions to comply with Code Sections
401(k) and 401(m) to reflect the provisions of the Pension Protection Act;

WHEREAS, in order to offer comparable retirement benefits to and not disadvantage employees who transfer their employment from the Company’s affiliate, Florida Gas Transmission Company, LLC, to the Company or to another “Employer,” as defined in the Plan, which is a subsidiary
of the Company, the Company wishes to credit these transferring employees with vesting service as determined under the Florida Gas Transmission Savings Plan (the “FGT Plan”) for periods prior to their transfers and also to make employer retirement power contributions on their behalf at the greater of the rate at which they would be eligible to receive such contributions under the Plan for periods after their transfers, or the five percent of compensation rate at which they were eligible to receive
non-elective employer contributions under the FGT Plan prior to their transfers, as well as allow them to roll over any outstanding loans that they have from the FGT Plan into the Plan;

WHEREAS, the Company wishes to remove the Plan provision that annualizes employer matching contributions;

WHEREAS, in order to comply with certain provisions of collective bargaining agreements covering Missouri Gas Energy participants (“MGE Union Participants”), the Company wishes to amend the Plan to provide that contributions made on behalf of MGE Union Participants who are receiving
workers’ compensation payments shall be contributed to a separate non-elective employer contribution source and shall be fully vested when made, subject to the requirements of Code Section 415;

WHEREAS, in order to provide flexibility in making certain corrective contributions, the Company wishes to amend the Plan to implement a qualified non-elective employer contribution source;

  

  

  

WHEREAS, the Company wishes to change the order in which certain types of contributions are removed from Participant accounts under the Plan in the event of excess annual additions under Code Section 415;

WHEREAS, the Company wishes to provide that individuals classified as interns, students and project contractors are not eligible to participate in the Plan;

WHEREAS, the Company wishes to provide that forfeitures may be used to off set retirement power contributions, as well as matching contributions, under the Plan;

WHEREAS, the Company wishes to increase employer matching contributions for “Panhandle Energy Participants,” as defined in the Plan; and

WHEREAS, the Company wishes to use the “Elapsed Time Method,” as defined below, for determining vesting service for Employees hired on or after January 1, 2009;

NOW, THEREFORE, in accordance with Section 10.1 of the Plan, the Plan is amended as set forth below.

1.             Effective January 1, 2008, Section 2.1 of the Plan, entitled 415 Compensation, is amended to add a second and final paragraph, to read as follows:

 

Section 3.3 addresses cessation of an Employee’s participation in the Plan.  415 Compensation shall include payments made within 21⁄2 months after severance from employment (as defined in Regulation Section 1.415(a)-1(f)(5)) if they relate to services performed prior
to severance from employment and if they are payments that, absent a severance from employment, would have been paid to the Employee while the Employee continued in employment with the Employer, and are regular compensation for services during the Employee’s regular working hours, compensation for services outside the Employee’s regular working hours (such as overtime or shift differential), commissions, bonuses and other similar compensation.  415 Compensation shall not include payments
made after severance from employment for accrued bona fide sick, vacation or other leave.

2.           Effective January 1, 2008, the Plan is amended to add a new paragraph (k), entitled Non-Elective Employer Contribution Account, to Section 2.2 of the Plan,
entitled Accounts, to read as follows:

(k)           Non-Elective Employer Contribution Account.  The Account maintained for a Participant to record those Non-Elective Employer Contributions made
to the Plan on his behalf by an Employer in accordance with Section 4.1(e) of the Plan.

3.           Effective January 1, 2008, the first sentence of Section 2.3 of the Plan, entitled Annual Additions, is amended to read as follows:

  

2

  

The sum credited to a Participant’s Accounts with respect to a Plan Year for any of (a) salary reduction contributions, (b) Employer matching contributions, (c) Retirement Power Contributions, (d) Forfeitures, (e) Employee post-tax contributions and (f) non-elective employer contributions.

4.           Effective January 1, 2009, Section 2.8 of the Plan, entitled Break in Service, is amended to read as follows:

2.8           Break in Service.  For Employees hired before January 1, 2009, a Plan Year during which the Employee completes not more than 500 Hours of Service.  For
Employees hired on or after January 1, 2009, a Break in Service means a 12-consecutive month period beginning on an Employee’s Severance Date or any anniversary thereof in which the Employee is not credited with an Hour of Service.  If an individual is absent from work because of maternity/paternity leave beyond the first anniversary of his Severance Date, the 12-consecutive month period beginning on the individual’s Severance Date shall
not constitute a Break in Service, and for purposes of determining whether any such individual has incurred a Break in Service, the 12-consecutive month period in which the individual is not credited with an Hour of Service shall begin on the first anniversary of the first date of absence from work for maternity/paternity leave.  For this purpose, a “maternity/paternity leave” means a leave of absence (A) by reason of the pregnancy of the individual, (B) by reason of the birth of a child
of the individual, (C) by reason of the placement of a child with the individual in connection with the adoption of such child by the individual, or (D) for purposes of caring for a child for the period beginning immediately following such birth or placement.  If an individual is absent from work because of FMLA leave and returns to employment with the Employer (or an employer considered as a single employer with the Employer under Code Section 414(b), (c) or (m) or required to be aggregated with the
Employer under Code Section 414(o)) following such FMLA leave, he shall not incur a Break in Service during any 12-consecutive month period beginning on his Severance Date or anniversaries thereof in which he is absent because of such FMLA leave.  For purposes of this paragraph, “FMLA leave” means an approved leave of absence pursuant to the Family and Medical Leave Act of 1993.

5.           Effective January 1, 2008, Section 2.12 of the Plan, entitled Compensation, is amended to add a final sentence, to read as follows:

Notwithstanding the foregoing and for the avoidance of doubt, Compensation shall not include accrued vacation that is paid at employment termination and that is classified under the Employer’s payroll system as vacation payout.

6.           Effective January 1, 2008, the third and final sentence of Section 2.18 of the Plan, entitled Employee, is amended to read as follows:

  

3

  

The preceding provisions of this Section 2.18 notwithstanding, for purposes of Section 3.1, the term Employee shall exclude those individuals who are classified by an Employer as interns, students or project contractors.

7.           Effective January 1, 2008, the Plan is amended to add a new Section 2.25A, entitled FGT, to read as follows:

2.25A           FGT.  Florida Gas Transmission Company, LLC.

8.           Effective January 1, 2008, the Plan is amended to add a new Section 2.25B, entitled FGT Plan, to read as follows:

2.25B           FGT Plan.  The Florida Gas Transmission Savings Plan.

9.             Effective January 1, 2009, the Plan is amended to add a new Section 2.42A, entitled Severance Date, to read as follows:

2.42A           Severance Date.  The earlier of (a) the date an Employee retires, dies, quits or is discharged from employment with the Employer (and all employers
considered as a single employer with the Employer under Code Section 414(b), (c) or (m) or required to be aggregated with the Employer under Code Section 414(o)), or (b) the first anniversary of the first date of a period in which an Employee remains continuously absent from service with the Employer (and all employers considered as a single employer with the Employer under Code Section 414(b), (c) or (m) or required to be aggregated with the Employer under Code Section 414(o)), with or without pay, for any reason
other than quit, retirement, discharge or death (such as vacation, holiday, sickness, disability, leave of absence or layoff).

10.           Effective January 1, 2009, paragraph (a), entitled General Rule, of Section 3.2 of the Plan, entitled Vesting
Service, is amended to read as follows:

(a)           General Rule.  For Employees hired on or after January 1, 2009, Vesting Service shall be calculated in accordance with the provisions of paragraph
(1), below.  For Employees hired before January 1, 2009 (even if they experience a severance from employment and are rehired on or after January 1, 2009), Vesting Service shall be calculated in accordance with the provisions of paragraph (2), below.

    (1)           Vesting Service for Participants Hired On or After January 1, 2009.  An
Employee who commences employment with an Employer on or after January 1, 2009 shall have his Vesting Service calculated in accordance with the elapsed time method under Treasury Regulation Section 1.410(a)-7 (the “Elapsed Time Method”).  In accordance with the Elapsed Time Method, an Employee’s Vesting Service shall be the aggregate of the following (applied without duplication and except for periods that may be disregarded under Section

  

4

  

3.5):  (a) each period from the Employee’s date of hire (or reemployment date) to his next Severance Date, and (b) if an Employee performs an Hour of Service within 12 months of a Severance Date, the period from such Severance Date to such Hour of Service.  Service shall be measured in whole years and fractions
of a year in months.  For this purpose, (a) periods of less than a full year shall be aggregated on the basis that 12 months or 365 days equals a year, and (b) in aggregating days into months, 30 days shall be rounded up to the nearest whole month.

(2)           Vesting Service for Participants Hired Before January 1, 2009.  Effective January 1, 2004 and thereafter, in accordance with the following provisions
of this Section 3.2(a)(2), an Employee who is hired before January 1, 2009 (even if the Employee experiences a severance from employment and is reemployed on or after January 1, 2009) shall accrue a year of Vesting Service for each Plan Year in which he completes 1,000 Hours of Service rather than, except as provided below, for each consecutive 12-month period that ends on an anniversary of his employment (or reemployment) with an Employer.

(A) Employment Commencement (or Recommencement) Before January 1, 2003.  An Employee who is covered by Section 3.2(a)(2) and who commenced (or recommenced)
employment with an Employer before January 1, 2003 shall accrue a year of Vesting Service for the consecutive 12-month period that ends in 2004 on the anniversary of the date that his employment with an Employer commenced (or recommenced) in which he completes 1,000 Hours of Service, and thereafter, for each Plan Year, beginning with the 2004 Plan Year, in which he completes 1,000 Hours of Service; provided, however, that an Employee who is covered by Section 3.2(a)(2) and who
commenced (or recommenced) employment with an Employer before January 1, 2003 and who is credited with 1,000 Hours of Service for the consecutive 12-month period that ends in 2004 on the anniversary of the date that his employment with an Employer commenced (or recommenced) and who is credited with 1,000 Hours of Service for the 2004 Plan Year, shall be credited with two years of Vesting Service for the period commencing in 2003 on the anniversary of the date that his employment with an Employer commenced (or
recommenced) and ending on the last day of the 2004 Plan Year.

(B) Employment Commencement (or Recommencement) On or After January 1, 2003.  An Employee who is covered by Section 3.2(a)(2) and who commences (or recommences)
employment with an Employer on or after January 1, 2003 shall accrue a year of Vesting Service for the consecutive 12-month period following the date that his employment with an Employer commenced (or recommenced) in which he completes 1,000 Hours of Service and thereafter, for each Plan Year, beginning with the Plan Year that includes the first anniversary of the date that his employment with an Employer commenced (or recommenced) in which he completes 1,000 Hours of Service; provided, however, that an Employee
who is covered by Section 3.2(a)(2) and who commences (or

  

5

  

recommences) employment with an Employer on or after January 1, 2003 and who is credited with 1,000 Hours of Service for the consecutive 12-month period following the date that his employment with an Employer commenced (or recommenced) and who is credited with 1,000 Hours of Service for the Plan Year that includes the first anniversary
of the date that his employment with an Employer commenced (or recommenced), shall be credited with two years of Vesting Service for the period commencing on the date that his employment with an Employer commenced (or recommenced) and ending on the last day of the Plan Year that includes the first anniversary of the date that his employment with an Employer commenced (or recommenced).

In no event shall an amendment to this Section 3.2 reduce the Vesting Service previously accrued by an Employee.  In construing the provisions of this Section 3.2, a Participant shall receive Vesting Service for employment with any employer that is considered a single employer with the Employer under Code Section 414(b), (c)
or (m) or required to be aggregated with the Employer under Code Section 414(o).

11.           Effective January 1, 2008, Section 3.2 of the Plan, entitled Vesting Service, is amended to add a new paragraph (g), entitled Participants
whose Employment is Transferred from FGT, to read as follows:

(g)           Participants whose Employment is Transferred from FGT.  For purposes of determining vesting service for a Participant whose employment is transferred
from the Employer’s affiliate, FGT, the provisions of Section 3.2(a) shall apply with respect to periods following the Participant’s transfer, and the provisions of the FGT Plan shall apply for periods preceding the Participant’s transfer, in such a way that the Participant does not receive double credit under this Plan for any one period of time.

12.           Effective January 1, 2008, the first sentence of Section 3.3 of the Plan, entitled Cessation of Participation and Service, is amended to read as follows:

Except as provided under Section 2.1, a Participant’s participation in the Plan shall cease upon severance from employment (as defined in Regulation Section 1.415(a)-1(f)(5)), and, except as provided in the following sentence and in Section 4.1(e)(2) with respect to contributions for MGE Union Participants who are on workers’
compensation, the Participant shall no longer participate in the Employer contribution, salary reduction contribution and after-tax contribution provisions of the Plan; provided, however, that such Participant shall continue to participate only in the Trust Fund Income.

13.           Effective January 1, 2008, the second and final sentence of paragraph (3), entitled MGE Union Participants, of paragraph (b), entitled Employer
Matching Contributions, of Section 4.1 of the Plan, entitled Employer Contributions, is deleted.  Prior to its deletion, this

  

6

  

sentence addressed contributions for MGE Union Participants on workers’ compensation, which are now addressed in Section 4.1(e)(2).

14.           Effective with respect to Compensation paid on or after January 16, 2009, paragraph (4), entitled Panhandle Energy Participants, of paragraph (b), entitled Employer
Matching Contributions, of Section 4.1 of the Plan, entitled Employer Contributions, is amended to read as follows:

(4)           Panhandle Energy Participants.  For Panhandle Energy Participants, the Employer matching contributions shall equal 100 percent of the first five
percent of each such Participant’s Compensation that he elects to defer as salary reduction contributions under Section 4.1(a).

15.           Effective January 1, 2008, the first sentence of the final paragraph of paragraph (b), entitled Employer Matching Contributions, of Section 4.1 of the Plan,
entitled Employer Contributions, is amended to read as follows:

To the extent not applied (1) to restore the accounts of terminated Participants who return to the employ of the Employer before incurring five consecutive one-year Breaks in Service, and who repay to the Plan the amount of the distributions, if any, such Participants received from their Employer Contributions Accounts, Prior Employer
Contributions Accounts and Retirement Power Accounts under Section 4.4 due to such Participants’ prior terminations of employment, or (2) to pay the reasonable expenses of the operation of the Plan, including the compensation of personnel employed pursuant to Section 9.4(f), Forfeitures are to be applied to off set the Employer’s Employer matching contributions under this Section 4.1(b) and the Employer’s Retirement Power Contributions.

16.           Effective January 1, 2008, the Plan is amended to add a new paragraph (e), entitled Non-Elective Employer Contributions, to Section 4.1 of the Plan, entitled Employer
Contributions, to read as follows:

 (e)           Non-Elective Employer Contributions.  For each Plan Year, the Employer may contribute to the Plan non-elective employer contributions, other
than Employer matching contributions or Retirement Power Contributions, to the Non-Elective Employer Contribution Accounts of eligible Participants, as described in paragraphs (1) and (2) below.

    (1)           Qualified Non-Elective Employer Contributions.  The Employer may, in
connection with certain Plan corrections, make qualified non-elective employer contributions to the Non-Elective Employer Contribution Accounts of eligible Participants.  These contributions shall be fully vested and non-forfeitable when made.

    (2)           Non-Elective Employer Contributions for Certain MGE Participants.  In
accordance with the terms of collective bargaining agreements

  

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covering MGE Union Participants, for an MGE Union Participant who is on workers’ compensation, and who does not rescind his deferral election during his period of workers’ compensation, the Company shall contribute to the Plan a dollar amount equal to his per payroll period salary reduction contributions immediately prior
to his period of workers’ compensation.  In addition, during the MGE Union Participant’s period of workers’ compensation, the Employer shall contribute to the Plan a dollar amount equal to the MGE Union Participant’s per payroll period Employer matching contributions immediately prior to his period of workers’ compensation.  The two preceding sentences notwithstanding, contributions under this paragraph (2) shall not be made to MGE Union Participants who were
highly compensated employees (as defined in Code Section 414(q)) immediately before their periods of workers’ compensation.  Contributions under this paragraph (2) shall be fully vested when made.

17.           Effective January 1, 2008, the third sentence of paragraph (a), entitled Salary Reduction Agreements, of Section 4.2 of the Plan, entitled Participant
Salary Reduction Agreements, is amended to read as follows:

The terms of any such salary reduction agreement shall provide that the Participant agrees to accept a pre-tax or after-tax reduction in salary, as applicable, from the Employer equal to a percentage or portion of his Compensation per payroll period, in accordance with procedures established by the Committee.

18.           Effective January 1, 2008, the first paragraph of Section 4.4 of the Plan, entitled Disposition of Forfeitures, is amended to read as follows:

Upon termination of employment, a Participant’s Employer Contributions Account, his Prior Employer Contributions Account and his Retirement Power Account shall be divided into two portions, one representing his vested portion of such Accounts and the other his forfeitable portion of such Accounts.  The vested portion of
his Accounts will be distributed pursuant to Section 6.4.  The forfeitable portion, if any, of his Employer Contributions Account, his Prior Employer Contributions Account and his Retirement Power Account shall be treated as a Forfeiture and shall become available for allocation to the Employer Contributions Accounts and the Retirement Power Accounts of other eligible Participants as of the earlier of (a) the end of the Plan Year in which such Participant requests and receives a benefit distribution
due to his termination of employment, or (b) the end of the Plan Year in which such Participant incurs five consecutive one-year Breaks in Service.  The Employer Contributions Account, the Prior Employer Contributions Account and the Retirement Power Account of a Participant who is not vested in such Accounts shall be considered to be fully distributed as of the Participant’s employment termination date.  Such available Forfeitures shall be allocated in accordance with Section 4.1(b)
as set forth in Section 5.2(c), and in accordance with Articles 13 and 14.  For the avoidance of doubt, Forfeitures are to be applied, first, to restore the Employer Contributions

  

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Accounts, the Prior Employer Contributions Accounts and the Retirement Power Accounts of terminated Participants in accordance with the following paragraph, second, to pay the reasonable expenses of the operation of the Plan, including the compensation of personnel employed pursuant to Section 9.4(f), and, third, to off set Employer matching
contributions under Section 4.1(b) and Retirement Power Contributions under Articles 13 and 14.

19.           Effective January 1, 2008, Section 4.5 of the Plan, entitled Rollover Amount from Other Plans, is amended to add one sentence, to be the second sentence of
Section 4.5, to read as follows:

Notwithstanding the foregoing, a Participant whose employment is transferred from FGT to the employ of the Employer and who has an outstanding participant loan under the FGT Plan, may elect to roll over 100 percent of his account balance under the FGT Plan to the Plan, including
any outstanding loan balances, and may thereafter continue to repay the loan under the Plan, within the original loan repayment period, under the provisions and procedures of Section 6.6.

20.           Effective January 1, 2008, the first sentence of Section 4.6 of the Plan, entitled Limitation on Salary Reduction Contributions, is amended to read as follows:

Notwithstanding anything herein to the contrary, in no event may the salary reduction contributions made on behalf of all Highly Compensated Participants who are eligible to participate in the Plan with respect to any Plan Year result in an Actual Deferral Percentage (as defined in the final paragraphs of this Section 4.6) for such group
of Highly Compensated Participants that exceeds the greater of (a) or (b) where

(a)           is an amount equal to 125 percent of the Actual Deferral Percentage for the Plan Year for all Participants eligible to participate in the Plan other than Highly Compensated Participants; and

(b)           is an amount equal to the sum of (1) two percent and (2) the Actual Deferral Percentage for the Plan Year for all Participants eligible to participate in the Plan other than Highly Compensated Participants, provided that
such amount does not exceed 200 percent of such Actual Deferral Percentage.

21.           Effective January 1, 2008, the second paragraph of Section 4.6 of the Plan, entitled Limitation on Salary Reduction Contributions, is amended to read as follows:

If, after taking into consideration the salary reduction contributions allocated to the Tax-Deferred Accounts of the Participants for the Plan Year, the initial allocation of salary reduction contributions does not satisfy one of the tests set forth under (a) and (b) of the first paragraph
of this Section 4.6 for the Plan Year, the salary reduction contributions of the Highly Compensated Participants shall be reduced to the extent required to meet one of such tests and the excess

  

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salary reduction contributions (plus gains or losses allocable to such contributions through the end of such Plan Year) shall be distributed to the Highly Compensated Participants by March 15 of the following Plan Year, and if not by such March 15 by the last day of the following Plan Year.  In determining the amount of the
excess salary reduction contributions and the Highly Compensated Participants to whom the excess salary reduction contributions are to be distributed, the salary reduction contributions of the Highly Compensated Participants shall be reduced in the order of the amounts of their salary reduction contributions beginning with those having the greatest dollar amounts of such salary reduction contributions.

22.           Effective January 1, 2008, the first sentence of Section 4.7 of the Plan, entitled Limitation on Employer Matching and Employee After-Tax Contributions, is
amended to read as follows:

Notwithstanding anything herein to the contrary, in no event may the sum of the Employer matching contributions made on behalf of all Highly Compensated Participants who are eligible to participate in the Plan with respect to any Plan Year and Employee after-tax contributions made by all Highly Compensated Participants who are eligible
to participate in the Plan with respect to any Plan Year result in a Contribution Percentage (as defined in the final paragraph of this Section 4.7) for such group of Highly Compensated Participants that exceeds the greater of (a) or (b) where

(a)           is an amount equal to 125 percent of the Contribution Percentage for the Plan Year for all Participants eligible to participate in the Plan other than Highly Compensated Participants; and

(b)           is an amount equal to the sum of (1) two percent and (2) the Contribution Percentage for the Plan Year for all Participants eligible to participate in the Plan other than Highly Compensated Participants, provided that
such amount does not exceed 200 percent of such Contribution Percentage.

23.           Effective January 1, 2008, the second paragraph of Section 4.7 of the Plan, entitled Limitation on Employer Matching and Employee After-Tax Contributions,
is amended to read as follows:

If, after taking into consideration the Employer matching contributions and the Employee after-tax contributions allocated to the Employer Contributions Accounts and the Deposit Accounts of the Participants for the Plan Year, the initial allocation of the Employer matching contributions
and the Employee after-tax contributions does not satisfy one of the tests set forth under (a) and (b) of the first paragraph of this Section 4.7 for the Plan Year, the Employer matching contributions and the Employee after-tax contributions of the Highly Compensated Participants shall be reduced to the extent required to meet one of such tests, and the excess Employer matching contributions (plus gains or losses

  

10

  

allocable to such contributions through the end of such Plan Year) shall be forfeited and allocated as Forfeitures hereunder and the excess Employee after-tax contributions (plus gains or losses allocable to such contributions through the end of such Plan Year) shall be distributed to the Highly Compensated Participants by March 15 of
the following Plan Year and if not by March 15 by the last day of the following Plan Year.  In determining the amount of the excess Employer matching contributions and the excess Employee after-tax contributions and the Highly Compensated Participants with respect to whom such excess contributions are to be forfeited or distributed, the Employer matching contributions and the Employee after-tax contributions of the Highly Compensated Participants shall be reduced in the order of the amounts of such
Employer matching contributions and Employee after-tax contributions beginning with those having the greatest dollar amounts of such Employer matching contributions and Employee after-tax contributions.

24.           Effective January 1, 2009, paragraph (c), entitled Employer Matching Contributions and Forfeitures, of Section 5.2 of the Plan, entitled Account
Adjustments, is amended to delete the second sentence of paragraph (c).  Prior to its deletion, the second sentence of paragraph (c) provided for matching contribution true ups.

25.           Effective January 1, 2008, the second paragraph of Section 5.3 of the Plan, entitled Maximum Additions, is amended to read as follows:

If the Annual Additions for a Participant exceed the limitations set forth in the first sentence of this Section 5.3, the Committee shall take the following actions, to the extent necessary to reduce the Annual Additions so as not to exceed such limitations.  First, the Participant’s
after-tax contributions, together with gains attributable to such contributions, shall be distributed to the Participant.  Second, Retirement Power Contributions allocated to the Participant’s Retirement Power Account, together with gains attributable to such contributions, shall be transferred to the suspense account described in the following paragraph.  Third, the Participant’s unmatched Roth elective deferral contributions, together with gains attributable to such contributions,
shall be distributed to the Participant.  Fourth, the Participant’s unmatched pre-tax salary reduction contributions, together with gains attributable to such contributions, shall be distributed to the Participant.  Fifth, the Participant’s matched Roth elective deferral contributions, together with gains attributable to such contributions, shall be distributed to the Participant, and in this case, Employer matching contributions attributable to such matched Roth elective deferral
contributions, together with gains attributable to such contributions, shall be transferred to the suspense account described in the following paragraph.  Sixth, the Participant’s matched pre-tax salary reduction contributions, together with gains attributable to such contributions, shall be distributed to the Participant, and in this case, Employer matching contributions attributable to such matched pre-tax salary reduction contributions, together with gains attributable to such

  

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contributions, shall be transferred to the suspense account described in the following paragraph.

26.           Effective January 1, 2008, the third paragraph of Section 5.3 of the Plan, entitled Maximum Additions, is deleted.  Prior to its deletion, the third
paragraph of Section 5.3 addressed a circumstance involving non-qualified supplemental retirement plans that off set Retirement Power Contributions made to the Plan, which paragraph is not applicable in the Plan’s operations because the Company does not maintain such a non-qualified supplemental retirement plan.

27.           Effective January 1, 2008, paragraph (l), entitled Events of Default, of Section 6.6 of the Plan, entitled Loans
to Participants, is amended to add a second and final sentence, to read as follows:

The preceding sentence notwithstanding, a Participant’s loan shall not be considered to be in default if the Participant’s employment is transferred to the Company’s affiliate, FGT, and, in connection with the transfer and prior to the 90th day
on which payment on the loan is delinquent, the Participant makes a direct rollover of 100 percent of his account balance under the Plan, including outstanding loan balances, to the FGT Plan.

28.           Effective January 1, 2008, paragraph (n), entitled Distributions to Participant and Beneficiaries, of Section 6.6 of the Plan, entitled Loans
to Participants, is amended to add a third and final sentence, to read as follows:

Notwithstanding the foregoing, if a Participant terminates employment with the Employer in connection with the transfer of his employment to the Company’s affiliate, FGT, and makes a direct rollover of 100 percent of his account balance under the Plan, including outstanding loan balances, to the FGT Plan prior to the 90th day
on which payment on the loan is delinquent, the first sentence of this paragraph (n) shall not apply.

29.           Effective January 1, 2009, the Plan is amended to add a new Section 15.3, entitled Transfer from FGT to a Position not Covered by a Defined Benefit Plan, to
read as follows:

15.3           Transfer from FGT to a Position not Covered by a Defined Benefit Plan.  The provisions of Article 13 and 14 notwithstanding, if a Participant’s
employment is transferred from FGT, where he was eligible to receive an annual non-elective employer contribution equal to five percent of compensation under the FGT Plan, to a division, or classification of employees, of the Company in which new employees are not eligible for current benefit accruals under a defined benefit plan described in Code Section 401(a), and regardless of whether he would be eligible to receive Retirement Power Contributions under this Plan in his new employment, such Participant shall
receive Retirement Power Contributions under this Plan that are equal to the greater of (a) the percentage of his “compensation” that he was eligible to receive as a non-elective employer

  

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contribution under the FGT Plan immediately prior to his transfer, and (b) the percentage of his “compensation” that he would be eligible to receive, as a new employee of the division or classification to which he transfers (based on the transferring Participant’s age at the time of such transfer but not his service
prior to the time of such transfer); provided, however, that the Plan’s definition of “compensation” that is used to determine contributions to the Plan on behalf of the employees of the division or classification to which the Participant transfers shall be applied to such greater percentage in calculating the transferring Participant’s Retirement Power Contributions after his transfer.

EXECUTED this 30th day of December, 2008.

SOUTHERN UNION COMPANY

By:­­­­­­­­ /s/ Gary P. Smith  

                Officer

  

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SECOND AMENDMENT

TO

SOUTHERN UNION SAVINGS PLAN

WHEREAS, Southern Union Company (the “Company”) maintains the Southern Union Savings Plan (the “Plan”) for the benefit of eligible employees;

WHEREAS, in order to reflect the terms of the collective bargaining agreements ratified January 3, 2009 and covering individuals designated on the Company’s books as employed in the Company’s Missouri Gas Energy Division and subject to a collective bargaining agreement, the Company
wishes to amend the Plan, effective May 1, 2009, to provide, generally, for (1) enhanced matching contributions for MGE Union Participants (as defined in the Plan) hired before May 1, 2009, and (2) further enhanced matching contributions for MGE Union Participants hired on or after May 1, 2009; and

WHEREAS, in order to reflect the terms of the above-described collective bargaining agreements, the Company wishes to amend the Plan, effective May 1, 2009, to adjust the level of non-elective employer contributions made to the
Plan on behalf of MGE Union Participants who are on workers’ compensation;

NOW, THEREFORE, in accordance with Section 10.1 of the Plan, the Plan is amended as set forth below.

1.           Effective May 1, 2009, paragraph (3), entitled MGE Union Participants, of paragraph (b), entitled Employer Matching Contributions, of Section
4.1 of the Plan, entitled Employer Contributions, is amended to read as follows:

(3)           MGE Union Participants.  For MGE Union Participants hired before May 1, 2009, the Employer matching contributions shall equal (A) 100 percent of
the first four percent of each such Participant’s Compensation that he elects to defer as salary reduction contributions under Section 4.1(a), and (B) 50 percent of each such Participant’s Compensation in excess of four percent up to a maximum of five percent that he elects to defer as salary reduction contributions under Section 4.1(a).  For MGE Union Participants hired on or after May 1, 2009, the Employer matching contributions shall equal (A) 100 percent of the first four percent of
each such Participant’s Compensation that he elects to defer as salary reduction contributions under Section 4.1(a), and (B) 50 percent of each such Participant’s Compensation in excess of four percent up to a maximum of seven percent that he elects to defer as salary reduction contributions under Section 4.1(a).  For purposes of this paragraph (3), an MGE Union Participant who is rehired on or after May 1, 2009 shall be treated as an MGE Union Participant hired on or after May 1, 2009 for
purposes of determining such individual’s Employer matching contributions under the Plan with respect to his post-rehire service, except as provided in the following sentence.  An MGE Union

  

  

  

Participant who is eligible for benefit accruals under Plan B with respect to his period of service commencing after his post-April 30, 2009 rehire date under one of the three final sentences of Section 3.2(a) of Plan B, as amended effective May 1, 2009, shall be treated as an MGE Union Participant hired before May 1, 2009 for purposes
of determining such individual’s Employer matching contributions under the Plan with respect to his post-rehire service.

2.           Effective May 1, 2009, paragraph (2), entitled Non-Elective Employer Contributions for Certain MGE Participants, of paragraph (e), entitled Non-Elective
Employer Contributions, of Section 4.1 of the Plan, entitled Employer Contributions, is amended to read as follows:

(2)           Non-Elective Employer Contributions for Certain MGE Participants.  In accordance with the terms of collective bargaining agreements covering MGE
Union Participants, for an MGE Union Participant who is on workers’ compensation, and who does not rescind his deferral election during his period of workers’ compensation, the Company shall contribute to the Plan a dollar amount equal to his per payroll period salary reduction contributions immediately prior to his period of workers’ compensation.  The preceding sentence notwithstanding, contributions under this paragraph (2) shall not be made to MGE Union Participants who were highly
compensated employees (as defined in Code Section 414(q)) immediately before their periods of workers’ compensation.  Contributions under this paragraph (2) shall be fully vested when made.

EXECUTED this 30th day of April, 2009.

SOUTHERN UNION COMPANY

By:­­­­­­­­  /s/ Richard N. Marshall

                        Officer

  

2

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