Document:

Exhibit
10.12

 

Summary of Oral Employment Agreements with Named Executive Officers

 

The Company’s Chief Executive Officer, Douglas B. Mackie, and Chief
Operating Officer, Richard M. Lowry, have written employment agreements with
the Company under which their annual salaries are determined by the
Compensation Committee (Exhibits 10.10 and 10.11 to the Annual Report on Form
10-K for the year ended December 31, 2004). 
The other named executive officers of the Company are “at will”
employees to the extent that they do not have written employment agreements
with the Company.  The annual base
salaries of these other named executive officers are set annually by the
Company’s Board of Directors, upon the recommendation of its Compensation
Committee.  For 2005, the annual base
salaries of the Company’s named executive officers are as follows:

 

	
  Douglas B. Mackie (President and CEO):

  	
   

  	
  $

  	
  378,000

  	
   

  
	
  Richard M. Lowry (EVP and COO):

  	
   

  	
  $

  	
  355,000

  	
   

  
	
  Deborah A. Wensel (SVP and CFO):

  	
   

  	
  $

  	
  225,000

  	
   

  
	
  William P. Pagendarm (VP, Division
  Manager):

  	
   

  	
  $

  	
  173,000

  	
   

  
	
  Bradley T.J. Hansen (VP, Division Manager):

  	
   

  	
  $

  	
  167,000

  	
   

  

 

In addition, each of these executive officers is entitled to
participate in the Company’s Annual Cash Bonus Plan, 401(k) Savings Plan and the
401(k) Lost Benefit Plan.Exhibit
10.13

 

THE GREAT LAKES DREDGE &
DOCK COMPANY

ANNUAL CASH BONUS PLAN

 

Purpose

 

The Great Lakes Dredge & Dock Company (the “Company”) Annual Cash
Bonus Plan (the “Plan”) is established to provide annual cash bonuses to
employees of the Company.  Different
levels are utilized to compensate employees appropriately based on their
ability to influence the profitability of Great Lakes Dredge & Dock
Corporation and its subsidiaries.

 

Administration

 

The plan is administered by the Company’s Chief Executive Officer,
Chief Operating Officer, and Chief Financial Officer (collectively, the “Committee”)
which, subject to action of the Board, has complete discretion and authority
with respect to the Plan and its application, except to the extent that
discretion is expressly limited by the Plan.

 

Eligibility for Participation

 

The Company’s Chief Executive Officer in his sole discretion,
designates each year those employees of the Company who shall participate in
the Plan (a “Participant”).  A
Participant whose employment by the Company terminates for any reason shall not
participate in the Plan for the year of termination and, following such
termination, the Company shall have no further obligation hereunder to that
Participant.

 

Determination of Bonus Amounts

 

Bonus awards are determined as follows:

 

1.                         Holiday Bonus Plan – Annual holiday bonuses are paid to
non-management employees.  Awards are
based solely on Company performance.  A
minimum EBITDA, defined as “Total Business Requirements”, must be attained to
pay the minimum bonus.  The target bonus
is paid if the Company’s EBITDA is between 85% and 115% of the Company’s
Budgeted EBITDA for the year.   A maximum bonus is paid when EBITDA reaches
above 115% of budgeted EBITDA.

 

Total
Business Requirements is defined as interest expense plus a return on equity
and a return on current capital spending.

 

Under this plan, employees are divided into four categories, based upon
each employee’s level of responsibility.  
Minimum bonuses are 50% of the target and maximum bonuses are 150% of
the target.

 

2.               Performance Bonus Plan – Annual performance bonuses are awarded to
management employees.  Awards are based
on Company performance and individual performance.  Individual bonus amounts are discretionary,
but a pool of allowable total awards is calculated based upon Company
performance.

 

The
bonus pools are determined as follows:

 

	
  Actual
  EBITDA for year

  	
   

  	
  Bonus Pool

  
	
  <
  70% of Budgeted EBITDA

  	
   

  	
  No
  bonus pool

  
	
  =
  70% of Budgeted EBITDA

  	
   

  	
  6.75%
  of eligible salaries

  
	
  =
  100% of Budgeted EBITDA

  	
   

  	
  13.5%
  of eligible salaries

  
	
  =
  130% of Budgeted EBITDA

  	
   

  	
  27%
  of eligible salaries

  

 

Between
each EBITDA threshold, the bonus pool will be interpolated based on actual
EBITDA.

 

1

 

3.               Senior Management Bonus Plan – Annual senior management awards are
determined in accordance with existing employment contracts for the CEO and COO.  The threshold EBITDA for payment of minimum
bonuses awards is 90% of the Company’s Budgeted EBITDA.

 

The
bonuses range as follows:

 

	
  Actual EBITDA for year

  	
   

  	
  Bonus award

  	
   

  
	
  = 90% of Budgeted EBITDA

  	
   

  	
  35% of
  annual salary

  	
   

  
	
  = Budgeted EBITDA

  	
   

  	
  70% of
  annual salary

  	
   

  
	
  = 120% of Budgeted EBITDA

  	
   

  	
  140% of
  annual salary

  	
   

  

 

Between
each EBITDA threshold, the awards are interpolated based on actual EBITDA.

 

Miscellaneous.

 

a)          Although it is the present intention of the Company to continue the Plan
for a indefinite period of time, the Company reserves the right to terminate
the Plan in its entirety at any time or to modify the Plan as it exists from
time to time, provided that no such action shall adversely affect any bonus
previously awarded under the Plan with respect to a prior Performance Year and
provided further that no termination or modification which would adversely
affect a Participant hereunder shall take effect with respect to a Performance
Year in progress at the time of such action.

 

b)         No bonus payable under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge prior to actual receipt thereof by the payee; and any attempt to so
anticipate, alienate, sell transfer, assign, pledge, encumber or charge prior
to such receipt shall be void.  The
Company shall not be liable in any manner for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to any bonus under the
Plan.

 

c)          Nothing contained herein shall confer upon any Participant the right to
be retained in the service of the Company or any subsidiary thereof, nor limit
the right of the Company or any subsidiary thereof to discharge or other wise
deal with any participant without regard to the existence of the Plan.

 

d)         The Plan shall at all times be entirely unfunded and no provision shall
at any time be made with respect to segregating assets of the Company or any
subsidiary thereof for payment of any bonuses hereunder.  No Participant or any other person shall have
any interest in any particular assets of the Company or any subsidiary thereof
by reason of the right to receive a bonus under the Plan and any such
Participant or any other person shall have only the rights of a general
unsecured creditor of the Company or any subsidiary thereof with respect to any
rights under the Plan.

 

e)          To the extent required by law, the Company will withhold from payments
otherwise due hereunder such taxes required to be withheld by the federal or
any state or local government.

 

f)            The Plan shall be governed by and construed
in accordance with the laws of the State of Illinois.

 

2Exhibit 10.14

 

[CONFORMED COPY, INCLUDING AMENDMENT Nos. 1
AND 2]

 

 

 

GREAT LAKES DREDGE & DOCK COMPANY

401(k) SAVINGS PLAN

 

 

 

As Amended and Restated

Effective January 1, 1997

 

 

 

CONTENTS

 

	
  PREAMBLE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  NAME, QUALIFIED STATUS AND EFFECTIVE DATE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Name

  	
   

  
	
  Section 1.2

  	
  Qualified Status

  	
   

  
	
  Section 1.3

  	
  Effective Date

  	
   

  
	
  Section 1.4

  	
  Safe-Harbor Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  “Accounts

  	
   

  
	
  Section 2.2

  	
  “Actual Deferral Percentage”

  	
   

  
	
  Section 2.3

  	
  “Administrative Committee”

  	
   

  
	
  Section 2.4

  	
  “Affiliated Employer”

  	
   

  
	
  Section 2.5

  	
  “Annual Addition”

  	
   

  
	
  Section 2.6

  	
  “Beneficiary”

  	
   

  
	
  Section 2.7

  	
  “Code”

  	
   

  
	
  Section 2.8

  	
  “Company”

  	
   

  
	
  Section 2.9

  	
  “Compensation”

  	
   

  
	
  Section 2.10

  	
  “Contribution Percentage”

  	
   

  
	
  Section 2.11

  	
  “Deferred Compensation”

  	
   

  
	
  Section 2.12

  	
  “Disabled”

  	
   

  
	
  Section 2.13

  	
  “Effective Date”

  	
   

  
	
  Section 2.14

  	
  “Elective Account”

  	
   

  
	
  Section 2.15

  	
  “Elective Contributions”

  	
   

  
	
  Section 2.16

  	
  “Employee”

  	
   

  
	
  Section 2.17

  	
  “Employer”

  	
   

  
	
  Section 2.18

  	
  “Employment Commencement Date”

  	
   

  
	
  Section 2.19

  	
  “Entry Date”

  	
   

  
	
  Section 2.20

  	
  “ERISA”

  	
   

  
	
  Section 2.21

  	
  “Highly Compensated Participant”

  	
   

  
	
  Section 2.22

  	
  “Hour of Service”

  	
   

  
	
  Section 2.23

  	
  “Limitation Year”

  	
   

  
	
  Section 2.24

  	
  “Matching Account”

  	
   

  
	
  Section 2.25

  	
  “Matching Contributions”

  	
   

  
	
  Section 2.26

  	
  “Non-Highly Compensated Participant”

  	
   

  
	
  Section 2.27

  	
  “Normal Retirement Date”

  	
   

  
	
  Section 2.28

  	
  “One-Year Break in Service”

  	
   

  
	
  Section 2.29

  	
  “Participant”

  	
   

  
	
  Section 2.30

  	
  “Participating Employer”

  	
   

  
	
  Section 2.31

  	
  “Plan Year”

  	
   

  
	
  Section 2.32

  	
  “Profit-Sharing Account”

  	
   

  

 

 

	
  Section 2.23

  	
  “Profit-Sharing Contributions”

  	
   

  
	
  Section 2.34

  	
  “Reemployment Commencement Date”

  	
   

  
	
  Section 2.35

  	
  “Rollover Account”

  	
   

  
	
  Section 2.36

  	
  “Secretary”

  	
   

  
	
  Section 2.37

  	
  “Trust”

  	
   

  
	
  Section 2.38

  	
  “Trust Agreement”

  	
   

  
	
  Section 2.39

  	
  “Trustee”

  	
   

  
	
  Section 2.40

  	
  “Trust Fund”

  	
   

  
	
  Section 2.41

  	
  “Valuation Date”

  	
   

  
	
  Section 2.42

  	
  “Year of Service”

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  PARTICIPATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Eligibility

  	
   

  
	
  Section 3.2

  	
  Beneficiary

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CONTRIBUTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Elective Contributions

  	
   

  
	
  Section 4.2

  	
  Matching Contributions

  	
   

  
	
  Section 4.3

  	
  Profit-Sharing Contributions

  	
   

  
	
  Section 4.4

  	
  Limits on Employer Contributions

  	
   

  
	
  Section 4.5

  	
  Deferred Compensation Elections by
  Participants

  	
   

  
	
  Section 4.6

  	
  Rollover Contributions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  ACCOUNTING AND ALLOCATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Individual Accounts

  	
   

  
	
  Section 5.2

  	
  Valuation of Trust Fund

  	
   

  
	
  Section 5.3

  	
  Allocation of Contributions and Forfeitures

  	
   

  
	
  Section 5.4

  	
  Limitation on Annual Additions

  	
   

  
	
  Section 5.5

  	
  Annual Dollar Limitation on Deferred
  Compensation

  	
   

  
	
  Section 5.6

  	
  Actual Deferral Percentage Tests

  	
   

  
	
  Section 5.7

  	
  Contribution Percentage Tests

  	
   

  
	
  Section 5.8

  	
  Multiple Use Limit

  	
   

  
	
  Section 5.9

  	
  Statements of Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  DISTRIBUTION OF BENEFITS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Termination of Employment on Account of
  Retirement, Death or Disability

  	
   

  
	
  Section 6.2

  	
  Other Termination of Employment

  	
   

  
	
  Section 6.3

  	
  Method of Making Distributions

  	
   

  

 

ii

 

	
  Section 6.4

  	
  Special Provisions Concerning Married
  Participants

  	
   

  
	
  Section 6.5

  	
  Forms, Etc.

  	
   

  
	
  Section 6.6

  	
  Change of Address

  	
   

  
	
  Section 6.7

  	
  Incapacity

  	
   

  
	
  Section 6.8

  	
  Assignment or Alienation of Benefits

  	
   

  
	
  Section 6.9

  	
  Restrictions on Distributions

  	
   

  
	
  Section 6.10

  	
  Commencement of Benefits

  	
   

  
	
  Section 6.11

  	
  Required Distributions

  	
   

  
	
  Section 6.12

  	
  Death of Beneficiary

  	
   

  
	
  Section 6.13

  	
  Direct Rollovers of Eligible Rollover
  Distributions

  	
   

  
	
  Section 6.14

  	
  Increase in $3,500 Threshold

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  TRUST AND TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Establishment of Trust

  	
   

  
	
  Section 7.2

  	
  Resignation and Removal of Trustee

  	
   

  
	
  Section 7.3

  	
  Powers and Duties of Trustee

  	
   

  
	
  Section 7.4

  	
  Payment of Compensation and Expenses

  	
   

  
	
  Section 7.5

  	
  Directed Investment of Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  ADMINISTRATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Administrative Committee

  	
   

  
	
  Section 8.2

  	
  Powers, Rights and Duties of Administrative
  Committee

  	
   

  
	
  Section 8.3

  	
  Delegation and Allocation of Administrative
  Committee’s Powers

  	
   

  
	
  Section 8.4

  	
  Compensation and Expenses of Administrative
  Committee

  	
   

  
	
  Section 8.5

  	
  Claims Procedure

  	
   

  
	
  Section 8.6

  	
  Administrative Committee Member Who Is a
  Participant

  	
   

  
	
  Section 8.7

  	
  Agent for Service of Process

  	
   

  
	
  Section 8.8

  	
  Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  FIDUCIARY RESPONSIBILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Exercise of Fiduciaries’ Duties

  	
   

  
	
  Section 9.2

  	
  Prohibited Transactions

  	
   

  
	
  Section 9.3

  	
  Acts of Co-fiduciaries

  	
   

  
	
  Section 9.4

  	
  Bonding

  	
   

  
	
  Section 9.5

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  AMENDMENT; MERGER, CONSOLIDATION OR
  TRANSFER OF ASSETS; TERMINATION; NO REVERSION IN EMPLOYER

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Amendment

  	
   

  

 

iii

 

	
  Section 10.2

  	
  Merger, Consolidation or Transfer of Assets

  	
   

  
	
  Section 10.3

  	
  Complete Discontinuance of Contributions;
  Termination

  	
   

  
	
  Section 10.4

  	
  No Reversion in Employer

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  LOANS TO PARTICIPANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  In General

  	
   

  
	
  Section 11.2

  	
  Interest

  	
   

  
	
  Section 11.3

  	
  Maximum to be Loaned

  	
   

  
	
  Section 11.4

  	
  Repayment

  	
   

  
	
  Section 11.5

  	
  Truth-in-Lending

  	
   

  
	
  Section 11.6

  	
  Purpose of Loan

  	
   

  
	
  Section 11.7

  	
  Collateral Security

  	
   

  
	
  Section 11.8

  	
  Rules and Regulations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.1

  	
  Employment

  	
   

  
	
  Section 12.2

  	
  Records

  	
   

  
	
  Section 12.3

  	
  Usage

  	
   

  
	
  Section 12.4

  	
  Validity

  	
   

  
	
  Section 12.5

  	
  Counterparts

  	
   

  
	
  Section 12.6

  	
  Severability

  	
   

  
	
  Section 12.7

  	
  Conditional Restatement

  	
   

  
	
  Section 12.8

  	
  Veterans’ Rights

  	
   

  
	
  Section 12.9

  	
  Participating Employers

  	
   

  
	
  Section 12.10

  	
  Special Provisions Applicable to Persons
  Who Were Participants in Gates Construction Corp. 401(k) Retirement Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
  TOP-HEAVY PLAN PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.1

  	
  Application

  	
   

  
	
  Section 13.2

  	
  Definitions

  	
   

  
	
  Section 13.3

  	
  Distributions Prior to Determination Date

  	
   

  
	
  Section 13.4

  	
  Minimum Contribution

  	
   

  

 

iv

 

PREAMBLE

 

Pursuant to the authority in Section 16.1 of the Great Lakes
Dredge & Dock Company 401(k) Savings Plan, Great Lakes Dredge &
Dock Company hereby amends and restates said plan in its entirety to read as
follows effective January 1, 1997 (except as may otherwise be provided
herein):

 

 

 

ARTICLE I

 

NAME, QUALIFIED STATUS AND EFFECTIVE DATE

 

1.1                                 Name.

 

The Plan as amended and restated herein shall
continue be known as the “Great Lakes Dredge & Dock Company 401(k)
Savings Plan.”

 

1.2                                 Qualified Status.

 

(a)                                  It is intended that
the Plan as amended and restated herein shall continue to constitute a
qualified profit-sharing plan and that the Trust shall continue to be exempt
from tax under the applicable provisions of the Code and ERISA and the Treasury
Regulations and rulings thereunder.  If
any provision of the Plan be subject to more than one interpretation, such
provision shall be interpreted in a manner which shall be consistent with the
Plan continuing to be regarded as a qualified profit-sharing plan and the Trust
continuing to be exempt from tax as aforesaid.

 

(b)                                 Contributions to the
Plan shall not be conditioned upon the existence of profits.  The Plan shall nevertheless be a
profit-sharing plan for all purposes under the Code, including without
limitation Code Section 401(a)(11)(B)(ii).

 

1.3                                 Effective Date.

 

The Plan, as amended and restated herein,
shall be effective January 1, 1997, except as may otherwise be provided
herein.

 

1.4                                 Safe-Harbor Plan.

 

(a)                                  Effective for Plan
Years beginning after December 31, 2000, the Plan shall satisfy the “safe-harbor”
provisions of Code Sections 401(k)(12)(B) and (C) and accordingly
Sections 5.6, 5.7 and 5.8 of the Plan shall not be effective for such Plan
Years.

 

(b)                                 At least 30 days, but
not more than 90 days, before the beginning of each Plan Year beginning after December 31,
2000, the Administrative Committee shall provide each Participant a comprehensive
notice of his rights and obligations under the Plan, written in a manner
calculated to be understood by the average Participant.  If an Employee becomes eligible after the
90th day before the beginning of any such Plan Year and does not receive the
notice for that reason, such notice shall be provided no more than 90 days
before such Employee becomes a Participant, but not later than the date he
becomes a Participant.

 

2

 

(c)                                  In addition to any
other election periods provided under the Plan, each Participant may make or
modify a deferral election during the 30-day period immediately following
receipt of the notice described in Section 1.4(b).

 

3

 

ARTICLE II

 

DEFINITIONS

 

For purposes of the Plan, the following words
and phrases shall have the meanings indicated below unless the context clearly
requires otherwise:

 

2.1                                 “Accounts”
shall mean the individual bookkeeping accounts maintained for a Participant as
provided in Section 5.1.

 

2.2                                 “Actual Deferral Percentage” shall
mean, with respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in each group, of the amount of
Elective Contributions allocated to each such Participant’s Elective Account
[unreduced by distributions made pursuant to Sections 5.5(b) and (c)] for
such Plan Year, to such Participant’s Compensation for such Plan Year.

 

2.3                                 “Administrative Committee” shall
mean the entity administering the Plan in accordance with Article VIII.

 

2.4                                 “Affiliated Employer” shall mean any
entity which is aggregated with the Company pursuant to Section 414 of the
Code.

 

2.5                                 “Annual Addition” shall mean, with respect to
a Participant for any Limitation Year, the sum of:

 

(a)                                  Employer
contributions allocated to such Participant for such Limitation Year under this
Plan and any other qualified defined contribution plan maintained by the
Employer;

 

(b)                                 Forfeitures,
if any, allocated to such Participant for such Limitation Year under this Plan
and under any other qualified defined contribution plan maintained by the
Employer;

 

(c)                                  Such
Participant’s voluntary non-deductible contributions under any qualified plan
of the Employer for such Limitation Year;

 

(d)                                 Amounts
allocated, after March 31, 1984, for such Limitation Year to an individual
medical account, as defined in Section 415(l)(2) of the Code, which
is part of a pension or annuity plan maintained by the Employer; and

 

(e)                                  Amounts
derived from contributions paid or accrued after December 31, 1985, in
taxable years ending after said date, which are attributable to post-retirement

 

4

 

medical benefits allocated for such
Limitation Year to the separate account of a “key employee,” as defined in Section 419A(d)(3) of
the Code, under a welfare benefit fund, as defined in Section 419(e) of
the Code, maintained by the Employer.

 

For purposes of this Section 2.5, the term “Employer” shall
include any Affiliated Employer.

 

2.6                                 “Beneficiary” shall mean the person or persons
designated by a Participant to receive any benefits payable under the Plan on
account of the Participant’s death, subject to Section 7.4.  If no person has been designated as a
Beneficiary by a Participant, or if the designated Beneficiary or Beneficiaries
(if more than one) are not in existence at the time of his death, the term “Beneficiary”
shall mean the Participant’s surviving spouse, or if there is no surviving
spouse, the term “Beneficiary” shall mean the Participant’s descendants who
survive him, per stirpes, or if there are no such descendants, the term “Beneficiary”
shall mean the Participant’s estate.

 

2.7                                 “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

2.8                                 “Company”
shall mean Great Lakes Dredge & Dock Company.

 

2.9                                 “Compensation” shall mean “wages” as defined in
Section 3401(a) of the Code and all other payments of compensation to
a Participant by the Employer (in the course of the Employer’s trade or
business) for which the Employer is required to furnish to such Participant a
written statement under Sections 6041(d), 6051(a)(3) and 6052 of the Code,
determined without regard to any rules which limit the remuneration
included in wages based upon the nature or location of the employment or the
services performed [such as the exception for agricultural labor in Section 3401(a)(2) of
the Code].  Effective as to remuneration
paid after January 31, 2000, the term “Compensation” shall mean the total
amount of all payments (without regard to whether or not an amount is paid in
cash) made by the Employer to a Participant during a Plan Year for personal
services actually rendered to the Employer in the course of employment with the
Employer, to the extent that such amount is includible in gross income,
including without limitation salary, bonuses, overtime or premium pay and
commissions, fringe benefits and all other amounts described in Treasury
Regulation Section 1.415-2(d)(2) and excluding those items set
forth in Treasury Regulation Section 1.415-2(d)(3).  The annual Compensation of each Participant
taken into account for any Plan Year shall not exceed $160,000 (subject to
cost-of-living adjustments prescribed by the Secretary).  Notwithstanding the first two sentences of
this Section 2.9:

 

(a)                                  Except
for purposes of Section 5.4 for Limitation Years beginning prior to January 1,
1998, there shall be included in a Participant’s Compensation (1) any “elective
deferral” [as defined in Section 402(g)(3) of the Code] and (2) any
amount which is contributed or deferred by the Employer at the election of such
Participant and which is not includible in his gross income under Section 125
of the Code.

 

5

 

(b)                                 There
shall be excluded from a Participant’s Compensation all of the following:
reimbursements or other expense allowances, fringe benefits (cash and noncash),
moving expenses, deferred compensation and welfare benefits.

 

(c)                                  For
purpose of Section 5.3(c), bonuses shall be excluded from Compensation.

 

(d)                                 A
Participant’s Compensation shall not include any amounts otherwise includable
pursuant to this Section 2.8 which are attributable to any period before
he became a Participant.

 

2.10                           “Contribution Percentage” shall mean,
with respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in each group, of the amount of
Matching Contributions allocated to each such Participant’s Matching Account
for such Plan Year, to such Participant’s Compensation for such Plan Year.

 

2.11                           “Deferred Compensation” with respect to
any Participant shall mean that portion of such Participant’s Compensation for
a Plan Year which such Participant has elected to defer pursuant to Section 4.4.

 

2.12                           “Disabled”
with respect to a Participant shall mean his inability to perform any of the
duties assigned by the Employer because of a medically-determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of at least 12 months.

 

2.13                           “Effective
Date” shall mean the date specified in Section 1.3.

 

2.14                           “Elective
Account” shall mean the Account established and maintained by the
Administrative Committee for each Participant with respect to his total
interest in the Plan resulting from the Employer’s Elective Contributions.  A Participant shall always be fully vested in
the balance in his Elective Account.

 

2.15                           “Elective Contributions” shall mean
the Employer’s contributions to the Plan which are made pursuant to Section 4.2.

 

2.16                           “Employee”
shall mean any person employed by and who receives salary-based Compensation
from the Employer, including officers of the Employer and directors thereof who
are employed as officers or in some capacity other than solely as
directors.  The term “Employee” shall not
include a leased employee.  For purposes of
the preceding sentence, the term “leased employee” shall mean any person (other
than an employee of the recipient)  who
pursuant to an agreement between the recipient and any other person has
performed services for the recipient [or for the recipient and related persons
determined in accordance with Section 414(n)(6) of the Code] on a
substantially full-time basis for a period of at least one year, and such
services are performed under

 

6

 

primary direction or control by the recipient.  In addition, the term “Employee” shall not
include an individual who is included in a unit of employees covered by a
collective bargaining agreement with the Company or any Participating Employer,
if retirement benefits were the subject of good-faith bargaining in connection
with such agreement.  Effective April 1,
1997, the term “Employee” shall not include any persons who are nonresident
aliens and who receive no earned income [within the meaning of Section 911(d)(2) of
the Code] which constitutes income from sources within the United States
[within the meaning of Section 861(a)(3) of the Code].

 

2.17                           “Employer”
shall mean, collectively, the Company and each Participating Employer.

 

2.18                           “Employment Commencement Date”
shall mean the first day on which an Employee completes an Hour of Service.

 

2.19                           “Entry
Date” shall mean the first day of each calendar quarter.  Effective April 1, 1997, the preceding
sentence shall read as follows: “Entry Date” shall mean the first day of
each calendar month.”

 

2.20                           “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time.

 

2.21                           “Highly Compensated Participant”
shall mean, with respect to a Plan Year, any Employee who:

 

(a)                                  During
such Plan Year or the preceding Plan Year was or at any time a “5-percent
owner” within the meaning of Section 416(i)(1) of the Code; or

 

(b)                                 During
such preceding Plan Year received Compensation from the Employer in excess of
$80,000 and was in the group of Employees of the Employer consisting of the top
20% of such Employees when ranked on the basis of Compensation paid during such
preceding Plan Year.

 

The $80,000 amount in Section 2.21(b) shall be adjusted in
the same time and in the same manner as provided in Code Section 415(d),
except that the base period shall be the calendar quarter ended September 30,
1996.

 

2.22                           “Hour
of Service” shall mean each hour (a) for which an Employee is
paid, or entitled to payment, for the performance of duties for an Employer
during the applicable Plan Year; (b) for which an Employee, directly or
indirectly, is paid, or entitled to payment, by the Employer on account of a
period of time during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty or leave of
absence; provided, however, that no more than 501 Hours of Service are required
to be credited under this Section 2.22(b) to an Employee on

 

7

 

account of any single continuous period during which the Employee
performs no duties (whether or not such period occurs in a single Plan Year),
and no Hours of Service are required to be credited to the Employee if such
payment or entitlement to payment (i) is made or due under a plan
maintained solely for the purpose of complying with applicable workmen’s
compensation, or unemployment compensation or disability insurance laws or (ii) solely
reimburses the Employee for medical or medically-related expenses incurred by
him; and (c) for which back pay, irrespective of mitigation of damages, is
either awarded to an Employee or agreed by the Employer to be paid to the
Employee, with such hours to be credited to the Employee for the Plan Year or
Plan Years to which the award or agreement pertains rather than the Plan Year
in which the award, agreement or payment is made.  For purposes of this Section 2.22, a
payment shall be deemed to be made by or due from the Employer regardless of
whether such payment is made by or due from the Employer directly, or
indirectly through, among others, a trust fund, or insurer, to which the
Employer contributes or pays premiums and regardless of whether contributions
made or due to the trust fund, insurer or other entity are for the benefit of
particular Employees or are on behalf of a group of Employees in the
aggregate.  The same Hours of Service
shall not be credited under both Sections 2.22(a) or (b) and under Section 2.22(c).
 The special rules of the Department
of Labor Regulations at 29 C.F.R. Sections 2530.200b-2(b) and (c) relating
to determining Hours of Service for reasons other than the performance of
duties and crediting Hours of Service to computation periods are incorporated
herein by this reference.  In the case of
an Employee who is absent from work for any period (i) by reason of the
Employee=s pregnancy, the birth of a
child of the Employee or the placement of a child with the Employee in
connection with such child’s adoption by the Employee or (ii) for purposes
of caring for such child for a period beginning immediately following such
birth or placement, the Plan shall treat as Hours of Service, solely in order
to determine whether a One-Year Break in Service has occurred for purposes of
eligibility, either (1) the Hours of Service which would normally have
been credited to such Employee but for such absence, or (2) in any case in
which the Plan is unable to determine the hours described in the preceding
clause, 8 Hours of Service per day of such absence; provided, however, that the
total number of hours treated as Hours of Service pursuant to this sentence by
reason of any such pregnancy, birth or placement shall not exceed 501; and
provided further that the Employee shall give the Administrative Committee such
timely information as it may reasonably require to establish (i) that the
absence from work is on account of one or more of the reasons enumerated above
and (ii) the number of days for which there was such an absence.  The hours described in the preceding sentence
shall be treated as Hours of Service (A) only in the Plan Year in which
the absence from work begins, if the Employee would be prevented from incurring
a One-Year Break in Service in such period solely because periods of absence
are treated as Hours of Service in accordance with the preceding sentence; or (B) in
any other case, in the immediately following Plan Year.  An Employee shall also receive full credit
under the Plan, for eligibility and vesting purposes, for Hours of Service
earned with respect to any Affiliated Employer. 
Hours of Service completed prior to the Effective Date of the Plan shall
be taken into account.  An Employee shall
be credited with 45 Hours of Service for each week or during which he completes
at least one Hour of Service as determined under the preceding provisions of
this Section 2.22.

 

8

 

2.23                           “Limitation
Year” shall mean the 12-month period for purposes of determining
the limitation on Annual Additions, in accordance with Section 415 of the
Code, which period shall begin on January 1 and shall end on the following
December 31.

 

2.24                           “Matching
Account” shall mean the Account established and maintained by the
Administrative Committee for each Participant with respect to his total
interest in the Plan resulting from the Employer’s Matching Contributions and
forfeitures allocated pursuant to Section 5.3(b).  A Participant shall always be fully vested in
the balance in his Matching Account.

 

2.25                           “Matching Contributions” shall mean
the Employer’s contributions to the Plan which are made pursuant to Section 4.2.

 

2.26                           “Non-Highly Compensated Participant”
shall mean any Participant who is not a Highly Compensated Participant.

 

2.27                           “Normal Retirement Date” shall mean the
date a Participant attains age 65.

 

2.28                           “One-Year Break in Service” shall mean
any Plan Year during which an Employee fails to complete more than 500 Hours of
Service.

 

2.29                           “Participant”
shall mean an Employee who has become a Participant in the Plan as provided in Article III
and shall include any Participant no longer actively employed by the Employer,
and any Beneficiary of a deceased Participant, until all benefits due such
Participant under the Plan shall have been fully distributed.

 

2.30                           “Participating Employer” shall mean
any Affiliated Employer which shall adopt the Plan in accordance with Section 12.9.

 

2.31                           “Plan
Year” shall mean the period beginning on January 1 and ending on
the following December 31.

 

2.32                           “Profit-Sharing Account” shall mean the
Account established and maintained by the Administrative Committee for each
Participant with respect to his total interest in the Plan resulting from the
Employer’s Profit-Sharing Contributions and forfeitures allocated pursuant to Section 5.3(c).  A Participant shall be fully vested in the
balance in his Profit-Sharing Account:

 

(a)                                  If
his Employment Commencement Date was prior to October 1, 1996;

 

(b)                                 At such time as he
completes 3 Years of Service;

 

(c)                                  Upon attainment of
His Normal Retirement Date while an Employee; or

 

(d)                                 In the event of his
death or Disability while an Employee.

 

9

 

If a Participant who is not vested in the balance in his Profit-Sharing
Account incurs 5 consecutive One-Year Breaks in Service, such balance shall be
forfeited by such Participant and shall be allocated as provided in Section 5.3(d).

 

2.33                           “Profit-Sharing Contributions”
shall mean the Employer’s contributions to the Plan which are made pursuant to Section 4.3.

 

2.34                           “Reemployment Commencement Date”
shall mean the first day on which an Employee completes an Hour of Service
after having previously terminated his employment.

 

2.35                           “Rollover
Account” shall mean the separate bookkeeping account established and
maintained for each Participant who has made one or more rollover contributions
to the Plan pursuant to Section 4.6, which account shall be credited with
the amount of such contributions.  A
Participant shall always be fully vested in the balance in his Rollover
Account.

 

2.36                           “Secretary”
shall mean the Secretary of the Treasury, or his delegate.

 

2.37                           “Trust”
shall mean the trust created pursuant to a Trust Agreement.  In the event there is more than one Trust
Agreement, unless the context otherwise admits, the term “Trust” shall mean,
collectively, all trusts created pursuant to such agreements.  The Trust forms a part of the Plan.  Effective August 1, 2000, the Trust
shall be the Great Lakes Dredge & Dock Company 401(k) Savings Plans
Master Trust, as set forth in a Master Trust Agreement by and between the
Company and Fidelity Management Trust Company and dated July 24, 2000.

 

2.38                           “Trust
Agreement” shall mean the agreement between the Company and a
corporation, establishing a Trust.

 

2.39                           “Trustee”
shall mean, with respect to a Trust Agreement, the corporation acting as
trustee thereunder.  As of the Effective
Date, the Trustee is Bank of America Illinois. 
Effective August 1, 2000, the Trustee shall be Fidelity Management
Trust Company.

 

2.40                           “Trust
Fund” shall mean the cash, securities and any other property held by
the Trustee pursuant to the provisions of the Trust Agreement, together with
any earnings or income therefrom.

 

2.41                           “Valuation
Date” shall mean the last day of each Plan Year and each other day,
determined by the Administrative Committee in its discretion (exercised in a
nondiscriminatory manner) as of which the assets of Trust are valued.

 

2.42                           “Year
of Service” shall mean a Plan Year during which an Employee completes at
least 1,000 Hours of Service.  In
determining the Years of Service of an Employee:

 

10

 

(a)                                  There
shall be included all of his Years of Service with the Employer, including
Years of Service completed prior to the date the Plan initially took effect.

 

(b)                                 His
Years of Service prior to a One-Year Break in Service shall be disregarded
until he has completed a Year of Service after his reemployment.

 

(c)                                  His
Years of Service prior to any period of consecutive One-Year Breaks in Service
shall be disregarded if he did not have a nonforfeitable right to any portion
of his Accounts at the time his employment was terminated and the number of
consecutive One-Year Breaks in Service within such period equals or exceeds the
greater of (1) 5 or (2) the aggregate number of Years of Service
before such period.

 

(d)                                 In
the case of a Participant who has incurred a period of 5 consecutive One-Year
Breaks in Service, Years of Service after such period shall not be taken into
account for purposes of determining the vested percentage of his Profit-Sharing
Account which accrued before such period.

 

11

 

ARTICLE III

 

PARTICIPATION

 

3.1                                 Eligibility

 

(a)                                  Each Employee who was
a Participant as of December 31, 1996 shall continue to be a Participant
as of the Effective Date.

 

(b)                                 Each Employee not
described in Section 3.1(a) shall become a Participant as of the
first Entry Date coinciding with or next following his Employment Commencement
Date.

 

(c)                                  If a Participant
terminates his employment with the Employer and thereafter returns to the
employ of the Employer, he shall resume active participation in the Plan as of
his Reemployment Commencement Date.

 

3.2                                 Beneficiary.

 

Subject to Section 7.4, an Employee,
upon becoming a Participant, may designate a Beneficiary of his own choosing,
and may, in addition, designate a contingent Beneficiary.  A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary previously designated.  Any such designation, revocation or change
shall be made in writing on forms provided for the purpose and filed with the
Administrative Committee.

 

12

 

ARTICLE IV

 

CONTRIBUTIONS

 

4.1                                 Elective Contributions.

 

For each Plan Year the Employer shall
contribute to the Plan for such Plan Year an Elective Contribution equal to the
Deferred Compensation of all Participants employed by such Employer for such
Plan Year.

 

4.2                                 Matching Contributions.

 

(a)                                  For each quarter of
each Plan Year, the Employer shall make a Matching Contribution equal to equal
66-2/3% of each eligible Participant’s Elective Contribution for such
quarter, excluding any Elective Contribution which exceeds 6% of such
Participant’s Compensation for such quarter. 
Effective April 1, 1997, the preceding sentence shall read as
follows:  “For each quarter of each Plan
Year, the Employer shall make a Matching Contribution equal to equal 100% of
each eligible Participant’s Elective Contribution for such quarter, excluding
any Elective Contribution which exceeds 6% of such Participant’s Compensation
for such quarter.”  In order to be
entitled to a Matching Contribution for a Plan Year, a Participant must be
employed by the Employer on the last day of such Plan Year.  Effective April 1, 1997, the preceding
sentence shall read as follows:  “In
order to be entitled to a Matching Contribution for any quarter of a Plan Year,
a Participant must be employed by the Employer on the last day of such quarter,
unless his employment terminated during such quarter on account of retirement
(on or after his Normal Retirement Date), Disability or death.”  Effective for Plan Years beginning after December 31,
2000, this Section 4.1(a) shall read as follows:

 

(a)          For each quarter of each
Plan Year, the Employer shall make a Matching Contribution equal to equal 100%
of each eligible Participant’s Elective Contribution for such quarter,
excluding any Elective Contribution which exceeds 6% of such Participant’s
Compensation for such quarter.

 

(b)                                 All Matching
Contributions shall be subject to the restrictions on distributions of Elective
Contributions set forth in Section 4.5(b) and may be taken into
account by the Administrative Committee for purposes of the Actual Deferral
Percentage tests set forth in Section 5.6. 
Any such Matching Contributions which are taken into account for
purposes of Section 5.6 shall not be taken into account for purposes of
the Actual Contribution Percentage tests in Section 5.7.

 

4.3                                 Profit-Sharing Contributions.

 

(a)                                  For each Plan Year
the board of directors of the Company shall determine the Profit-Sharing
Contribution, if any, to be paid to the Plan.

 

13

 

(b)                                 The Employer’s
Profit-Sharing Contribution for a Plan Year may be made in a single installment
or in 2 or more installments in cash to the Trustee, and shall be considered
made on the last day of such Plan Year.

 

(c)                                  In order to be
entitled to a share of the Employer’s Profit-Sharing Contribution for a Plan
Year, a Participant must be employed on the last day of such Plan Year.

 

4.4                                 Limits on Employer Contributions.

 

In no event shall the Employer’s
contributions for a Plan Year pursuant to Sections 4.1, 4.2 and 4.3:

 

(a)                                  Cause
the Annual Additions to any Participant’s Accounts to exceed the limits
specified in Section 5.5;

 

(b)                                 Exceed the amount
deductible under Section 404 of the Code; or

 

(c)                                  Be
paid to the Trustee later than the time (including any extensions thereof)
prescribed by law for filing the Employer’s Federal income tax return for its
taxable year corresponding to the Plan Year to which the contribution relates.

 

Notwithstanding Section 4.4(c), the Employer’s Elective
Contribution shall be paid to the Trustee with reasonable promptness, and in
any event not later than the 15th business day of the month following the month
in which occurred the payroll deductions comprising such contribution.

 

4.5                                 Deferred Compensation Elections
by Participants.

 

(a)                                  Each Participant may
elect to defer a portion of his Compensation expressed as a whole-number
multiple of 1% of his Compensation (but not more than 15%); provided, however,
that a Highly Compensated Participant may not defer more than 6% of his
Compensation unless the Administrative Committee determines that a higher
percentage is permissible.  Effective April 1,
1997, the preceding sentence shall read as follows:  “Each Participant may elect to defer a
portion of his Compensation expressed a whole-number multiple of 1% of his
Compensation (but not more than 8%); provided, however, that a Highly
Compensated Participant may not defer more than 6% of his Compensation unless
the Administrative Committee determines that a higher percentage is
permissible.”  The amount by which a
Participant’s Compensation is deferred shall be that Participant’s Deferred
Compensation and shall be treated as an Elective Contribution.  Any Participant may change or suspend his
election pursuant to this Section 4.4(a) in accordance with
procedures specified by the Administrative Committee.

 

(b)                                 Amounts held in a
Participant’s Elective Account shall not be distributable prior to the earliest
of:

 

14

 

(1)                                  His
termination of employment with the Company and all Affiliated Employers, or his
death;

 

(2)                                  The
termination of the Plan without establishment of a successor plan by the
Employer or an entity aggregated with the Employer or an Affiliated Employer;

 

(3)                                  The
date of the sale by the Employer to an entity that is not an Affiliated
Employer of substantially all of the assets [within the meaning of Code Section 409(d)(2)]
with respect to a Participant who continues employment with the corporation
acquiring such assets; or

 

(4)                                  The
date of the sale by the Employer or an Affiliated Employer of its interest in a
subsidiary [within the meaning of Code Section 409(d)(3)] to an entity
which is not an Affiliated Employer with respect to a Participant who continues
employment with such subsidiary.

 

The Administrative Committee may authorize distribution of a
Participant’s Elective Account where any of the events in Sections 4.5(b)(1) through
4.5(b)(4) has occurred, subject to all other requirements of the Plan
concerning distributions.

 

(c)                                  The Administrative Committee
shall adopt a procedure necessary to implement the salary reduction elections
provided for herein.

 

4.6                                 Rollover Contributions.

 

(a)                                  A Participant may
transfer, or cause to be transferred, to the Trust Fund all or part of a
distribution in cash or in kind which he receives from a trust qualified under Section 401(a) of
the Code, provided such distribution is an “Eligible Rollover Distribution,” as
defined in Section 6.13(b)(4).

 

(b)                                 The Administrative Committee
shall develop such procedures, and may require such information from the
Participant 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 4.6.  Upon approval by
the Administrative Committee, the amount transferred shall be deposited in the
Trust Fund and shall be credited to Rollover Account established and maintained
in such Participant’s name.

 

(c)                                  A Participant shall
always be fully vested in the balance in his Rollover Account.

 

15

 

ARTICLE V

 

ACCOUNTING AND
ALLOCATIONS

 

5.1                                 Individual Accounts.

 

Adequate records shall be established and
maintained to disclose the interest of each Participant in the Trust Fund.  Such records shall be in the form of
individual Accounts which shall be credited and charged in the manner provided
in the Plan.

 

5.2                                 Valuation of Trust Fund.

 

The assets of the Trust Fund shall be valued
at fair market value as of each Valuation Date. 
As to each investment fund subject to Participant direction in
accordance with Section 7.5, the earnings or losses thereof since the
preceding Valuation Date shall be allocated among the Accounts of Participants
holding shares or units of such fund pro
rata.  For Participants on
whose behalf directed brokerage accounts have been established pursuant to Section 7.5(e),
the earnings or losses of the assets held in such accounts shall be credited or
charged to such accounts, as the case may be, as of each Valuation Date.  Each Account shall be adjusted for
distributions and repayments since the immediately preceding Valuation Date.

 

5.3                                 Allocation of Contributions and
Forfeitures.

 

(a)                                  As of each Valuation
Date, any Elective Contributions received by the Trustee since the preceding
Valuation Date shall be credited to the Elective Accounts of the Participants
on whose behalf such contributions were made.

 

(b)                                 As of each Valuation
Date, any Matching Contributions received by the Trustee since the preceding
Valuation Date shall be credited to the Matching Accounts of the Participants
on whose behalf such contributions were made.

 

(c)                                  As of the last
Valuation Date in a Plan Year, the Employer’s Profit-Sharing contribution, if
any, for such year shall be allocated among the Accounts of Participants who
were employed by the Employer on the last day of such Plan Year pro rata in accordance with the relative
Compensation of each such Participant for such Plan Year.

 

(d)                                 Forfeitures arising
during a Plan Year shall first be used to reduce the Employer’s Matching
Contribution for such year and if any forfeitures then remain, they shall be
used to offset the Employer’s Profit-Sharing Contribution for such year.

 

16

 

5.4                                 Limitation on Annual Additions.

 

(a)                                  In no event shall any
Annual Addition with respect to a Participant for a Limitation Year exceed the
lesser of:

 

(1)                                  $30,000,
adjusted by allowable increases attributable to cost of living as prescribed by
the Secretary; or

 

(2)                                  25%
of such Participant’s Compensation for such Limitation Year.

 

(b)                                 In the event any
Participant is participating or has participated in a defined benefit plan of
an the Company or an Affiliated Employer, the Annual Addition with respect to
such Participant for any Limitation Year shall not exceed the amount permitted
by Section 415(e) of the Code, and if the sum of the “defined benefit
plan fraction” and the “defined contribution plan fraction” [as defined in said
Section 415(e)] shall exceed 1.0 in any Limitation Year for any such
Participant, the Employer shall adjust the numerator of the “defined
contribution plan fraction” so that the sum of both fractions shall not exceed
1.0 for such year, and the amount of the Annual Addition with respect to such
Participant for such year shall be reduced accordingly.  This Section 5.4(b) shall not apply
as to Annual Additions in Limitation Years beginning after December 31,
1999.

 

5.5                                 Annual Dollar Limitation on
Deferred Compensation.

 

(a)                                  A Participant’s
Deferred Compensation shall not exceed $9,500 for the taxable year of the
Participant.  This dollar limitation
shall be adjusted annually as provided in Code Section 415(d) pursuant
to regulations of the Secretary.  The
adjusted limitation shall be effective as of the beginning of each calendar
year.

 

(b)                                 In the event that the
dollar limitation provided for in Section 5.5(a) is exceeded, the
Administrative 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 Participant’s Elective Account or the Participant’s Deferred
Compensation for the Plan Year.  Income
or loss shall be allocated to such excess amount in accordance with Regulation Section 1.402(g)-1(e)(5),
excluding income or loss for the period between the end of such taxable year
and the date of distribution.  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 Elective Account or
the Participant’s Deferred Compensation for the Plan Year.

 

(c)                                  In the event that a
Participant is also a participant in (1) another qualified
cash-or-deferred arrangement [as defined in Code Section 401(k)], (2) a
simplified employee pension [as defined in Code Section 408(k)] or (3) a
salary reduction arrangement [within the meaning of Code

 

17

 

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 $9,500 [or such amount adjusted annually as provided in
Code Section 415(d) pursuant to regulations] for such Participant’s
taxable year, such Participant may, not later than March 1 following the
close of his taxable year, notify the Administrative Committee in writing of
such excess and request that his Deferred Compensation under this Plan be
reduced by an amount specified by him. 
Such amount may then be distributed in the same manner as provided in Section 5.5(b),
together with income or loss allocated thereto determined in accordance with
the procedure specified in Section 5.5(b).

 

5.6                                 Actual Deferral Percentage Tests.

 

(a)                                  For each Plan Year,
the annual allocation derived from Elective Contributions to a Participant’s
Elective Account shall satisfy one of the following tests:

 

(1)                                  The
Actual Deferral Percentage for the Highly Compensated Participant group for
such Plan Year shall not be more than the Actual Deferral Percentage of the
Non-Highly Compensated Participant group for such Plan Year multiplied by 1.25;
or

 

(2)                                  The
excess of the Actual Deferral Percentage for the Highly Compensated Participant
group for such Plan Year over the Actual Deferral Percentage for the Non-Highly
Compensated Participant group for such Plan Year shall not be more than 2
percentage points or such lesser amount determined pursuant to Treasury
Regulations to prevent the multiple use of this alternative limitation with
respect to any Highly Compensated Participant. 
Additionally, the Actual Deferral Percentage for the Highly Compensated
Participant group for such Plan Year shall not exceed the Actual Deferral
Percentage for the Non-Highly Compensated Participant group for such Plan Year
multiplied by 2.

 

(b)                                 For purposes of
Sections 5.6(a) and (d), a Highly Compensated Participant and a Non-Highly
Compensated Participant shall include any Participant eligible to make a
deferral election pursuant to Section 4.4, whether or not such deferral
election was made.

 

(c)                                  If 2 or more plans
which include cash-or-deferred arrangements are considered one plan for the
purposes of Code Section 401(a)(4) or 410(b), the cash-or-deferred
arrangements included in such plans shall be treated as one arrangement.

 

(d)                                 In the event that the
initial allocation of the Employer’s Elective Contributions does not satisfy
one of the tests set forth in Section 5.6(a) [after taking into
account any distributions pursuant to Sections 5.5(b) and (c)], the
Administrative Committee shall adjust the Employer’s Elective Contribution as
follows:  On or before the 15th day of
the third month following the end of each Plan Year, but in no event later than
the close of the following Plan Year, the amount necessary

 

18

 

to reduce the Elective Contributions of Highly Compensated Participants
to the point where one of such tests is satisfied, determined by reducing
Elective Contributions on behalf of Highly Compensated Participants in the
order of their Actual Deferral Percentages, beginning with the highest of such
percentages (the “Excess Elective Contributions”), shall be distributed among
such Highly Compensated Participants with the largest amount of Elective
Contributions taken into account in calculating the Actual Deferral Percentage
tests for the Plan Year in which such Excess Elective Contributions arose,
beginning with the Highly Compensated Participant with the largest amount of
such Elective Contributions and continuing in descending order until all such
Excess Elective Contributions have been allocated.  Income or loss shall be allocated to such
Excess Elective Contributions in accordance with Regulation Section 1.401(k)-1(f)(4)(ii),
excluding income or loss for the period between the end of the Plan Year in which
such Excess Elective Contributions arose and the date of distribution.

 

5.7                                 Contribution Percentage Tests.

 

(a)                                  For each Plan Year,
the annual allocation derived from Matching Contributions to a Participant’s
Matching Account shall satisfy one of the following tests:

 

(1)                                  The
Contribution Percentage for the Highly Compensated Participant group for such
Plan Year shall not be more than 125% of the Contribution Percentage of the
Non-Highly Compensated Participant group for such Plan Year; or

 

(2)                                  The
excess of the Contribution Percentage for the Highly Compensated Participant
group for such Plan Year over the Contribution Percentage for the Non-Highly
Compensated Participant group for such Plan Year shall not be more than 2
percentage points or such lesser amount determined pursuant to Treasury
Regulations to prevent the multiple use of this alternative limitation with
respect to any Highly Compensated Participant. 
Additionally, the Contribution Percentage for the Highly Compensated
Participant group for such Plan Year shall not exceed 200% of the Contribution
Percentage for the Non-Highly Compensated Participant group for such Plan Year.

 

(b)                                 For purposes of
Sections 5.7(a) and (d), a Highly Compensated Participant and a Non-Highly
Compensated Participant shall include any Participant eligible to make a
deferral election pursuant to Section 4.4, whether or not such deferral
election was made.

 

(c)                                  If 2 or more plans
which include matching contribution arrangements are considered one plan for
the purposes of Code Section 401(a)(4) or 410(b), the matching
contribution arrangements included in such plans shall be treated as one
arrangement.

 

19

 

(d)                                 In the event that the
initial allocation of the Employer’s Matching Contributions does not satisfy
one of the tests set forth in Section 5.7(a), the Administrative Committee
shall adjust the Employer’s Matching Contribution as follows:  On or before the 15th day of the third month
following the end of each Plan Year, but in no event later than the close of
the following Plan Year, the amount necessary to reduce the Matching
Contributions of Highly Compensated Participants to the point where one of such
tests is satisfied, determined by reducing Matching Contributions on behalf of
Highly Compensated Participants in the order of their Contribution Percentages,
beginning with the highest of such percentages (the “Excess Matching
Contributions”), shall be distributed among such Highly Compensated
Participants with the largest amount of Matching Contributions taken into
account in calculating the Contribution Percentage tests for the Plan Year in
which such Excess Matching Contributions arose, beginning with the Highly
Compensated Participant with the largest amount of such Matching Contributions
and continuing in descending order until all such Excess Matching Contributions
have been allocated.  Income or loss
shall be allocated to such Excess Matching Contributions in accordance with Regulation
Section 1.401(m)-1(e)(3)(ii), excluding income or loss for the
period between the end of the Plan Year in which such Excess Matching
Contributions arose and the date of distribution.

 

5.8                                 Multiple Use Limit.

 

If the Actual Deferral Percentage tests are
satisfied by use of the limitation in Section 5.6(a)(2) and, in the
same Plan Year, the Contribution Percentage tests are satisfied by use of the
limitation in Section 5.7(a)(2), and if the Aggregate Limit is exceeded,
then the Contribution Percentage of Highly Compensated Participants receiving
Matching Contributions shall be adjusted in the manner described in Section 5.7(d) until
the Aggregate Limit is not exceeded.  The
term “Aggregate Limit” shall mean, as to a Plan Year, the greater of:

 

(a)                                  The
sum of (1) 1.25 times the greater of (i) the Actual Deferral
Percentage of the Highly Compensated Participants in the Plan for such Plan
Year or (ii) the Contribution Percentage of such Highly Compensated
Participants for such Plan Year and (2) the lesser of (i) 2
percentage points plus the lesser of such Actual Deferral Percentage or such
Contribution Percentage or (ii) 2 times the lesser of such Actual Deferral
Percentage or such Contribution Percentage.

 

(b)                                 The
sum of (1) 1.25 times the lesser of (i) the Actual Deferral
Percentage of the Highly Compensated Participants in the Plan for such Plan
Year or (ii) the Contribution Percentage of such Highly Compensated
Participants for such Plan Year and (2) the lesser of (i) 2
percentage points plus the greater of such Actual Deferral Percentage or such
Contribution Percentage or (ii) 2 times the greater of such Actual
Deferral Percentage or such Contribution Percentage.

 

20

 

5.9                                 Statements of Accounts.

 

Each Participant shall receive a statement of
the balance in his Accounts not less than quarterly.

 

21

 

ARTICLE VI

 

DISTRIBUTION
OF BENEFITS

 

6.1                                 Termination of Employment on
Account of Retirement, Death or Disability.

 

If a Participant’s employment with the
Employer is terminated on or after he attains his Normal Retirement Date, or on
account of death or Disability, the entire balance in his Accounts shall, as
soon as practicable thereafter, be distributed to or for his benefit, or to or
for the benefit of his Beneficiary (subject to Section 6.4), as the case
may be, in the manner provided in Section 6.3.

 

6.2                                 Other Termination of Employment.

 

(a)                                  If, on the
termination of a Participant’s employment for any reason other than as
specified in Section 6.1, (1) the vested amount of the balance in his
Accounts is not greater than $3,500 or (2) he files with the
Administrative Committee a written request for the payment of his entire vested
amount, the Administrative Committee shall direct the Trustee to pay out such
Participant’s vested amount as soon as practicable.  Upon payment of such amount, any nonvested
portion of his Profit-Sharing Account shall be immediately forfeited.  Such forfeited amount shall be reinstated (by
an additional Employer contribution for this purpose) if the Participant
returns to the employ of the Employer and repays the full amount of the
distribution prior to the earlier of:

 

(1)                                  5
years after he is subsequently re-employed by the Employer; or

 

(2)                                  The
close of the first period of 5 consecutive One-Year Breaks in Service
commencing after such distribution.

 

The Administrative Committee shall give timely notification to any
rehired person, if such person is eligible to make a repayment, of the
consequences of not making such repayment.

 

(b)                                 If a Participant
terminates employment at the time there are no balances in his Elective
Account, Matching Account and Rollover Account and the vested balance in his
Profit-Sharing Account is zero, upon such termination of employment he shall be
deemed to have received a distribution of the entire vested balance in his
Accounts, and in the event he should become re-employed by the Employer within
the time specified for repayment in Section 6.2(b)(2), the balance in his
Profit-Sharing Account shall be reinstated (by an additional Employer
contribution for this purpose).

 

6.3                                 Method of Making Distributions.

 

Distribution of the vested credit balance in
a Participant’s Accounts shall be made to or for his benefit, or to or for the
benefit of his Beneficiary, by payment in a lump sum.  Notwithstanding the preceding sentence, if
distribution must begin to a Participant in accordance

 

22

 

with Section 6.11, he may elect to receive payment in
substantially equal annual installments over a period certain equal to his life
expectancy, or the joint life expectancy of himself and his designated
beneficiary, in accordance with Treasury regulations under Section 401(a)(9) of
the Code, and for this purpose life expectancy may not be recalculated
annually.

 

6.4                                 Special Provisions Concerning
Married Participants.

 

Notwithstanding any Beneficiary designation
in effect, if a Participant is married at a time of his death, his vested
interest in his Accounts shall be payable to his surviving spouse, unless he
has designated some other Beneficiary and said surviving spouse has given her
consent to the payment of such interest to such Beneficiary, which consent
shall acknowledge the effect thereof. 
Any such consent (a) shall be in writing, (b) shall be
witnessed by a notary public or by a representative of the Plan and (c) shall
be effective only with respect to the spouse giving it.  No consent shall be required where it is
established to the satisfaction of the Administrative Committee that the
Participant’s surviving spouse cannot be located or because of such other
circumstances as the Secretary shall have prescribed by regulations.

 

6.5                                 Forms,
Etc.

 

Each Participant who retires, resigns or is
discharged, and the Beneficiary of any deceased Participant, shall be required
to complete such administrative forms and furnish such proof as the
Administrative Committee shall deem necessary and appropriate for purposes of
administering the Plan.

 

6.6                                 Change of Address.

 

It shall be the duty of each retired,
resigned or discharged Participant, and any Beneficiary of any deceased
Participant, to keep on file with the Administrative Committee a correct
mailing address or to claim in person each benefit payment as it becomes due.

 

6.7                                 Incapacity.

 

If the Administrative Committee determines
that any retired, resigned or discharged Participant, or any Beneficiary of a
deceased Participant, is unable to care for his affairs because of illness or
injury or because he is a minor, any benefits due to him may be paid to the
spouse or parent of such Participant or Beneficiary, or to his legal
representative, duly appointed guardian or some other person designated to
receive such benefits on his behalf.

 

6.8                                 Assignment or Alienation of Benefits.

 

(a)                                  No benefit or
interest available hereunder shall be subject to assignment or alienation,
either voluntarily or involuntarily.

 

23

 

(b)                                 Section 6.8(a) shall
not apply to the creation, assignment or recognition of a right to any benefit
payable with respect to a participant pursuant to a domestic relations order,
unless such order is determined to be a “qualified domestic relations order,”
as defined in Section 414(p) of the Code, or any domestic relations order entered
before January 1, 1985. 
Distribution of all or part of a Participant’s benefits to an alternate
payee under such an order may be made at any time, irrespective of whether such
Participant has attained the “earliest retirement age” [within the meaning of Section 414(p)(4)(B) of
the Code].

 

(c)                                  Section 6.8(a) shall
also not apply to any offset of a Participant’s benefits provided under the
Plan against an amount that he is ordered or required to pay to the Plan if:

 

(1)                                  The
order or requirement to pay arises (i) under a judgment of conviction for
a crime involving the Plan; (ii) under a civil judgment (including a
consent order or decree) entered by a court in an action brought in connection
with a violation (or alleged violation) of Part 4 of Subtitle B of Title I
of ERISA; or (iii) pursuant to a settlement agreement between the
Secretary of Labor and such Participant, or a settlement agreement between the
Pension Benefit Guaranty Corporation and such Participant, in connection with a
violation (or alleged violation) of Part 4 of such subtitle by a fiduciary
or any other person;

 

(2)                                  Such
judgment, order, decree, or settlement agreement expressly provides for the
offset of all or part of the amount ordered or required to be paid to the Plan
against such Participant’s benefits provided under the Plan; and

 

(3)                                  In
a case in which the survivor annuity requirements of Section 401(a)(11) of
the Code apply with respect to distributions from the Plan to such Participant,
if such Participant has a spouse at the time at which such offset is to be
made, (i) either such spouse has consented in writing to such offset and
such consent is witnessed by a notary public or representative of the Plan [or
it is established to the satisfaction of a Plan representative that such
consent may not be obtained by reason of circumstances described in Section 417(a)(2)(B) of
the Code], or an election to waive the right of such spouse to either a “qualified
joint and survivor annuity” [within the meaning of Section 417(b) of
the Code] or a “qualified preretirement survivor annuity” [within the meaning
of section 417(c) of the Code] is in effect in accordance with the
requirements of Section 417(a) of the Code; (ii) such spouse is
ordered or required in such judgment, order, decree or settlement to pay an
amount to the Plan in connection with a violation of Part 4 of such
subtitle; or (iii) in such judgment, order, decree, or settlement, such
spouse retains the right to receive the survivor annuity under such a qualified
joint and survivor annuity provided pursuant to Section 401(a)(11)(A)(i) of
the Code and

 

24

 

under such a qualified pre-retirement
survivor annuity provided pursuant to Section 401(a)(11)(A)(ii) of
the Code, determined in accordance with Section 401(a)(13)(D) of the
Code.

 

This Section 6.8(c) shall apply to judgments, orders and
decrees issued, and settlement agreements entered into, on or after August 5,
1997.

 

6.9                                 Restrictions on Distributions.

 

Notwithstanding any other provision of the
Plan, the Administrative Committee shall not direct the Trustee distribute, or
cause to be distributed, a Participant’s interest in his Accounts, if such
interest exceeds $3,500, without the recipient’s consent prior to his Normal
Retirement Date.  If the value of a
Participant’s vested interest in his Accounts, determined at the time of a
distribution to such Participant, exceeds $3,500, then such value at any
subsequent time shall be deemed to exceed $3,500.

 

6.10                           Commencement of Benefits.

 

Unless a Participant or Beneficiary otherwise
elects, payment of benefits under the Plan to such Participant or Beneficiary
shall commence not later than the 60th day after the latest to close of the
Plan Year in which (a) the date on which the Participant attains his
Normal Retirement Date, (b) occurs the 10th anniversary of the year in
which the Participant commenced participation in the Plan or (c) the
Participant terminates his service with the Employer.

 

6.11                           Required Distributions.

 

Notwithstanding any other provision of this
Plan:

 

(a)                                  The
entire interest of each Participant in the Plan (1) shall be distributed
to such Participant not later than the Required Beginning Date (as hereinafter
defined) or (2) shall be distributed beginning not later than the Required
Beginning Date, or over a period not extending beyond the life expectancy of
such Participant or the life expectancy of such Participant and a Designated
Beneficiary.

 

(b)                                 If
the distribution of a Participant’s interest in the Plan has begun in
accordance with Section 6.11(a)(2) and such Participant dies before
his entire interest has been distributed to him, the remaining portion of his
interest shall be distributed at least as rapidly as under the method of
distribution being used under Section 6.11(a)(2) as of the date of
his death.

 

(c)                                  If
a Participant dies before distribution of his interest in the Plan has begun
under Section 6.11(a)(2), the entire such interest shall be distributed
within 5 years after his death.  Any
portion of a deceased Participant’s interest in the Plan which is

 

25

 

payable to, or for the benefit of, a
Designated Beneficiary shall, for purposes of the preceding sentence, be
treated as distributed on the date on which distribution of such portion begins
provided (1) such portion shall actually be distributed (in accordance
with regulations of the Secretary) over a period not extending beyond such
Designated Beneficiary’s life expectancy and (2) actual distribution of such
portion begins not later than one year after the date of such deceased
Participant’s death (or such later date as the Secretary may be regulations
prescribe), except that if any such Designated Beneficiary is the surviving
spouse of such deceased Participant, distribution of the portion of the
deceased Participant’s interest in the Plan to or for the benefit of such
surviving spouse need not begin earlier than the date on which such deceased
Participant would have attained age 70-1/2.  If such surviving spouse dies before
distribution of such portion were to begin, the preceding sentence shall be
applied, with respect to such portion, as if such surviving spouse were the
Participant.

 

(d)                                 The
“Required Beginning Date,” for purposes of this Section 6.11, shall mean,
with respect to a Participant, April 1 of the calendar year following the
calendar year in which such Participant attains age 70-1/2.  Notwithstanding the preceding sentence,
except for a Participant who is a “5% owner” [as defined in Section 416(i)(1)(B)(i) of
the Code], the Required Beginning Date of a Participant who attains age 70-1/2
on or after January 1, 2001 shall be April 1 of the calendar year
following the later of (i) the calendar year in which he attains age 70-1/2
or (ii) the calendar year in which he terminates employment.

 

(e)                                  The
life expectancy of a Participant or such Participant’s spouse shall not be
redetermined annually for purposes of this Section 6.11.

 

(f)                                    For
purposes of this Section 6.11, the term “Designated Beneficiary” shall
have the meaning set forth in Proposed Regulation Section 1.401(a)(9)-1,
Part D.

 

(g)                                 Notwithstanding
any other provision of this Section 6.11, distributions from the Plan
shall be made in accordance with Section 401(a)(9) of the Code and
the regulations thereunder, including Proposed Regulation Section 1.401(a)(9)-2,
and the provisions of the Plan reflecting Section 401(a)(9) and such
regulations shall override any distribution options in the Plan inconsistent
with Section 401(a)(9) and such regulations.

 

(h)                                 In
the event of any conflict between the (1) provisions of this Section 6.11
and (2) the provisions of Section 401(a)(9) of the Code and the
regulations thereunder [including without limitation Proposed Regulation Section 1.401(a)(9)-2],
the provisions referred to in Clause (2) herein shall be controlling
and all distributions made under the Plan shall be in accordance with such
provisions.

 

26

 

6.12                           Death of Beneficiary.

 

If any Beneficiary dies after having received
some but less than all of his entire interest in the Trust Fund, the
undistributed portion thereof shall be paid to such Beneficiary’s estate.

 

6.13                           Direct Rollovers of Eligible
Rollover Distributions.

 

(a)                                  Notwithstanding any
other provision of the Plan to the contrary which would otherwise limit a
Distributee=s
election under this Section 6.13, a Distributee may elect, at the time and
in the manner permitted by the Administrative Committee, to have any portion of
an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover.

 

(b)                                 For purposes of this Section 6.13:

 

(1)                                  “Direct
Rollover” shall mean a payment by the Plan to the Eligible Retirement Plan
specified by a Distributee.

 

(2)                                  “Distributee”
shall mean a Participant who is an Employee or former Employee.  In addition, (i) such a Participant’s
spouse or former spouse who is the alternate payee under a “qualified domestic
relations order,” as defined in Section 414(p) of the Code, and (ii) 
the surviving spouse of a deceased Participant who was an Employee or former
Employee, shall be Distributees with regard to the interest of such spouse or
former spouse in the Plan.

 

(3)                                  “Eligible
Retirement Plan” shall mean an individual retirement account described in Section 408(a) of
the Code, an individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the Code, or
a qualified trust described in Section 401(a) of the Code, which
accepts a Distributee’s Eligible Rollover Distribution.  However, in the case of an Eligible Rollover
Distribution to a Distributee who is surviving spouse, an “Eligible Retirement
Plan” shall mean an individual retirement account or individual retirement
annuity.

 

(4)                                  “Eligible
Rollover Distribution” shall mean any distribution of all or any portion of
the balance to the credit of the Distributee under the Plan, except that an
Eligible Rollover Distribution shall not include:  (i) any distribution which is one of a
series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the Distributee and the Distributee’s
designated beneficiary, or for a specified period of 10 years or more; (ii) any
distribution to the extent

 

27

 

such distribution is required under Section 401(a)(9) of
the Code; and (iii) the portion of any distribution which is not
includible in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities).  The enumeration in the preceding sentence of
any form of payment shall not imply that any person has the right to receive
benefits under the Plan in such form unless otherwise specifically provided
under the Plan.

 

6.14                           Increase in $3,500 Threshold.

 

Effective for Plan Years beginning after December 31,
1997, “$5,000” shall be substituted for “$3,500” wherever the latter appears in
the Plan.

 

28

 

ARTICLE VII

 

TRUST AND
TRUSTEE

 

7.1                                 Establishment of Trust.

 

The Trustee shall receive all contributions
paid to it by the Employer, and shall hold, manage, invest, reinvest and
administer all such contributions in trust pursuant to the provisions of the
Trust Agreement to which the Trustee is a party.

 

7.2                                 Resignation and Removal of Trustee.

 

In accordance with the procedure specified in
the Trust Agreement to which a Trustee is a party, such Trustee shall have the
right to resign at any time by giving written notice to the Employer which is a
party to such agreement, and may be removed by the board of directors of such
Employer upon written notice.  In the event
of removal of or resignation of a Trustee, the board of directors of the
Employer which is a party to the Trust Agreement under which such trustee was
serving may appoint a successor Trustee who shall have the same powers and
duties conferred upon its predecessor.

 

7.3                                 Powers and Duties of Trustee.

 

The Trustee shall have such powers and duties
as are specified in the Trust Agreement to which it is a party.

 

7.4                                 Payment of Compensation and
Expenses.

 

Subject to the provisions of the Trust
Agreement to which it is a party:

 

(a)                                  No
Trustee who is an officer or employee of the Employer shall be paid any
compensation for serving as Trustee.  Any
institutional Trustee shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Employer and such Trustee, and
such compensation shall be paid by the Employer, unless the Administrative
Committee directs that it be paid from the Trust Fund.

 

(b)                                 All
taxes of any and all kinds whatsoever that may be levied or assessed under
existing or future laws upon, or in respect of, the Trust Fund or the income
thereof shall be paid from the Trust Fund. 
To the extent such expenses or taxes are paid from the Trust Fund, they
shall be charged against Participants’ Accounts pro rata.

 

29

 

7.5                                 Directed Investment of Accounts.

 

(a)                                  Subject to a
procedure established and applied in a uniform nondiscriminatory manner, all
Participants shall be permitted to direct the Trustee as to the investment of
their Account balances in specific investments permitted under the Trust
Agreement and designated by the Administrative Committee.  For purposes of this Section 7.5, the
term “Participant” includes the Beneficiary or Beneficiaries of a deceased
Participant.  To the extent so directed,
the Trustee is relieved of its fiduciary responsibilities as provided in Section 404
of ERISA and the regulations thereunder.

 

(b)                                 Neither the Trustee
nor any other persons shall be under any duty to question any direction of a
Participant with respect to his investment directions as to his Accounts or to
review any securities or other property, real or personal, or to make any
suggestions to the Participant in connection therewith, and the Trustee shall
comply as promptly as practicable with directions given by the Participant
hereunder.  Any such direction may be of
a continuing nature or otherwise and may be revoked by the Participant at any
time in such form as the Trustee may require. 
The Trustee shall not be responsible or liable for any loss or expense
which may arise from or result from compliance with any directions from the
Participant nor shall the Trustee be responsible for, or liable for, any loss
or expense which may result from the Trustee’s refusal or failure to comply
with any directions from the Participant. 
The Trustee may refuse to comply with any direction from the Participant
in the event the Trustee, in his sole and absolute discretion, deems such
directions improper by virtue of applicable law.  Any costs and expenses related to compliance
with a Participant’s directions shall be borne by the Participant’s Directed
Investment Accounts.

 

(c)                                  In lieu of directing
the investment of his Accounts pursuant to Section 7.5(a), a Participant
may direct the Trustee to transfer the balances in his Accounts to separate
brokerage accounts registered in the name of the trustee for such Participant’s
benefit, at a broker-dealer specified by the Administrative Committee.  Each such brokerage account shall be
established in such a fashion as to permit the Participant who is the
beneficial owner thereof to direct the broker-dealer as to how the assets of
such account should be invested from among specific investments permitted under
the Plan.  All trading commissions, fees
imposed by such broker-dealer and other expenses relating to such a brokerage
account shall be charged against such account. 
Sections 7.5(a) and 7.5(b) shall apply to each such brokerage
account.

 

(d)                                 The Administrative
Committee shall have the authority to prescribe reasonable rules and
regulations, uniformly applicable, concerning the operation of this Section 7.5.

 

30

 

ARTICLE VIII

 

ADMINISTRATION

 

8.1                                 Administrative Committee.

 

(a)                                  The Plan shall be
administered by an Administrative Committee appointed by the Company and
consisting of 4 members.  Each
Administrative Committee member shall serve at the pleasure of the
Company.  The members of the
Administrative Committee shall be “named fiduciaries” with respect to the Plan
within the meaning of Section 402(a) of ERISA.  An Administrative Committee member may resign
at any time by giving at least 30 days written notice to the Company, and the
Company may remove a member at any time with or without cause by giving him
notice in writing to such effect.  The
Company may fill any vacancy in the membership of the Administrative Committee
and shall give prompt written notice thereof to the Trustee and the other
Administrative Committee members.  While
there is a vacancy in the membership of the Administrative Committee, the
remaining Administrative Committee members shall have the same powers as the
full Committee until the vacancy is filled.

 

8.2                                 Powers, Rights and Duties of
Administrative Committee.

 

In controlling and managing the operation and
administration of the Plan, the Administrative Committee shall have the
following powers, rights and duties in addition to those vested in it elsewhere
in the Plan:

 

(a)                                  To
adopt such regulations and rules of procedure, consistent with the
provisions of the Plan as may be necessary or desirable for the proper and
efficient administration of the Plan;

 

(b)                                 To
enforce the Plan in accordance with its terms and with such applicable rules and
regulations as may be adopted by the Administrative Committee, which shall be
uniformly applied to all Participants and Beneficiaries similarly situated;

 

(c)                                  To
determine all questions arising under the Plan, including questions relating to
the eligibility of Employees and the benefits of Participants and their
Beneficiaries, and to remedy ambiguities, inconsistencies or omissions;
provided, that the Administrative Committee shall not, through interpretation
of the Plan or action thereunder, increase the responsibilities imposed on the
Trustee without the consent of the Trustee;

 

(d)                                 To
maintain and keep adequate records concerning the Plan and concerning its
proceedings and acts in such form and detail as the Administrative Committee
may deem necessary or desirable;

 

31

 

(e)                                  To
direct the Trustee as to the investment of Trust Fund assets, the payment of
benefits and other matters reserved to the Administrative Committee under the
Plan; and

 

(f)                                    To
appoint one or more persons to issue directions and execute documents on behalf
of the Administrative Committee.

 

8.3                                 Delegation and Allocation of
Administrative Committee’s Powers.

 

The Administrative Committee shall have the
right and authority:

 

(a)                                  To
appoint an investment manager for the Trust Fund, and to delegate to such
investment manager the authority to manage, acquire, dispose of, invest and
reinvest the Trust Fund; provided, that the Administrative Committee shall not
appoint any person as investment manager other than (1) a person
registered under the Investment Advisers Act of 1940, (2) a bank, or (3) a
qualifying insurance company.  Any
investment manager so appointed shall acknowledge in writing that he or it is a
fiduciary with respect to the Plan.  With
respect to the assets over which an investment manager has investment
responsibility, the investment manager shall possess all and administrative
powers and responsibilities granted to the Trustee hereunder.  The Trustee shall have no investment responsibility
with respect to the assets subject to the investment responsibility of an
investment manager, and shall have no duty to inquire into any directions from
such investment manager, to solicit such directions or to review and follow the
investments made pursuant to any such directions, except to the extent provided
by law;

 

(b)                                 To
employ one or more persons to render advice with respect to any responsibility
or responsibilities of the Administrative Committee under the Plan, including
without limitation legal counsel, licensed physicians and accountants;

 

(c)                                  To
delegate any of such duties or responsibilities to other persons, including
without limitation to officers or employees of the Employer.  In the case of any such delegation, the
Administrative Committee shall not be liable for any act or omission of another
person in carrying out his allocated or delegated duties except to the extent
the Administrative Committee:

 

(1)                                  Violated
the provisions of ERISA:

 

(A)                              With respect to such
delegation;

 

(B)                                With respect to the
establishment or implementation of the procedure for delegating
responsibilities; or

 

32

 

(C)                                In continuing the
delegation; or

 

(2)                                  Would otherwise be
liable under the provisions of ERISA.

 

8.4                                 Compensation and Expenses of
Administrative Committee.

 

No fee or compensation shall be paid to any
Employee for his services as a member of the Administrative Committee.  Any expenses properly incurred by the
Administrative Committee shall be reimbursed or paid by the Company, unless
reimbursed or paid by the Trustee from the Trust Fund in accordance with the
Trust Agreement.  To the extent such
expenses are paid from the Trust Fund, they shall be charged against
Participants’ Accounts pro rata.

 

8.5                                 Claims Procedure.

 

The Administrative Committee shall formulate
a claims procedure whereby any Employee or Participant who feels aggrieved with
respect to any of his rights under the Plan may have his grievance heard or his
claim considered.  Such procedure shall
afford the Employee or Participant with an opportunity for appeal of any
decision which is adverse to him at the initial hearing level, and shall in all
respects comply with the provisions of ERISA and the applicable rules and
regulations of the Department of Labor.

 

8.6                                 Administrative Committee Member
Who Is a Participant.

 

Any member of the Administrative Committee
who is a Participant in the Plan may not decide any matter concerning
distributions of any kind to be made to him unless such decision could be made
by him under the Plan if he were not the Administrative Committee.

 

8.7                                 Agent for Service of Process.

 

The Company shall be the agent for service of
process with respect to the Plan.

 

8.8                                 Capacity.

 

Any person may serve in more than one
fiduciary capacity with respect to the Plan, including service both as Trustee
and as a member of the Administrative Committee.

 

33

 

ARTICLE IX

 

FIDUCIARY
RESPONSIBILITY

 

9.1                                 Exercise of Fiduciaries’ Duties.

 

The Plan’s fiduciaries shall discharge their
duties hereunder solely in the interest of Participants and their
Beneficiaries, and:

 

(a)                                  For the exclusive
purpose of:

 

(1)                                  Providing
benefits to Participants and their Beneficiaries; and

 

(2)                                  Defraying
reasonable expenses of administering the Plan;

 

(b)                                 With
the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with
like aims; and

 

(c)                                  By
diversifying the investments of the Trust Fund so as to minimize the risk of
large losses, unless under the circumstances it is clearly prudent not to do
so.

 

9.2                                 Prohibited Transactions.

 

Except as expressly permitted by ERISA, a
fiduciary shall not:

 

(a)                                  Cause
the Plan to engage in a transaction, if he knows or should know that such
transaction constitutes a direct or indirect:

 

(1)                                  Sale
or exchange, or leasing, of any property between the Plan and a party-in-interest
or disqualified person;

 

(2)                                  Lending
of money or other extension of credit between the Plan and a party-in-interest
or disqualified person;

 

(3)                                  Furnishing
of goods, services, or facilities between the Plan and a party-in-interest or
disqualified person; or

 

(4)                                  Transfer
to, or use by or for the benefit of, a party-in-interest or disqualified
person, of any assets of the Plan;

 

(b)                                 Deal
with the assets of the Plan in his own interest or for his own account;

 

34

 

(c)                                  In
his individual or any other capacity act in any transaction involving the Plan
on behalf of a party (or represent a party) whose interests are adverse to the
interests of the Plan or the interests of the Participants or Beneficiaries; or

 

(d)                                 Receive
any consideration for his own personal account from any party dealing with the
Plan in connection with a transaction involving the assets of the Plan.

 

9.3                                 Acts of Co-fiduciaries.

 

No fiduciary to whom duties or
responsibilities under the Plan are charged shall be liable or responsible for
the acts or omissions of another fiduciary unless:

 

(a)                                  He
knowingly participates in or attempts to conceal the act or omission of the
other fiduciary and he knows the act or omission is a breach of fiduciary
responsibility by the other fiduciary;

 

(b)                                 He
has knowledge of a breach by the other fiduciary and fails to make reasonable
efforts to remedy the breach; or

 

(c)                                  His
breach of his own fiduciary responsibility permits the other fiduciary to
commit a breach.

 

9.4                                 Bonding.

 

Each fiduciary with respect to the Plan and
every other person who handles funds or other property of the Plan shall be
bonded in an amount which is not less than the greater of 10% of the assets of
the Plan or $1,000; provided, that in no event shall such bond be required to be
an amount in excess of $500,000.

 

9.5                                 Indemnification.

 

The Employer shall jointly and severally
indemnify the Trustee (other than an institutional Trustee) and the members of
Administrative Committee, to the fullest extent permitted by the law, against any
and all claims, losses, damages, liability and expense arising out of any act
or failure to act on the part of such Trustee or Administrative Committee
members.

 

35

 

ARTICLE X

 

AMENDMENT; MERGER, CONSOLIDATION OR

TRANSFER OF ASSETS; TERMINATION; NO REVERSION
IN EMPLOYER

 

10.1                           Amendment.

 

The boards of directors of the Company shall
have the right at any time, and from time to time, to amend, in whole or in
part, any or all of the provisions of the Plan; provided that no such amendment
shall:

 

(a)                                  Authorize
or permit any part of the Trust Fund to be used for or diverted to purposes
other than for the exclusive benefit of the Participants or their
Beneficiaries;

 

(b)                                 Cause
any reduction in the amount theretofore credited to the Account of any
Participant, or cause or permit any portion of the Trust Fund to revert to or
become the property of the Employer; or

 

(c)                                  In
the case of any amendment which affects the rights, duties or responsibility of
the Trustee, increase or otherwise change such rights, duties or
responsibilities without the Trustee’s prior written consent.

 

An amendment shall become effective upon authorization by resolutions
of such boards of directors and execution by the Employer of an appropriate
written instrument and, if the rights or duties of the Trustee are affected,
consent to the amendment by the Trustee. 
If any amendment changes the vesting schedules set forth in Sections
2.24 or 2.32, any Participant with 3 or more Years of Service may, by filing a
written request with the Administrative Committee within 60 days after he has
received notice of such amendment, elect to have the vested percentage of his
Profit-Sharing Account computed under the vesting schedule in effect prior
to such amendment.

 

10.2                           Merger, Consolidation, or Transfer
of Assets.

 

Neither the Plan nor the Trust shall be
merged or consolidated with, nor shall any assets or liabilities be transferred
to, any other plan, unless the benefits payable to each Participant if the Plan
was terminated immediately after such action would be equal to or greater than
the benefits to which such Participant would have been entitled if the Plan had
been terminated immediately before such action.

 

36

 

10.3                           Complete Discontinuance of
Contributions; Termination.

 

(a)                                  The board of
directors of each Employer shall have the right at any time to discontinue
completely such Employer’s contributions hereunder or to terminate the Plan,
and the Trust created hereby, as they apply to Participants employed or
formerly employed by such Employer, and their respective Beneficiaries,
completely or partially, by delivering to the Trustee written notice
thereof.  In the event of such a complete
discontinuance of contributions, or such a complete or partial termination,
affected Participants shall become fully vested in their Accounts if not
already fully vested.

 

(b)                                 Upon final termination
of the Plan, the Trustee shall distribute all assets remaining in the Trust,
after payment of any expenses properly chargeable against the Trust, to the
Participants or Beneficiaries in accordance with the Account balances of each
as of the date of such termination in such manner as the Trustee shall
determine.  Until completion of such
liquidation and distribution, the Trustee shall continue to have all of the
powers and duties provided in the Plan.

 

10.4                           No Reversion in Employer.

 

(a)                                  The Employer shall
have no beneficial interest in the Trust Fund and no part of the Trust Fund shall
revert or be repaid to the Employer, directly or indirectly.

 

(b)                                 Employer contributions
under this Plan are expressly conditioned upon the deductibility of such
contributions under Section 404 of the Code.  Notwithstanding Section 10.4(a) or
any other provision of the Plan, upon the Employer’s written request, a
contribution which was made by a mistake of fact, or conditioned upon the
deductibility of the contribution, shall be returned to the Employer by the
Trustee within one year after the mistaken payment of such contribution or the
disallowance of the deduction (to the extent disallowed), whichever is
applicable.  Earnings attributable to a
contribution which occurred due to a mistake of fact or conditioned upon
deductibility may not be returned to the Employer and losses attributable
thereto shall reduce the amount to be so returned.

 

37

 

ARTICLE XI

 

LOANS TO PARTICIPANTS

 

11.1                           In
General.

 

(a)                                  In the sole
discretion of the Administrative Committee, the Administrative Committee may
direct the Trustee to make a bona fide loan to a Participant, upon such terms,
security, interest, and conditions as the Administrative Committee deems
appropriate, provided, however, that all loans granted hereunder:

 

(1)                                  Are
available to all potential borrowers on an equivalent basis; and

 

(2)                                  Are
made in accordance with and subject to all the provisions of this Article XII.

 

(b)                                 The minimum initial
amount of any loan shall be $1,000.

 

(c)                                  Each loan shall be
charged against the borrower’s Elective Account, Matching Account, vested
Profit-Sharing Account and Rollover Account, as the case may be, in proportion
to the source of funds used to provide such loan from such Accounts.

 

11.2                           Interest.

 

All loans pursuant to this Article XI
shall be considered Trust Fund investments, and as such shall bear interest at
a reasonable rate, as determined by the Administrative Committee.

 

11.3                           Maximum
to be Loaned.

 

Loans to a borrower made pursuant to this Article XII
(when added to the outstanding balance of all other loans made to such borrower
by the Plan, or by any other qualified plan maintained by the Company or any
Affiliated Employer) shall be limited to the lesser of:

 

(a)                                  $50,000,
reduced by the excess (if any) of the highest outstanding balance of loans from
the Plan to the borrower during the one-year period ending on the day before
the date on which such loan is made, over the outstanding balance of loans from
the Plan to the borrower on the date on which such loan was made; or

 

(b)                                 One half of the sum of
the vested balance of the borrower’s Accounts.

 

For purposes of the above limits, all plans of the Company and any
Affiliated Employers shall be considered one plan.

 

38

 

11.4                           Repayment.

 

The period for repayment of any such loan or
loans shall be arrived at by mutual agreement between the Administrative
Committee and the borrower pursuant to a uniform, nondiscriminatory policy, but
in no event shall the term of any such loan exceed a period of 60 months from
the effective date of the loan. 
Repayments of any loan shall be made no less frequently than quarterly,
and shall be by payroll deduction for any borrower who is an Employee.  Repayment of a loan shall be credited to the
borrower’s Accounts in proportion to the sources of funds used to provide such
loan from such Accounts.

 

11.5                           Truth-in-Lending.

 

Where required by law, every Participant or
Beneficiary of a deceased Participant receiving a loan hereunder shall receive
a statement clearly reflecting the charges involved in each loan transaction,
which statement shall also include the dollar amount and annual interest rate
of any finance charge.

 

11.6                           Purpose
of Loan.

 

All applications for loans shall state the
purpose for which the loan is sought. 
The Administrative Committee may approve a loan for any reasonable
purpose, provided that the Administrative Committee is satisfied as to the
potential borrower’s ability to repay the loan and provided further that the
Administrative Committee’s decision to approve or deny a loan shall not be
based upon any criteria which have the effect of discriminating for or against
any group or groups of potential borrowers

 

11.7                           Collateral Security.

 

Notwithstanding any other provision of the
Plan to the contrary, in the event of a loan the Administrative Committee shall
require or take such security from the borrower as shall be available, feasible
or practical under all of the circumstances, uniformly administered, but in any
and all events and whether or not any other security shall be obtained or shall
be obtainable, the Administrative Committee shall always take and have as
collateral security a security interest in one half of said borrower’s entire
vested right, title and interest in his Accounts and in this connection shall
also have the right (i) upon default in payment of any installment due
under the terms of repayment of such loan to accelerate (with or without
notice) the unpaid indebtedness of any such loan and to offset the amount of
such indebtedness against any distribution then due or to become due to the
borrower, but if no distribution is then due, or becoming due, then upon notice
to the borrower, to debit the borrower’s Accounts by any such amount, and (ii) upon
termination of the borrower’s employment with the Employer or other event
permitting or requiring distribution, to accelerate (with or without notice)
such indebtedness and to pay or cause payment to the Trust of the entire unpaid
amount of principal and accrued interest from any benefits then payable or
distributable to the borrower.  If such

 

39

 

applications do not fully satisfy the borrower’s indebtedness, he shall
remain liable for and continue to make payments on any unpaid balance still
due.

 

11.8                           Rules and Regulations.

 

The Administrative Committee shall have the
authority to prescribe rules and regulations for the administration of
this Article XI.  No such rules or
regulations shall discriminate in favor of borrowers who are Highly Compensated
Participants.  All such rules and
regulations shall be in writing, shall be communicated to all Participants and
Beneficiaries of deceased Participants and shall be considered part of the
Plan.

 

40

 

ARTICLE XII

 

MISCELLANEOUS

 

12.1                           Employment.

 

Neither the establishment of the Plan or any
amendment thereto, nor the creation of the Trust Fund or the payment of
benefits hereunder, shall be construed as giving any Participant or Employee any
right to be retained in the employ of the Employer, and the Employer hereby
expressly retains the right to hire and discharge any Participant or Employee
at any time, with or without cause, as if the Plan had not been adopted, and
any such discharged Participant or Employee shall have only such rights or
interests in the Trust Fund as may be specified herein.

 

12.2                           Records.

 

The records of the Employer with respect to
age, service, employment history, compensation, absences, illnesses, and all
other relevant matters shall be conclusive for purposes of the administration
of the Plan.

 

12.3                           Usage.

 

Pronouns and other similar words used herein
in the masculine gender shall be read as the feminine gender where appropriate,
and the singular form of words shall be read as the plural where appropriate.

 

12.4                           Validity.

 

The validity, construction, and
administration of this Plan shall be determined under the laws of the State of
Illinois, except to the extent such laws are preempted by federal law.

 

12.5                           Counterparts.

 

The Plan may be executed in any number of
counterparts, each of which shall be considered an original but which together
shall constitute a single plan.

 

12.6                           Severability.

 

In case any provision of the Plan shall be held illegal or invalid for
any reason, said illegality or invalidity shall not affect the remaining
provisions, but the illegal or invalid provision shall be fully severable and
the plan shall be construed and enforced as if such provision had never been
inserted herein.

 

41

 

12.7                           Conditional Restatement.

 

The provisions of the Plan as restated herein
are subject to approval by the Internal Revenue Service confirming that the
Plan continues to constitute a qualified plan under the Code and applicable
rulings and regulations thereunder.  No
Employee, Participant, or Beneficiary shall have any rights under the Plan as
amended and restated herein unless and until such approval has been obtained,
and the Employer retains the right to make such amendments or changes in the
Plan as may be necessary to obtain such approval.

 

12.8                           Veterans’
Rights.

 

Effective December 14, 1994, and
notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code.

 

12.9                           Participating Employers.

 

With the consent of the Company, any
Affiliated Employer may become a Participating Employer by executing an
instrument adopting the Plan for the benefit of its employees.  Such instrument shall remain in effect unless
and until revoked by such Affiliated Employer with the consent of the Company.

 

12.10                     Special Provisions Applicable to
Persons Who Were Participants in

      Gates Construction Corp. 401(k)
Retirement Plan.   

 

(a)                                  Notwithstanding any
other provision of this Plan, this Section 12.10 shall apply with respect
to any individual who was a participant in the Gates Construction Corp. 401(k)
Retirement Plan (the “Gates Plan”) immediately before the merger of the Gates
Plan with and into this Plan effective August 1, 1994 and who became a
participant in this Plan on that date (a “Gates Participant”).

 

(b)                                 As result of the
merger of the Gates Plan with and into this Plan, the following amounts held
under the Gates Plan on behalf of a Gates Participant immediately prior to such
merger shall be considered such individual’s August 1, 1994 Account
balances in this Plan, to-wit:

 

(1)                                  The
Gates Participant’s account balance in the Gates Plan attributable to his tax
deferred 401(k) contributions under the Gates Plan immediately prior to such
merger shall be his August 1, 1994 account balance in his Elective Account
under this Plan.

 

(2)                                  The
Gates Participant’s account balance in the Gates Plan attributable to “matching
contributions” and “profit sharing contributions” under the Gates Plan
immediately prior to such merger shall be his August 1, 1994

 

42

 

account balance in an “Employer Contribution
Account” established and maintained in his name under this Plan.

 

(3)                                  The
Gates Participant’s account balance in the Gates Plan attributable to rollover
contributions under the Gates Plan immediately prior to such merger shall be
his August I, 1994 account balance in his Rollover Account under this
Plan.

 

Each Gates Participant shall have a nonforfeitable right to the
balances of his accounts on and after August 1, 1994.

 

(b)                                 Notwithstanding any
other provision of this Plan, each Gates Participant shall be eligible to elect
a hardship withdrawal from his Elective Account balance, as determined as of August 1,
1994 and as adjusted for gains and losses after that date, in accordance with
the provisions of Section 9.5 of the Plan as amended on April 1, 1997.  In addition to the provisions said Section 9.5,
a Gates Participant may elect to withdraw all or any portion of the balance of
his employer contribution account, as determined as of August 1, 1994 and
as adjusted for gains and losses after that date, because of a hardship causing
him immediate and heavy financial needs.

 

(c)                                  Notwithstanding any
other provision of this Plan, each Gates Participant who has attained age 59-1/2
shall be eligible to elect a pre-termination withdrawal of all or any portion
of his account balances, as determined as of August 1, 1994 and as
adjusted for gains and losses after that date, in accordance with the
provisions of Section 9.2 of the Plan as amended on April 1, 1997.

 

(d)                                 Notwithstanding any
other provision this Plan, once during each Plan Year, a Gates Participant may
elect to withdraw all or any portion of the balance of his Rollover Account, as
determined as of August 1, 1994 and as adjusted for gains and losses after
that date.

 

(e)                                  Notwithstanding any
other provision this Plan, if a Gates Participant whose employment with Gates
Construction Corp. terminated because of resignation or dismissal before he was
100% vested in his account balances attributable to employer contributions
returns to employment with an employer before incurring 5 consecutive One-Year
Breaks in Service, then the amount that was previously forfeited from such
accounts shall be restored to a “forfeiture account” established and maintained
in his name as of the last day of the Plan Year in which he returns to
employment (after all adjustments then required under the plan have been
made).  A Gates Participant shall have a
nonforfeitable right to the balance of his forfeiture account on and after such
date.  Such a Gates Participant may, but
need not, repay the amount, if any, that was previously distributed to him
before the earlier of five years after the first date on which he is reemployed
by an Employer, or the date he incurs five consecutive One-Year Breaks in
Service commencing after the distribution.

 

(f)                                    Notwithstanding any
other provision of this Plan, upon a Gates Participant’s Early Retirement Date,
he shall have a nonforfeitable right to the balances of his Accounts and he
shall be

 

43

 

entitled to a distribution of his account balances, as determined as of
August 1, 1994 and as adjusted for gains and losses after that date, as of
that date.  For purposes of this Section 12.10(f),
the term “Early Retirement Date” means the first day of the month coincident
with or next following the date a Gates Participant terminates from employment
with an employer on or after the date he both attains age 55 years and
completes at least 10 Years of Service for any reason other than death or
disability, provided that such Gates Participant has not attained age 65 years
on that date.  If a Gates Participant
terminates from employment before satisfying the age requirement for early
retirement but after having satisfied the service requirement, then he shall be
entitled to elect a distribution of his account balances, as determined as of August 1,
1994 and as adjusted for gains and losses after that date, upon satisfying such
age requirement.

 

44

 

ARTICLE XIII

 

TOP-HEAVY PLAN PROVISIONS

 

13.1                           Application.

 

The provisions of this Article XIII
shall apply notwithstanding any other provisions of the Plan in any Plan Year
in which the Plan is determined to be a Top-Heavy Plan.

 

13.2                           Definitions.

 

For purposes of this Article XIII the
following terms shall have the meanings indicated:

 

(a)                                  “Determination
Date” shall mean, with respect to a plan, the last day of the preceding
plan year or, in the case of the first plan year, the last day of such plan
year.

 

(b)                                 “Employee”
shall mean a person employed by the Employer, including a self-employed person
who is a partner of any Employer.

 

(c)                                  “Employer”
shall mean the Company and all Affiliated Employers.

 

(d)                                 “Key
Employee” shall mean an Employee who, at any time during a plan year
or any of the 4 preceding plan years, is:

 

(1)                                  An officer of the
Employer having an annual Compensation greater than 50% of the amount in effect
under Section 415(b)(1)(A) of the Code for any such plan year;

 

(2)                                  One of the 10
Employees having annual Compensation from the Employer of more than the
limitation in effect under Section 415(c)(1)(A) of the Code and
owning [or considered as owning within the meaning of Section 318 of the
Code as modified by Section 416(i)(l)(B)(iii)] the largest interests in
the Employer;

 

(3)                                  A person who owns (or
is considered as owning within the meaning of said Section 318, as so
modified) (i) more than 5% of the outstanding stock of the Employer or
stock possessing more than 5% of the total combined voting power of all stock
of the Employer or (ii) in the case of an Employer which is not a
corporation, more than 5% of the capital or profits interest in the Employer;
or

 

45

 

(4)                                  A person whose annual
Compensation from the Employer is more than $150,000 and who owns (or is
considered as owning within the meaning of said Section 318, as so
modified) (i) more than 1% of the outstanding stock of the Employer or
more than 1% of the total combined voting power of all stock of the Employer or
(ii) in the case of an Employer which is not a corporation, more than 1%
of the capital or profits interest in the Employer.

 

If a Participant is a Key Employee, his Beneficiary, if any, shall also
be deemed a Key Employee.  For purposes
of Section 13.2(d)(2), if two Employees have the same interest in the
Employer, the Employee having the greater annual Compensation from the Employer
shall be treated as having a larger interest. 
The term “Non-Key Employee” shall mean an Employee who is not a Key
Employee.

 

(e)                                  “Permissive
Aggregation Group” shall mean a group of plans of the Employer consisting
of (1) the plans comprising the Required Aggregation Group and (2) one
or more other plans, such that, when considered together, such group of plans
will satisfy the requirements of Sections 401(a)(4) and 410 of the Code.

 

(f)                                    “Required
Aggregation Group” shall mean (1) each plan of the Employer in which a
Key Employee is a participant and (2) each other plan of the Employer
which enables any plan described in Section 13.2(f)(1) to meet the
requirements of Sections 401(a)(4) or 410 of the Code.

 

(g)                                 “Top-Heavy
Group” shall mean any Required Aggregation Group or Permissive Aggregation
Group if (1) the sum, as of the Determination Date, of (A) the
present value of the cumulative accrued benefits for Key Employees under all
defined benefit plans included in such group and (B) the aggregate of the
accounts of all Key Employees under all defined contribution plans included in
such group, exceeds (2) 60% of a similar sum determined for all Employees
participating in the plans included in such group.  In the case of a defined benefit plan, the
present value of an Employee=s accrued benefit as of the
Determination Date shall be determined as of the most recent plan valuation
date which is within a 12-month period ending on the Determination
Date.  In the first plan year of such a
plan, such accrued benefit shall be determined either (1) as if the
Employee terminated service as of the Determination Date or (2) as if the
Employee terminated service as of such valuation date, but taking into account
the estimated accrued benefit as of the Determination Date; for any other year
the accrued benefit shall be determined as if the Employee terminated service
as of such valuation date, and for this purpose the valuation date shall be the
same valuation date used for computing plan costs for minimum funding
regardless of whether a valuation is performed in such year.  In the case of a defined contribution plan
not subject to the minimum funding standards of Section 412 of

 

46

 

the Code, an Employee’s account balance shall
be the sum of (1) the account balance as of the most recent plan valuation
date occurring within a 12-month period ending on the Determination Date
and (2) an adjustment for Employer contributions due as of the
Determination Date, being the amount of any Employer contributions actually
made after said valuation date but on or before the Determination Date (except
than in the first plan year of such a plan, such adjustment shall also reflect
the amount of any such contributions made after the Determination Date that are
allocated as of a date in such year).  In
the case of a defined contribution plan subject to said minimum funding
standards, an Employee’s account balance shall be the sum of (1) the
account balance as of the most recent plan valuation date occurring within a 12-month
period ending on the Determination Date (including the amount of Employer
contributions that would be allocated as of a date not later than the
Determination Date, even though such amount is not yet required to be
contributed) and (2) an adjustment for contributions due as of the
Determination Date, reflecting the amount of any contribution actually made (or
due to be made) after such valuation date but before the extended payment
period in Section 412(c)(10) of the Code.  If any person is not a Key Employee with
respect to a plan for any plan year but was a Key Employee with respect to such
plan for any prior plan year, any accrued benefit for such person under such
plan, or the accounts of such person under such plan, as the case may be, shall
not be taken into account for purposes of this Section 13.2(g).  Where two or more plans have different
Determination Dates, there shall be aggregated the values of accrued benefits
and accounts as of the Determination Dates which fall within the same calendar
year.  The accrued benefit of any
Employee (other than a Key Employee) shall be determined (i) under the
method which is used for accrual purposes for all plans of the Employer, or (ii) if
there is no method described in clause (i), as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under Section 411(b)(1)(C) of
the Code.  For purposes of determining
present value,

 

(1)                                  The interest rates
shall be the “immediate annuity rate” specified in 29 C.F.R. Part 4044,
Appendix B, for valuing plan benefits as of October 1 in the calendar year
preceding the calendar year in which payment commences, unless there is less
than a 1 percentage point change from the preceding year’s rate, in which event
the preceding year’s rate shall continue to be used.

 

(2)                                  Mortality shall be
determined by the 1986 Projected Experience Table prepared by The Wyatt
Company, with the percentage of males assumed to be 90% and with an assumed
spousal mortality rate of 10%.

 

(3)                                  Subsidized early
retirement benefits and subsidized benefit options shall not be taken into
account unless the subsidies are nonproportional; for

 

47

 

this purpose, a subsidy shall be treated as nonproportional unless it
applies to a group of Participants that would independently satisfy the requirements
of Section 410(b) of the Code.

 

The accrued benefit of any Employee (other than a Key Employee) shall
be determined (1) under the method which is used for accrual purposes for
all plans of the Employer or (2) if there is no single method, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted under Section 411(b)(1)(C) of
the Code.

 

(h)                                 “Top-Heavy
Plan” shall mean, with respect to this Plan for any Plan Year, a situation
where, as of the Determination Date, (1) the aggregate of the Accounts of
all Key Employees under the Plan (consisting of all Account balances as of the
most recent Valuation Date occurring within a 12-month period ending on
the Determination Date plus an adjustment for Employer contributions due as of
the Determination Date equal to any contributions actually made after such
Valuation Date, but on or before the Determination Date, exceeds 60% of the
Accounts of all Participants under the Plan (similarly adjusted) or (2) the
Plan is part of a Required Aggregation Group which is a Top-Heavy Group.  Notwithstanding the foregoing, the Plan shall
not be considered a Top-Heavy Plan for any Plan Year in which it is part of a
Required Aggregation Group or a Permissive Aggregation Group which is not a
Top-Heavy Group.  If any Participant is
not a Key Employee with respect to the Plan for any Plan Year but was a Key
Employee with respect to the Plan for any prior Plan Year, the Accounts of such
Participant under the Plan shall not be taken into account for purposes of this
Section 13.2(h).

 

13.3                           Distributions Prior to
Determination Date.

 

For purposes of determining the cumulative
accrued benefits for any Employee (under a defined benefit plan of the
Employer) or the amount of the account of any Employee (under a defined
contribution plan of the Employer), such present value or amount, as the case
may be, shall be increased by the aggregate distributions made with respect to
such Employee under such plan or plans during the 5-year period ending on
the Determination Date.  The preceding
sentence shall also apply to distributions under a terminated plan which, if it
had not been terminated, would have been included in a Required Aggregation
Group.  If any individual has not
performed services for any Employer maintaining a plan at any time during the 5-year
period ending on the Determination Date, any accrued benefit for such
individual (and the account of such individual) shall not be taken into
account.

 

48

 

13.4                           Minimum Contribution.

 

(a)                                  Each Participant in
this Plan who is a Non-Key Employee shall be entitled to a minimum contribution
from the Employer which, expressed as a percentage of such Participant’s
Compensation for the Plan Year, is the lesser of:

 

(1)                                  3%;
or

 

(2)                                  The
percentage at which contributions are made or required to be made under the
Plan for such year for the Key Employee for whom such percentage is the highest
for such year.

 

The percentage in Section 13.4(a)(2) shall be determined for
each Key Employee by dividing the contributions of the Employer for such Key
Employee by his Compensation, taking into account for this purpose all defined
contribution plans included in a Required Aggregation Group but excluding any
plan included in a Required Aggregation Group if such plan enables a defined
benefit plan included in such group to meet the requirements of
Sections 401(a)(4) or 410 of the Code.  If any Participant who is a Non-Key Employee
would not receive the minimum contribution required by this Section 13.4(a) for
such Plan Year as a result of applying the allocation formula specified in Section 5.4,
the Employer shall contribute to the Trust for such Plan Year the additional
amounts necessary to achieve such minimum. 
Such amount shall be allocated directly to the Profit-Sharing Account of
such Participant.

 

(b)                                 The provisions of this
Section 13.4 shall apply to all Participants who have not separated from
service at the end of the Plan Year, including individuals who have failed to
complete 1,000 Hours of Service during such Plan Year.

 

(c)                                  The provisions of
this Section 13.4 shall not apply to a Participant who is a participant in
one or more other defined contribution plans of the Employer which is or are
part of a Top-Heavy Group which includes this Plan, if any such other plan or
plans provide such Participant with the required minimum contribution, as
determined in accordance with applicable regulations of the Secretary.  If any Participant is also a participant in a
defined benefit plan of the Employer which is part of a Top-Heavy Group,
nothing herein shall affect such Participant’s right to receive the required
minimum benefit provided by such defined benefit plan.

 

(d)                                 Elective Contributions
on behalf of a Key Employee shall be taken into account in determining the
minimum contribution, if any, required on behalf of Non-Key Employees.  For purposes of satisfying any required
minimum contribution on behalf of Non-Key Employees,

 

49

 

Elective Contributions on their behalf shall not be taken into account.

 

Dated this 24th day of July, 2000.

 

	
   

  	
  GREAT LAKES DREDGE & DOCK 

  
	
   

  	
   

  	
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
     /s/ Douglas B. Mackie

  
	
   

  	
   

  	
    Douglas B. Mackie, President

  

 

50

 

AMENDMENT NO. 1 TO

GREAT LAKES DREDGE & DOCK
COMPANY

401(k) SAVINGS PLAN

(As Amended and Restated Effective January 1,
1997)

 

GREAT
LAKES DREDGE & DOCK COMPANY, a New Jersey corporation, pursuant to the
authority in Section 10.1 of the Great Lakes Dredge & Dock
Company 401(k) Savings Plan (as amended and restated effective January 1,
1997) (the “Plan”), hereby amends the Plan as follows:

 

1.                  Effective
January 1, 2001, Section 1.4(a) of the Plan is deleted and the
following is substituted in its place:

 

(a)             Effective
for Plan Years beginning after December 31, 2000, the Plan shall satisfy
the “safe-harbor” provisions of Code Sections 401(k)(12)(B) and (D) and
accordingly Sections 5.6, 5.7 and 5.8 of the Plan shall not be effective for
such Plan Years.

 

2.                  Effective
January 1, 1997, Section 2.9(a) of the Plan is deleted and the
following is substituted in its place:

 

(a)             Except
for purposes of Section 5.4 for Limitation Years beginning prior to January 1,
1998, there shall be included in a Participant’s Compensation (1) any “elective
deferral” [as defined in Section 402(g)(3) of the Code], (2) any
amount which is contributed or deferred by the Employer at the election of such
Participant and which is not includible in his gross income under Section 125
of the Code and (3) any amount which is contributed or deferred by the
Employer on or after January 1, 1998 at the election of such Participant
and which is not includible in his gross income under Section 132(f)(4) of
the Code.

 

3.                  Effective
January 1, 1997, Section 2.9(d) of the Plan is deleted and the
following is substituted in its place:

 

(d)            Except
for purposes of Article XIII, a Participant’s Compensation shall not
include any amounts otherwise includable pursuant to this Section 2.8
which are attributable to any period before he became a Participant.

 

4.                  Effective
August 1, 2000, Section 2.19 of the Plan shall no longer apply.

 

5.                  Effective
August 1, 2000, the following sentence is added to Section 3.1(b) of
the Plan:

 

Effective August 1, 2000, any Employee who
is not then a Participant shall become a Participant as of the first day of the
first payroll period following his Employment Commencement Date.

 

51

 

6.                  Effective
January 1, 1997, Section 4.2(a) of the Plan is deleted and the
following is substituted in its place:

 

(a)                                  For
each quarter of each Plan Year, the Employer shall make a Matching Contribution
equal to 66-2/3% of each eligible Participant’s Elective Contribution for
such quarter, excluding any Elective Contribution which exceeds 6% of such
Participant’s Compensation for such quarter. 
Effective April 1, 1997, the preceding sentence shall read as
follows:  “For each quarter of each Plan
Year, the Employer shall make a Matching Contribution equal to equal 100% of
each eligible Participant’s Elective Contribution for such quarter, excluding
any Elective Contribution which exceeds 6% of such Participant’s Compensation
for such quarter.”  In order to be
entitled to a Matching Contribution for a Plan Year, a Participant must be
employed by the Employer on the last day of such Plan Year.  Effective April 1, 1997, the preceding
sentence shall read as follows: “In order to be entitled to a Matching
Contribution for any quarter of a Plan Year, a Participant must be employed by
the Employer on the last day of such quarter, unless his employment terminated
during such quarter on account of retirement (on or after his Normal Retirement
Date), Disability or death.”  Effective January 1,
2000, if the total of the Matching Contributions to which Participant is
entitled for a Plan Year is less than 6% of his Compensation for that period of
the Plan Year during which he was eligible to participate, the Employer shall
make an additional Matching Contribution on his behalf for the fourth quarter
of the Plan Year to equal the difference. 
Effective for Plan Years beginning after December 31, 2000, this Section 4.1(a) shall
read as follows:

 

(a)                          For
each quarter of each Plan Year, the Employer shall make a Matching Contribution
equal to 100% of each eligible Participant’s Elective Contribution for such
quarter, excluding any Elective Contribution which exceeds 6% of such
Participant’s Compensation for such quarter. 
If the total of the Matching Contributions to which Participant is
entitled for a Plan Year is less than 6% of his Compensation for that period of
the Plan Year during which he was eligible to participate, the Employer shall
make an additional Matching Contribution on his behalf for the fourth quarter
of the Plan Year to equal the difference.

 

7.                  Effective
January 1, 2000, the following sentence is added to Section 4.5(a) of
the Plan:

 

Notwithstanding the preceding sentences of this Section 4.5(a),
effective for Plan Years beginning on or after January 1, 2000, each Participant,
whether or not a Highly Compensated Employee, may elect to defer a portion of
his Compensation expressed as a whole-number multiple of his Compensation (but
not more than 8%).

 

52

 

8.                  Effective
January 1, 1997, the second and third sentences of Section 6.11(c) of
the Plan are deleted.

 

9.                  Effective
January 1, 1997, Section 6.11(d) of the Plan is deleted and the
following is substituted in its place:

 

(d)                                 The
“Required Beginning Date,” for purposes of this Section 6.11, shall mean,
with respect to a Participant, April 1 of the calendar year following the
calendar year in which such Participant attains age 70-1/2, except that a
Participant who is not a “5% owner” [as defined in Section 416(i)(1)(B)(i) of
the Code] may elect to defer his Required Beginning Date until April 1 of
the calendar year calendar year following the later of (i) the calendar
year in which he attains age 70-1/2 or (ii) the calendar year in
which he terminates employment. Notwithstanding the preceding sentence, except
for a Participant who is such a “5% owner,” the Required Beginning Date of a
Participant who attains age 70-1/2 on or after January 1, 2002 shall
be April 1 of the calendar year following the later of (i) the
calendar year in which he attains age 70-1/2 or (ii) the calendar
year in which he terminates employment.

 

10.            Effective
January 1, 1999, the first sentence of Section 6.13(b)(4) of the
Plan is deleted and the following is substituted in its place:

 

“Eligible Rollover Distribution” shall
mean any distribution of all or any portion of the balance to the credit of the
Distributee under the Plan, except that an Eligible Rollover Distribution shall
not include: (i) any distribution which is one of a series of substantially
equal periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee’s designated beneficiary,
or for a specified period of 10 years or more; (ii) any distribution to
the extent such distribution is required under Section 401(a)(9) of
the Code; (iii) the portion of any distribution which is not includable in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to Employer securities); and (iv) any hardship
distribution described in Section 401(k)(2)(B)(i)(IV) of the Code received
after December 31, 1998.

 

11.            Effective
January 1, 1997, Section 11.1(a) of the Plan is deleted and the
following is substituted in its place:

 

(a)                                  In
the sole discretion of the Administrative Committee, the Administrative
Committee may direct the Trustee to make a bona fide loan to a Participant who
is an Employee, upon such terms, security, interest, and conditions as the
Administrative Committee deems appropriate, provided, however, that all loans
granted hereunder:

 

(1)                                  Are
available to all potential borrowers on an equivalent basis; and

 

53

 

(2)                                  Are
made in accordance with and subject to all the provisions of this Article XII.

 

Dated this 17th day of May, 2001.

 

	
   

  	
  GREAT LAKES DREDGE & DOCK

  
	
   

  	
   

  	
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Douglas B. Mackie

  
	
   

  	
  Douglas B. Mackie, President

  

 

 

54

 

AMENDMENT NO. 2 TO

GREAT LAKES DREDGE & DOCK
COMPANY 401(k) SAVINGS PLAN

(As Amended and Restated Effective January 1,
1997)

 

GREAT
LAKES DREDGE & DOCK COMPANY, a New Jersey corporation, pursuant to the
authority in Section 10.1 of the Great Lakes Dredge & Dock
Company 401(k) Savings Plan (as amended and restated effective January 1,
1997 and as thereafter further amended) (the “Plan”), hereby further amends the
Plan as follows, effective January 1, 2002 (except as otherwise indicated
herein):

 

1.                                       Sections
2.6A and 2.6B are added to the Plan to read as follows:

 

2.6A                       “Catch-Up
Contribution” shall mean, with respect to any Catch-Up Eligible
Participant, that portion of such Participant’s Compensation (determined
pursuant to Section 2.9 as if the Plan were not in existence) for a Plan
Year that such Catch-Up Eligible Participant has elected to defer pursuant to Section 4.7.

 

2.6B                         “Catch
Up-Eligible Participant” shall mean, with respect to a Plan Year, an
Employee who is a Participant and who is age 50 or older in such Plan
Year.  For purposes of the preceding
sentence, a Participant who is projected to attain age 50 before the end of a
Plan year shall be deemed to be age 50 as of January 1 of such Plan Year,
without regard to whether he ceases to be an Employee during such Plan Year
before actually attaining age 50.

 

2.                                       The
following sentence is added to Section 2.9 of the Plan:

 

Effective for Plan Years beginning after December 31,
2001, the Compensation of each Participant taken into account for any Plan Year
shall not exceed $200,000 [subject to cost-of-living adjustments pursuant to Section 401(a)(17)(B) of
the Code].

 

3.                                       Section 4.3(d) is
added to the Plan to read as follows:

 

(d)                                 Effective
for Plan Years beginning after December 31, 2001, the board of directors
of the Company and of each Participating Employer shall determine the
Profit-Sharing Contribution, if any to be paid to the Plan and to be allocated
among the Profit-Sharing Accounts of Participants employed by the Company or by
such Participating Employer, as the case may be, in accordance with Sections
4.3(c) and 5.3.

 

4.                                       The
following sentence is added to Section 4.5(a) of the Plan:

 

Notwithstanding the preceding provisions of this
Section 4.5(a), effective for Plan Years beginning after December 31,
2001, each Participant may elect to defer a

 

55

 

portion of his Compensation expressed as a
whole-number percentage of his Compensation, but not more than 15%.

 

5.                                       Section 4.5(b) of
the Plan is deleted and the following is substituted in its place:

 

(b)                                 Amounts
held in a Participant’s Elective Account shall not be distributable prior to
the earliest of (1) his termination of employment with the Company and all
Affiliated Employers, or his death; or (2) the termination of the Plan
without establishment of a successor plan by the Employer or an entity
aggregated with the Employer or an Affiliated Employer.  The Administrative Committee may authorize
distribution of a Participant’s Elective Account where any of the events in the
preceding sedntence has occurred, subject to all other requirements of the Plan
concerning distributions.

 

6.                                       Section 4.7
is added to the Plan to read as follows:

 

4.7                                 Catch-Up
Contributions.

 

(a)                                  This
Section 4.7 shall apply to Plan Years beginning after December 31,
2001.

 

(b)                                 A
Catch-Up Eligible Participant may make a Catch-Up Contribution for a Plan Year,
expressed as a whole-number percentage of his Compensation, but not more than
15%, if:

 

(1)                                  At
the beginning of such Plan Year, he elects pursuant to Section 4.5(a) to
defer the maximum portion of his Compensation during such Plan Year which is
permitted thereunder.

 

(2)                                  At
any time during such Plan Year, that portion of his Compensation which he has
elected to defer for each pay period during the remainder of such Plan Year
pursuant to Section 4.5(a), when added to that portion of his Compensation
already deferred during such Plan Year pursuant to Section 4.5(a), is
projected to equal the maximum amount permitted pursuant to Section 5.5.

 

(3)                                  At
any time during such Plan Year, that portion of his Compensation already
deferred during such Plan Year pursuant to Section 4.5(a) equals the
maximum amount permitted pursuant to Section 5.5; or

 

56

 

(4)                                  At
any time during the Limitation Year coinciding with such Plan Year, that
portion of his Compensation already deferred during such Limitation Year
pursuant to Section 4.5(a), when added to his other Annual Additions
during such Limitation Year, equals the maximum Annual Addition permitted for
such Limitation Year pursuant to Section 5.4.

 

(c)                                  The
Administrator shall establish procedures to assure that each Catch-Up Eligible
Participant described in Section 4.7(b) shall have an effective
opportunity to make a Catch-Up Contribution. 
Such procedures shall include, but shall not necessarily be limited to,
allowing such a Catch-Up Eligible Participant to defer an additional dollar
amount of his Compensation for each remaining payroll period during such Plan
Year such that the total of all such additional dollar amounts during such Plan
Year equals the maximum Catch-Up Contribution permitted for such Plan Year
pursuant to Section 4.7(d).

 

(d)                                 A
Catch-Up Contribution with respect to a Catch-Up Eligible Participant shall not
exceed the following amount:

 

 

	
  Calendar
  Year in Which

  Catch-Up Eligible

  Participant’s

  Taxable Year Begins

  	
   

  	
  Maximum Catch-Up

  Contribution

  	
   

  
	
  2002

  	
   

  	
  $

  	
  1,000

  	
   

  
	
  2003

  	
   

  	
  2,000

  	
   

  
	
  2004

  	
   

  	
  3,000

  	
   

  
	
  2005

  	
   

  	
  4,000

  	
   

  
	
  2006

  	
   

  	
  5,000

  	
   

  
					

 

For taxable years beginning in calendar years
after 2006, the maximum Catch-Up Contribution shall be $5,000, as adjusted
pursuant to Section 414(v)(2)(C) of the Code.

 

(e)                                    A
Catch-Up Eligible Participant’s Catch-up Contributions shall be treated as
Elective Contributions [except for purposes of Section 4.2(a), relating to
Matching Contributions] and shall be credited to his Elective Account, but
shall not be subject to the following Plan provisions:

 

(1)                                    The
limits on Deferred Compensation in Sections 4.5 and 5.5.

 

(2)                                    The
limitations on Annual Additions in Section 5.4.

 

57

 

A Catch-Up Contribution for a Plan Year by a
Catch-Up Eligible Participant who is a Key Employee shall not be taken into
account for purposes of Clause (2) of the first sentence of Section 13.4(a).

 

7.                                       Sections
5.3(c) and 5.3(d) are deleted and the following provisions are
substituted in their place:

 

(c)                                    As
of the last Valuation Date in a Plan Year, the Profit-Sharing contribution, if
any, for such year by the Company or by a Participating Employer shall be
allocated among the Accounts of Participants who were employed by the Company
or by such Participating Employer, as the case may be, on the last day of such
Plan Year in accordance with the Compensation of each such Participant for such
Plan Year in relation to the Compensation of all Participants employed by the
Company or such Participating Employer, as the case may be, on the last day of
such Plan Year.

 

(d)                                   Forfeitures
arising during a Plan Year which are attributable to Participants who were
employees of the Company shall first be used to reduce the Matching
Contribution of the Company for such year and if any forfeitures then remain,
they shall be used to offset the Profit-Sharing Contribution for such year of
the Company.  Forfeitures arising during
a Plan Year which are attributable to Participants who were employees of a
Participating Employer shall first be used to reduce the Matching Contribution
of such Participating Employer for such year and if any forfeitures then
remain, they shall be used to offset the Profit-Sharing Contribution for such
year of such Participating Employer.

 

8.                                       The
following sentence is added to Section 5.4(a) of the Plan:

 

Effective for Limitation Years beginning after December 31,
2001, the preceding sentence shall read as follows:

 

In no event shall any Annual Addition with
respect to a Participant for a Limitation Year exceed the lesser of:

 

(1)                                  $40,000,
or such higher amount as may be permitted at the relevant time under Section 415(c) of
the Code; or

 

(2)                                  100%
of the Compensation paid to the Participant by the Employer (or any Affiliated
Employer) during such Limitation Year.

 

9.                                       Section 5.5(d) is
added to the Plan to read as follows:

 

58

 

(d)                                 Effective
for taxable years beginning after December 31, 2001, “the Applicable
Dollar Amount” shall be substituted for “$9,500” in Sections 5.5(a) and
5.5(c).  The term “Applicable Dollar
Amount” shall mean the following:

 

	
  For
  Taxable Years

  Beginning in Calendar Year

  	
   

  	
  Applicable Dollar Amount

  	
   

  
	
  2002

  	
   

  	
  $

  	
  11,000

  	
   

  
	
  2003

  	
   

  	
  12,000

  	
   

  
	
  2004

  	
   

  	
  13,000

  	
   

  
	
  2005

  	
   

  	
  14,000

  	
   

  
	
  2006 or thereafter

  	
   

  	
  15,000

  	
   

  
					

 

For taxable years beginning in calendar years after 2006, the $15,000
Applicable Dollar Amount shall be adjusted in accordance with Code Section 402(g)(4).

 

10.                                 Section 6.9
of the Plan is deleted and the following is substituted in its place:

 

6.9                                 Restrictions
on Distributions.

 

Notwithstanding any other provision of the Plan,
the Administrative Committee shall not direct the Trustee to distribute, or
cause to be distributed, a Participant’s vested interest in his Accounts, if
such vested interest exceeds $5,000, without the recipient’s consent prior to
his Normal Retirement Date.  For purposes
of the preceding sentence, the value of a Participant’s vested interest in his
Accounts shall not include his Rollover Account.

 

11.                                 Section 6.11(i) is
added to the Plan to read as follows:

 

(i)                                     With
respect to distributions under the Plan made in calendar years beginning on or
after January 1, 2002, the Plan shall apply the minimum distribution
requirements of Section 401(a)(9) of the Code in accordance with the
regulations under said Section 401(a)(9) which were proposed in January 2001,
notwithstanding any provision of the Plan to the contrary.  This Section 6.11(i) shall continue
in effect until the end of the last calendar year beginning before the
effective date of final regulations under said Section 401(a)(9) or
such other date which is specified in guidance published by the Internal
Revenue Service.

 

12.                                 The
following sentence is added at the end of Section 6.13:

 

Effective for distributions made after December 31,
2001, the term “Eligible Retirement Plan” shall also include (i) an
annuity contract described in Section 403(b) of the Code and (ii) an
eligible plan which is maintained under Section 457(b)

 

59

 

of the Code and which is maintained by a state
or political subdivision of a state or instrumentality of a state and which
agrees to separately account for amounts transferred to such plan from this
Plan.  Also effective for distributions
made after December 31, 2001, the definition of “Eligible Retirement Plan”
shall apply in the case of a distribution to a surviving spouse of a
Participant or to a spouse or former spouse of a Participant who is an
alternate payee under a “qualified domestic relations order,” as defined in Section 414(p)
of the Code.  Also effective for
distributions made after December 31, 2001, Section 6.13(b)(4)(iv) shall
read as follows:  “(iv) any
distribution which is made upon the hardship of a Participant.”

 

13.                                 Section 13.2(d) of the Plan is
deleted and the following is substituted in its place:

 

(d)                                 “Key Employee” shall mean an Employee
who, at any time during a plan year containing the Determination Date, is:

 

(1)                                  An officer of the Employer having an annual
Compensation greater than $130,000 [subject to cost-of-living adjustments
pursuant to Code Section 416(i)(1)(A)];

 

(2)                                  A person who owns [or is considered as owning
within the meaning of Code Section 318, as modified by Code Section 416(i)(1)(B)(iii)]
(i) more than 5% of the outstanding stock of the Employer or stock
possessing more than 5% of the total combined voting power of all stock of the
Employer or (ii) in the case of an Employer which is not a corporation,
more than 5% of the capital or profits interest in the Employer; or

 

(3)                                  A person whose annual Compensation from the
Employer is more than $150,000 and who owns (or is considered as owning within
the meaning of said Section 318, as so modified) (i) more than 1% of
the outstanding stock of the Employer or more than 1% of the total combined
voting power of all stock of the Employer or (ii) in the case of an Employer
which is not a corporation, more than 1% of the capital or profits interest in
the Employer.

 

If a Participant is a Key Employee, his
Beneficiary, if any, shall also be deemed a Key Employee.

 

14.                                 The
text of Section 13.3 of the Plan is deleted and the following is
substituted in its place:

 

For purposes of determining the cumulative
accrued benefits for any employee (under a defined benefit plan of the
Employer) or the amount of the account of any

 

60

 

Employee (under a defined contribution plan of
the Employer), such present value or amount, as the case may be, shall be
increased by the aggregate distributions made with respect to such Employee
under such plan or plans during the one-year period ending on the Determination
Date.  The preceding sentence shall also
apply to distributions under a terminated plan which, if it had not been
terminated, would have been included in a Required Aggregation Group.  In the case of any distribution made for a
reason other than severance from employment, death or disability, the second
preceding sentence shall be applied by substituting “five-year period” for “one-year
period.”  If any individual has not
performed services for any Employer maintaining a plan at any time during the
one-year period ending on the Determination Date, any accrued benefit for such
individual (and the account of such individual) shall not be taken into
account.

 

15.                                 Article XIV,
in the form attached as Exhibit A, is added to the Plan effective January 1,
2003.

 

Dated this 13th day of December, 2002.

 

	
   

  	
  GREAT LAKES DREDGE & DOCK

  
	
   

  	
   

  	
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Douglas B. Mackie

  
	
   

  	
  Douglas B. Mackie, President

  

 

 

61

 

EXHIBIT A

 

 

ARTICLE XIV

 

REQUIRED MINIMUM DISTRIBUTIONS

 

14.1                           Applicability
and Effective Date.

 

The provisions of this Article XIV
shall apply in lieu of Section 6.11 and notwithstanding any other
provision of the Plan for purposes of determining required minimum
distributions from the Plan for calendar years beginning after December 31,
2002.

 

14.2                           Requirements
of Treasury Regulations Incorporated.

 

All distributions required
under this Article XIV shall be determined and made in accordance with the
Treasury regulations under Code Section 401(a)(9).

 

14.3                           Time
and Manner of Distribution.

 

(a)                                  A
Participant’s entire vested interest in the Plan shall be distributed, or begin
to be distributed, to him no later than his Required Beginning Date.

 

(b)                                 If
a Participant dies before his Required Beginning Date, his entire vested
interest in the Plan shall be distributed, or begin to be distributed, no later
than as follows:

 

(1)                                  If such Participant’s
surviving spouse is his sole Designated Beneficiary, then distributions to such
surviving spouse shall begin by December 31 of the calendar year
immediately following the calendar year in which such Participant died, or by December 31
of the calendar year in which such Participant would have attained age 70-1/2,
if later.

 

(2)                                  If such Participant’s
surviving spouse is not his sole Designated Beneficiary, then distributions to
his Designated Beneficiary shall begin by December 31 of the calendar year
immediately following the calendar year in which such Participant died.

 

(3)                                  If there is no
Designated Beneficiary as of September 30 of the year following the year
of such Participant’s death, such Participant’s entire vested interest in the
Plan shall be distributed by December 31 of the calendar year containing
the fifth anniversary of such Participant’s death.

 

(4)                                  If such Participant’s
surviving spouse is his sole Designated Beneficiary and

 

62

 

his surviving spouse dies after him but before distributions to such
surviving spouse begin, this Section 14.3(b), other than Section 14.3(b)(1),
shall apply as if such surviving spouse were such Participant.

 

For purposes of this Section 14.3(b) and Section 14.6,
unless Section 14.3(b)(4) applies, distributions are considered to
begin on a Participant’s Required Beginning Date.  If Section 14.3(b)(4) applies,
distributions are considered to begin on the date distributions are required to
begin to the surviving spouse of a Participant under Section 14.3(b)(1).

 

(c)                                  The
required minimum distribution for a Participant’s first Distribution Calendar
Year shall be made on or before his Required Beginning Date.  The required minimum distribution for any
Distribution Calendar Year, including the required minimum distribution for the
Distribution Calendar Year in which the Participant’s Required Beginning Date
occurs, shall be made on or before December 31 of such Distribution
Calendar Year.

 

14.4                           Forms
of Distribution.

 

Unless a Participant’s
vested interest in the Plan is distributed in a single sum on or before his
Required Beginning Date, as of the first Distribution Calendar Year
distributions shall be made in accordance with Sections 14.5 and 14.6 of this Article XIV.

 

14.5                           Required
Minimum Distributions during Participant’s Lifetime.

 

(a)                                  During
the lifetime of a Participant, the minimum amount that shall be distributed for
each Distribution Calendar Year is the lesser of:

 

(1)                                  The quotient obtained
by dividing the vested balance in such Participant’s Accounts by the
distribution period in the Uniform Lifetime Table set forth in Treasury
Regulation Section 1.401(a)(9)-9, using his age as of his birthday
in such Distribution Calendar Year; or

 

(2)                                  If such Participant’s
sole Designated Beneficiary for the Distribution Calendar Year is his spouse,
the quotient obtained by dividing the vested balance in such Participant’s
Accounts by the number in the Joint and Last Survivor Table set forth in
Treasury Regulation Section 1.401(a)(9)-9, using his and spouse’s
attained ages as of their respective birthdays in such Distribution Calendar
Year.

 

(b)                                 Required
minimum distributions as to a Participant shall be determined under this Section 14.5
beginning with the first Distribution Calendar Year and up to and including the
Distribution Calendar Year that includes such Participant’s date of death.

 

63

 

14.6                           Required
Minimum Distributions after Participant’s Death.

 

(a)                                  If a Participant dies on or after his
Required Beginning Date and there is a Designated Beneficiary as of September 30
of the year after the year of his death, the minimum amount which shall be
distributed for each Distribution Calendar Year after the year of his death is
the quotient obtained by dividing the vested balance in the Participant’s
Accounts by the longer of the remaining life expectancy of the Participant or
the remaining life expectancy of his Designated Beneficiary, determined as
follows:

 

(1)                                  Such Participant’s
remaining life expectancy is calculated using his age in the year of death,
reduced by one for each subsequent year.

 

(2)                                  If such Participant’s
surviving spouse is his sole Designated Beneficiary, the remaining life
expectancy of such surviving spouse shall be calculated for each Distribution
Calendar Year after the year of his death using the surviving spouse’s age as
of such surviving spouse’s birthday in such year.  For Distribution Calendar Years after the
year of such surviving spouse’s death, the remaining life expectancy of such
surviving spouse is calculated using the age of such surviving spouse as of such
surviving spouse’s birthday in the calendar year of such surviving spouse’s
death, reduced by one for each subsequent calendar year.

 

(3)                                  If such Participant’s
surviving spouse is not his sole Designated Beneficiary, the Designated
Beneficiary’s remaining life expectancy shall be calculated using the age of
such Designated Beneficiary in the year following the year of such Participant’s
death, reduced by one for each subsequent year.

 

(b)                                 If
a Participant dies on or after his Required Beginning Date and there is no
Designated Beneficiary as of September 30 of the year after the year of
his death, the minimum amount which shall be distributed for each Distribution
Calendar Year after the year of his death shall be the quotient obtained by
dividing the vested balance in his Accounts by his remaining life expectancy
calculated using his age in the year of death, reduced by one for each
subsequent year.

 

(c)                                  If
a Participant dies before his Required Beginning Date and there is a Designated
Beneficiary as of September 30 of the year after the year of his death,
the minimum amount which shall be distributed for each Distribution Calendar
Year after the year of his death shall be the quotient obtained by dividing the
vested balance in his Accounts by the remaining life expectancy of his
Designated Beneficiary, determined as provided in Section 14.7(a).

 

(d)                                 If
a Participant dies before his Required Beginning Date and there is no
Designated Beneficiary as of September 30 of the year after the year of
his death, distribution of such Participant’s entire vested interest in the
Plan shall be completed by December 31 of the calendar year containing the
fifth anniversary of his death.

 

64

 

(e)                                  If
(1) a Participant dies before his Required Beginning Date, (2) his
surviving spouse is his sole Designated Beneficiary and (3) such surviving
spouse dies before distributions are required to begin to such surviving spouse
under Section 14.3(b)(1), Sections 14.6(c) and 14.6(d) shall apply
as if such surviving spouse were such Participant.

 

14.7                           Miscellaneous.

 

(a)                                  Life expectancy shall be computed by use of
the Single Life Table in Treasury Regulation Section 1.401(a)(9)-9.

 

(b)                                 For purposes of a Distribution Calendar Year,
the balance in a Participant’s Accounts shall be determined as the balance as
of the last Valuation Date in the Valuation Calendar Year with respect to such
Distribution Calendar Year, increased by the amount of any contributions made
and allocated or forfeitures allocated to such balance as of dates in such
Valuation Calendar Year after such Valuation Date and decreased by
distributions made in such Valuation Calendar Year after such Valuation
Date.  An Account balance for a Valuation
Calendar Year with respect to a Distribution Calendar Year shall include any
amounts rolled over or transferred to the Plan either in such Valuation
Calendar Year or in such Distribution Calendar Year if distributed or
transferred in such Valuation Calendar Year.

 

14.8                           Definitions.

 

For purposes of this Article XIV, the following terms shall have
the meanings indicated:

 

(a)                                  “Designated
Beneficiary” shall mean, collectively, the individual or individuals who
are designated as the beneficiary under Section 2.6 and who are the “designated
beneficiary” under Code Section 401(a)(9) and Treasury Regulation Section 1.401(a)(9)-1,
Q&A-4.

 

(b)                                 “Distribution
Calendar Year” shall mean a calendar year for which a minimum distribution
is required under this Article XIV. 
For distributions beginning before a Participant’s death, the first
Distribution Calendar Year is the calendar year immediately preceding the
calendar year which contains his Required Beginning Date.  For distributions beginning after a
Participant’s death (where he dies prior to his Required Beginning Date), the
first Distribution Calendar Year is the calendar year in which distributions
are required to begin under Section 14.3(b).

 

(c)                                  “Required
Beginning Date” shall mean, with respect to a Participant, April 1 of
the calendar year following the calendar year in which he attains age 70-1/2.  Effective with respect to any Participant who
attains age 70-1/2 on or after January 1, 2001 and who is not a “5-percent
owner” within the meaning of Section 416 of the Code, “Required Beginning
Date” means April 1 of the calendar year following the later of (1) calendar
year in which he attains age 70-1/2 or (2) the calendar year in
which he retires.

 

65

 

(d)                                 “Valuation Calendar
Year” shall mean, with respect to a Distribution Calendar Year, the
calendar year immediately preceding such Distribution Calendar Year.

 

 

66

 

ADOPTION OF

GREAT LAKES DREDGE & DOCK COMPANY
401(k) SAVINGS PLAN

BY NORTH AMERICAN SITE DEVELOPERS, INC.

 

NORTH AMERICAN SITE DEVELOPERS, INC., a Massachusetts corporation,
hereby adopts the Great Lakes Dredge & Dock Company 401(k) Savings
Plan for the benefit of its eligible employees, effective as of January 1,
2002.

 

Dated as of January 1, 2002.

 

	
   

  	
  NORTH AMERICAN SITE

  
	
   

  	
   

  	
  DEVELOPERS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Chris A. Berardi

  
	
   

  	
   

  	
  Chris A. Berardi, President

  

 

 

67

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