-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, qNEH21WRHe6+BSG57w6bZsBtunkF42ExlFd206oF/3/jQ3pzVVkf4dmb7TmxTlMf qXLoyIB3E+fyUygxHrslgQ== 0000779334-95-000003.txt : 19950508 0000779334-95-000003.hdr.sgml : 19950508 ACCESSION NUMBER: 0000779334-95-000003 CONFORMED SUBMISSION TYPE: S-8 POS PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950109 EFFECTIVENESS DATE: 19950109 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIRMINGHAM STEEL CORP CENTRAL INDEX KEY: 0000779334 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 133213634 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-8 POS SEC ACT: 1933 Act SEC FILE NUMBER: 033-23563 FILM NUMBER: 95500663 BUSINESS ADDRESS: STREET 1: 1000 URBAN CENTER PARKWAY STREET 2: SUITE 300 CITY: BIRMINGHAM STATE: AL ZIP: 35242 BUSINESS PHONE: 2059701255 MAIL ADDRESS: STREET 1: P.O. BOX 1208 CITY: BIRMINGHAM STATE: AL ZIP: 35201-1208 S-8 POS 1 As filed with the Securities and Exchange Commission on January 9, 1995. Registration No. 33-23563 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Post-Effective Amendment No. 2 To FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 BIRMINGHAM STEEL CORPORATION (Exact name of registrant as specified in its charter) Delaware 13-3213634 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) 1000 Urban Center Drive Suite 300 Birmingham, Alabama 35242 (205) 970-1200 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices and principal place of business) BIRMINGHAM STEEL CORPORATION NON-UNION EMPLOYEES' 401(k) PLAN (Full Title of Plan) EMPLOYEE BENEFIT COMMITTEE Birmingham Steel Corporation 1000 Urban Center Drive Suite 300 Birmingham, Alabama 35242 (205) 970-1200 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Helen T. Ferraro, Esq. Smith, Gambrell & Russell Suite 1800, East Tower 3343 Peachtree Road, N.E. Atlanta, Georgia 30326 (404) 264-2620 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The documents listed below are hereby incorporated by reference into this Registration Statement, and all documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post- effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing such documents: (a) the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1994; (b) the Plan's Annual Report on Form 11-K for the fiscal year ended December 31, 1993; (c) the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994; and (d) the description of the Company's Common Stock contained in the Company's Registration Statement on Form 8-A, as filed with the Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934, on January 22, 1988. Item 6. Indemnification of Officers and Directors. The Registrant's By-Laws provide for indemnification of directors and officers of the Registrant to the full extent permitted by Delaware law. Section 145 of the General Corporation Law of the State of Delaware provides generally that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at its request in such capacity in another corporation or business association, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. In addition, pursuant to the authority of Delaware law, the Certificate of Incorporation of the Registrant also eliminates the monetary liability of directors to the fullest extent permitted by Delaware law. An employment agreement between the Registrant and James A. Todd, Jr., provides for indemnification of Mr. Todd against expenses, judgments, fines and amounts paid in settlement by reason of the fact that Mr. Todd is or was an officer or director of the Registrant or any subsidiary of the Registrant. The Registrant has purchased directors' and officers' liability insurance covering certain liabilities incurred by its officers and directors in connection with the performance of their duties. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable. Item 8. Exhibits. The following exhibit is filed with or incorporated by reference into this Registration Statement. Exhibit Number Description of Exhibit - ----------- ----------------------- 4.1 Birmingham Steel Non-Union Employees' 401(k) Plan (Restated as of January 1, 1995) 4.2 Amendment No. 1 to the Birmingham Steel Non-Union Employees' 401(k) Plan (As Amended and Restated Effective January 1, 1995) Item 9. Undertakings. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's Annual Report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof. (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Post- Effective Amendment No. 2 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Birmingham, State of Alabama, on this 4th day of January, 1995. BIRMINGHAM STEEL CORPORATION Date: 01/04/95 By: James A. Todd, Jr. -------------------------- James A. Todd, Jr., Chairman of the Board and Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Act of 1933, this registration statement (post-effective amendment) has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date James A. Todd, Jr. Chairman of the Board 01/04/95 - ----------------------- and James A. Todd, Jr. Chief Executive Officer Paul H. Ekberg Vice Chairman of the 01/04/95 - ----------------------- Board and Chief Paul H. Ekberg Operating Officer Thomas N. Tyrrell Vice Chairman of the 01/04/95 - ----------------------- Board and Chief Thomas N. Tyrrell Operating Officer John M. Casey Executive Vice 01/04/95 - ----------------------- President and Chief Financial John M. Casey Officer Robert E. Powell Vice President - 01/04/95 - ---------------------- Controller and Chief Accounting Robert E. Powell Officer William J. Cabaniss, Jr. Director 01/04/95 - ------------------------ William J. Cabaniss, Jr. John M. Harbert III Director 01/04/95 - ------------------------ John M. Harbert III Harry Holiday, Jr. Director 01/04/95 - ------------------------ Harry Holiday, Jr. George A. Stinson Director 01/04/95 - ------------------------ George A. Stinson Pursuant to the requirements of the Securities Act of 1933, the trustee (or other persons who administer the employee benefit plan) have duly caused this Post- Effective Amendment No. 2 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Birmingham, State of Alabama, on the 4th day of January, 1995. BIRMINGHAM STEEL CORPORATION NON-UNION EMPLOYEES' 401(k) PLAN By: James Rogers ------------------------------- James Rogers - Member of the Employee Benefit Committee and Vice President - Human Resources of the Company EXHIBIT 4 Exhibit Index Exhibit Description 4.1 Birmingham Steel Non-Union Employees' 401(k) Plan (Restated as of January 1, 1995) BIRMINGHAM STEEL CORPORATION 401(k) PLAN Restated Effective January 1, 1995 TABLE OF CONTENTS ARTICLE I DEFINITIONS 1.01 "Account" 1.02 "Accounting Date" 1.03 "Accrued Benefit" 1.04 "Active Participant" 1.05 "AS&W" 1.06 "AS&W Plan" 1.07 "AS&W Account Balance or Balances" 1.08 "Beneficiary" 1.09 "Board of Directors" 1.10 "Code" 1.11 "Committee" 1.12 "Compensation" 1.13 "Disability" 1.14 "Effective Date" 1.15 "Employee" 1.16 "Employer" 1.17 Employer Basic Contributions 1.18 Employer Matching Contributions 1.19 Employer Qualified Nonelective Contributions 1.20 "Employer Securities" 1.21 "ERISA" 1.22 "Hardship Distribution" 1.23 "Highly Compensated Employee" 1.24 "Hour of Service" 1.25 "Investment Manager" 1.26 Leased Employees 1.27 Named Administrative Fiduciary 1.28 Named Fiduciary 1.29 Named Investment Fiduciary 1.30 "Nonforfeitable" 1.31 "Participant" 1.32 "Participating Employer" 1.33 "Plan" 1.34 "Plan Administrator" 1.35 Plan Maintained by More Than One Employer 1.36 "Plan Year" 1.37 Related Employers 1.38 "Separation from Service" 1.39 "Service" 1.40 Service for Predecessor Employer 1.41 Top Heavy Status 1.42 "Trust" or "Trust Agreement" 1.43 "Trust Fund" 1.44 "Trustee" 1.45 "Valuation Date" ARTICLE II ELIGIBILITY AND PARTICIPATION 2.01 Eligibility to participate 2.02 Excluded Employees 2.03 Rules pertaining to Excluded Employees 2.04 Participation upon Re-employment ARTICLE III CONTRIBUTIONS 3.01 Employee Deferral Contributions 3.02 Employer Matching Contributions 3.03 Employer Basic Contributions 3.04 Employer Qualified Nonelective Contributions 3.05 Forfeiture Allocation 3.06 Time of Payment of Deferral Contributions and Employer Contributions 3.07 Return of Contributions 3.08 Top Heavy Minimum Allocation 3.09 Suspension of Active Participant Requirement 3.10 Employee After-Tax Contributions 3.11 Participant Rollover Contributions 3.12 Establishment of Participant Accounts 3.13 Limitations on Allocations to Participants' Accounts 3.14 Definitions - Article III ARTICLE IV PROVISIONS RELATING TO CODE SUBSECTION 401(k) AND TO CODE SUBSECTION 401(m) 4.01 SUBSECTION 401(k) Arrangement 4.02 Definitions 4.03 Annual Elective Deferral Limitation 4.04 Actual Deferral Percentage ("ADP") Test 4.05 Nondiscrimination Rules for Employer Matching Contributions/Participant Nondeductible Contributions 4.06 Multiple Use Limitation ARTICLE V DISTRIBUTIONS 5.01 Normal Retirement Age 5.02 Participant Disability or Death 5.03 Vesting Schedule 5.04 Cash-Out Distributions to Partially-Vested Participants/ Restoration of Forfeited Accrued Benefit 5.05 Segregated Account for Repaid Amount 5.06 Year of Service - Vesting 5.07 Break In Service - Vesting 5.08 Included Years of Service - Vesting 5.09 Forfeiture Occurs 5.10 Vesting for Special Classes of Participants ARTICLE VI TIME AND METHOD OF PAYMENT OF BENEFITS 6.01 Time of Payment of Accrued Benefit 6.02 Method of Payment of Accrued Benefit 6.03 Benefit Payment Elections after Separation from Service 6.04 Form of Distribution 6.05 Optional Forms of Benefit under the AS&W Plan 6.06 Distributions under Domestic Relations Order ARTICLE VII DUTIES OF THE BOARD OF DIRECTORS AND THE EMPLOYER 7.01 Responsibilities of the Board of Directors 7.02 Responsibilities of the Employer 7.03 Information to Committee 7.04 No Liability 7.05 Indemnity of Certain Fiduciaries 7.06 Amendment to Vesting Schedule ARTICLE VIII PARTICIPANT ADMINISTRATIVE PROVISIONS 8.01 Beneficiary Designation 8.02 No Beneficiary Designation/Death of Beneficiary 8.03 Personal Data to Committee 8.04 Address for Notification 8.05 Assignment or Alienation 8.06 Notice of Change in Terms 8.07 Litigation against the Trust 8.08 Information Available 8.09 Appeal Procedure for Denial of Benefits ARTICLE IX EMPLOYEE BENEFITS COMMITTEE 9.01 Appointment and Term of Office 9.02 Named Administrative Fiduciary 9.03 Named Investment Fiduciary 9.04 Assistants and Advisors 9.05 Funding Policy 9.06 Manner of Action 9.07 Authorized Representative 9.08 Interested Member 9.09 Individual Accounts 9.10 Value of Participant's Accrued Benefit 9.11 Allocation and Distribution of Net Income Gain or Loss 9.12 Individual Statement 9.13 Account Charged 9.14 Unclaimed Account Procedure ARTICLE X LOANS AND HARDSHIP DISTRIBUTIONS 10.01 Loans 10.02 Hardship Distributions ARTICLE XI TRUST AGREEMENT 11.01 Establishment of Trust Agreement 11.02 Removal of Trustee 11.03 Powers of the Trustee ARTICLE XII INVESTMENT OF THE TRUST FUND 12.01 Investment Funds 12.02 Company Stock Fund 12.03 Investment Manager ARTICLE XIII EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION 13.01 Exclusive Benefit 13.02 Amendment by Employer 13.03 Discontinuance 13.04 Full Vesting on Termination 13.05 Merger/Direct Transfer 13.06 Termination ARTICLE XIV PARTICIPATING EMPLOYERS 14.01 Procedures for Adopting the Plan 14.02 Single Plan 14.03 Authority under the Plan 14.04 Termination of a Participating Employer from the Plan ARTICLE XV MERGER OF THE AS&W PLAN INTO THIS PLAN 15.01 Merger of the AS&W Plan 15.02 Trustee and Plan Administrator 15.03 Participant Account Balances 15.04 Accrual of Future Benefits 15.05 Transfer of Assets ARTICLE XVI MISCELLANEOUS 16.01 Delegation of Authority 16.02 No Responsibility for Employer Action 16.03 Fiduciaries not Insurers 16.04 Waiver of Notice 16.05 Successors 16.06 Employment Not Guaranteed 16.07 Rules of Construction 16.08 Governing Law BIRMINGHAM STEEL CORPORATION 401(k) PLAN Restated Effective January 1, 1995 BIRMINGHAM STEEL CORPORATION, a Delaware corporation, hereby adopts this amendment and restatement of the BIRMINGHAM STEEL CORPORATION 401(k) PLAN, effective as of January 1, 1995. BACKGROUND: Effective August 15, 1984, BIRMINGHAM STEEL CORPORATION (the "Employer") established The Birmingham Steel Corporation and Affiliated Companies Non-Union Employees' Profit Sharing Plan and Trust Agreement (the "Profit Sharing Plan"). Effective January 1, 1990, the Employer amended, restated and continued the Profit Sharing Plan in the form of The Birmingham Steel Corporation 401(k) Plan (the "401(k) Plan"), and entered into a related 401(k) Trust Agreement with Merrill Lynch Trust Company, as Trustee. On May 30, 1994, the Employer amended and restated the 401(k) Plan to comply with the Tax Reform Act of 1986 and related pension reform legislation. Effective January 1, 1995, the American Steel & Wire Corporation Savings and Retirement Plan (the "AS&W Plan") is merged into the Birmingham Steel Corporation 401(k) Plan. Article XV of this restated 401(k) Plan sets forth certain terms and provisions of such merger. Such merger is expressly permitted under Section 8.3 of the AS&W Plan and under Section 13.05 of the Birmingham Steel Corporation 401(k) Plan. On and after January 1, 1995, no further benefits shall accrue for a Participant in the AS&W Plan, and the Birmingham Steel Corporation 401(k) Plan, as the survivor of the plan merger, shall be the source of all accrued benefits for all Participants of the two merged Plans. Immediately after such merger, the Birmingham Steel Corporation 401(k) Plan, being the surviving Plan, provides each Participant in the AS&W Plan a benefit equal to or greater than the benefit such AS&W Participant would have received had the AS&W Plan terminated on December 31, 1994. Furthermore, on and after January 1, 1995, the Birmingham Steel Corporation 401(k) Plan shall preserve the Code Subsection 411(d)(6) protected benefits of the January 1, 1995 account balances of Participants in the AS&W Plan. The 401(k) Plan permits Birmingham Steel Corporation to adopt amendments or restatements without the consent of any Participating Employer or Participant. Birmingham Steel Corporation now wishes to amend and restate the Birmingham Steel Corporation 401(k) Plan, effective January 1, 1995, to change certain features of the 401(k) Plan and to incorporate the protected benefits of the January 1, 1995 account balances of Participants in the AS&W Plan. The rights of an Employee who terminates employment shall be governed by the provisions of the 401(k) Plan in effect on the Employee's termination date. THEREFORE, Birmingham Steel Corporation hereby amends and restates the Birmingham Steel Corporation 401(k) Plan, effective January 1, 1995, as follows: ARTICLE I DEFINITIONS The following terms, when used in this Plan with an initial capital letter, have the meanings set forth below, unless a different meaning is clearly required by the context. Definitions of other terms are set forth throughout the Plan. 1.01 "Account" means the separate account(s) which the Committee or the Trustee maintains for a Participant under the Plan. 1.02 "Accounting Date" is the last day of the Plan Year. Unless otherwise specified in the Plan, the Committee will make all Plan allocations for a particular Plan Year as of the Accounting Date of that Plan Year. 1.03 "Accrued Benefit" means the amount standing in a Participant's Account(s) as of any date derived from both Employer contributions and Employee contributions, if any. 1.04 "Active Participant" means a Participant who is entitled to an Employer Basic Contribution under Section 3.03 and/or an Employer Qualified Nonelective Contribution under Section 3.04. 1.05 "AS&W" means American Steel & Wire Corporation, which is a wholly-owned subsidiary of Birmingham Steel Corporation. 1.06 "AS&W Plan" means the American Steel & Wire Corporation Savings and Retirement Plan, which was merged into the Birmingham Steel Corporation 401(k) Plan, effective January 1, 1995. 1.07 "AS&W Account Balance or Balances" means the account balances of the Participants, Former Participants, and Beneficiaries under the AS&W Plan as of January 1, 1995 (and earnings on such account balances after such date), which are merged into and transferred to the Birmingham Steel Corporation 401(k) Plan and Trust on or after January 1, 1995. 1.08 "Beneficiary" means a person designated by a Participant who is or may become entitled to a benefit under the Plan. A Beneficiary who becomes entitled to a benefit under the Plan remains a Beneficiary under the Plan until the Trustee has fully distributed his benefit to him. A Beneficiary's right to (and the Plan Administrator's, the Committee's or a Trustee's duty to provide to the Beneficiary) information or data concerning the Plan does not arise until he first becomes entitled to receive a benefit under the Plan. 1.09 "Board of Directors" means the members of the Board of Directors of Birmingham Steel Corporation. 1.10 "Code" means the Internal Revenue Code of 1986, as amended. 1.11 "Committee" means the Employee Benefits Committee appointed by the Board of Directors to administer the Plan, as provided in Article IX. 1.12 "Compensation" means wages as defined under Code Subsection 3401(a) for purposes of federal income tax withholding at the source, and all payments to an Employee in the course of the Employer's trade or business, for which the Employer must furnish the Employee a written statement under Code Subsection 6041(d) and 6051(a)(3). As long as the instructions to Form W-2, Box 10, are consistent with the instructions for the 1990 or 1991 Form W-2, the Employer may treat the amount reported in Box 10 as satisfying this definition. The Committee will determine Compensation by disregarding any rules limiting the remuneration included as wages based on the nature or location of the employment or services performed. Compensation also includes elective contributions made by the Employer on the Employee's behalf. "Elective contributions" are amounts excludible from the Employee's gross income under Code Subsection 125, 402(a)(8), 402(h) or 403(b), and contributed by the Employer, at the Employee's election, to a Code Subsection 401(k) arrangement, a Simplified Employee Pension, cafeteria plan or tax- sheltered annuity. A Compensation payment includes Compensation paid by the Employer to an Employee through another person under the common paymaster provisions in Code Subsection 3121(s) and 3306(p). Any reference in this Plan to Compensation is a reference to the definition in this Section 1.12 unless the Plan reference specifies a modification to this definition. The Committee will take into account only Compensation actually paid for the relevant period. Special definition for salary reduction contributions. For purposes of determining the Employee's salary reduction contributions under a salary reduction agreement, "Compensation" means Compensation as defined in this Section 1.12 determined prior to the reduction authorized by that salary reduction agreement. (A) Limitations on Compensation. (1) Compensation dollar limitation. This Section 1.12(A)(1) limits Compensation as required by the Omnibus Budget Reconciliation Act of 1993 ("OBRA 93"). In addition to other applicable provisions set forth in the Plan and notwithstanding any other provision of the Plan to the contrary, for the Plan years beginning on or after January 1, 1994, the annual compensation of each employee taken into account under the Plan shall not exceed the OBRA 93 annual compensation limit. The OBRA 93 annual compensation limit is $150,000, as adjusted by the Commissioner for increases in the cost of living in accordance with Code Subsection 401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA 93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, the denominator of which is 12. For Plan years beginning on or after January 1, 1994, any reference in this Plan to the limitation under Code Subsection 401(a)(17) shall mean the OBRA 93 annual compensation limit set forth in this provision. If compensation for any prior determination period is taken into account in determining an employee's benefits accruing in the current Plan year, the compensation for that prior determination period is subject to the OBRA 93 annual compensation limit in effect for that prior determination period. For this purpose, for determination period beginning before the first day of the first Plan year beginning on or after January 1, 1994, the OBRA 93 annual compensation limit is $150,000. (2) Application of compensation limitation to certain family members. The $200,000 Compensation limitation applies to the combined Compensation of the Employee and of any family member aggregated with the Employee under Section 1.23 who is either (i) the Employee's spouse; or (ii) the Employee's lineal descendant under the age of 19. If, for a Plan Year, the combined Compensation of the Employee and such family members who are Participants entitled to an allocation for that Plan Year exceeds the $200,000 (or adjusted) limitation, "Compensation" for each such Participant, for purposes of the contribution and allocation provisions of Article III, means his Adjusted Compensation. Adjusted Compensation is the amount which bears the same ratio to the $200,000 (or adjusted) limitation as the affected Participant's Compensation (without regard to the $200,000 Compensation limitation) bears to the combined Compensation of all the affected Participants in the family unit. If the Plan uses permitted disparity, the Committee must determine the integration level of each affected family member Participant prior to the proration of the $200,000 Compensation limitation, but the combined integration level of the affected Participants may not exceed $200,000 (or the adjusted limitation). The combined Excess Compensation of the affected Participants in the family unit may not exceed $200,000 (or the adjusted limitation) minus the affected Participants' combined integration level (as determined under the preceding sentence). If the combined Excess Compensation exceeds this limitation, the Committee will prorate the Excess Compensation limitation among the affected Participants in the family unit in proportion to each such individual's Adjusted Compensation minus his integration level. (B) Nondiscrimination. For purposes of determining whether the Plan discriminates in favor of Highly Compensated Employees, Compensation means Compensation as defined in this Section 1.12 except any exclusions from Compensation do not apply. The Employer may also elect to use an alternate nondiscriminatory definition, in accordance with the requirements of Code Subsection 414(s) and the regulations issued under that Code section. In determining Compensation under this Section 1.12, the Employer may elect to include all elective contributions made by the Employer on behalf of the Employees. The Employer's election to include elective contributions must be consistent and uniform with respect to Employees. The Employer may make this election to include elective contributions for nondiscrimination testing purposes, irrespective of whether this Section 1.12 includes elective contributions in the general Compensation definition applicable to this Plan. 1.13 "Disability" means the Participant, because of a physical or mental disability, will be unable to perform the duties of his customary position of employment (or is unable to engage in any substantial gainful activity) for an indefinite period which the Committee considers will be of long continued duration. The Plan considers a Participant Disabled on the date the Committee determines the Participant satisfies the definition of Disability. The Committee may require a Participant to submit to a physical examination in order to confirm Disability. The Committee will apply the provisions of this Section 1.13 in a nondiscriminatory, consistent and uniform manner. 1.14 "Effective Date" of the Plan, is August 15, 1984. The Effective Date of this amendment and restatement of the Plan is January 1, 1995, except that certain provisions of this amended and restated Plan are effective on other dates, as provided herein. 1.15 "Employee" means any person who is considered an employee of the Employer for purposes of ERISA or the Code. In addition, the term "Employee" includes each Leased Employee as defined in Section 1.26. A Leased Employee is not eligible to participate in the Plan. Birmingham Steel Corporation may, to the extent permitted by the Code or ERISA, exclude from participation in the Plan any Employee or class of Employee or any Related Employer (as defined in Section 1.37) or any division, department or distinct unit of an Employer. 1.16 "Employer" means BIRMINGHAM STEEL CORPORATION, a Delaware corporation, or its successor or successors. The term "Employer" also includes each Participating Employer that, with the consent of BIRMINGHAM STEEL CORPORATION, adopts the Plan for its eligible Employees. Birmingham Steel Corporation is the Plan sponsor and has full authority to amend or terminate the Plan, to appoint or to act as the Plan Administrator, and to appoint or remove the Trustee or Trustees. 1.17 Employer Basic Contributions. See Section 3.03. 1.18 Employer Matching Contributions. See Section 3.02. 1.19 Employer Qualified Nonelective Contributions. See Section 3.04. 1.20 "Employer Securities" means common stock issued by Birmingham Steel Corporation, or by a corporation that is a member of the same controlled group of corporations. 1.21 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 1.22 "Hardship Distribution" means an in-Service distribution by reason of a Participant's financial hardship, as provided in Section 10.2. 1.23 "Highly Compensated Employee" means an Employee who, during the Plan Year or during the preceding 12-month period: (a) Is a more than 5% owner of the Employer (applying the constructive ownership rules of Code Subsection 318, and applying the principles of Code Subsection 318, for an unincorporated entity); (b) Has Compensation in excess of $75,000 (as adjusted by the Commissioner of Internal Revenue for the relevant year); (c) Has Compensation in excess of $50,000 (as adjusted by the Commissioner of Internal Revenue for the relevant year) and is part of the top-paid 20% group of employees (based on Compensation for the relevant year); or (d) Has Compensation in excess of 50% of the dollar amount prescribed in Code Subsection 415(b)(1)(A) (relating to defined benefit plans) and is an officer of the Employer. If the Employee satisfies the definition in clause (b), (c) or (d) in the Plan Year but does not satisfy clause (b), (c) or (d) during the preceding 12-month period and does not satisfy clause (a) in either period, the Employee is a Highly Compensated Employee only if he is one of the 100 most highly compensated Employees for the Plan Year. The number of officers taken into account under clause (d) will not exceed the greater of 3 or 10% of the total number (after application of the Code Subsection 414 (q) exclusions) of Employees, but no more than 50 officers. If no Employee satisfies the Compensation requirement in clause (d) for the relevant year, the Committee will treat the highest paid officer as satisfying clause (d) for that year. For purposes of this Section 1.23, "Compensation" means Compensation as defined in Section 1.12, except Compensation must include "elective contributions" (as defined in Section 1.12). The Committee must make the determination of who is a Highly Compensated Employee, including the determinations of the number and identity of the top paid 20% group, the top 100 paid Employees, the number of officers includible in clause (d) and the relevant Compensation, consistent with Code Subsection 414(q) and regulations issued under that Code section. The Employer may make a calendar year election to determine the Highly Compensated Employees for the Plan Year, as prescribed by Treasury regulations. A calendar year election must apply to all plans and arrangements of the Employer. For purposes of applying any nondiscrimination test required under the Plan or under the Code, in a manner consistent with applicable Treasury regulations, the Committee will treat a Highly Compensated Employee and all family members (a spouse, a lineal ascendant or descendant, or a spouse of a lineal ascendant or descendant) as a single Highly Compensated Employee, but only if the Highly Compensated Employee is a more than 5% owner or is one of the 10 Highly Compensated Employees with the greatest Compensation for the Plan Year. This aggregation rule applies to a family member even if that family member is a Highly Compensated Employee without family aggregation. The term "Highly Compensated Employee" also includes any former Employee who separated from Service (or has a deemed Separation from Service, as determined under Treasury regulations) prior to the Plan Year, performs no Service for the Employer during the Plan Year, and was a Highly Compensated Employee either for the separation year or any Plan Year ending on or after his 55th birthday. 1.24 "Hour of Service" means: (a) Each Hour of Service for which the Employer, either directly or indirectly, pays an Employee, or for which the Employee is entitled to payment, for the performance of duties. The Committee credits Hours of Service under this paragraph (a) to the Employee for the computation period in which the Employee performs the duties, irrespective of when paid; (b) Each Hour of Service for back pay, irrespective of mitigation of damages, to which the Employer has agreed or for which the Employee has received an award. The Committee credits Hours of Service under this paragraph (b) to the Employee for the computation period(s) to which the award or the agreement pertains rather than for the computation period in which the award, agreement or payment is made; and (c) Each Hour of Service for which the Employer, either directly or indirectly, pays an Employee, or for which the Employee is entitled to payment (irrespective of whether the employment relationship is terminated), for reasons other than for the performance of duties during a computation period, such as leave of absence, vacation, holiday, sick leave, illness, incapacity (including disability), layoff, jury duty or military duty. The Committee will credit no more than 501 Hours of Service under this paragraph (c) to an Employee on account of any single continuous period during which the Employee does not perform any duties (whether or not such period occurs during a single computation period). The Committee credits Hours of Service under this paragraph (c) in accordance with the rules of paragraphs (b) and (c) of Labor Reg. Subsection 2530.200b-2, which the Plan, by this reference, specifically incorporates in full within this paragraph (c). The Committee will not credit an Hour of Service under more than one of the above paragraphs. A computation period for purposes of this Section 1.24 is the Plan Year, Year of Service period, Break in Service period or other period, as determined under the Plan provision for which the Committee is measuring an Employee's Hours of Service. The Committee will resolve any ambiguity with respect to the crediting of an Hour of Service in favor of the Employee. (A) Method of crediting Hours of Service. The Employer will credit every Employee with Hours of Service on the basis of the "actual" method. For purposes of the Plan, "actual" method means the determination of Hours of Service from records of hours worked and hours for which the Employer makes payment or for which payment is due from the Employer. (B) Maternity/paternity leave. Solely for purposes of determining whether the Employee incurs a Break in Service under any provision of this Plan, the Committee must credit Hours of Service during an Employee's unpaid absence period due to maternity or paternity leave. The Committee considers an Employee on maternity or paternity leave if the Employee's absence is due to the Employee's pregnancy, the birth of the Employee's child, the placement with the Employee of an adopted child, or the care of the Employee's child immediately following the child's birth or placement. The Committee credits Hours of Service under this paragraph on the basis of the number of Hours of Service the Employee would receive if he were paid during the absence period or, if the Committee cannot determine the number of Hours of Service the Employee would receive, on the basis of 8 hours per day during the absence period. The Committee will credit only the number (not exceeding 501) of Hours of Service necessary to prevent an Employee's Break in Service. The Committee credits all Hours of Service described in this paragraph to the computation period in which the absence period begins or, if the Employee does not need these Hours of Service to prevent a Break in Service in the computation period in which his absence period begins, the Committee credits these Hours of Service to the immediately following computation period. 1.25 "Investment Manager" means a fiduciary (as defined in ERISA Subsection 3(21)(A)), other than a trustee or named fiduciary as defined in ERISA Subsection 402(a)(2), who: (a) has the power to manage, acquire or dispose of any asset of the Plan; (b) who is (i) registered as an investment advisor under the Investment Advisors Act of 1940, or (ii) is a bank as defined in such Act, or (iii) is an insurance company qualified to perform services referred to in (a) under the laws of more than one state; and (c) who has acknowledged in writing that he is a fiduciary with respect to the Plan. 1.26 Leased Employees. Except as provided in Subsection (A) below, the Plan treats a Leased Employee as an Employee of the Employer, but a Leased Employee is not eligible to participate in the Plan. A Leased Employee is an individual (who otherwise is not an Employee of the Employer) who, pursuant to a leasing agreement between the Employer and any other person, has performed services for the Employer (or for the Employer and any persons related to the Employer within the meaning of Code Subsection 144(a)(3)) on a substantially full time basis for at least one year and who performs services historically performed by employees in the Employer's business field. If a Leased Employee is treated as an Employee by reason of this Section 1.26, "Compensation" includes Compensation from the leasing organization which is attributable to services performed for the Employer. (A) Safe harbor plan exception. The Plan does not treat a Leased Employee as an Employee if the leasing organization covers the employee in a safe harbor plan and, prior to application of this safe harbor plan exception, 20% or less of the Employer's Employees (other than Highly Compensated Employees) are Leased Employees. A safe harbor plan is a money purchase pension plan providing immediate participation, full and immediate vesting, and a nonintegrated contribution formula equal to at least 10% of the employee's compensation without regard to employment by the leasing organization on a specified date. The safe harbor plan must determine the 10% contribution on the basis of compensation as defined in Code Subsection 415(c)(3) plus elective contributions (as defined in Section 1.12). (B) Other requirements. The Committee must apply this Section 1.26 in a manner consistent with Code Subsection 414(n) and 414(o) and the regulations issued under those Code sections. The Committee will reduce a Leased Employee's allocation of Employer contributions under this Plan by the Leased Employee's allocation under the leasing organization's plan, but only to the extent that allocation is attributable to the Leased Employee's service provided to the Employer. 1.27 Named Administrative Fiduciary. See Section 9.02. 1.28 Named Fiduciary means a fiduciary within the meaning of ERISA Subsection 402(a). 1.29 Named Investment Fiduciary. See Section 9.03. 1.30 "Nonforfeitable" means a Participant's or Beneficiary's unconditional claim, legally enforceable against the Plan, to the Participant's Accrued Benefit. 1.31 "Participant" is an Employee who is eligible to be and becomes a Participant in accordance with the provisions of Section 2.01. 1.32 "Participating Employer" means any business organization that, with the consent of Birmingham Steel Corporation, adopts the Plan as provided in Article XIV. 1.33 "Plan" means THE BIRMINGHAM STEEL CORPORATION 401(k) PLAN as set forth herein, as it may be amended from time to time. 1.34 "Plan Administrator" is Birmingham Steel Corporation, unless Birmingham Steel Corporation designates another person to hold the position of Plan Administrator. In addition to its other duties, the Plan Administrator has full responsibility for compliance with the reporting and disclosure rules under ERISA as respects this Plan. 1.35 Plan Maintained by More Than One Employer. (A) Treatment of Employers. If more than one Employer maintains this Plan, then for purposes of determining Service and Hours of Service, the Committee will treat all Participating Employers maintaining this Plan as a single employer. (B) Plan Allocations. The Committee must allocate all Employer contributions and forfeitures to each Participant in the Plan, in accordance with Article III, without regard to which contributing Employer employs the Participant. A Participant's Compensation includes Compensation from all Participating Employers, irrespective of which Employers are contributing to the Plan. 1.36 "Plan Year" means the fiscal year of the Plan, a 12 consecutive month period ending every December 31. 1.37 Related Employers. A related group is a controlled group of corporations (as defined in Code Subsection 414(b)), trades or businesses (whether or not incorporated) which are under common control (as defined in Code Subsection 414(c)) or an affiliated service group (as defined in Code Subsection 414(m) or in Code Subsection 414(o)). If the Employer is a member of a related group, the term "Employer" includes the related group members for purposes of crediting Hours of Service, determining Years of Service and Breaks in Service under Articles II and V, applying the Participation Test and the Coverage Test under Section 3.06(D), applying the limitations on allocations in Part 2 of Article III, applying the top heavy rules and the minimum allocation requirements of Article III, the definitions of Employee, Highly Compensated Employee, Compensation and Leased Employee, and for any other purpose required by the applicable Code section or by a Plan provision. However, only an Employer described in Section 1.16 may contribute to the Plan and only an Employee employed by an Employer described in Section 1.16 is eligible to participate in this Plan. For Plan allocation purposes, "Compensation" does not include Compensation received from a Related Employer that is not participating in this Plan. 1.38 "Separation from Service" means an Employee's termination from the Service of Birmingham Steel Corporation and all Participating Employers. 1.39 "Service" means any period of time the Employee is in the employ of the Employer (or a Participating Employer), including any period the Employee is on an unpaid leave of absence authorized by the Employer (or a Participating Employer) under a uniform, nondiscriminatory policy applicable to all Employees. The Service of an Employee of AS&W includes all such Employee's Service with AS&W. 1.40 Service for Predecessor Employer. If the Employer maintains the plan of a predecessor employer, the Plan treats service of the Employee with the predecessor employer as service with the Employer or a Participating Employer. In this connection, it is acknowledged and agreed that Birmingham Steel Corporation maintains the AS&W Plan by reason of the merger of the AS&W Plan into the Birmingham Steel Corporation 401(k) Plan, effective January 1, 1995. 1.41 Top Heavy Status. If this Plan is the only qualified plan maintained by the Employer, the Plan is top heavy for a Plan Year if the top heavy ratio as of the Determination Date exceeds 60%. The Top Heavy Ratio is a fraction, the numerator of which is the sum of the present value of Accrued Benefits of all Key Employees as of the Determination Date and the denominator of which is a similar sum determined for all Employees. The Committee must include in the top heavy ratio, as part of the present value of Accrued Benefits, any contribution not made as of the Determination Date but includible under Code Subsection 416 and the applicable Treasury regulations, and distributions made within the Determination Period. The Committee must calculate the top heavy ratio by disregarding the Accrued Benefit (and distributions, if any, of the Accrued Benefit) of any Non-Key Employee who was formerly a Key Employee, and by disregarding the Accrued Benefit (including distributions, if any, of the Accrued Benefit) of an individual who has not received credit for at least one Hour of Service with the Employer during the Determination Period. The Committee must calculate the top heavy ratio, including the extent to which it must take into account distributions, rollovers and transfers, in accordance with Code Subsection 416 and the regulations under that Code section. If the Employer maintains other qualified plans (including a simplified employee pension plan), or maintained another such plan which now is terminated, this Plan is top heavy only if it is part of the Required Aggregation Group, and the top heavy ratio for the Required Aggregation Group and for the Permissive Aggregation Group, if any, each exceeds 60%. The Committee will calculate the top heavy ratio in the same manner as required by the first paragraph of this Section 1.41, taking into account all plans within the Aggregation Group. To the extent the Committee must take into account distributions to a Participant, the Committee must include distributions from a terminated plan which would have been part of the Required Aggregation Group if it were in existence on the Determination Date. The Committee will calculate the present value of accrued benefits under defined benefit plans or simplified employee pension plans included within the group in accordance with the terms of those plans, Code Subsection 416 and the regulations under that Code section. If a Participant in a defined benefit plan is a Non-Key Employee, the Committee will determine his accrued benefit under the accrual method, if any, which is applicable uniformly to all defined benefit plans maintained by the Employer or, if there is no uniform method, in accordance with the slowest accrual rate permitted under the fractional rule accrual method described in Code Subsection 411(b)(1)(C). To calculate the present value of benefits from a defined benefit plan, the Committee will use the actuarial assumptions (interest and mortality only) prescribed by the defined benefit plan(s) to value benefits for top heavy purposes. If an aggregated plan does not have a valuation date coinciding with the Determination Date, the Committee must value the Accrued Benefits in the aggregated plan as of the most recent valuation date falling within the twelve-month period ending on the Determination Date, except as Code Subsection 416 and applicable Treasury regulations require for the first and second plan year of a defined benefit plan. The Committee will calculate the top heavy ratio with reference to the Determination Dates that fall within the same calendar year. Definitions. For purposes of applying the provisions of this Section 1.41: (a) "Key Employee" means, as of any Determination Date, any Employee or former Employee (or Beneficiary of such Employee) who, for any Plan Year in the Determination Period: (i) has Compensation in excess of 50% of the dollar amount prescribed in Code Subsection 415(b)(1)(A) (relating to defined benefit plans) and is an officer of the Employer; (ii) has Compensation in excess of the dollar amount prescribed in Code Subsection 415(c)(1)(A) (relating to defined contribution plans) and is one of the Employees owning the ten largest interests in the Employer; (iii) is a more than 5% owner of the Employer; or (iv) is a more than 1% owner of the Employer and has Compensation of more than $150,000. The constructive ownership rules of Code Subsection 318 (or the principles of that section, in the case of an unincorporated Employer,) will apply to determine ownership in the Employer. The number of officers taken into account under clause (i) will not exceed the greater of 3 or 10% of the total number (after application of the Code Subsection 414(q) exclusions) of Employees, but no more than 50 officers. The Committee will make the determination of who is a Key Employee in accordance with Code Subsection 416(i)(1) and the regulations under that Code section. (b) "Non-Key Employee" is an employee who does not meet the definition of Key Employee. (c) "Compensation" means Compensation as determined under Section 1.23 for purposes of identifying Highly Compensated Employees. (d) "Required Aggregation Group" means: (1) each qualified plan of the Employer in which at least one Key Employee participates at any time during the Determination Period; and (2) any other qualified plan of the Employer which enables a plan described in clause (1) to meet the requirements of Code Subsection 401(a)(4) or of Code Subsection 410. (e) "Permissive Aggregation Group" is the Required Aggregation Group plus any other qualified plans maintained by the Employer, but only if such group would satisfy in the aggregate the requirements of Code Subsection 401(a)(4) and of Code Subsection 410. The Committee will determine the Permissive Aggregation Group. (f) "Employer" means the Employer that adopts this Plan and any related employers described in Section 1.37. (g) "Determination Date" for any Plan Year is the Accounting Date of the preceding Plan Year or, in the case of the first Plan Year of the Plan, the Accounting Date of that Plan Year. The "Determination Period" is the 5 year period ending on the Determination Date. 1.42 "Trust" or "Trust Agreement" means the separate written declaration of trust entered into between Birmingham Steel Corporation and the Trustee, under which the Trust Fund is held. 1.43 "Trust Fund" means all property of every kind held, invested and distributed in accordance with the provisions of this Plan and of the Trust entered into between Birmingham Steel Corporation and the Trustee. This Plan creates a single Trust for all employers participating under the Plan. However, the Trustee will maintain separate records of account in order to reflect properly each Participant's Accrued Benefit derived from each Participating Employer. 1.44 "Trustee" means MERRILL LYNCH TRUST COMPANY, a New Jersey corporation, or any successor in office who in writing accepts the position of Trustee, as provided in the Trust Agreement. 1.45 "Valuation Date" means the Accounting Date and each other date on which the Trust Fund and/or Participant Accounts are valued as provided under the Plan or as designated by the Committee. ARTICLE II ELIGIBILITY AND PARTICIPATION 2.01 Eligibility to participate. Each Employee (other than an Excluded Employee, as defined in Section 2.01) becomes a Participant in the Plan on the January 1, April 1, July 1 or October 1 (if employed on that date) coinciding with or next following the date the Employee first performs an Hour of Service for the Employer. Each Employee who was a Participant in the Plan on December 31, 1994 shall continue as a Participant in this restated Plan, unless such Participant has Separated from Service. The AS&W Plan was merged into this Plan effective January 1, 1995, and each Employee who was a Participant in the AS&W Plan on January 1, 1995 shall become a Participant in this Plan on January 1, 1995, unless such Employee has Separated from Service. 2.02 Excluded Employees. An Excluded Employee shall not participate in the Plan. An Excluded Employee is defined as follows: (a) A member of a collective bargaining unit, unless the collective bargaining agreement provides otherwise, or except as otherwise provided in this Section 2.02(a). An Employee is a member of a collective bargaining unit if he is included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers if there is evidence that retirement benefits were the subject of good faith bargaining between such employee representatives and such employer or employers. The term "employee representatives" does not include an organization more than one half of the members of which are owners, officers or executives of the Employer. Notwithstanding the foregoing provisions of this Section 2.02(a), an Employee of AS&W who is required by a collective bargaining agreement to be covered under the AS&W Plan, or a similar or successor qualified retirement plan, is not an Excluded Employee, and is eligible to participate in this Plan; (b) A nonresident alien who does not receive any earned income (as defined in Code Subsection 911(d)(2)) from the Employer which constitutes United States source income (as defined in Code Subsection 861(a)(3)); or (c) A Leased Employee. 2.03 Rules pertaining to Excluded Employees. (a) If a Participant has not incurred a Separation from Service but becomes an Excluded Employee, then during the period such a Participant is an Excluded Employee, the Committee will limit that Participant's sharing in the allocation of Employer contributions and Participant forfeitures, if any, under the Plan by disregarding his Compensation paid by the Employer for services rendered in his capacity as an Excluded Employee. However, during such period of exclusion, the Participant, without regard to employment classification, continues to receive credit for vesting under Article V for each included Year of Service and the Participant's Account continues to experience its pro rata share of Trust Fund investment performance. (b) If an Excluded Employee who is not a Participant becomes eligible to participate in the Plan by reason of a change in employment classification, such Employee shall participate in the Plan immediately if he has satisfied the eligibility conditions of Section 2.01 and would have been a Participant had he not been an Excluded Employee during his period of Service. Furthermore, the Plan takes into account all of the Participant's included Years of Service with the Employer as an Excluded Employee for purposes of vesting credit under Article V. 2.04 Participation upon Re-employment. A Participant whose employment with the Employer terminates will re-enter the Plan as a Participant on the date of his re-employment. An Employee (who is not an Excluded Employee) who satisfies the Plan's eligibility conditions but who terminates employment with the Employer prior to becoming a Participant will become a Participant on the January 1, April 1, July 1 or October 1 coinciding with or next following the date of his re-employment. An Employee (who is not an Excluded Employee) who terminates employment prior to satisfying the Plan's eligibility conditions becomes a Participant in accordance with the provisions of Section 2.01. ARTICLE III CONTRIBUTIONS 3.01 Employee Deferral Contributions. (A) Amount. Subject to the limitations of the Plan, for each Plan Year, each Participant may elect to make deferral contributions to his Account in an amount equal to a whole percentage, not less than 1% nor greater than 15%, of his Compensation (including bonuses, if any) determined for the portion of the Plan Year during which the Employee has entered the Plan and is a Participant. A "deferral contribution" is a pre- tax contribution of an amount which the Participant authorizes his Employer to contribute to the Plan on his behalf in lieu of current cash compensation, pursuant to a salary reduction agreement which the Participant shall file with the Committee. The contribution percentage the Participant has elected under the salary reduction agreement applies to the Participant's Compensation (including increases in Compensation, and bonuses, if any) which become currently available to the Participant on and after the effective date of the Participant's salary reduction agreement. The election shall remain effective until the Participant (i) modifies or suspends his election, or (ii) Separates from Service, or (iii) becomes an Excluded Employee. Each Participating Employer shall promptly advise the Committee of the amount of deferral contributions elected by Participants employed by such Participating Employer. (B) Enrollment dates for deferral contributions. The Plan's enrollment dates for Participant deferral contributions are January 1, April 1, July 1, and October 1. A Participant who wishes to make deferral contributions to his Deferral Contributions Account must file a salary reduction agreement with the Committee no later than the deadline established by the Committee before the enrollment date on which the Participant's deferral contributions will commence. A Participant who fails to file salary reduction agreement within the deadline for an enrollment date may file a salary reduction agreement to take effect on any subsequent enrollment date, provided the Participant's salary reduction agreement has been timely filed with the Committee. (C) 100% vested. All deferral contributions and earnings thereon are at all times 100% Nonforfeitable, and are subject to all the terms, conditions and limitations of the Plan. (D) Suspension of Deferrals. A Participant may completely discontinue his deferral contributions at any time, effective as of the payroll period next following the date the Participant files a new salary reduction agreement, or other change form, with the Committee. A Participant who has completely discontinued his deferral contributions may resume deferral contributions effective as of any January 1, April 1, July 1 or October 1 enrollment date coinciding with or next following the date such Participant files a new salary reduction agreement, or other change form, with the Committee. (E) Change of Deferral Percentage. A Participant may increase or decrease the amount of his deferral contributions effective as of the January 1, April 1, July 1 or October 1 enrollment date coinciding with or next following the date the Participant files a new salary reduction agreement, or other change form, with the Committee. (F) Limitations on amount. The Committee may on a nondiscriminatory basis limit the amount of a Participant's deferral contributions for any Plan Year to avoid exceeding the annual elective deferral limitation under Code Subsection 402(g), or the actual deferral percentage tests under Code Subsection 401(k), or the average contribution percentage tests under Code Subsection 401(m), the annual additions limitations under Code Subsection 415, or any other applicable requirement of ERISA or the Code. (G) Payroll deductions. Participant deferral contributions shall generally be made through an automatic payroll deduction arrangement; provided, however, that the Committee may, in its discretion, allow deferral contributions to be made in a manner other than through regular payroll deductions if consistent with applicable law. Participant deferral contributions deducted from the Participants' Compensation under a payroll deduction arrangement shall be held by the Employer as the Participants' agent and shall be deposited to the 401(k) Trust no later than the deadline prescribed by applicable law. (H) Committee rules. The Committee may from time to time furnish the Participants a form of salary reduction agreement, or other administrative forms, which the Participants must use in order to make, discontinue, change, or resume their deferral contribution elections. The Committee may from time to time establish and uniformly apply rules governing Participant deferral contributions, including (without limitation) deadlines for electing, changing or resuming deferral contributions. (I) Time of Allocation. The Committee shall allocate Participant deferral contributions each payroll period. (J) Subject to Distribution Restrictions. Participant deferral contributions are subject to the distribution restrictions of Section 4.02(m). 3.02 Employer Matching Contributions. (A) Amount of Employer Matching Contributions. Subject to the limitations of the Plan, the Employer shall make a Matching Contribution to the Matching Contributions Account of a Participant who makes deferral contributions, such Matching Contribution to be an amount equal to 100% of the deferral contributions made by such Participant, up to the first 3% of such Participant's Compensation for the Plan Year. (B) Time of Allocation. The Committee will, each month, allocate Employer Matching Contributions to the Matching Contributions Account of each Participant who has made deferral contributions that month. (C) Vesting. Employer Matching Contributions shall be subject to the vesting schedule under Article V. (D) Form of Matching Contributions. Employer Matching Contributions may be made in cash and/or Employer Securities, as determined by the Board of Directors. 3.03 Employer Basic Contributions. (A) Amount. Subject to the limitations of the Plan, the Board of Directors may, in its discretion, authorize each Participating Employer to make an Employer Basic Contribution to the Employer Basic Contributions Account of each Active Participant in an amount equal to 2% of the first $10,000 of Compensation paid to each Active Participant for such Plan Year. Moreover, the Board of Directors may, in its discretion, authorize the Employer to make an additional Employer Basic Contribution in an amount designated by the Board. Such additional Employer Basic Contribution shall be allocated to the Employer Basic Contributions account of each Active Participant in the same ratio that the Active Participant's Compensation for the Plan Year bears to the total Compensation of all Active Participants for such Plan Year. For purposes of this Section 3.03, "Active Participant" means a Participant who completes not less than 1,000 Hours of Service during the Plan Year and is in Service on the last day of the Plan Year. (B) Compensation taken into Account. In allocating an Employer Basic Contribution to the Participant's Basic Contribution Account, the Committee, except for purposes of determining the top heavy minimum contribution under Section 3.08, shall take into account only the Compensation determined for the portion of the Plan Year during which the Employee has entered the Plan and is a Participant. (C) Vesting. Employer Basic Contributions shall be subject to the vesting schedule under Article V. (D) Form of Contribution. An Employer Basic Contribution may be made in cash and/or Employer Securities, as determined by the Board of Directors. (E) Time of Allocation. The Committee shall allocate Employer Basic Contributions to the Employer Basic Contributions Account of each Active Participant as of December 31 of each Plan Year. 3.04 Employer Qualified Nonelective Contributions. (A) Amount. For each Plan Year, the Employer may make Qualified Nonelective Contributions (as defined in Section 4.02(l)) to the Plan in such amount as the Employer may determine to be necessary to comply with ERISA and the Code. (B) Allocation. The Committee shall allocate Qualified Nonelective Contributions (if any) to the Qualified Nonelective Contributions Account of each Participant who is a Nonhighly Compensated Employee and who is an Active Participant (as defined in this Section 3.04) in the same ratio that such Participant's Compensation for the Plan Year bears to the total Compensation of all such Nonhighly Compensated Employees who meet the definition of an Active Participant. For purposes of this Section 3.04, "Active Participant" means a Participant who is a Nonhighly Compensated Employee and who completes not less than 1,000 Hours of Service during the Plan Year and is in Service on the last day of the Plan Year. (C) Compensation taken into Account. In allocating an Employer Qualified Nonelective Contribution to a Participant's Account, the Committee, except for purposes of determining the top heavy minimum contribution under Section 3.08, shall take into account only the Compensation determined for the portion of the Plan Year in which the Employee has entered the Plan and is a Participant. (D) Vesting. Qualified Nonelective Contributions and earnings thereon are at all times 100% Nonforfeitable. (E) Form of Contribution. Employer Qualified Nonelective Contributions may be made in cash and/or Employer Securities, as determined by the Employer. (F) Subject to Distribution Restrictions. Participant Qualified Nonelective Contributions are subject to the distribution restrictions of Section 4.02(m). 3.05 Forfeiture Allocation. The amount of a Participant's Accrued Benefit forfeited under the Plan is a Participant forfeiture. Subject to any restoration allocation required under Sections 5.04 or 9.14 and the special forfeiture allocation for certain excess aggregate contributions described in Section 4.05, the Committee will credit Participant forfeitures against future Employer Matching Contributions or Employer Basic Contributions. The Committee will continue to hold the undistributed, non-vested portion of a terminated Participant's Accrued Benefit in his Account solely for his benefit until a forfeiture occurs at the time specified in Section 5.09 or if applicable, until the time specified in Section 9.14. 3.06 Time of Payment of Deferral Contributions and Employer Contributions. Participant deferral contributions and Employer Matching Contributions, Employer Basic Contributions and Employer Qualified Nonelective Contributions shall be deposited to the Trust within the time prescribed by the Code or applicable Treasury regulations. Employer contributions may be made in one or more installments without interest. 3.07 Return of Contributions. The Employer contributes to this Plan on the condition its contribution is not due to a mistake of fact and the Revenue Service will not disallow the deduction for its contribution. The Trustee, upon written request from the Employer, must return to the Employer the amount of the Employer's contribution made by the Employer by mistake of fact or the amount of the employer's contribution disallowed as a deduction under Code Subsection 404. The Trustee will not return any portion of the Employer's contribution under the provisions of this paragraph more than one year after: (a)The Employer made the contribution by mistake of fact; or (b) The disallowance of the contribution as a deduction, and then, only to the extent of the disallowance. The Trustee will not increase the amount of the Employer contribution returnable under this Section 3.07 for any earnings attributable to the contribution, but the Trustee will decrease the Employer contribution returnable for any losses attributable to it. The Trustee may require the Employer to furnish it whatever evidence the Trustee deems necessary to enable the Trustee to confirm the amount the Employer has requested be returned is properly returnable under ERISA. 3.08 Top Heavy Minimum Allocation. (1) Minimum Allocation. If the Plan is top heavy in any Plan Year: (a) Each Non-Key Employee who is a Participant and is employed by the Employer on the last day of the Plan Year will receive a top heavy minimum allocation for that Plan Year, irrespective of whether he satisfies the Hours of Service condition under Sections 3.03 and 3.04; and (b) The top heavy minimum allocation is the lesser of 3% of the Non-Key Employee's Compensation for the Plan Year or the highest contribution rate for the Plan Year made on behalf of any Key Employee. However, if a defined benefit plan maintained by the Employer which benefits a Key Employee depends on this Plan to satisfy the antidiscrimination rules of Code Subsection 401(a)(4) or the coverage rules of Code Subsection 410 (or another plan benefiting the Key Employee so depends on such defined benefit plan), the top heavy minimum allocation is 3% of the Non-Key Employee's Compensation regardless of the contribution rate for the Key Employees. (2) Special Definitions. For purposes of this Section 3.08, the term "Participant" includes any Employee otherwise eligible to participate in the Plan but who is not a Participant because of his failure to make elective deferrals under a Code Subsection 401(k) arrangement or because of his failure to make mandatory employee contributions. For purposes of clause (b), "Compensation" means Compensation as defined in Section 1.12 except: (i) Compensation does not include elective contributions; (ii) any exclusions from Compensation (other than the exclusion of elective contributions) do not apply; and (iii) any modification to the definition of Compensation in this Article III does not apply. (3) Determining Contribution Rates. For purposes of this Section 3.08, a Participant's contribution rate is the sum of Employer contributions (not including Employer contributions to Social Security) and forfeitures allocated to the Participant's Account for the Plan Year divided by his Compensation for the entire Plan Year. However, for purposes of satisfying a Participant's top heavy minimum allocation in Plan Years beginning after December 31, 1988, a Participant's contribution rate does not include any elective contributions under a Code Subsection 401(k) arrangement nor any Employer matching contributions necessary to satisfy nondiscrimination requirements of Code Subsection 401(k) or of Code Subsection 401(m). To determine a Participant's contribution rate, the Committee must treat all qualified top heavy defined contribution plans maintained by the Employer (or by any Related Employers described in Section 1.37) as a single plan. (4) No Allocations. If, for a Plan Year, there are no allocations of Employer contributions or forfeitures for any Key Employee, the Plan does not require any top heavy minimum allocation for the Plan Year, unless a top heavy minimum allocation applies because of the maintenance by the Employer of more than one plan. (5) Method of Compliance. The Plan will satisfy the top heavy minimum allocation in accordance with this Section 3.08. The Committee first will allocate the Employer contributions (and Participant forfeitures, if any) for the Plan Year in accordance with the allocation formula under Sections 3.02, 3.03 and 3.04. The Employer then will contribute an additional amount for the Account of any Participant entitled under this Section 3.08 to a top heavy minimum allocation and whose contribution rate for the Plan Year, under this Plan and any other plan aggregated under paragraph (3), is less than the top heavy minimum allocation. The additional amount is the amount necessary to increase the Participant's contribution rate to the top heavy minimum allocation. The Committee will allocate the additional contribution to the Account of the Participant on whose behalf the Employer makes the contribution. 3.09 Suspension of Active Participant Requirements. The Plan suspends the Active Participant requirements under Sections 3.03 and 3.04 if, for any Plan Year beginning after December 31, 1989, the Plan fails to satisfy the Participation Test or the Coverage Test. A Plan satisfies the Participation Test if, on each day of the Plan Year, the number of Employees who benefit under the Plan is at least equal to the lesser of 50 or 40% of the total number of Includible Employees as of such day. A Plan satisfies the Coverage Test if, on the last day of each quarter of the Plan Year, the number of Nonhighly Compensated Employees who benefit under the Plan is at least equal to 70% of the total number of Includible Nonhighly Compensated Employees as of such day. "Includible" Employees are all Employees other than: (1) those Employees excluded from participating in the Plan for the entire Plan Year by reason of the collective bargaining unit exclusion or the nonresident alien exclusion described in the Code or by reason of the age and service requirements of Article II; and (2) any Employee who incurs a Separation from Service during the Plan Year and fails to complete at least 501 Hours of Service for the Plan Year. A "Nonhighly Compensated Employee" is an Employee who is not a Highly Compensated Employee and who is not a family member aggregated with a Highly Compensated Employee pursuant to Section 1.23 of the Plan. For purposes of the Participation Test and the Coverage Test, an Employee is benefiting under the Plan on a particular date if, under this Article III, he is entitled to an allocation for the Plan Year. For any portion of the Plan subject to the discrimination test described in Section 4.05, an Employee is benefiting if he is an Eligible Employee for purposes of Section 4.05 and the Coverage Test applies separately to that portion of the Plan. If this Section 3.09 applies for a Plan Year, the Committee will suspend the accrual requirements for the Includible Employees who are Participants, beginning first with the Includible Employee(s) employed with the Employer on the last day of the Plan Year, then the Includible Employee(s) who have the latest Separation from Service during the Plan Year, and continuing to suspend in descending order the accrual requirements for each Includible Employee who incurred an earlier Separation from Service, from the latest to the earliest Separation from Service date, until the Plan satisfies both the Participation Test and the Coverage Test for the Plan Year. If two or more Includible Employees have a Separation from Service on the same day, the Committee will suspend the accrual requirements for all such Includible Employees, irrespective of whether the plan can satisfy the Participation Test and the Coverage Test by accruing benefits for fewer than all such Includible Employees. If the Plan suspends the accrual requirements for an Includible Employee, that Employee will share in the allocation of Employer contributions and Participant forfeitures, if any, without regard to the number of Hours of Service he has earned for the Plan Year and without regard to whether he is employed by the Employer on the last day of the Plan Year. 3.10 Employee After-Tax Contributions. No Participant may make an After-Tax Contribution to the Plan for Compensation paid on or after January 1, 1990. A Participant's After-Tax Contributions Account, consisting of After-Tax Contributions made by such Participant to the Plan prior to January 1, 1990, and earnings thereon, is at all times 100% Nonforfeitable. After-Tax Contributions Account shall be invested in the same manner as the balance of the Participant's Account is invested. After-Tax Contributions shall be distributed in the same manner as the balance of the Participant's Account is distributed, except that, as provided in Article X, After-Tax Contributions shall serve as the first source of funds for loans and Hardship Distributions. A Participant's After-Tax Contributions are at all times 100% Nonforfeitable. An "After-Tax Contribution" is a voluntary, after-tax contribution which the Plan permitted a Participant to contribute prior to January 1, 1990. 3.11 Participant Rollover Contributions. An Employee (who is not an Excluded Employee) may, either prior to or after he has commenced participation in the Plan as provided in Article II, and with the express consent of the Committee and Trustee, contribute cash or other property to the Trust under a "rollover contribution" which the Code permits an Employee to transfer either directly or indirectly from one qualified plan to another qualified plan. Before accepting a rollover contribution, the Committee and Trustee may require the Participant to furnish satisfactory evidence that the proposed transfer is in fact a "rollover contribution" which the Code permits an Employee to make to a qualified plan. A rollover contribution is not an Annual Addition for purposes of this Plan. A Participant's Rollover Contributions Account, and earnings thereon, is at all times 100% Nonforfeitable. A Participant's Rollover Contributions Account shall be invested in the same manner as the balance of his Account is invested. A Participant's Rollover Contributions Account (including earnings) may not be distributed to the Participant until the Participant has incurred a Separation from Service. 3.12 Establishment of Participant Accounts. For the purpose of Plan allocations and accounting, the Committee shall establish and maintain separate Accounts for each Participant. Such separate Accounts shall be for accounting purposes only and shall not, unless the Plan otherwise requires, involve a segregation of Plan assets. The Committee shall establish such separate Accounts as it deems necessary or advisable, and shall allocate contributions, investment performance and forfeitures to each such Account as required under the Plan. Such separate Accounts may include (without limitation) the following: a Deferral Contributions Account; a Matching Contributions Account; an Employer Basic Contributions Account; a Qualified Nonelective Contributions Account, an After-Tax Contributions Account and a Rollover Contributions Account. The Committee shall maintain special Accounts and accounting procedures as required under Code Subsection 401(k). The Committee shall maintain adequate records of the cost basis of Employer Securities allocated to Participant Accounts. If the Committee determines that the strict application of its accounting procedures will not result in an equitable and nondiscriminatory allocation among Participant Accounts, it may, to the extent permitted by applicable law, modify its accounting procedures, or direct that special valuations of the Trust Fund shall be made, in order to achieve an equitable and nondiscriminatory allocation of Account balances as required by ERISA and the Code. 3.13 Limitations on Allocations to Participants' Accounts. The amount of Annual Additions which the Committee may allocate under this Plan on a Participant's behalf for a Limitation Year may not exceed the Maximum Permissible Amount. If the amount the Employer otherwise would contribute to the Participant's Account would cause the Annual Additions for the Limitation Year to exceed the Maximum Permissible Amount, the Employer will reduce the amount of its contribution so the Annual Additions for the Limitation Year will equal the Maximum Permissible Amount. If an allocation of Employer contributions, pursuant to this Article III, would result in an Excess Amount (other than an Excess Amount resulting from the circumstances described in Section 3.13(B)) to the Participant's Account, the Committee will reallocate the Excess Amount to the remaining Participants who are eligible for an allocation of Employer contributions for the Plan Year in which the Limitation Year ends. The Committee will make this reallocation on the basis of the allocation method under the Plan as if the Participant whose Account otherwise would receive the Excess Amount is not eligible for an allocation of Employer contributions. (A) Estimation of Compensation. Prior to the determination of the Participant's actual Compensation for a Limitation Year, the Committee may determine the Maximum Permissible Amount on the basis of the Participant's estimated annual Compensation for such Limitation Year. The Committee must make this determination on a reasonable and uniform basis for all Participants similarly situated. The Committee must reduce any Employer contributions (including any allocation of forfeitures) based on estimated annual Compensation by any Excess Amounts carried over from prior years. As soon as is administratively feasible after the end of the Limitation Year, the Committee will determine the Maximum Permissible Amount for such Limitation Year on the basis of the Participant's actual Compensation for such Limitation Year. (B) Disposition of Excess Amount. If, pursuant to Section 3.13(A), or because of the allocation of forfeitures, there is an Excess Amount with respect to a Participant for a Limitation Year, the Committee will dispose of such Excess Amount as follows: (a) The Committee will return any nondeductible voluntary Employee contributions to the Participant to the extent the return would reduce the Excess Amount. (b) If, after the application of paragraph (a), an Excess Amount still exists, and the Plan covers the Participant at the end of the Limitation Year, then the Committee will use the Excess Amount(s) to reduce future Employer contributions (including any allocation of forfeitures) under the Plan for the next Limitation Year and for each succeeding Limitation Year, as is necessary, for the Participant. The Participant may elect to limit his Compensation for allocation purposes to the extent necessary to reduce his allocation for the Limitation Year to the Maximum Permissible Amount and eliminate the Excess Amount. (c) If, after the application of paragraph (a), an Excess Amount still exists, and the Plan does not cover the Participant at the end of the Limitation Year, then the Committee will hold the Excess Amount unallocated in a suspense account. The Committee will apply the suspense account to reduce Employer Contributions (including allocation of forfeitures) for all remaining Participants in the next Limitation Year, and in each succeeding Limitation Year if necessary. Neither the Employer nor any Employee may contribute to the Plan for any Limitation Year in which the Plan is unable to allocate fully a suspense account maintained pursuant to this paragraph (c). (d) The Committee will not distribute any Excess Amount(s) to Participants or to former Participants. (C) Defined Benefit Plan Limitation. The Employer does not maintain and never has maintained a defined benefit plan covering any Participant in this Plan. Accordingly, a special defined benefit plan limitation does not apply under this Plan. 3.14 Definitions - Article III. For purposes of Article III, the following terms mean: (a) "Annual Addition" - The sum of the following amounts allocated on behalf of a Participant for a Limitation Year, of (i) all Employer contributions; (ii) all forfeitures; and (iii) all Employee contributions. Except to the extent provided in Treasury regulations, Annual Additions include excess contributions described in Code Subsection 401(k), excess aggregate contributions described in Code Subsection 401(m) and excess deferrals described in Code Subsection 402(g), irrespective of whether the plan distributes or forfeits such excess amounts. Annual Additions also include Excess Amounts reapplied to reduce Employer contributions under Section 3.13. Amounts allocated after March 31, 1984, to an individual medical account (as defined in Code Subsection 415(l)(2)) included as part of a defined benefit plan maintained by the Employer are Annual Additions. Furthermore, Annual Additions include contributions paid or accrued after December 31, 1985, for taxable years ending after December 31, 1985, attributable to post-retirement medical benefits allocated to the separate account of a key employee (as defined in Code Subsection 419A(d)(3)) under a welfare benefit fund (as defined in Code Subsection 419(e)) maintained by the Employer, but only for purposes of the dollar limitation applicable to the Maximum Permissible Amount. (b) "Compensation" - For purposes of applying the limitations of Sections 3.13 and 3.14, "Compensation" means Compensation as defined in Section 1.12, except Compensation does not include elective contributions and any exclusion from Compensation (other than the exclusion of elective contributions) does not apply. (c) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if greater, one-fourth of the defined benefit dollar limitation under Code Subsection 415(b)(1)(A)), or (ii) 25% of the Participant's Compensation for the Limitation Year. If there is a short Limitation Year because of a change in Limitation Year, the Committee will multiply the $30,000 (or adjusted) limitation by the following fraction: Number of months in the short Limitation Year 12 (d) "Employer" - The Employer that adopts this Plan and any related employers described in Article I. Solely for purposes of applying the limitations of Sections 3.13 and 3.14, the Committee will determine related employers described in Article I by modifying Code Subsection 414(b) and (c) in accordance with Code Subsection 415(h). (e) "Excess Amount" - The excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount. (f) "Limitation Year" - The Plan Year. If the Employer amends the Limitation Year to a different 12 consecutive month period, the new Limitation Year must begin on a date within the Limitation Year for which the Employer makes the amendment, creating a short Limitation Year. (g) "Defined contribution plan" - A retirement plan which provides for an individual account for each participant and for benefits based solely on the amount contributed to the participant's account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which the plan may allocate to such participant's account. The Committee must treat all defined contribution plans (whether or not terminated) maintained by the Employer as a single plan. Solely for purposes of the limitations of Sections 3.13 and 3.14, the Committee will treat employee contributions made to a defined benefit plan maintained by the Employer as a separate defined contribution plan. The Committee also will treat as a defined contribution plan an individual medical account (as defined in Code Subsection 415(l)(2)) included as part of a defined benefit plan maintained by the Employer and, for taxable years ending after December 31, 1985, a welfare benefit fund under Code Subsection 419(e) maintained by the Employer to the extent there are post-retirement medical benefits allocated to the separate account of a key employee (as defined in Code Subsection 419A(d)(3)). (h) "Defined benefit plan" - A retirement plan which does not provide for individual accounts for Employer contributions. The Committee must treat all defined benefit plans (whether or not terminated) maintained by the Employer as a single plan. ARTICLE IV PROVISIONS RELATING TO CODE SUBSECTION 401(k) AND TO CODE SUBSECTION 401(m) 4.01 Subsection 401(k) Arrangement. The Employer makes the deferral contributions described in Section 3.01 pursuant to a 401(k) arrangement, pursuant to salary reduction agreements filed by the Participants with the Committee. A salary reduction agreement may not be effective earlier than the following date which occurs last: (i) the Employee's date of participation in the Plan (or, in the case of a reemployed Employee, his reparticipation date under Article II); (ii) the execution date of the Employee's salary reduction agreement; (iii) the date the Employer adopts the Code Subsection 401(k) arrangement by executing the Plan; or (iv) the effective date of the Code Subsection 401(k) arrangement. Deferral contributions are deemed to be Employer contributions under the Code. 4.02 Definitions. For purposes of this Article IV: (a) "Highly Compensated Employee" means an Eligible Employee who satisfies the definition in Section 1.23 of the Plan. Family members aggregated as a single Employee under Section 1.23 constitute a single Highly Compensated Employee, whether a particular family member is a Highly Compensated Employee or a Nonhighly Compensated Employee without the application of family aggregation. (b) "Nonhighly Compensated Employee" means an Eligible Employee who is not a Highly Compensated Employee and who is not a family member treated as a Highly Compensated Employee. (c) "Eligible Employee" means, for purposes of the ADP test described in Section 4.04, an Employee who is eligible to participate in the Code Subsection 401(k) arrangement, irrespective of whether the Employer actually makes deferral contributions on behalf of the Employee. For purposes of the ACP test described in Section 4.05, an "Eligible Employee" means a Participant who is eligible to receive an allocation of matching contributions (or would be eligible if he made the type of contributions necessary to receive an allocation of matching contributions) and a Participant who is eligible to make employee contributions, irrespective of whether he actually makes employee contributions. An Employee continues to be an Eligible Employee during a period the Plan suspends the Employee's right to make elective deferrals or nondeductible contributions following a hardship distribution. (d) "Highly Compensated Group" means the group of Eligible Employees who are Highly Compensated Employees for the Plan Year. (e) "Nonhighly Compensated Group" means the group of Eligible Employees who are Nonhighly Compensated Employees for the Plan Year. (f) "Compensation" means, except as specifically provided under this Article IV, Compensation as defined for nondiscrimination purposes in Section 1.23(B) of the Plan. To compute an Employee's ADP or ACP, the Committee may limit Compensation taken into account to Compensation received only for the portion of the Plan Year in which the Employee was an Eligible Employee and only for the portion of the Plan Year in which the Plan or the Code Subsection 401(k) arrangement was in effect. (g) "Deferral contributions" means the sum of the deferral contributions the Employer contributes to the Trust on behalf of an Eligible Employee, pursuant to Section 3.01. (h) "Elective deferrals" are the deferral contributions the Employer contributes to the Trust at the election of an Eligible Employee. If the Code Subsection 401(k) arrangement includes a cash or deferred feature, any portion of a cash or deferred contribution contributed to the Trust because of the Employee's failure to make a cash election is an elective deferral, but any portion of a cash or deferred contribution over which the Employee does not have a cash election is not an elective deferral. Elective deferrals do not include amounts which have become currently available to the Employee prior to the election nor amounts designated as employee contributions at the time of deferral or contribution. (i) "Matching contributions" are contributions made by the Employer on account of elective deferrals under a Code Subsection 401(k) arrangement or on account of employee contributions. Matching contributions also include Participant forfeitures allocated on account of such elective deferrals or employee contributions. (j) "Nonelective contributions" are contributions made by the Employer which are not subject to a deferral election by an Employee and which are not matching contributions. (k) "Qualified matching contributions" are matching contributions which are 100% Nonforfeitable at all times and which are subject to the distribution restrictions described in paragraph (m). Matching contributions are not 100% Nonforfeitable at all times if the Employee has a 100% Nonforfeitable interest because of his Years of Service taken into account under a vesting schedule. (l) "Qualified nonelective contributions" are nonelective contributions which are 100% Nonforfeitable at all times and which are subject to the distribution restrictions described in paragraph (m). Nonelective contributions are not 100% Nonforfeitable at all times if the Employee has a 100% Nonforfeitable interest because of his Years of Service taken into account under a vesting schedule. Any nonelective contributions allocated to a Participant's Qualified Nonelective Contributions Account under the Plan automatically satisfy the definition of qualified nonelective contributions. (m) "Distribution restrictions" means the Employee may not receive a distribution of the specified contributions (nor earnings on those contributions) except in the event of (1) the Participant's death, disability, termination of employment, attainment of age 59 1/2, (2) financial hardship satisfying the requirements of Code Subsection 401(k) and the applicable Treasury regulations, (3) plan termination, without establishment of a successor defined contribution plan (other than an ESOP), (4) a sale of substantially all of the assets (within the meaning of Code Subsection 409(d)(2)) used in a trade or business, but only to an employee who continues employment with the corporation acquiring those assets, or (5) a sale by a corporation of its interest in a subsidiary (within the meaning of Code Subsection 409(d)(3)), but only to an employee who continues employment with the subsidiary. For Plan Years beginning after December 31, 1988, a distribution on account of financial hardship, as described in clause (2), may not include earnings on elective deferrals credited as of a date later than December 31, 1988, and may not include qualified matching contributions and qualified nonelective contributions, nor any earnings on such contributions, credited after December 31, 1988. A distribution described in clauses (3), (4) or (5), if made after March 31, 1988, must be a lump sum distribution, as required under Code Subsection 401(k)(10). (n) "Employee contributions" are contributions made by a Participant on an after-tax basis, whether voluntary or mandatory, and designated, at the time of contribution, as an employee (or nondeductible) contribution. Elective deferrals and deferral contributions are not employee contributions. Participant nondeductible contributions, made pursuant to Article III, are employee contributions. 4.03 Annual Elective Deferral Limitation. (A) Annual Elective Deferral Limitation. An Employee's elective deferrals for a calendar year beginning after December 31, 1986, may not exceed the 402(g) limitation. The 402(g) limitation is the greater of $7,000 or the adjusted amount determined by the Secretary of the Treasury. If the Employer determines the Employee's elective deferrals to the Plan for a calendar year would exceed the 402(g) limitation, the Employer will not make any additional elective deferrals with respect to that Employee for the remainder of that calendar year, paying in cash to the Employee any amounts which would result in the Employee's elective deferrals for the calendar year exceeding the 402(g) limitation. If the Committee determines an Employee's elective deferrals already contributed to the Plan for a calendar year exceed the 402(g) limitation, the Committee will distribute the amount in excess of the 402(g) limitation (the "excess deferral"), as adjusted for allocable income, no later than April 15 of the following calendar year. If the Committee distributes the excess deferral by the appropriate April 15, it may make the distribution irrespective of any other provision under this Plan or under the Code. The Committee will reduce the amount of excess deferrals for a calendar year distributable to the Employee by the amount of excess contributions (as determined in Section 4.04), if any, previously distributed to the Employee for the Plan Year beginning in that calendar year. If an Employee participates in another plan under which he makes elective deferrals pursuant to a Code Subsection 401(k) arrangement, elective deferrals under a Simplified Employee Pension, or salary reduction contributions to a tax-sheltered annuity, irrespective of whether the Employer maintains the other plan, he may provide the Committee a written claim for excess deferrals made for a calendar year. The Employee must submit the claim no later than the March 1 following the close of the particular calendar year and the claim must specify the amount of the Employee's elective deferrals under this Plan which are excess deferrals. If the Committee receives a timely claim, it will distribute the excess deferral (as adjusted for allocable income) the Employee has assigned to this Plan, in accordance with the distribution procedure described in the immediately preceding paragraph. (B) Allocable income. For purposes of making a distribution of excess deferrals, allocable income means net income or net loss allocable to the excess deferrals for the calendar year in which the Employee made the excess deferral, determined in a manner which is uniform, nondiscriminatory and reasonably reflective of the manner used by the Plan to allocate income to Participant's accounts. 4.04 Actual Deferral Percentage ("ADP") Test. For each Plan Year, the Committee must determine whether the Plan's Code Subsection 401(k) arrangement satisfies either of the following ADP tests: (i) The average ADP for the Highly Compensated Group does not exceed 1.25 times the average ADP of the Nonhighly Compensated Group; or (ii) The average ADP for the Highly Compensated Group does not exceed the average ADP for the Nonhighly Compensated Group by more than two percentage points (or the lesser percentage permitted by the multiple use limitation in Section 4.06) and the average ADP for the Highly Compensated Group is not more than twice the average ADP for the Nonhighly Compensated Group. (A) Calculation of ADP. The average ADP for a group is the average of the separate ADPs calculated for each Eligible Employee who is a member of that group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible Employee's deferral contributions for the Plan Year to the Employee's Compensation for the Plan Year. For aggregated family members treated as a single Highly Compensated Employee, the ADP of the family unit is the ADP determined by combining the deferral contributions and Compensation of all aggregated family members. A Nonhighly Compensated Employee's ADP does not include elective deferrals made to this Plan or to any other Plan maintained by the Employer, to the extent such elective deferrals exceed the 402(g) limitation described in Section 4.03. The Committee may determine (in a manner consistent with Treasury regulations) the ADPs of the Eligible Employees by taking into account qualified nonelective contributions or qualified matching contributions, or both, made to this Plan or to any other qualified Plan maintained by the Employer. The Committee may not include qualified nonelective contributions in the ADP test unless the allocation of nonelective contributions is nondiscriminatory when the Committee takes into account all nonelective contributions (including the qualified nonelective contributions) and also when the Committee takes into account only the nonelective contributions not used in either the ADP test or the ACP test described in Section 4.05. For Plan Years beginning after December 31, 1989, the Committee may not include in the ADP test any qualified nonelective contributions or qualified matching contributions under another qualified plan unless that plan has the same plan year as this Plan. The Committee must maintain records to demonstrate compliance with the ADP test, including the extent to which the Plan used qualified nonelective contributions or qualified matching contributions to satisfy the test. (B) Special aggregation rule for Highly Compensated Employees. To determine the ADP of any Highly Compensated Employee, the deferral contributions taken into account must include any elective deferrals made by the Highly Compensated Employee under any other Code Subsection 401(k) arrangement maintained by the Employer, unless the elective deferrals are to an ESOP. If the plans containing the Code Subsection 401(k) arrangements have different plan years, the Committee will determine the combined deferral contributions on the basis of the plan years ending in the same calendar year. (C) Aggregation of certain Code Subsection 401(k) arrangements. If the Employer treats two plans as a unit for coverage or nondiscrimination purposes, the Employer must combine the Code Subsection 401(k) arrangements under such plans to determine whether either plan satisfies the ADP test. This aggregation rule applies to the ADP determination for all Eligible Employees, irrespective of whether an Eligible Employee is a Highly Compensated Employee or a Nonhighly Compensated Employee. For Plan Years beginning after December 31, 1989, an aggregation of Code Subsection 401(k) arrangements under this paragraph does not apply to plans which have different plan years and, for Plan Years beginning after December 31, 1988, the Committee may not aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of a plan). (D) Characterization of excess contributions. If, pursuant to this Section 4.04, the Committee has elected to include qualified matching contributions in the average ADP, the Committee will treat excess contributions as attributable proportionately to deferral contributions and to qualified matching contributions allocated on the basis of those deferral contributions. If the total amount of a Highly Compensated Employee's excess contributions for the Plan Year exceeds his deferral contributions or qualified matching contributions for the Plan Year, the Committee will treat the remaining portion of his excess contributions as attributable to qualified nonelective contributions. The Committee will reduce the amount of excess contributions for a Plan Year distributable to a Highly Compensated Employee by the amount of excess deferrals (as determined in Section 4.03), if any, previously distributed to that Employee for the Employee's taxable year ending in that Plan Year. (E) Distribution of excess contributions. If the Committee determines the Plan fails to satisfy the ADP test for a Plan Year, it must distribute the excess contributions, as adjusted for allocable income, during the next Plan Year. However, the Employer will incur an excise tax equal to 10% of the amount of excess contributions for a Plan Year not distributed to the appropriate Highly Compensated Employees during the first 2 1/2 months of that next Plan Year. The excess contributions are the amount of deferral contributions made by the Highly Compensated Employees which causes the Plan to fail to satisfy the ADP test. The Committee will distribute to each Highly Compensated Employee his respective share of the excess contributions. The Committee will determine the respective shares of excess contributions by starting with the Highly Compensated Employee(s) who has the greatest ADP, reducing his ADP (but not below the next highest ADP), then, if necessary, reducing the ADP of the Highly Compensated Employee(s) at the next highest ADP level (including the ADP of the Highly Compensated Employee(s) whose ADP the Committee already has reduced), and continuing in this manner until the average ADP for the Highly Compensated Group satisfies the ADP test. If the Highly Compensated Employee is part of an aggregated family group, the Committee, in accordance with the applicable Treasury regulations, will determine each aggregated family member's allocable share of the excess contributions assigned to the family unit. (F) Allocable income. To determine the amount of the corrective distribution required under this Section 4.04, the Committee must calculate the allocable income for the Plan Year in which the excess contributions arose. "Allocable income" means net income or net loss. To calculate allocable income for the Plan Year, the Committee will use a uniform and nondiscriminatory method which reasonably reflects the manner used by the Plan to allocate income to Participants' Accounts. 4.05 Nondiscrimination Rules for Employer Matching Contributions/Participant Nondeductible Contributions. For Plan Years beginning after December 31, 1986, the Committee must determine whether the annual Employer matching contributions (other than qualified matching contributions used in the ADP test), if any, and the Employee contributions, if any, satisfy either of the following average contribution percentage ("ACP") tests: (i) The ACP for the Highly Compensated Group does not exceed 1.25 times the ACP of the Nonhighly Compensated Group; or (ii) The ACP for the Highly Compensated Group does not exceed the ACP for the Nonhighly Compensated Group by more than two percentage points (or the lesser percentage permitted by the multiple use limitation in Section 4.06) and the ACP for the Highly Compensated Group is not more than twice the ACP for the Nonhighly Compensated Group. (A) Calculation of ACP. The average contribution percentage for a group is the average of the separate contribution percentages calculated for each Eligible Employee who is a member of that group. An Eligible Employee's contribution percentage for a Plan Year is the ratio of the Eligible Employee's aggregate contributions for the Plan Year to the Employee's Compensation for the Plan Year. "Aggregate contributions" are matching contributions (other than qualified matching contributions used in the ADP test) and employee contributions. For aggregated family members treated as a single Highly Compensated Employee, the contribution percentage of the family unit is the contribution percentage determined by combining the aggregate contributions and Compensation of all aggregated family members. The Committee, in a manner consistent with Treasury regulations, may determine the contribution percentages of the Eligible Employees by taking into account qualified nonelective contributions (other than qualified nonelective contributions used in the ADP test) or elective deferrals, or both, made to this Plan or to any other qualified Plan maintained by the Employer. The Committee may not include qualified nonelective contributions in the ACP test unless the allocation of nonelective contributions is nondiscriminatory when the Committee takes into account all nonelective contributions (including the qualified nonelective contributions) and also when the Committee takes into account only the nonelective contributions not used in either the ADP test or the ACP test. The Committee may not include elective deferrals in the ACP test, unless the Plan which includes the elective deferrals satisfies the ADP test both with and without the elective deferrals included in this ACP test. For Plan Years beginning after December 31, 1989, the Committee may not include in the ACP test any qualified nonelective contributions or elective deferrals under another qualified plan unless that plan has the same plan year as this Plan. The Committee must maintain records to demonstrate compliance with the ACP test, including the extent to which the Plan used qualified nonelective contributions or elective deferrals to satisfy the test. (B) Special aggregation rule for Highly Compensated Employees. To determine the contribution percentage of any Highly Compensated Employee, the aggregate contributions taken into account must include any matching contributions (other than qualified matching contributions used in the ADP test) and any employee contributions made on his behalf to any other plan maintained by the Employer, unless the other plan is an ESOP. If the plans have different plan years, the Committee will determine the combined aggregate contributions on the basis of the plan years ending in the same calendar year. (C) Aggregation of certain plans. If the Employer treats two plans as a unit for coverage or nondiscrimination purposes, the Employer must combine the plans to determine whether either plan satisfies the ACP test. This aggregation rule applies to the contribution percentage determination for all Eligible Employees, irrespective of whether an Eligible Employee is a Highly Compensated Employee or a Nonhighly Compensated Employee. For Plan Years beginning after December 31, 1989, an aggregation of plans under this paragraph does not apply to plans which have different plan years and, for Plan Years beginning after December 31, 1988, the Committee may not aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of a plan). (D) Distribution of excess aggregate contributions. The Committee will determine excess aggregate contributions after determining excess deferrals under Section 4.03 and excess contributions under Section 4.04. If the Committee determines the Plan fails to satisfy the ACP test for a Plan Year, it must distribute the excess aggregate contributions, as adjusted for allocable income, during the next Plan Year. However, the Employer will incur an excise tax equal to 10% of the amount of excess aggregate contributions for a Plan Year not distributed to the appropriate Highly Compensated Employees during the first 2 1/2 months of that next Plan Year. The excess aggregate contributions are the amount of aggregate contributions allocated on behalf of the Highly Compensated Employees which causes the Plan to fail to satisfy the ACP test. The Committee will distribute to each Highly Compensated Employee his respective share of the excess aggregate contributions. The Committee will determine the respective shares of excess aggregate contributions by starting with the Highly Compensated Employee(s) who has the greatest contribution percentage, reducing his contribution percentage (but not below the next highest contribution percentage), then, if necessary, reducing the contribution percentage of the Highly Compensated Employee(s) at the next highest contribution percentage level (including the contribution percentage of the Highly Compensated Employee(s) whose contribution percentage the Committee already has reduced), and continuing in this manner until the ACP for the Highly Compensated Group satisfies the ACP test. If the Highly Compensated Employee is part of an aggregated family group, the Committee, in accordance with the applicable Treasury regulations, will determine each aggregated family member's allocable share of the excess aggregate contributions assigned to the family unit. (E) Allocable income. To determine the amount of the corrective distribution required under this Section 4.05, the Committee must calculate the allocable income for the Plan Year in which the excess aggregate contributions arose. "Allocable income" means net income or net loss. The Committee will determine allocable income in the same manner as described in Section 4.04(F) for excess contributions. (F) Characterization of excess aggregate contributions. The Committee will treat a Highly Compensated Employee's allocable share of excess aggregate contributions in the following priority: (1) first as attributable to his employee contributions which are voluntary contributions, if any; (2) then as matching contributions allocable with respect to excess contributions determined under the ADP test; (3) then on a pro rata basis to matching contributions and to the deferral contributions relating to those matching contributions which the Committee has included in the ACP test; (4) then on a pro rata basis to Employee contributions which are mandatory contributions, if any, and to the matching contributions allocated on the basis of those mandatory contributions; and (5) last to qualified nonelective contributions used in the ACP test. To the extent the Highly Compensated Employee's excess aggregate contributions are attributable to matching contributions, and he is not 100% vested in his Accrued Benefit attributable to matching contributions, the Committee will distribute only the vested portion and forfeit the nonvested portion. The vested portion of the Highly Compensated Employee's excess aggregate contributions attributable to Employer matching contributions is the total amount of such excess aggregate contributions (as adjusted for allocable income) multiplied by his vested percentage (determined as of the last day of the Plan Year for which the Employer made the matching contribution). The Plan will allocate forfeited excess aggregate contributions to reduce Employer matching contributions for the Plan Year in which the forfeiture occurs. 4.06 Multiple Use Limitation. For Plan Years beginning after December 31, 1988, if at least one Highly Compensated Employee is includible in the ADP test and in the ACP test, the sum of the Highly Compensated Group's ADP and ACP may not exceed the multiple use limitation. The multiple use limitation is the sum of (i) and (ii): (i) 125% of the greater of: (a) the ADP of the Nonhighly Compensated Group under the Code Subsection 401(k) arrangement; or (b) the ACP of the Nonhighly Compensated Group for the Plan Year beginning with or within the Plan Year of the Code Subsection 401(k) arrangement. (ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice the lesser of (i)(a) or (i)(b). The Committee, in lieu of determining the multiple use limitation as the sum of (i) and (ii), may elect to determine the multiple use limitation as the sum of (iii) and (iv): (iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated Group under the Code Subsection 401(k) arrangement; or (b) the ACP of the Nonhighly Compensated Group for the Plan Year beginning with or within the Plan Year of the Code Subsection 401(k) arrangement. (iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than twice the greater of (iii)(a) or (iii)(b). The Committee will determine whether the Plan satisfies the multiple use limitation after applying the ADP test under Section 4.04 and the ACP test under Section 4.05 and after making any corrective distributions required by those Sections. If, after applying this Section 4.06, the Committee determines the Plan has failed to satisfy the multiple use limitation, the Committee will correct the failure by treating the excess amount as excess contributions under Section 4.04 or as excess aggregate contributions under Section 4.05, as it determines in its sole discretion. This Section 4.06 does not apply unless, prior to application of the multiple use limitation, the ADP and the ACP of the Highly Compensated Group each exceeds 125% of the respective percentages for the Nonhighly Compensated Group. ARTICLE V DISTRIBUTIONS 5.01 Normal Retirement Age. Except as otherwise provided in Section 5.01(A), a Participant's Normal Retirement Age is age 65; provided, however, that Normal Retirement Age for an Employee who attained age 53 by July 1, 1989 is age 60. A Participant's Accrued Benefit derived from Employer contributions is 100% Nonforfeitable upon and after his attaining Normal Retirement Age (if employed by the Employer on or after that date). (A) Special Rule for AS&W Plan. Notwithstanding any contrary provisions of this Section 5.01, a Participant who was also a Participant in the AS&W Plan shall become 100% vested in his AS&W Account Balance on the first day of the month coinciding with or following the date on which such Participant attains age 55, if such Participant is still employed on such date. 5.02 Participant Disability or Death. If a Participant's employment with the Employer terminates as a result of death or disability, the Participant's Accrued Benefit derived from Employer contributions will be 100% Nonforfeitable. 5.03 Vesting Schedule. (A) Deferral Contributions Account, Qualified Nonelective Contributions Account, After-Tax Contributions Account, and Rollover Contributions Account. A Participant has a 100% Nonforfeitable interest at all times in his Deferral Contributions Account, Qualified Nonelective Contributions Account, After-Tax Contributions Account, and Rollover Contributions Account. (B) Matching Contributions Account and Employer Basic Contributions. Except as provided in Sections 5.01 and 5.02, for each Year of Service, a Participant's Nonforfeitable percentage of his Matching Contributions Account and Employer Basic Contributions Account equals the percentage in the following vesting schedule: Percent of Years of Service Nonforfeitable Interest Less than 1. . . . . . . . . . . . . . . .. . . . 0% 1 . . . . . . . . . . . . . . . . . . . 20% 2 . . . . . . . . . . . . . . . . . . . . .40% 3 . . . . . . . . . . . . . . . . . . . . .60% 4 . . . . . . . . . . . . . . . . . . . . .80% 5 or more . . . . . . . . . . . . . . . . 100% (C) Vesting of AS&W Account Balances. Notwithstanding any contrary provisions of the Plan, the Nonforfeitable interest of an AS&W Plan Participant in his AS&W Account Balance shall be the greater of the Nonforfeitable interest as determined under the AS&W Plan or the Nonforfeitable interest as determined under the vesting schedule set forth in Section 5.03(B). (D) Vesting Prior to January 1, 1995. A Participant who Separates from Service before January 1, 1995 shall have his Nonforfeitable interest determined under the Birmingham Steel Corporation 401(k) Plan in effect on December 31, 1994, except that a Participant who was participating in the AS&W Plan and who Separated from Service prior to January 1, 1995, shall have the Nonforfeitable interest of his AS&W Account Balance determined under the AS&W Plan as in effect on December 31, 1994. 5.04 Cash-Out Distributions to Partially- Vested Participants/ Restoration of Forfeited Accrued Benefit. If, pursuant to Article VI, a partially- vested Participant receives a cash-out distribution before he incurs a Forfeiture Break in Service (as defined in Section 5.08), the cash-out distribution will result in an immediate forfeiture of the nonvested portion of the Participant's Accrued Benefit derived from Employer contributions. See Section 5.09. A partially-vested Participant is a Participant whose Nonforfeitable Percentage determined under Section 5.03 is less than 100%. A cash-out distribution is a distribution of the entire present value of the Participant's Nonforfeitable Accrued Benefit. (A) Restoration and Conditions upon Restoration. A partially-vested Participant who is re-employed by the Employer after receiving a cash-out distribution of the Nonforfeitable percentage of his Accrued Benefit may repay the Trustee the amount of the cash-out distribution attributable to Employer contributions, unless the Participant no longer has a right to restoration by reason of the conditions of this Section 5.04(A). If a partially-vested Participant makes the cash-out distribution repayment, the Committee, subject to the conditions of this Section 5.04(A), must restore his Accrued Benefit attributable to Employer contributions to the same dollar amount as the dollar amount of his Accrued Benefit on the Accounting Date, or other valuation date, immediately preceding the date of the cash-out distribution, unadjusted for any gains or losses occurring subsequent to that Accounting Date, or other valuation date. Restoration of the Participant's Accrued Benefit includes restoration of all Code Subsection 411(d)(6) protected benefits with respect to that restored Accrued Benefit, in accordance with applicable Treasury regulations. The Committee will not restore a re-employed Participant's Accrued Benefit under this paragraph if: (1) 5 years have elapsed since the Participant's first re-employment date with the Employer following the cash-out distribution; or (2) The Participant incurred a Forfeiture Break in Service (as defined in Section 5.08). This condition also applies if the Participant makes repayment within the Plan Year in which he incurs the Forfeiture Break in Service and that Forfeiture Break in Service would result in a complete forfeiture of the amount the Committee otherwise would restore. (B) Time and Method of Restoration. If neither of the two conditions preventing restoration of the Participant's Accrued Benefit applies, the Committee will restore the Participant's Accrued Benefit as of the Plan Year Accounting Date coincident with or immediately following the repayment. To restore the Participant's Accrued Benefit, the Committee, to the extent necessary, will allocate to the Participant's Account: (1) First, the amount, if any, of Participant forfeitures the Committee would otherwise allocate under Section 3.05; (2) Second, the amount, if any, of the Trust Fund net income or gain for the Plan Year; and (3) Third, the Employer contribution for the Plan Year to the extent made under a discretionary formula. To the extent the amounts described in clauses (1), (2) and (3) are insufficient to enable the Committee to make the required restoration, the Employer must contribute, without regard to any requirement or condition of Section 3.01, the additional amount necessary to enable the Committee to make the required restoration. If, for a particular Plan Year, the Committee must restore the Accrued Benefit of more than one re-employed Participant, then the Committee will make the restoration allocations to each such Participant's Account in the same proportion that a Participant's restored amount for the Plan Year bears to the restored amount for the Plan Year of all re-employed Participants. The Committee will not take into account any allocation under this Section 5.04 in applying the limitation on allocations under Part 2 of Article III. (C) 0% Vested Participant. The deemed cash-out rule applies to a 0% vested Participant. A 0% vested Participant is a Participant whose Accrued Benefit derived from Employer contributions is entirely forfeitable at the time of his Separation from Service. Under the deemed cash-out rule,the Committee will treat the 0% vested Participant as having received a cash-out distribution on the date of the Participant's Separation from Service or, if the Participant's Account is entitled to an allocation of Employer contributions for the Plan Year in which he separates from Service, on the last day of that Plan Year. For purposes of applying the restoration provisions of this Section 5.04, the Committee will treat the 0% vested Participant as repaying his cash-out "distribution" on the first date of his re-employment with the Employer. 5.05 Segregated Account for Repaid Amount. Until the Committee restores the Participant's Accrued Benefit, as described in Section 5.04, the Trustee will invest the cash-out amount the Participant has repaid in a segregated Account maintained solely for that Participant. The Trustee must invest the amount in the Participant's segregated Account in Federally insured interest bearing savings account(s) or time deposit(s) (or a combination of both), or in other fixed income investments. Until commingled with the balance of the Trust Fund on the date the Committee restores the Participant's Accrued Benefit, the Participant's segregated Account remains a part of the Trust, but it alone shares in any income it earns and it alone bears any expense or loss it incurs. Unless the repayment qualifies as a rollover contribution, the Committee will direct the Trustee to repay to the Participant as soon as is administratively practicable the full amount of the Participant's segregated Account if the Committee determines either of the conditions of Section 5.04(A) prevents restoration as of the applicable Accounting Date, notwithstanding the Participant's repayment. 5.06 Year of Service - Vesting. For purposes of vesting under Section 5.03, Year of Service means any Plan Year during which an Employee completes not less than 1000 Hours of Service with the Employer. 5.07 Break In Service - Vesting. For purposes of this Article V, a Participant incurs a "Break in Service" if during any Plan Year he does not complete more than 500 Hours of Service with the Employer. 5.08 Included Years of Service - Vesting. (A) Included Years of Service. For purposes of determining "Years of Service" under Section 5.06, the Plan takes into account all Years of Service an Employee completes with the Employer, except: (1) Any Year of Service during the period the Employer did not maintain this Plan or a predecessor plan. (2) Any Year of Service before a Break in Service if the number of consecutive Breaks in Service equals or exceeds the greater of 5 or the aggregate number of the Years of Service prior to the Break. This exception applies only if the Participant is 0% vested in his Accrued Benefit derived from Employer contributions at the time he has a Break in Service. Furthermore, the aggregate number of Years of Service before a Break in Service does not include any Years of Service not required to be taken into account under this exception by reason of any prior Break in Service. (B) Forfeiture Break in Service. For the sole purpose of determining a Participant's Nonforfeitable percentage of his Accrued Benefit derived from Employer contributions which accrued for his benefit prior to a Forfeiture Break in Service, the Plan disregards any Year of Service after the Participant first incurs a Forfeiture Break in Service. The Participant incurs a Forfeiture Break in Service when he incurs 5 consecutive Breaks in Service. 5.09 Forfeiture Occurs. A Participant's forfeiture, if any, of his Accrued Benefit derived from Employer contributions occurs under the Plan on the earlier of: (a) The last day of the vesting computation period in which the Participant first incurs a Forfeiture Break in Service; or (b) The date the Participant receives a cash-out distribution. The Committee determines the percentage of a Participant's Accrued Benefit forfeiture, if any, under this Section 5.09 solely by reference to the vesting schedule of Section 5.03. A Participant will not forfeit any portion of his Accrued Benefit for any other reason or cause except as expressly provided by this Section 5.09 or as provided under Section 9.14 5.10 Vesting for Special Classes of Participants. (A) Barbary Coast Participants. Notwithstanding any contrary provisions of the Plan, the Account balance of a Barbary Coast Participant (as defined in Section 3.02(E)) shall become 100% Nonforfeitable on the date the closing of the Barbary Coast facility is announced to the employees, and all Employer Contributions to such Participant's Account shall be 100% vested when made. (B) Norfolk Participants. Notwithstanding any contrary provisions of the Plan, the Account balance of a Norfolk Participant (as defined in Section 3.02(F)) shall be 100% vested on the date the Norfolk Steel Corporation facility at which the Participant worked was closed. Moreover, future Employer contributions for the Account of a Norfolk Participant shall be 100% Nonforfeitable when made; provided, however, that if a Norfolk facility Participant Separates from the Service of his Employer, remains absent from such Service for more than 365 days and is then rehired by the Employer, the vesting schedule under Section 5.03 shall apply to Matching Contributions and Profit Sharing Contributions to such Participant's Account on and after such Participant's reemployment and reentry into the Plan. (C) BSC Steel Inc., Klean Steel Division (Prichard and Jackson) Participants. Notwithstanding any contrary provisions of the Plan, the Account balance of a BSC Steel Inc., Klean Steel Division (Prichard and Jackson) Participant (as defined in Section 3.02(G)) shall be 100% vested on the date the BSC Steel Inc., Klean Steel Division (Prichard and Jackson) facility at which the Participant worked is closed. Moreover, future Employer contributions to the account of such a Participant shall be 100% vested when made; provided, however, that if such a Participant Separates from the Service of his Employer, remains absent from such Service for more than 365 days and is then rehired by the Employer, the vesting schedule under Section 5.03 shall apply to Matching Contributions and Profit Sharing Contributions to such Participant's Account on and after such Participant's reemployment and reentry into the Plan. (D) Birmingham Bolt Company, Inc., Knoxville Division Participants. Notwithstanding any contrary provisions of the Plan, the Account balance of a Birmingham Bolt Company, Inc., Knoxville Division Participant (as defined in Section 3.02(H)) shall be 100% Nonforfeitable on the date the Birmingham Bolt Company, Inc., Knoxville Division facility at which the Participant worked is closed. Moreover, future Matching Contributions and Profit Sharing Contributions to the Account of such Participant shall be 100% Nonforfeitable when made; provided, however, that if such a Participant Separates from the Service of his Employer, remains absent from such Service for more than 365 days and is then rehired by the Employer, the vesting schedule under Section 5.03 shall apply to Matching Contributions and Profit Sharing Contributions to such Participant's Account on and after such Participant's reemployment and reentry into the Plan. ARTICLE VI TIME AND METHOD OF PAYMENT OF BENEFITS 6.01 Time of Payment of Accrued Benefit. (A) Participant's Nonforfeitable Account balance does not exceed $3,500. If the Nonforfeitable Account balance of a Participant who has Separated from Service does not exceed $3,500, the Committee shall direct the Trustee to pay the Participant his Nonforfeitable Account balance in a lump sum as soon as practicable after the Valuation Date next following the Participant's Separation from Service. (B) Participant's Nonforfeitable Account balance exceeds $3,500. Subject to the consent requirements described below, the Committee shall direct the Trustee to commence distribution of a Participant's Nonforfeitable Account balance as soon as practicable after the Valuation Date next following the Participant's Separation from Service. The Participant must consent in writing to a distribution of his Nonforfeitable Account balance if the present value of his Nonforfeitable Account balance has ever, at the time of any distribution, exceeded $3,500 and the Participant has not attained age 65. Notwithstanding any contrary provisions of the Plan, the Committee shall direct the Trustee to distribute the Participant's Nonforfeitable Account balance in a lump sum not later than 60 days following the close of the Plan Year in which the later of the following events occurs: (1) the Participant attains age 65; or (2) the Participant Separates from Service. (C) Deceased Participant. When the Committee has received confirmation to its satisfaction of the Participant's death, the Committee shall direct the Trustee to distribute the Nonforfeitable Account balance of the deceased Participant to such Participant's Beneficiary in the form elected by the Participant, or if applicable, by the Beneficiary. In the absence of such an election, the Committee shall direct the Trustee to distribute the Participant's Nonforfeitable Account balance in a lump sum as soon as practicable after the Valuation Date following the date the Committee receives notification of or otherwise confirms the Participant's death. The Nonforfeitable Account balance of a deceased Participant shall be reduced by any security interest the Plan has against such Nonforfeitable Account balance by reason of an outstanding loan from the Plan to the deceased Participant. (D) Required Beginning Date. If any distribution commencement date described in this Article VI, either by Plan provision or by Participant election (or nonelection), is later than the Participant's Required Beginning Date, the Committee instead must direct the Trustee to make distribution on the Participant's Required Beginning Date. A Participant's Required Beginning Date is the April 1 following the close of the calendar year in which the Participant attains age 70 1/2. However, if the Participant, prior to incurring a Separation from Service, attained age 70 1/2 by January 1, 1988, and, for the five Plan Year period ending in the calendar year in which he attained age 70 1/2 and for all subsequent years, the Participant was not a more than 5% owner, the Required Beginning Date is the April 1 following the close of the calendar year in which the Participant separates from Service or, if earlier, the April 1 following the close of the calendar year in which the Participant becomes a more than 5% owner. Furthermore, if a Participant who was not a more than 5% owner attained age 70 1/2 during 1988 and did not incur a Separation from Service prior to January 1, 1989, his Required Beginning Date is April 1, 1990. A mandatory distribution at the Participant's Required Beginning Date will be in lump sum, unless the Participant, pursuant to the provisions of this Article VI, makes a valid election to receive an alternative form of payment. 6.02 Method of Payment of Accrued Benefit. If the Participant's Nonforfeitable Account balance does not exceed $3,500, it shall be distributed to the Participant (or his Beneficiary) in a lump sum. If the Participant's Nonforfeitable Account balance exceeds $3,500, the Participant or Beneficiary may elect distribution under one of the following methods: (a) by payment in a lump sum; or (b) by payment in monthly, quarterly or annual installments over a fixed period of time not exceeding the life expectancy of the Participant, or the joint and last survivor expectancy of the Participant and his Beneficiary; provided, however, that a Participant may not receive an installment distribution unless the Participant's Account balance is 100% Nonforfeitable. (A) Minimum Distribution Requirements for Participants. The Committee may not direct the Trustee to distribute the Participant's Nonforfeitable Accrued Benefit, nor may the Participant elect to have the Trustee distribute his Nonforfeitable Accrued Benefit, under a method of payment which, as of the Required Beginning Date, does not satisfy the minimum distribution requirements under Code Subsection 401(a)(9) and the applicable Treasury regulations. The minimum distribution for a calendar year equals the Participant's Nonforfeitable Accrued Benefit as of the latest Valuation Date preceding the beginning of the calendar year divided by the Participant's life expectancy or, if applicable, the joint and last survivor expectancy of the Participant and his designated Beneficiary (as determined under Article VIII, subject to the requirements of the Code Subsection 401(a)(9) regulations). The Committee will increase the Participant's Nonforfeitable Accrued Benefit, as determined on the relevant Valuation Date, for contributions or forfeitures allocated after the Valuation Date and by December 31 of the valuation calendar year, and will decrease the Valuation by distributions made after the Valuation Date and by December 31 of the valuation calendar year. For purposes of this valuation, the Committee will treat any portion of the minimum distribution for the first distribution calendar year made after the close of that year as a distribution occurring in that first distribution calendar year. In computing a minimum distribution, the Committee must use the unisex life expectancy multiples under Treas. Reg. Subsection 1.72-9. The Committee, only upon the Participant's written request, will compute the minimum distribution for a calendar year subsequent to the first calendar year for which the Plan requires a minimum distribution by redetermining the applicable life expectancy. However, the Committee may not redetermine the joint life and last survivor expectancy of the Participant and a nonspouse designated Beneficiary in a manner which takes into account any adjustment to a life expectancy other than the Participant's life expectancy. If the Participant's spouse is not his designated Beneficiary, a method of payment to the Participant (whether by Participant election or by Committee direction) may not provide more than incidental benefits to the Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must satisfy the Minimum Distribution Incidental Benefit ("MDIB") requirement in the Treasury regulations issued under Code Subsection 401(a)(9) for distributions made on or after the Participant's Required Beginning Date and before the Participant's death. To satisfy the MDIB requirement, the Committee will compute the minimum distribution required by this Section 6.02(A) by substituting the applicable MDIB divisor for the applicable life expectancy factor, if the MDIB divisor is a lesser number. Following the Participant's death, the Committee will compute the minimum distribution required by this Section 6.02(A) solely on the basis of the applicable life expectancy factor and will disregard the MDIB factor. For Plan Years beginning prior to January 1, 1989, the Plan satisfies the incidental benefits requirement if the distributions to the Participant satisfied the MDIB requirement or if the present value of the retirement benefits payable solely to the Participant is greater than 50% of the present value of the total benefits payable to the Participant and his Beneficiaries. The Committee must determine whether benefits to the Beneficiary are incidental as of the date the Trustee is to commence payment of the retirement benefits to the Participant, or as of any date the Trustee redetermines the payment period to the Participant. The minimum distribution for the first distribution calendar year is due by the Participant's Required Beginning Date. The minimum distribution for each subsequent distribution calendar year, including the calendar year in which the Participant's Required Beginning Date occurs, is due by December 31 of that year. (B) Minimum Distribution Requirements for Beneficiaries. The method of distribution to the Participant's Beneficiary must satisfy Code Subsection 401(a)(9) and the applicable Treasury regulations. If the Participant's death occurs after his Required Beginning Date, the method of payment to the Beneficiary must provide for completion of payment over a period which does not exceed the payment period which had commenced for the Participant. If the Participant's death occurs prior to his Required Beginning Date the method of payment to the Beneficiary must provide for completion of payment to the Beneficiary over a period not exceeding: (i) 5 years after the date of the Participant's death; or (ii) if the Beneficiary is a designated Beneficiary, the designated Beneficiary's life expectancy. The Committee may not direct payment of the Participant's Nonforfeitable Accrued Benefit over a period described in clause (ii) unless the Trustee will commence payment to the designated Beneficiary no later than the December 31 following the close of the calendar year in which the Participant's death occurred or, if later, and the designated Beneficiary is the Participant's surviving spouse, December 31 of the calendar year in which the Participant would have attained age 70 1/2. If the Trustee will make distribution in accordance with clause (ii), the minimum distribution for a calendar year equals the Participant's Nonforfeitable Accrued Benefit as of the latest Valuation Date preceding the beginning of the calendar year divided by the designated Beneficiary's life expectancy. The Committee must use the unisex life expectancy multiples under Treas. Reg. Subsection 1.72-9 for purposes of applying this paragraph. The Committee, only upon the written request of the Participant or of the Participant's surviving spouse, will recalculate the life expectancy of the Participant's surviving spouse not more frequently than annually, but may not recalculate the life expectancy of a nonspouse designated Beneficiary after the Trustee commences payment to the designated Beneficiary. The Committee will apply this paragraph by treating any amount paid to the Participant's child, which becomes payable to the Participant's surviving spouse upon the child's attaining the age of majority, as paid to the Participant's surviving spouse. Upon the Beneficiary's written request, the Committee must direct the Trustee to accelerate payment of all, or any portion, of the Participant's unpaid Accrued Benefit, as soon as administratively practicable following the effective date of that request. (C) Direct Rollover Option. This Subsection (C) is necessary to comply with the Unemployment Compensation Amendments Act of 1992 and is an integral part of the Plan. This Subsection (C) applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Article VI a distributee may elect, at the time and in the manner prescribed by the 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. (1) Definitions. (a) "Eligible rollover distribution." An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code Subsection 401(a)(9); and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion of net unrealized appreciation with respect to employer securities). (b) "Eligible retirement plan." An eligible retirement plan is an individual retirement account described in Code Subsection 408(a), an individual retirement annuity described in Code Subsection 408(b), an annuity plan described in Code Subsection 403(a), or a qualified trust described in Code Subsection 401(a), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (c) "Distributee." A distributee includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Subsection 414(p), are distributees with regard to the interest of the spouse or former spouse. (d) "Direct rollover." A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. 6.03 Benefit Payment Elections after Separation from Service. If the Participant's Nonforfeitable Account balance exceeds $3,500, he may elect to have the Trustee commence distribution as soon as practicable after any Valuation Date following his Separation from Service. Not earlier than 90 days, but not later than 30 days, before the Participant's benefit commencement date, the Committee must provide a benefit notice to a Participant who is eligible to make an election under this Section 6.03. The benefit notice must explain the optional forms of benefit in the Plan, including the material features and relative values of those options, and the Participant's right to defer distribution until he attains age 65. If a Participant or Beneficiary makes an election prescribed by this Section 6.03, the Committee will direct the Trustee to distribute the Participant's Nonforfeitable Account balance in accordance with that election. Any election under this Section 6.03 is subject to the requirements of Section 6.02 and of Section 6.04. The Participant or Beneficiary must make an election under this Section 6.03 by filing his election with the Committee at any time before the Trustee otherwise would commence to pay a Participant's Accrued Benefit in accordance with the requirements of Article VI. If the Participant is partially-vested in his Accrued Benefit, an election under this Paragraph (A) to distribute prior to the Participant's incurring a Forfeiture Break in Service (as defined in Section 5.08), must be in the form of a cash-out distribution (as defined in Article V). A Participant may not receive a cash-out distribution if, prior to the time the Trustee actually makes the cash-out distribution, the Participant returns to employment with the Employer. 6.04 Form of Distribution. Distribution of a Participant's Account shall be made in cash; provided, however, that a Participant has the right to demand that his Account be distributed in the form of shares of Birmingham Steel Corporation common stock to the extent that his Account balance as of the date of such distribution is invested in Birmingham Steel Corporation common stock. 6.05 Optional Forms of Benefit under the AS&W Plan. This Plan protects the distribution alternatives (i.e., the "optional forms of benefit") available to the AS&W Account Balances. However, the optional forms of benefit, set forth in this Section 6.05, apply only to the AS&W Account Balances, and not to other Account balances under this Plan. (A) AS&W Account Balance Available at Age 65. A Participant in this Plan who was also a Participant under the AS&W Plan has a continuing election to receive his AS&W Account Balance on or after the first day of the month coinciding with or next following such Participant's attainment of age 65, even if such Participant has not Separated from Service. (B) AS&W Account Balance Available at Age 59 1/2. A Participant in this Plan who was also a Participant under the AS&W Plan has a continuing election to receive his AS&W Account Balance on or after the first day of the month coinciding with or next following such Participant's attainment of age 59 1/2, even if such Participant has not Separated from Service; provided, however, that no such distribution shall be made unless such Participant is 100% vested in his AS&W Account Balance. 6.06 Distributions under Domestic Relations Orders. Nothing contained in this Plan prevents the Trustee, in accordance with the direction of the Committee, from complying with the provisions of a Qualified Domestic Relations Order (as defined in Code Subsection 414(p)). This Plan specifically permits distribution to an alternate payee under a qualified domestic relations order at any time, irrespective of whether the Participant has attained his earliest retirement age (as defined under Code Subsection 414(p)) under the Plan. A distribution to an alternate payee prior to the Participant's attainment of earliest retirement age is available only if: (1) the order specifies distribution at that time or permits an agreement between the Plan and the alternate payee to authorize an earlier distribution; and (2) if the present value of the alternate payee's benefits under the Plan exceeds $3,500, and the order requires, the alternate payee consents to any distribution occurring prior to the Participant's attainment of earliest retirement age. Nothing in this Section 6.06 gives a Participant a right to receive distribution at a time otherwise not permitted under the Plan nor does it permit the alternate payee to receive a form of payment not otherwise permitted under the Plan. The Committee must establish reasonable procedures to determine the qualified status of a domestic relations order. Upon receiving a domestic relations order, the Committee promptly will notify the Participant and any alternate payee named in the order, in writing, of the receipt of the order and the Plan's procedures for determining the qualified status of the order. Within a reasonable period of time after receiving the domestic relations order, the Committee must determine the qualified status of the order and must notify the Participant and each alternate payee, in writing, of its determination. The Committee must provide notice under this paragraph by mailing to the individual's address specified in the domestic relations order, or in a manner consistent with Department of Labor regulations. If any portion of the Participant's Nonforfeitable Accrued Benefit is payable during the period the Committee is making its determination of the qualified status of the domestic relations order, the Committee must make a separate accounting of the amounts payable. If the Committee determines the order is a qualified domestic relations order within 18 months of the date amounts first are payable following receipt of the order, the Committee will direct the Trustee to distribute the payable amounts in accordance with the order. If the Committee does not make its determination of the qualified status of the order within the 18-month determination period, the Committee will direct the Trustee to distribute the payable amounts in the manner the Plan would distribute if the order did not exist and will apply the order prospectively if the Committee later determines the order is a qualified domestic relations order. To the extent it is not inconsistent with the provisions of the qualified domestic relations order, the Committee may direct the Trustee to invest any partitioned amount in a segregated subaccount or separate account and to invest the account in Federally insured, interest-bearing savings account(s) or time deposit(s) (or a combination of both), or in other fixed income investments. A segregated subaccount remains a part of the Trust, but it alone shares in any income it earns, and it alone bears any expense or loss it incurs. The Trustee will make any payments or distributions required under this Section 6.06 by separate benefit checks or other separate distribution to the alternate payee(s). ARTICLE VII DUTIES OF THE BOARD OF DIRECTORS AND THE EMPLOYER 7.01 Responsibilities of the Board of Directors. The Board of Directors of the Birmingham Steel Corporation is a Named Fiduciary under the Plan with the following duties and responsibilities: (a) To establish or terminate the Plan; (b) To authorize or ratify Plan amendments that materially change Plan costs or benefits; (c) To appoint or remove the Trustee and to monitor the Trustee's performance; and (d) To appoint or remove members of the Employee Benefits Committee and to monitor the performance of the Committee. 7.02 Responsibilities of the Employer. The Employer is the Named Fiduciary under the Plan which has the duties and responsibilities set forth in the Plan, including the following duties and responsibilities: (a) To take actions and execute documents as authorized and directed by the Board of Directors; (b) To approve the appointment of one or more Investment Managers by the Employee Benefits Committee, as provided under Section 9.03(a); and (c) To approve the Investment Funds selected from time to time by the Employee Benefits Committee as provided under Section 9.03(b). 7.03 Information to Committee. The Employer (including each Participating Employer) must supply current information to the Committee as to the name, date of birth, date of employment, annual compensation, leaves of absence, Years of Service and date of termination of employment of each Employee who is, or who will be eligible to become, a Participant under the Plan, together with any other information which the Committee considers necessary, including the Employee's elected deferral contributions under his salary reduction agreement. The Employer's records as to the current information the Employer furnishes to the Committee are conclusive as to all persons. 7.04 No Liability. The Employer assumes no obligation or responsibility to any of its Employees, Participants or Beneficiaries for any act of, or failure to act, on the part of its Committee (unless the Employer is the Committee). 7.05 Indemnity of Certain Fiduciaries. The Employer indemnifies and saves harmless the Plan Administrator and the members of the Committee, and each of them, from and against any and all loss resulting from liability to which the Plan Administrator and the Committee, or the members of the Committee, may be subjected by reason of any act or conduct (except willful misconduct or gross negligence) in their official capacities in the administration of this Trust or Plan or both, including all expenses reasonably incurred in their defense, in case the Employer fails to provide such defense. The indemnification provisions of this Section 7.05 do not relieve the Plan Administrator or any Committee member from any liability he may have under ERISA for breach of a fiduciary duty. Furthermore, the Plan Administrator and the Committee members and the Employer may execute a letter agreement further delineating the indemnification agreement of this Section 7.05, provided the letter agreement must be consistent with and does not violate ERISA. The indemnification provisions of this Section 7.05 extend to the Trustee (or to a Custodian, if any) solely to the extent provided by a letter agreement executed by the Trustee (or Custodian) and the Employer. 7.06 Amendment to Vesting Schedule. Though the Employer reserves the right to amend the vesting schedule at any time, the Committee will not apply the amended vesting schedule to reduce the Nonforfeitable percentage of any Participant's Accrued Benefit derived from Employer contributions (determined as of the later of the date the Employer adopts the amendment, or the date the amendment becomes effective) to a percentage less than the Nonforfeitable percentage computed under the Plan without regard to the amendment. An amended vesting schedule will apply to a Participant only if the Participant receives credit for at least one Hour of Service after the new schedule becomes effective. If the Employer makes a permissible amendment to the vesting schedule, each Participant having at least 3 Years of Service with the Employer may elect to have the percentage of his Nonforfeitable Accrued Benefit computed under the Plan without regard to the amendment. For Plan Years beginning prior to January 1, 1989, the election described in the preceding sentence applies only to Participants having at least 5 Years of Service with the Employer. The Participant must file his election with the Committee within 60 days of the latest of (a) the Employer's adoption of the amendment; (b) the effective date of the amendment; or (c) his receipt of a copy of the amendment. The Committee, as soon as practicable, must forward a true copy of any amendment to the vesting schedule to each affected Participant, together with an explanation of the effect of the amendment, the appropriate form upon which the Participant may make an election to remain under the vesting schedule provided under the Plan prior to the amendment and notice of the time within which the Participant must make an election to remain under the prior vesting schedule. The election described in this Section 7.06 does not apply to a Participant if the amended vesting schedule provides for vesting at least as rapid at all times as the vesting schedule in effect prior to the amendment. For purposes of this Section 7.06, an amendment to the vesting schedule includes any Plan amendment which directly or indirectly affects the computation of the Nonforfeitable percentage of an Employee's rights to his Employer derived Accrued Benefit. ARTICLE VIII PARTICIPANT ADMINISTRATIVE PROVISIONS 8.01 Beneficiary Designation. Any Participant may from time to time designate, in writing, any person or persons, contingently or successively, to whom the Trustee will pay his Nonforfeitable Accrued Benefit (including any life insurance proceeds payable to the Participant's Account) in the event of his death and the Participant may designate the form and method of payment. The Committee will prescribe the form for the written designation of Beneficiary and, upon the Participant's filing the form with the Committee, the form effectively revokes all designations filed prior to that date by the same Participant. A married Participant's Beneficiary designation is not valid unless the Participant's spouse consents, in writing, to the Beneficiary designation. The spouse's consent must acknowledge the effect of that consent and a notary public or the Plan Administrator (or his representative) must witness that consent. The spousal consent requirements of this paragraph do not apply if: (1) the Participant and his spouse are not married throughout the one year period ending on the date of the Participant's death; (2) the Participant's spouse is the Participant's sole primary beneficiary; (3) the Plan Administrator is not able to locate the Participant's spouse; (4) the Participant is legally separated or has been abandoned (within the meaning of State law) and the Participant has a court order to that effect; or (5) other circumstances exist under which the Secretary of the Treasury will excuse the consent requirement. If the Participant's spouse is legally incompetent to give consent, the spouse's legal guardian (even if the guardian is the Participant) may give consent. 8.02 No Beneficiary Designation/Death of Beneficiary. If a Participant fails to name a Beneficiary in accordance with Section 8.01, or if the Beneficiary named by a Participant predeceases him, then the Trustee will pay the Participant's Nonforfeitable Accrued Benefit in accordance with Section 6.02 in the following order of priority to: (a) The Participant's surviving spouse; (b) The Participant's surviving children, including adopted children, in equal shares; (c) The Participant's surviving parents, in equal shares; or (d) The Participant's estate. If the Beneficiary does not predecease the Participant, but dies prior to distribution of the Participant's entire Nonforfeitable Accrued Benefit, the Trustee will pay the remaining Nonforfeitable Accrued Benefit to the Beneficiary's estate unless the Participant's Beneficiary designation provides otherwise. The Committee will direct the Trustee as to the method and to whom the Trustee will make payment under this Section 8.02. 8.03 Personal Data to Committee. Each Participant and each Beneficiary of a deceased Participant must furnish to the Committee such evidence, data or information as the Committee considers necessary or desirable for the purpose of administering the Plan. The provisions of this Plan are effective for the benefit of each Participant upon the condition precedent that each Participant will furnish promptly full, true and complete evidence, data and information when requested by the Committee, provided the Committee advises each Participant of the effect of his failure to comply with its request. 8.04 Address for Notification. Each Participant and each Beneficiary of a deceased Participant must file with the Committee from time to time, in writing, his post office address and any change of post office address. Any communication, statement or notice addressed to a Participant, or Beneficiary, at his last post office address filed with the Committee, or as shown on the records of the Employer, binds the Participant, or Beneficiary, for all purposes of this Plan. 8.05 Assignment or Alienation. Subject to Code Subsection 414(p) relating to qualified domestic relations orders, neither a Participant nor a Beneficiary may anticipate, assign or alienate (either at law or in equity) any benefit provided under the Plan, and the Trustee will not recognize any such anticipation, assignment or alienation. Furthermore, a benefit under the Plan is not subject to attachment, garnishment, levy, execution or other legal or equitable process. 8.06 Notice of Change in Terms. The Plan Administrator, within the time prescribed by ERISA and the applicable regulations, must furnish all Participants and Beneficiaries a summary description of any material amendment to the Plan or notice of discontinuance of the Plan and all other information required by ERISA to be furnished without charge. 8.07 Litigation against the Trust. A court of competent jurisdiction may authorize any appropriate equitable relief to redress violations of ERISA or to enforce any provisions of ERISA or the terms of the Plan. A fiduciary may receive reimbursement of expenses properly and actually incurred in the performance of his duties with the Plan. 8.08 Information Available. Any Participant in the Plan or any Beneficiary may examine copies of the Plan description, latest annual report, any bargaining agreement, this Plan and Trust, contract or any other instrument under which the Plan was established or is operated. The Plan Administrator will maintain all of the items listed in this Section 8.08 in his office, or in such other place or places as he may designate from time to time in order to comply with the regulations issued under ERISA, for examination during reasonable business hours. Upon the written request of a Participant or Beneficiary the Plan Administrator must furnish him with a copy of any item listed in this Section 8.08. The Plan Administrator may make a reasonable charge to the requesting person for the copy so furnished. 8.09 Appeal Procedure for Denial of Benefits. A Participant or a Beneficiary ("Claimant") may file with the Committee a written claim for benefits, if the Participant or Beneficiary determines the distribution procedures of the Plan have not provided him his proper Nonforfeitable Accrued Benefit. The Committee must render a decision on the claim within 60 days of the Claimant's written claim for benefits. The Plan Administrator must provide adequate notice in writing to the Claimant whose claim for benefits under the Plan the Committee has denied. The Plan Administrator's notice to the Claimant must set forth: (a) The specific reason for the denial; (b) Specific references to pertinent Plan provisions on which the Committee based its denial; (c) A description of any additional material and information needed for the Claimant to perfect his claim and an explanation of why the material or information is needed; and (d) That any appeal the Claimant wishes to make of the adverse determination must be in writing to the Committee within 75 days after receipt of the Plan Administrator's notice of denial of benefits. The Plan Administrator's notice must further advise the Claimant that his failure to appeal the action to the Committee in writing within the 75-day period will render the Committee's determination final, binding and conclusive. If the Claimant should appeal to the Committee, he, or his duly authorized representative, may submit, in writing, whatever issues and comments he, or his duly authorized representative, feels are pertinent. The Claimant, or his duly authorized representative, may review pertinent Plan documents. The Committee will re-examine all facts related to the appeal and make a final determination as to whether the denial of benefits is justified under the circumstances. The Committee must advise the Claimant of its decision within 60 days of the Claimant's written request for review, unless special circumstances (such as a hearing) would make the rendering of a decision within the 60-day limit unfeasible, but in no event may the Committee render a decision respecting a denial for a claim for benefits later than 120 days after its receipt of a request for review. The Plan Administrator's notice of denial of benefits must identify the name of each member of the Committee and the name and address of the Committee member to whom the Claimant may forward his appeal. member to whom the Claimant may forward his appeal. ARTICLE IX EMPLOYEE BENEFITS COMMITTEE 9.01 Appointment and Term of Office. (a) The Board of Directors shall appoint an Employee Benefits Committee to administer the Plan, the members of which may or may not be Participants in the Plan. If the Board of Directors fails to appoint an Employee Benefits Committee, or if all members of the Committee are on unable or unwilling to serve, the Employer shall act as, and shall have all the powers, duties and responsibilities of, the Employee Benefits Committee. The members of the Committee will serve without compensation for services as such, but the Employer will pay all expenses of the Committee, except to the extent the Trust properly pays for such expenses. (b) The Board of Directors may remove any member of the Committee at any time. A member may resign at any time by written resignation delivered to the Board. If a vacancy in the Committee occurs, a successor member may be appointed by the Board of Directors. (c) At the request of the Employer, the Committee shall furnish the Employer or the Trustee a written certification of all members of the Committee, together with a specimen signature of each member. 9.02 Named Administrative Fiduciary. The Employee Benefits Committee is the Named Administrative Fiduciary responsible for administering the Plan. The Committee has complete discretionary authority and control over the administration of the Plan and has all powers necessary to carry out its administrative duties, including (without limitation) the following: (a) To determine the eligibility of an Employee to participate in the Plan, the value of a Participant's Accrued Benefit and the Nonforfeitable percentage of each Participant's Accrued Benefit; (b) To adopt rules of procedure and regulations necessary for the proper and efficient administration of the Plan, provided the rules are not inconsistent with the terms of the Plan; (c) To construe and enforce the terms of the Plan and the rules and regulations it adopts, including interpretation of the Plan documents and documents related to the Plan's operation; (d) To direct the Trustee as respects the crediting and distribution of the Trust; (e) To review and render decisions respecting a claim for (or denial of a claim for) a benefit under the Plan; (f) To furnish the Employer with information which the Employer may require for tax or other purposes; and (g) To establish, in its discretion, written Loan Guidelines, Hardship Guidelines, and Qualified Domestic Relations Order Guidelines; The Committee must exercise all of its powers, duties and discretion under the Plan in a uniform and nondiscriminatory manner. 9.03 Named Investment Fiduciary. The Employee Benefits Committee is the Named Investment Fiduciary solely with respect to the following responsibilities: (a) With the approval of the Employer, to engage the services of one or more Investment Managers (as defined in ERISA Subsection 3(38)), each of whom shall have full power and authority to manage, acquire or dispose (or direct the Trustee with respect to acquisition or disposition) of any Plan asset under the control of such Manager; (b) To establish written Investment Guidelines and, with the approval of the Employer, to select, and change as appropriate, one or more Investment Funds for use by the Participants in directing the investment of their Account balances; and (c) To study and monitor the financial status of the Plan, the services of any Investment Manager, and the investment performance of the Investment Funds, and to make such reports and recommendations to the Employer as the Committee may deem appropriate. 9.04 Assistants and Advisors. The Employee Benefits Committee has the right to hire, at the expense of the Employer or of the Plan, such professional assistants and consultants as the Committee deems necessary or advisable. To the extent the fees and expenses of such assistants and advisors are not paid by the Employer, they shall be paid at the direction of the Committee as an expense of the Trust Fund. 9.05 Funding Policy. The Committee will review, not less often than annually, all pertinent Employee information and Plan data in order to establish the funding policy of the Plan and to determine the appropriate methods of carrying out the Plan's objectives. The Committee must communicate periodically, as it deems appropriate, to the Trustee and to any Investment Manager the Plan's short-term and long-term financial needs so that the Plan's investment policy can be coordinated with Plan financial requirements. 9.06 Manner of Action. Each action of the Committee shall be taken by a majority vote of all members then in office, except that the Committee may establish procedures for taken written votes without a meeting. 9.07 Authorized Representative. The Committee may authorize any one of its members, or its Secretary, to sign on its behalf any notices, directions, applications, certificates, consents, approvals, waivers, letters or other documents. The Committee must evidence this authority by an instrument signed by all members and filed with the Trustee. 9.08 Interested Member. No member of the Committee may decide or determine any matter concerning the distribution, nature or method of settlement of his own benefits under the Plan, except in exercising an election available to that member in his capacity as a Participant, unless the Plan Administrator is acting alone in the capacity of the Committee. 9.09 Individual Accounts. The Committee will maintain, or direct the Trustee to maintain, a separate Account or multiple Accounts, in the name of each Participant to reflect the Participant's Accrued Benefit under the Plan. If a Participant re-enters the Plan subsequent to his having a Forfeiture Break in Service, the Committee, or the Trustee, must maintain a separate Account for the Participant's pre-Forfeiture Break in Service Accrued Benefit and a separate Account for his post-Forfeiture Break in Service Accrued Benefit, unless the Participant's entire Accrued Benefit under the Plan is 100% Nonforfeitable. The Committee will make its allocations, or request the Trustee to make its allocations, to the Accounts of the Participants in accordance with the provisions of Section 9.11. The Committee may direct the Trustee to maintain a temporary segregated investment Account in the name of a Participant to prevent a distortion of income, gain or loss allocations under Section 9.11. The Committee must maintain records of its activities. 9.10 Value of Participant's Accrued Benefit. The value of each Participant's Accrued Benefit consists of that proportion of the net worth (at fair market value) of the Trust Fund which the net credit balance in his Account (exclusive of the cash value of incidental benefit insurance contracts) bears to the total net credit balance in the Accounts of all Participants plus the cash surrender value of any incidental benefit insurance contracts held by the Trustee on the Participant's life. For purposes of a distribution under the Plan, the value of a Participant's Accrued Benefit is its value as of the Valuation Date immediately preceding the date of the distribution. 9.11 Allocation and Distribution of Net Income Gain or Loss. A "Valuation Date" is each quarterly Valuation Date, namely March 31, June 30, September 30 and December 31, and each interim Valuation Date directed by the Committee. As of each Valuation Date the Committee must adjust Accounts to reflect net income, gain or loss since the last Valuation Date. The valuation period is the period beginning the day after the last Valuation Date and ending on the current Valuation Date. (A) Trust Fund Accounts. The allocation provisions of this paragraph apply to all Participant Accounts other than segregated investment Accounts. The Committee first will adjust the Participant Accounts, as those Accounts stood at the beginning of the current valuation period, by reducing the Accounts for any forfeitures arising under Section 5.09 or under Section 9.14, and for amounts charged during the valuation period to the Accounts in accordance with Section 9.13 (relating to distributions) The Committee then, subject to the restoration allocation requirements of Section 5.04 or of Section 9.14, will allocate the net income, gain or loss pro rata to the adjusted Participant Accounts. The allocable net income, gain or loss is the net income (or net loss), including the increase or decrease in the fair market value of assets, since the last Valuation Date. (B) Segregated investment Accounts. A segregated investment Account receives all income it earns and bears all expense or loss it incurs. The Committee will adopt uniform and nondiscriminatory procedures for determining income or loss of a segregated investment Account in a manner which reasonably reflects investment directions relating to pooled investments and investment directions occurring during a valuation period. As of the Valuation Date, the Committee must reduce a segregated Account for any forfeiture arising under Section 5.09 after the Committee has made all other allocations, changes or adjustments to the Account for the Plan Year. (C) Additional rules. An Excess Amount or suspense account described in Sections 3.13 and 3.14 does not share in the allocation of net income, gain or loss described in this Section 9.11. This Section 9.11 applies solely to the allocation of net income, gain or loss of the Trust. The Committee will allocate the Employer contributions and Participant forfeitures, if any, in accordance with Article III. 9.12 Individual Statement. As soon as practicable after December 31 of each Plan Year, but within the time prescribed by ERISA and the regulations under ERISA, the Plan Administrator will deliver to each Participant (and to each Beneficiary) a statement reflecting the condition of his Accrued Benefit in the Trust as of that date and such other information ERISA requires be furnished the Participant or Beneficiary. The Plan Administrator may in its discretion furnish benefit statements to the Participants at other times during the Plan Year. No Participant, except a member of the Committee, has the right to inspect the records reflecting the Account of any other Participant. 9.13 Account Charged. The Committee will charge a Participant's Account for all distributions made from that Account to the Participant, to his Beneficiary or to an alternate payee. The Committee may, in its discretion, charge a Participant's Account for any administrative expenses incurred by the Plan directly related to that Account. 9.14 Unclaimed Account Procedure. The Plan does not require either the Trustee or the Committee to search for, or to ascertain the whereabouts of, any Participant or Beneficiary. At the time the Participant's or Beneficiary's benefit becomes distributable under Article VI, the Committee, by certified or registered mail addressed to his last known address of record with the Committee or the Employer, must notify any Participant, or Beneficiary, that he is entitled to a distribution under this Plan. The notice must quote the provisions of this Section 9.14 and otherwise must comply with the notice requirements of Article VI. If the Participant, or Beneficiary, fails to claim his distributive share or make his whereabouts known in writing to the Committee within 6 months from the date of mailing of the notice, the Committee will treat the Participant's or Beneficiary's unclaimed payable Accrued Benefit as forfeited and will reallocate the unclaimed payable Accrued Benefit in accordance with Section 3.05. A forfeiture under this paragraph will occur at the end of the notice period or, if later, the earliest date applicable Treasury regulations would permit the forfeiture. Pending forfeiture, the Committee, following the expiration of the notice period, may direct the Trustee to segregate the Nonforfeitable Accrued Benefit in a segregated Account and to invest that segregated Account in Federally insured interest bearing savings accounts or time deposits (or in a combination of both), or in other fixed income investments. If a Participant or Beneficiary who has incurred a forfeiture of his Accrued Benefit under the provisions of the first paragraph of this Section 9.14 makes a claim, at any time, for his forfeited Accrued Benefit, the Committee must restore the Participant's or Beneficiary's forfeited Accrued Benefit to the same dollar amount as the dollar amount of the Accrued Benefit forfeited, unadjusted for any gains or losses occurring subsequent to the date of the forfeiture. The Committee will make the restoration during the Plan Year in which the Participant or Beneficiary makes the claim, first from the amount, if any, of Participant forfeitures the Committee otherwise would allocate for the Plan Year, then from the amount, if any, of the Trust Fund net income or gain for the Plan Year and then from the amount, or additional amount, the Employer contributes to enable the Committee to make the required restoration. The Committee must direct the Trustee to distribute the Participant's or Beneficiary's restored Accrued Benefit to him not later than 60 days after the close of the Plan Year in which the Committee restores the forfeited Accrued Benefit. The forfeiture provisions of this Section 9.14 apply solely to the Participant's or to the Beneficiary's Accrued Benefit derived from Employer contributions. ARTICLE X LOANS AND HARDSHIP DISTRIBUTIONS 10.01 Loans. The Committee in its sole discretion may direct the Trustee to make one or more loans to a Participant who requests a loan from the Plan, under the following terms and conditions: (A) Administration. The Committee shall administer Plan loans. All applications for loans shall be given by the Participant to the Committee on forms prescribed by the Committee. In addition to the rules set forth in this Article X, the Committee may, in its discretion promulgate such reasonable and nondiscriminatory rules as it may deem advisable under the circumstances. (B) Participant Loan Application. A Participant who wishes to borrow from the Plan must first submit a written Participant Loan Application to the Committee. For purposes of this Section 10.01, the term "Participant" means any Participant or beneficiary who is party in interest (as determined under ERISA Subsection 3(14)) with respect to the Plan. Each loan application shall be considered by the Committee within a reasonable time after the Participant makes formal application. To determine the Participant's credit- worthiness and ability to repay the loan, the Committee may require the Participant to furnish such financial information as the Committee may deem necessary. Such financial information may include (without limitation) the Participant's personal financial statement, tax returns for the past three years and credit reports on the Participant. (C) Committee's Decision on Loan Application. The Committee shall determine whether a Participant qualifies for a loan, applying such criteria as the Committee deems appropriate, which may (but need not) include such criteria as a commercial lender of funds would apply in like circumstances with respect to the Participant. Such criteria may include, but are not limited to, the credit-worthiness of the Participant and his general ability to repay the loan, whether adequate security has been provided for the loan, and whether the Participant agrees, as a condition for receiving the loan, to make repayments through direct, after-tax payroll deduction by the Employer. (D) Limitation on Amount of Loan. The Committee will not approve any loan to a Participant in an amount which exceeds 50% of his or her nonforfeitable accrued benefit (account balance), as reflected by the books and records of the Plan. The maximum aggregate dollar amount of loans outstanding to any Participant may not exceed $50,000 as aggregated with all Participant loans from other employer qualified plans, reduced by the excess of the Participant's highest outstanding Participant loan balance during the 12-month period ending on the date of the loan over the Participant's current outstanding Participant loan balance on the date of the loan. (E) Term of Loan. The Committee shall fix the term for repayment of the loan, but in no case may the term of repayment be longer than 5 years, unless the loan qualifies as a "home loan." A "home loan" is a loan used to acquire a dwelling unit to be used within a reasonable time as the principal residence of the Participant. the Committee may fix the term for repayment of a "home loan," provided such term does not exceed 15 years or the borrower-Participant's attainment of age 65. (F) Minimum Loan Amount. No loan will be made under this program of less than $1,000. (G) Only One Loan Outstanding. No more than one loan may be outstanding at any time for a Participant. (H) Promissory Note and Terms of the Note. The Committee will document every loan in the form of a promissory note signed by the Participant for the face amount of the loan, together with a commercially reasonable rate of interest. The interest rate quote(s) must take into account the term of the loan, the security on that loan, the credit-worthiness of the Participant, whether the interest rate is adjustable during the term of the loan, and the intended use of the loan proceeds, if known, and must reflect a commercially reasonable rate for the geographical region in which the Participant lives. If Participants in the Plan live in different geographical regions, the Committee may establish a uniform commercially reasonable interest rate applicable to all regions based on information obtained from at least one region in which Participants live. The Committee must reevaluate interest rates for loans made more than one month since the last loan made by the Plan. A loan may provide a fixed rate of interest or an adjustable rate of interest, as negotiated between the Committee and the Participant. If the loan carries a fixed rate of interest, the Committee will at the time it approves the loan determine whether the fixed interest rate is commercially reasonable. If the interest is adjustable, the Committee will determine at the time of each scheduled adjustment whether the interest rate is commercially reasonable. The loan must provide at least quarterly payments under a level amortization schedule. The loan may permit a suspension of payments for a period not exceeding one year which occurs during an approved leave of absence. The Committee will fix the term for repayments of any loan, however, in no instance may the term of repayment be greater than five years. Participants should note the law treats the amount of a Plan loan not repaid five years after the date of the loan as a taxable distribution on the last day of the five year period or, if sooner, at the time the loan is in default. (I) Security for the Loan. The Plan shall require that adequate security be provided by the Participant before a loan is granted. For this purpose, the Plan shall generally consider a Participant's interest under the Plan to be adequate security. However, in no event shall more than 50% of a Participant's vested interest in the Plan (determined immediately after the origination of the loan) be used as security for the loan. The Plan's general policy is not to make loans that require security other than the Participant's vested interest in the Plan. However, if additional security is necessary to adequately secure the loan, then the Committee shall require that such security be provided before the loan will be granted. For this purpose, the Participant's principal residence may serve as additional security. (J) Events of Default. The Committee may (but is not required to) treat a loan as in default upon: (1) The Participant's failure to make timely payments under the loan when due; (2) The Participant's termination of employment with the Employer which is providing coverage under the Plan; (3) The making or furnishing of any representation or statement to the Plan by or on behalf of the Participant proves to have been false in any material respect when made or furnished; (4) Loss, theft, damage, destruction, sale or encumbrance to or of any of the collateral, or the making of any levy seizure or attachment thereof; (5) The Participant's assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against the Participant; (6) A distribution is required to be made from the Participant's account under a qualified domestic relations order and the amount of such distribution exceeds the non-loaned value of the account. If an event of default occurs, the Committee may instruct the Trustee to take such reasonable actions as a prudent fiduciary in similar circumstances would take to protect and preserve Plan assets, including foreclosing on any collateral and commencing such other legal action for collection as the Committee deems advisable. However, the Committee is not required to instruct the Trustee to commence such actions immediately upon default. Instead, the Committee may choose, in its discretion, to defer enforcement proceedings, and may grant the Participant reasonable rights to cure any default, provided such actions constitute prudent conduct for a professional lender in like circumstances and would not create an unreasonable risk of loss of principal or income to the Plan. Accordingly, if permitted by the Committee, the Participant will have the opportunity to repay the loan, resume current status of the loan by paying any missed payment plus interest or, if distribution is available under the plan, request distribution of the note. However, if the loan remains in default, the Committee may instruct the Trustee to foreclose on any other security the Trustee holds. Further, if the qualified status of the Plan is not jeopardized, the Committee may treat a loan that has been defaulted upon and not cured within a reasonable period of time as a deemed distribution from the Plan. The Committee will treat the note as repaid to the extent of any permissible offset. Pending final disposition of the note, the Participant remains obligated for any unpaid principal and accrued interest. (K) Participant-Directed Investment. The Plan intends this loan program not to place other Participants at risk with respect to their interests in the Plan. In this regard, the Committee will administer any Participant loan as a Participant-directed investment of that portion of the Participant's vested account balance equal to the outstanding principal balance of the loan. The Plan will credit that portion of the Participant's account with the interest earned on the note and with principal payments received by the Participant. The Plan also may charge that portion of the Participant's account balance with a reasonable loan set up fee, and with expenses directly related to the maintenance and collection of the note. (L) Domestic Relations Order. The Committee may in its discretion refuse to grant a loan to a Participant while the Committee is determining whether a domestic relations order affecting the Participant's account is a qualified domestic relations order. (M) Source of Funds. The source of funds for a loan shall be taken pro-rata from the contribution sources and Investment Funds comprising the Participant's Account. 10.02 Hardship Distributions. A Participant may, while in Service, apply to the Committee for a Hardship Distribution. If the Committee authorizes a Hardship Distribution, the source of funds for such distribution shall come first from the Participant's After-Tax Contributions Account (comprised of his After- Tax Contributions and earnings thereon) and next from the principal amount of his deferral contributions. No portion of earnings on the Participant's deferral contributions and no portion of the Participant's Matching Contributions Account or Employer Basic Contributions Account is available for a Hardship Distribution. Notwithstanding the foregoing provisions of this Section 10.02, an officer or director of an Employer, or a person having directly or indirectly beneficial ownership of not more than 10% of any class of equity securities of the Employer registered under Section 12 of the Securities and Exchange Act of 1934 is not eligible for a Hardship Distribution. The determination of whether the Participant is entitled to a Hardship Distribution shall be determined by the Committee in accordance with the rules of this Section 10.02. A Participant who wishes to apply for a Hardship Distribution shall submit a Hardship Distribution Application Form to the Committee. The Committee may, in administering Hardship Distributions, promulgate such reasonable administrative procedures and deadlines as it deems advisable. If the Committee approves a Participant's Hardship Distribution request, the Committee shall direct the Trustee to distribute the approved amount to the Participant in a lump sum as soon as practicable after the next Valuation Date. (A) Definition of hardship. A hardship distribution must be on account of one or more of the following immediate and heavy financial needs: (1) medical care described in Code Subsection 213(d) incurred by the Participant, by the Participant's spouse, or by any of the Participant's dependents or necessary to obtain such medical care; (2) the purchase (excluding mortgage payments) of a principal residence for the Participant; (3) the payment of post-secondary education tuition and related educational fees, for the next 12-month period, for the Participant, for the Participant's spouse, or for any of the Participant's dependents (as defined in Code Subsection 152); (4) to prevent the eviction of the Participant from his principal residence or the foreclosure on the mortgage of the Participant's principal residence; or (5) any need prescribed by the Revenue Service in a revenue ruling, notice or other document of general applicability which satisfies the safe harbor definition of hardship, provided such need is approved by the Committee. (B) Restrictions. The following restrictions apply to a Participant who receives a hardship distribution: (a) the Participant may not make elective deferrals or employee contributions to the Plan for the 12-month period following the date of his hardship distribution; (b) the distribution is not in excess of the amount of the immediate and heavy financial need (including any amounts necessary to pay any federal, state or local income taxes or penalties reasonable anticipated to result from the distribution); (c) the Participant must have obtained all distributions, other than hardship distributions, and all nontaxable loans (determined at the time of the loan) currently available under this Plan and all other qualified plans maintained by the Employer; and (d) the Participant agrees to limit elective deferrals under this Plan and under any other qualified plan maintained by the Employer, for the Participant's taxable year immediately following the taxable year of the hardship distribution, to the 402(g) limitation (as described in Section 4.03), reduced by the amount of the Participant's elective deferrals made in the taxable year of the hardship distribution. The suspension of elective deferrals and employee contributions described in clause (a) also must apply to all other qualified plans and to all nonqualified plans of deferred compensation maintained by the Employer, other than any mandatory employee contribution portion of a defined benefit plan, including stock option, stock purchase and other similar plans, but not including health or welfare benefit plans (other than the cash or deferred arrangement portion of a cafeteria plan). (C) Employee representation. The Committee will treat the distribution as the amount necessary to satisfy the immediate and heavy financial need, without further determination of other available resources, if the Participant represents, and the Committee determines under the facts and circumstances it is reasonable to rely on that representation, he is not able to relieve his immediate and heavy financial need: (a) through reimbursement or compensation by insurance or otherwise; (b) by reasonable liquidation of the Participant's assets (including the assets of the Participant's spouse or of the Participant's minor children, if those assets are reasonably available to the Participant); (c) by cessation of elective deferrals or of employee contributions under the Plan; (d) by other distributions or nontaxable loans from this Plan or from any other qualified Plan maintained by the Employer or by any other Employer; or (e) by borrowing from commercial sources on reasonable commercial terms. ARTICLE XI TRUST AGREEMENT 11.01 Establishment of Trust Agreement. Birmingham Steel Corporation has entered into a Trust Agreement with the Trustee to provide for the management, investment and distribution of the Trust Fund. 11.02 Removal of Trustee. The Trustee under the Trust Agreement shall be appointed and may be removed, and a successor may be appointed, in accordance with the terms of the Trust Agreement. If the Trust Agreement provides that the Employer has the power to appoint and remove the Trustee, then the Employer shall take such actions with the consent of the Board of Directors of Birmingham Steel Corporation. 11.03 Powers of the Trustee. The Trustee shall have such powers and responsibilities over the Trust Fund as are provided under the Trust Agreement. ARTICLE XII INVESTMENT OF THE TRUST FUND 12.01 Investment Funds. (A) Available Funds. Except as otherwise provided in this Article XII, on and after January 1, 1990, a portion, or all, of the Trust Fund shall be divided for investment purposes into such number and type of Investment Funds as the Committee, with the approval of the Employer, determines to be in the best interest of the Participants. All income, earnings and gains from the sale or other disposition of assets comprising an Investment Fund shall be reinvested in such Investment Fund. (B) Information concerning Funds. The Committee and the Trustee (or their delegates) shall timely furnish the Participants such information about the investment characteristics of the Investment Funds and about the rules of this Plan's investment program as may be required or advisable under ERISA. (C) Liquidity. Each Investment Fund may hold cash and other liquid investments in such amounts as the Committee considers necessary to meet the Plan's obligations to pay benefits and to pay administrative expenses. (D) Participant elections among the Investment Funds. Except as otherwise provided, each Participant may direct the investment and reinvestment of his Account balance among the available Investment Funds in accordance with written Investment Guidelines which the Committee or its delegate will furnish to each Participant. The Investment Guidelines shall be set forth in prospectuses and other documents, administrative forms and descriptive literature relating to each Investment Fund. The Committee may from time to time prescribe such administrative forms, election procedures and deadlines for Participant investment elections among the Investment Funds as the Committee may deem appropriate. The Account balance of a Participant who fails to elect any Investment Fund will automatically be invested in the Investment Fund which has the lowest risk of loss. (E) Restrictions imposed on certain Participants. Notwithstanding any contrary provisions of the Plan or related Trust Agreement, no Participant who is a person required to file reports with respect to securities positions or transactions in Employer Securities pursuant to Section 16 of the Securities Exchange Act of 1934 may give any direction to the Trustee which would change the invested percentage or dollar amount of his Account balance invested in the Company Stock Fund or change the invested percentage or dollar amount thereafter to be allocated to his Account in the Company Stock Fund with respect to contributions and Forfeitures otherwise than during a Permitted Election Period. For the purposes of this Section 12.01, the term "Permitted Election Period" means the period beginning on the third business day and ending on the twelfth business day following the public release by the Employer by means of press release to a wire service, financial news service or newspapers of general circulation, of a summary statement of sales and earnings for the Employer for the immediately preceding fiscal quarter, or, in respect of the Employer's fiscal year end, the immediately preceding fiscal year. No Participant who is a person subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934 shall direct the Trustee as to investment of his Account balance, contributions or Forfeitures in the Company Stock Fund if he has issued any such direction to the Trustee within the immediately preceding six-month period. 12.02 Company Stock Fund. As directed in writing by the Committee, the Trustee may invest up to 100% of the Trust Fund (subject to the limits of the Committee's direction) in Employer Securities. Moreover, as directed in writing by the Committee, the Trustee may establish a pooled Investment Fund comprised in whole or in part of Employer Securities (the "Company Stock Fund"). The Company Stock Fund and any shares of Employer Securities acquired and held under the Trust Fund or distributed to the Participants shall comply with applicable State and/or Federal Securities laws. Accordingly, notwithstanding the foregoing provisions of this Section 12.02, the Trustee may, prior to establishing the Company Stock Fund, or prior to distributing shares of Employer Securities to a Participant, (a) require the Company to register the Employer Securities, the Company Stock Fund and/or Participant interests in the Company Stock Fund with the Securities and Exchange Commission, and/or (b) require the Company to furnish the Trustee such opinions of counsel and such rulings, letters or other permission in a form satisfactory to the Trustee from the Securities and Exchange Commission or any other governmental agency which the Trustee in its discretion deems may have an interest in the Employer Securities, the Company Stock Fund and/or Participant interests in the Company Stock Fund. (A) Voting of Employer Securities. Each Participant is entitled to direct the Trustee as to the exercise of all voting rights of Employer Securities then allocated to his Account, in accordance with procedures set forth in the Trust Agreement. The Committee shall direct the Trustee in writing (which may be a continuing direction) to vote, tender or otherwise act with respect to the Employer Securities held in the Trust Fund in accordance with the votes of the Participants to whose accounts the Employer Securities have been allocated. 12.03 Investment Manager. (A) Appointment. The Committee may, with the Employer's approval, appoint in writing a person, or more than one person, who either (i) is registered as an investment advisor under the Investment Advisers Act of 1940 (the "Act"), (ii) is a bank, as defined in the Act, or (iii) is an insurance company which, within the meaning of ERISA Subsection 3(38), is qualified to manage, acquire and dispose of the assets of an employee benefit plan under the laws of more than one state, as an Investment Manager for all or a specified portion of the Trust Fund as designated by the Committee (the "Manager's Account"). Upon the effective date of his appointment as Investment Manager, as provided herein, such person shall have the sole responsibility and duty and the sole power to manage and direct the acquisition and disposition of the Trust Fund assigned to the Manager's Account. The Committee as the Named Investment Fiduciary also may terminate the appointment of any person as an Investment Manager and may cause assets of the Trust Fund to be added to or deleted from any Manager's Account. (B) Manager's acknowledgement of Fiduciary Status. The appointment of a person as an Investment Manager shall not become effective until the later of: (1) The date such person delivers to the Trustee and the Company a written statement: (i) Acknowledging that such person is a fiduciary within the meaning of ERISA Subsection 3(2)(A) and has assumed sole responsibility for the management and the direction of the acquisition and disposition of the Trust Fund assets in such Manager's Account; and (ii) Certifying that such person either is registered as an investment advisor under the Act, is a bank as defined in the Act, or is an insurance company which, within the meaning of ERISA Subsection 3(38), is qualified under the laws of more than one state to manage, acquire and dispose of the assets of an employee benefit plan, whichever is appropriate; and (iii) Containing the names and signatures of individuals who are authorized to act on behalf of the Investment Manager in connection with the management of the Manager's Account (the "List"), which List may be amended from time to time by the Investment Manager delivering written Notice thereof to the Trustee and the company and which List may be relied upon by them; or (2) If deemed appropriate by the Committee, the date the Company and such person enter into a contract in connection with the appointment of such person as an Investment Manager which contains such terms and conditions as the Company, with the approval of the Committee, deems appropriate, including, if applicable, an agreement that such person will immediately notify the Company of the commencement of any Securities and Exchange Commission investigation of any of his investment activities which may result either in a censure under the Act or in the suspension or revocation of his resignation as an investment advisor under the Act. (C) Investment Procedures. The Investment Manager may exercise his power through written directions to the Trustee or, at his option, may communicate such directions orally and as soon as practicable thereafter confirm them in writing, providing all directions, written or oral, shall be communicated by or, as applicable, signed, by one of the individuals whose name and signature appear on the List. In addition, and notwithstanding any other provision of the Trust to the contrary, the Trustee and the Investment Manager may establish such electronic confirmation, acknowledgement and book entry settlement procedures through a registered security depository as the Investment Manager reasonably deems consistent with the rules of the New York Stock Exchange, Inc. and of such other securities exchanges on which securities transactions are effected on behalf of the Trust Fund at the direction of the Investment Manger. All securities transactions made in accordance with such procedures shall be deemed made at the direction of the Investment Manager, and the Trustee shall be indemnified and held harmless for acting in accordance with such procedures. Finally, the Trustee and Investment Manager may establish procedures consistent with any such stock exchange rules under this paragraph on or after the date such rules are adopted without regard to the effective date of such rules. The Trustee shall follow all such directions from the Investment Manager, (including all directions deemed to be made by the Investment Manager), as provided in this paragraph, and shall not be liable in any respect to any person for acting in connection with such directions or failing to act in the absence of such directions. Pending receipt of directions from the Investment Manager, any cash received by the Trustee from time to time for the Manager's Account may be retained by the Trustee in cash, unless the Trustee is otherwise instructed. (D) More than one Investment Manager. Nothing herein contained shall prevent the Committee from appointing two or more Investment Managers and assigning the management of a separate Manager's account to each such Investment Manager. If two or more Investment Managers are appointed, the provisions of this Trust relating to the duties and powers of the Investment Manager shall be construed to govern the duties and powers of each Investment Manager in the singular shall be construed to include the plural number. ARTICLE XIII EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION 13.01 Exclusive Benefit. Except as provided under Article III, the Employer has no beneficial interest in any asset of the Trust and no part of any asset in the Trust may ever revert to or be repaid to an Employer, either directly or indirectly; nor, prior to the satisfaction of all liabilities with respect to the Participants and their Beneficiaries under the Plan, may any part of the corpus or income of the Trust Fund, or any asset of the Trust, be (at any time) used for, or diverted to, purposes other than the exclusive benefit of the Participants or their Beneficiaries. 13.02 Amendment by Employer. (A) Right to Amend. In accordance with procedures described in (B), Birmingham Steel Corporation reserves the right at any time and from time to time to amend the Plan in whole or in part without the consent of any Participating Employer or Participant. Each Plan amendment shall be set forth in a written instrument executed by duly authorized officers of Birmingham Steel Corporation. (B) Amendment procedures. (1) The Board of Directors of Birmingham Steel Corporation must authorize or ratify any amendment that materially affects Plan costs or benefits; (2) Duly authorized officers of Birmingham Steel Corporation may, with Committee approval but without Board authorization, adopt amendments that do not materially affect Plan costs and do not materially change Plan benefits. (3) A Plan amendment may be retroactive as permitted by applicable federal pension law to qualify or maintain the qualified status of the Plan under Code Section Subsection 401(a) and 501(a). (C) Limitations on reversion of the Trust Fund. No amendment may authorize or permit any of the Trust Fund (other than the part which is required to pay taxes and administration expenses) to be used for or diverted to purposes other than for the exclusive benefit of the Participants or their Beneficiaries or estates. No amendment may cause or permit any portion of the Trust Fund to revert to or become a property of the Employer. The Employer may not make any amendment which affects the rights, duties or responsibilities of the Trustee, the Plan Administrator or the Committee without the written consent of the affected Trustee, the Plan Administrator or the affected member of the Committee. The Employer must make all amendments in writing. Each amendment must state the date to which it is either retroactively or prospectively effective. (D) Code Subsection 411(d)(6) Protected Benefits. An amendment (including the adoption of this Plan as a restatement of an existing plan) may not decrease a Participant's Accrued Benefit, except to the extent permitted under Code Subsection 412(c)(8), and may not reduce or eliminate Code Subsection 411(d)(6) protected benefits determined immediately prior to the adoption date (or, if later, the effective date) of the amendment. An amendment reduces or eliminates Code Subsection 411(d)(6) protected benefits if the amendment has the effect of either (1) eliminating or reducing an early retirement benefit or a retirement-type subsidy (as defined in Treasury regulations), or (2) except as provided by Treasury regulations, eliminating an optional form of benefit. The Committee must disregard an amendment to the extent application of the amendment would fail to satisfy this paragraph. If the Committee must disregard an amendment because the amendment would violate clause (1) or clause (2), the Committee must maintain a schedule of the early retirement option or other optional forms of benefit the Plan must continue for the affected Participants. (F) Effect on Participating Employers. Each Participating Employer by its adoption of the Plan delegates to Birmingham Steel Corporation the exclusive authority to amend the Plan. 13.03 Discontinuance. The Plan has been established by Birmingham Steel Corporation with the intention that it shall be continued indefinitely. However, of necessity, Birmingham Steel Corporation reserves the right at any time, with the approval of its Board of Directors, to terminate the Plan and the related Trust. The Plan will terminate upon the first to occur of the following: (a) The date terminated by action of the Employer, with the authority of the Board of Directors; (b) The dissolution or merger of the Employer, unless the successor makes provision to continue the Plan, in which event the successor must substitute itself as the Employer under this Plan. Any termination of the Plan resulting from this paragraph (b) is not effective until compliance with any applicable notice requirements under ERISA. (A) Effect on Participating Employers. Each Participating Employer by its adoption of this Plan delegates to Birmingham Steel Corporation the exclusive authority to terminate the Plan. 13.04 Full Vesting on Termination. Upon either full or partial termination of the Plan, or, if applicable, upon complete discontinuance of profit sharing plan contributions to the Plan, an affected Participant's right to his Accrued Benefit is 100% Nonforfeitable, irrespective of the Nonforfeitable percentage which otherwise would apply under Article V. 13.05 Merger/Direct Transfer. The Trustee may not consent to, or be a party to, any merger or consolidation with another plan, or to a transfer of assets or liabilities to another plan, unless immediately after the merger, consolidation or transfer, the surviving Plan provides each Participant a benefit equal to or greater than the benefit each Participant would have received had the Plan terminated immediately before the merger or consolidation or transfer. The Trustee possesses the specific authority to enter into merger agreements or direct transfer of assets agreements with the trustees of other retirement plans described in Code Subsection 401(a), including an elective transfer, and to accept the direct transfer of plan assets, or to transfer plan assets, as a party to any such agreement. (A) Elective Transfers. The Trustee may accept an elective transfer of assets from another qualified plan in accordance with the provisions of this Subsection (A). The Trustee will hold, administer and distribute the transferred assets as a part of the Trust Fund and the Trustee must maintain a separate Employer contribution Account for the benefit of the Employee on whose behalf the Trustee accepted the transfer in order to reflect the value of the transferred assets. Unless a transfer of assets to this Plan is an elective transfer, the Plan will preserve all Code Subsection 411(d)(6) protected benefits with respect to those transferred assets, in the manner described in Section 13.02. A transfer is an elective transfer if: (1) the transfer satisfies the first paragraph of this Section 13.05; (2) the transfer is voluntary, under a fully informed election by the Participant; (3) the Participant has an alternative that retains his Code Subsection 411(d)(6) protected benefits (including an option to leave his benefit in the transferor plan, if that plan is not terminating); (4) the transfer satisfies the applicable spousal consent requirements of the Code; (5) the transferor plan satisfies the joint and survivor notice requirements of the Code, if the Participant's transferred benefit is subject to those requirements; (6) the Participant has a right to immediate distribution from the transferor plan, in lieu of the elective transfer; (7) the transferred benefit is at least the greater of the single sum distribution provided by the transferor plan for which the Participant is eligible or the present value of the Participant's accrued benefit under the transferor plan payable at that plan's normal retirement age; (8) the Participant has a 100% Nonforfeitable interest in the transferred benefit; and (9) the transfer otherwise satisfies applicable Treasury regulations. An elective transfer may occur between qualified plans of any type. (B) Distribution restrictions under Code Subsection 401(k). If the Plan receives a direct transfer (by merger or otherwise) of elective contributions (or amounts treated as elective contributions) under a Plan with a Code Subsection 401(k) arrangement, the distribution restrictions of Code Section Subsection 401(k)(2) and (10) continue to apply to those transferred elective contributions. 13.06 Termination. (A) Distribution procedures. Upon termination of the Plan, the Committee will direct the Trustee to distribute each Participant's Nonforfeitable Accrued Benefit, in lump sum, as soon as administratively practicable after the termination of the Plan, irrespective of the present value of the Participant's Nonforfeitable Accrued Benefit and whether the Participant consents to that distribution. This paragraph applies only if: (1) the Plan does not provide an annuity option; (2) the Plan is a profit sharing plan at the time of its termination date; and (3) as of the period between the Plan termination date and the final distribution of assets, the Employer does not maintain any other defined contribution plan (other than an ESOP). (B) Continuation of Trust. The Trust will continue until the Trustee in accordance with the direction of the Committee has distributed all of the benefits under the Plan. On each Valuation Date, the Committee will credit any part of a Participant's Accrued Benefit retained in the Trust with its proportionate share of the Trust's income, expenses, gains and losses, both realized and unrealized. Upon termination of the Plan, the amount, if any, in a suspense account under Article III will revert to the Employer, subject to the conditions of the Treasury regulations permitting such a reversion. A resolution or amendment to freeze all future benefit accrual but otherwise to continue maintenance of this Plan, is not a termination for purposes of this Section 13.06. (C) Distribution restrictions under Code Subsection 401(k). The portion of the Participant's Nonforfeitable Accrued Benefit attributable to elective contributions under a Code Subsection 401(k) arrangement (or to amounts treated under the Code Subsection 401(k) arrangement as elective contributions) is not distributable on account of Plan termination, as described in Section 13.06, unless: (a) the Participant otherwise is entitled under the Plan to a distribution of that portion of his Nonforfeitable Accrued Benefit; or (b) the Plan termination occurs without the establishment of a successor plan. A successor plan under clause (b) is a defined contribution plan (other than an ESOP maintained by the Employer (or by a related employer) at the time of the termination of the Plan or within the period ending twelve months after the final disposition of assets. A distribution made after March 31, 1988, pursuant to clause (b), must be part of a lump sum distribution to the Participant of his Nonforfeitable Accrued Benefit. ARTICLE XIV PARTICIPATING EMPLOYERS 14.01 Procedures for Adopting the Plan. Any business entity that is a "Related Employer" as defined in Article I may become a Participating Employer with the consent of the Board of Directors of Birmingham Steel Corporation and the Board of Directors of the Related Employer. The new Participating Employer shall furnish the Employee Benefits Committee a certified copy of the resolutions of the Board of Directors of the new Participating Employer authorizing its adoption of this Plan. The new Participating Employer must evidence its adoption of the Plan either by becoming a signatory to the execution page of the Plan document, or by entering into a suitable adoption agreement with Birmingham Steel Corporation, in either case specifying the effective date of the new Participating Employer's adoption of the Plan. If appropriate, the adoption agreement may also amend this Plan as appropriate to the circumstances of the new Participating Employer. Upon the adoption of the Plan by a Participating Employer, the Employees of such Participating Employer will be eligible to participate in the Plan, subject to the terms of the Plan and the adoption agreement. 14.02 Single Plan. The Plan, as adopted by all Participating Employers, shall be considered a single plan for purposes of Treasury Regulation Subsection 1.414(a)-1(b)(1). All assets contributed to the Plan by the Participating Employers shall be held in a single Trust Fund and, as long as a participating Employer continues to be designated as such, all assets held in such fund shall be available to pay benefits to all Participants and Beneficiaries irrespective of which Participating Employer is the Employer of such Participant. Nothing contained herein shall be construed to prohibit the separate accounting for assets contributed by the Participating Employers for purposes of cost allocation, contributions, forfeitures and other purposes, pursuant to the terms of the Plan and as directed by the Employee Benefits Committee. 14.03 Authority under the Plan. As long as a participating Employer's designation as such remains in effect, such Participating Employer shall be bound by, and subject to, all provisions of the Plan and the Trust. Each Participating Employer shall make such contributions to the Plan as Birmingham Steel Corporation may determine. 14.04 Termination of a Participating Employer from the Plan. Birmingham Steel Corporation, acting through its Board of Directors, may terminate a Participating Employer from the Plan, effective as of any date. An organization's status as a Participating Employer automatically shall cease as of the date it ceases to be a Related Employer. No Participating Employer other than Birmingham Steel Corporation has the right to amend or terminate the Plan. The Birmingham Steel Corporation, acting through its senior officers, and the terminating Participating Employer, acting through its senior officers, shall mutually agree as to the handling of the portion of the Trust Fund allocable to Employees of the Participating Employer. ARTICLE XV MERGER OF THE AS&W PLAN INTO THIS PLAN 15.01 Merger of the AS&W Plan. Effective January 1, 1995, the AS&W Plan shall be merged into this Plan. By executing this Plan, AS&W hereby adopts and agrees to be bound by all the terms and conditions of this Plan, and of the related Trust Agreement, as the Plan and related Trust Agreement may from time to time be amended by Birmingham Steel Corporation and the Trustee. 15.02 Trustee and Plan Administrator. By executing this Plan, AS&W hereby accepts the Plan Administrator and Trustee appointed by Birmingham Steel Corporation. 15.03 Participant Account Balances. By reason of the merger of the AS&W Plan into this Plan, the following rules shall, as required under the Internal Revenue Code, apply: (A) The sum of the account balances of the Participants under the AS&W Plan and under this Plan shall equal the fair market value of the entire assets of this Plan immediately after the merger and transfer of assets from the AS&W Plan to this Plan; (B) Immediately after the merger, each Participant shall have an Account balance in this Plan equal to the sum of the Account balances such Participant had in the AS&W Plan and in this Plan immediately prior to the merger and transfer of assets; (C) The merger shall not eliminate any Code Subsection 411(d)(6) protected benefits provided by the AS&W Plan, unless the transfer of assets, pursuant to the merger, satisfies the definition of an "elective transfer" under the applicable Treasury regulations. 15.04 Accrual of Future Benefits. On and after January 1, 1995, no further benefits shall accrue for a Participant in the AS&W Plan. This Plan, as the survivor of the plan merger, shall be the source of all accrued benefits for all Participants of the two merged Plans. 15.05 Transfer of Assets. The assets of the AS&W Plan shall be transferred to this Plan as soon as administratively feasible after January 1, 1995. The assets of the AS&W Plan transferred to this Plan shall be held, invested, administered and distributed in accordance with the terms of this Plan. ARTICLE XVI MISCELLANEOUS 16.01 Delegation of Authority. Any action to be taken, or document to be executed, under the terms of this Plan may be done or executed by a duly authorized officer or individual of Birmingham Steel Corporation. 16.02 No Responsibility for Employer Action. Neither the Trustee nor the Committee has any obligation or responsibility with respect to any action required by the Plan to be taken by the Employer, any Participant or eligible Employee, or for the failure of any of the above persons to act or make any payment or contribution, or to otherwise provide any benefit contemplated under this Plan. Furthermore, the Plan does not require the Trustee or the Committee to collect any contribution required under the Plan, or to determine the correctness of the amount of any Employer contribution. Neither the Trustee nor the Committee need inquire into or be responsible for any action or failure to act on the part of the others, or on the part of any other person who has any responsibility regarding the management, administration or operation of the Plan, whether by the express terms of the Plan or by a separate agreement authorized by the Plan or by the applicable provisions of ERISA. Any action required of a corporate Employer must be by its Board of Directors or its designate. 16.03 Fiduciaries not Insurers. The Trustee, the Committee, the Plan Administrator and the Employer in no way guarantee the Trust Fund from loss or depreciation. The Employer does not guarantee the payment of any money which may be or becomes due to any person from the Trust Fund. The liability of the Committee and the Trustee to make any payment from the Trust Fund at any time and all times is limited to the then available assets of the Trust. 16.04 Waiver of Notice. Any person entitled to notice under the Plan may waive the notice, unless the Code or Treasury regulations prescribe the notice or ERISA specifically or impliedly prohibits such a waiver. 16.05 Successors. The Plan is binding upon all persons entitled to benefits under the Plan, their respective heirs and legal representatives, upon the Employer, its successors and assigns, and upon the Trustee, the Committee, the Plan Administrator and their successors. 16.06 Employment Not Guaranteed. Nothing contained in this Plan, or with respect to the establishment of the Trust, or any modification or amendment to the Plan or Trust, or in the creation of any Account, or the payment of any benefit, gives any Employee, Employee-Participant or any Beneficiary any right to continue employment, any legal or equitable right against the Employer, or Employee of the Employer, or against the Trustee, or its agents or employees, or against the Plan Administrator, except as expressly provided by the Plan, the Trust, ERISA or by a separate agreement. 16.07 Rules of Construction. (a) Gender and Number. Except where otherwise clearly indicated by context, masculine and neuter shall include feminine and neuter, singular shall include plural and vice-versa. (b) Headings and Captions. The Table of Contents and section headings of the Plan are provided only for convenience of reference; they are not a part of the Plan and shall be ignored in its interpretation and construction. (c) Counterparts. This Plan may be executed in any number of counterparts, each of which shall be deemed an original and together shall constitute one and the same Plan. The Plan may be sufficiently evidenced by any one executed counterpart. 16.08 Governing Law. This Plan shall be administered, construed and enforced under the laws of the State of Delaware except to the extent preempted by federal law. IN WITNESS WHEREOF, Birmingham Steel Corporation has caused this amendment and restatement of the Birmingham Steel Corporation 401(k) Plan to be executed, sealed and attested by its duly authorized officers this 8th day of October, 1994. "Employer" [Corporate Seal] BIRMINGHAM STEEL CORPORATION Attested by: By: Catherine W. Pecher James S. Rogers - -------------------- --------------------- Catherine W. Pecher James S. Rogers Title: Corporate Secretary Title: VP-Human Resources "Employer" [Corporate Seal] AMERICAN STEEL & WIRE CORPORATION Attested by: By: Catherine W. Pecher James S. Rogers - -------------------- --------------------- Catherine W. Pecher James S. Rogers Title: Corporate Secretary Title: VP-Human Resources "Employer" [Corporate Seal] BARBARY COAST STEEL CORPORATION Attested by: By: Catherine W. Pecher James S. Rogers - -------------------- --------------------- Catherine W. Pecher James S. Rogers Title: Corporate Secretary Title: VP-Human Resources "Employer" [Corporate Seal] NORFOLK STEEL CORPORATION Attested by: By: Catherine W. Pecher James S. Rogers - -------------------- --------------------- Catherine W. Pecher James S. Rogers Title: Corporate Secretary Title: VP-Human Resources "Employer" [Corporate Seal] SALMON BAY STEEL CORPORATION Attested by: By: Catherine W. Pecher James S. Rogers - -------------------- --------------------- Catherine W. Pecher James S. Rogers Title: Corporate Secretary Title: VP-Human Resources ALPHABETICAL LISTING OF DEFINITIONS Account Accounting Date Accrued Benefit Active Participant Actual Deferral Percentage ("ADP") Test Annual Addition AS&W AS&W Account Balance or Balances AS&W Plan Average Beneficiary Board of Directors Cash-Out Distribution Code Code Subsection 411(d)(6) Protected Benefits Committee Compensation Deferral contributions Defined benefit plan Defined contribution plan Determination Date Disability Effective Date Elective contributions Elective deferrals Elective Transfer Employee Employer Employer Basic Contributions Employer Matching Contributions Employer Nonqualified Nonelective Contributions ERISA Excess aggregate contributions Excess Amount Excess contributions Forfeiture Break in Service Highly Compensated Employee Hour of Service Key Employee Leased Employees Limitation Year Maximum Permissible Amount Minimum Distribution Incidental Benefit Multiple Use Limitation Named Administrative Fiduciary Named Investment Fiduciary Non-Key Employee Nonelective contributions Nonforfeitable Normal Retirement Age Participant Participant Forfeiture Participating Employer Permissive Aggregation Group Plan Plan Administrator Plan Year Predecessor Employer Qualified Domestic Relations Order Qualified matching contributions Qualified nonelective contributions Related Employers Required Aggregation Group Separation from Service Service Top Heavy Minimum Allocation Top Heavy Ratio Trust Trust Fund Trustee Valuation Date AMENDMENT NO. 1 TO THE BIRMINGHAM STEEL CORPORATION 401(k) PLAN (As Amended and Restated Effective January 1, 1995) THIS AMENDMENT NO. 1 (the "Amendment") of the BIRMINGHAM STEEL CORPORATION 401(k) PLAN (as amended and restated effective January 1, 1995) (the "Plan") is adopted this 29th day of December, 1994, by BIRMINGHAM STEEL CORPORATION, a Delaware corporation, as Plan sponsor (the "Employer"). RECITALS: The Employer established the Plan effective August 15, 1984 and restated the Plan effective January 1, 1995. The Plan reserves to the Employer the right to amend the Plan without the consent of any Participating Employer or Participant. The Employer now wishes to amend the Plan to provide special rules for employees of Port Everglades Steel Corporation. NOW, THEREFORE, in consideration of those recitals, the Employer hereby amends the Plan, effective as of January 1, 1995 as follows: 1. Section 5.10 (Vesting for Special Classes of Participants) is amended by creating a new Subsection 5.10(E) reading as follows: "(E) Port Everglades Steel Corporation Participants. Notwithstanding any contrary provisions of the Plan, all employment service of an employee of Port Everglades Steel Corporation who becomes a Participant in this Plan on January 1, 1995 shall be credited toward such Participant's 'Years of Service' for vesting purposes as defined in Section 5.08(A)." 2. Section 3.02(A) (Amount of Employer Matching Contributions) is amended by adding a new sentence reading as follows: "Employer Matching Contribution shall be made each month; provided, however, that the Committee may, in its discretion, defer payment of an Employer Matching Contribution for any Participant in order to ensure that such Participant receives Matching Contributions during the Plan Year in an amount equal to 100% of the deferral contributions made by such Participant, up to the first 3% of such Participant's Compensation for the Plan Year." 3. Section 3.02(B) (Time of Allocation) is amended to read as follows: "(B) (Time of Allocation). The Committee will, as of December 31 of each Plan Year, allocate Employer Matching Contributions to the Matching Contributions Account of each Participant who has made deferral contributions during the Plan Year." 4. Except as changed by this Amendment, the provisions of the Plan are hereby ratified and confirmed and shall remain in full force and effect. The Plan may be restated to incorporate the provisions of this Amendment. IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed, attested and sealed as of the date first above written. "Employer" (Corporate Seal) BIRMINGHAM STEEL CORPORATION Attested by: By: Catherine W. Pecher James S. Rogers - ------------------------- -------------------------- Catherine W. Pecher James S. Rogers II Title: Corporate Secretary Title: Vice President- Human Resources -----END PRIVACY-ENHANCED MESSAGE-----