-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AQbaJvjnVA8hZWeyh7VEYOnOP7Cb66HiMKlwWnK6lXqDx9XSSmTjpmb92KWQ2MT2 VX9ZiRTJmB4nnYTaYImaxw== 0000950116-02-002409.txt : 20021028 0000950116-02-002409.hdr.sgml : 20021028 20021028172542 ACCESSION NUMBER: 0000950116-02-002409 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20021028 EFFECTIVENESS DATE: 20021028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENESIS HEALTH VENTURES INC /PA CENTRAL INDEX KEY: 0000874265 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 061132947 STATE OF INCORPORATION: PA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-100800 FILM NUMBER: 02800480 BUSINESS ADDRESS: STREET 1: 101 EAST STATE STREET CITY: KENNETT SQUARE STATE: PA ZIP: 19348 BUSINESS PHONE: 6104446350 MAIL ADDRESS: STREET 1: 101 EAST STATE STREET CITY: KENNETT SQUARE STATE: PA ZIP: 19348 S-8 1 s-8.txt S-8 As Filed with the Securities and Exchange Commission on October 28, 2002 Registration No. 333-_____ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------------------- GENESIS HEALTH VENTURES, INC. (Exact name of registrant as specified in its charter) Pennsylvania 06-1132947 ------------------------------- ----------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 101 East State Street Kennett Square, PA 19348 (610) 444-6350 (Address, including telephone number, zip code of Principal Executive Offices) GENESIS HEALTH VENTURES, INC. 401(k) Plan for Collective Bargaining Unit Employees GENESIS HEALTH VENTURES, INC. Union Retirement Savings Plan (Full title of the Plans) George V. Hager, Jr. Executive Vice President and Chief Financial Officer 101 East State Street, Kennett Square, PA 19348 (610) 444-6350 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Richard J. McMahon, Esquire Blank Rome Comisky & McCauley LLP One Logan Square Philadelphia, PA 19103 (215) 569-5554
--------------------------------- CALCULATION OF REGISTRATION FEE ================================================================================================================== Proposed Maximum Proposed Maximum Amount Of Amount To Be Offering Price Aggregate Offering Registration Title Of Securities To Be Registered Registered (1) Per Share (2) Price (2) Fee - --------------------------------------------- ------------------ ----------------- -------------------- -------------- Common Stock, par value $0.02, issuable under the 401(k) Plan for Collective Bargaining Unit Employees................ 3,000 $13.40 $ 40,200 $ 3.70 - --------------------------------------------- ------------------ ----------------- -------------------- -------------- Common Stock, par value $0.02, issued under the Union Retirement Savings Plan........ 7,000 $13.40 $ 93,800 $ 8.63 - --------------------------------------------- ------------------ ----------------- -------------------- -------------- Total 10,000 $13.40 $134,000 $12.33 ======================================================================================================================
(1) The number of shares being registered represents the number of shares that may be acquired by (i) the 401(k) Plan for Collective Bargaining Unit Employees in connection with a participant's election to invest a portion of his or her interest in such plan in a fund that invests in the Company's common stock, par value $0.02 ("Common Stock"); and (ii) the Union Retirement Savings Plan in connection with a participant's election to invest a portion of his or her interest in such plan in a fund that invests in Common Stock. (2) Pursuant to Rule 457(h) of the Securities Act, based upon the average of the bid and ask price of the registrant's common stock reported on the Nasdaq National Market on October 24, 2002. Pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the "Securities Act"), this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant the 401(k) Plan for Collective Bargaining Unit Employees and the Union Retirement Savings Plan. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Item 1. Plan Information. ------- ----------------- Genesis Health Ventures, Inc. (the "Company") is filing this registration statement on Form S-8 (the "Registration Statement") in connection with the Company's 401(k) Plan for Collective Bargaining Unit Employees and the Company's Union Retirement Savings Plan. The document(s) containing the information specified in Part I of Form S-8 will be sent or given to participants in the Company's 401(k) Plan for Collective Bargaining Unit Employees and the Company's Union Retirement Savings Plan as specified by Rule 428(b)(1) promulgated by the Securities and Exchange Commission (the "Commission") under the Securities Act. Such documents are not being filed with the Commission, but constitute (along with the documents incorporated by reference into this Registration Statement pursuant to Item 3 of Part II hereof) a prospectus that meets the requirements of Section 10(a) of the Securities Act. Item 2. Registration Information and Employee Plan Annual Information. ------- -------------------------------------------------------------- The Company will furnish without charge to each participant in the Company's 401(k) Plan for Collective Bargaining Unit Employees and the Company's Union Retirement Savings Plan, upon the written or oral request of such person, a copy of any or all of the documents (i) incorporated by reference in Item 3 of Part II of this Registration Statement, which are incorporated by reference into the prospectus for each of the Company's 401(k) Plan for Collective Bargaining Unit Employees and the Company's Union Retirement Savings Plan, and (ii) any other documents required to be delivered pursuant to Rule 428(b) promulgated by the Commission under the Securities Act. Requests should be directed to James J. Wankmiller, Secretary, Genesis Health Ventures, Inc., 101 East State Street, Kennett Square, PA 19348, telephone (610) 444-6350. I-1 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents, as filed with the Securities and Exchange Commission, are incorporated by reference in this registration statement: o Annual Report on Form 10-K for the year ended September 30, 2001; o Quarterly Report on Form 10-Q for the quarter ended December 31, 2001; o Quarterly Report on Form 10-Q for the quarter ended March 30, 2002; o Quarterly Report on Form 10-Q for the quarter ended June 30, 2002; o Current Report on Form 8-K filed on July 1, 2002; o Current Report on Form 8-K filed on July 29, 2002; o Current Report on Form 8-K filed on August 16, 2002; o Current Report on Form 8-K filed on October 4, 2002; and o the description of our common stock, par value $0.02 per share, contained in our Form 8-A, File No. 000-33217, filed on October 2, 2001 pursuant to Section 12(g) of the Securities Exchange Act of 1934, and all amendments or reports filed for the purpose of updating the description. All documents filed by the registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, after the date of this Registration Statement and 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 each of the prospectuses for the Company's 401(k) Plan for Collective Bargaining Unit Employees and the Company's Union Retirement Savings Plan (other than reports furnished pursuant to Item 9 of Form 8-K) and to be part of this Registration Statement and each of the prospectuses for the Company's 401(k) Plan for Collective Bargaining unit Employees and the Company's Union Retirement Savings Plan from the date of the filing of such documents. Any statement contained in the documents incorporated, or deemed to be incorporated, by reference herein or therein shall be deemed to be modified or superseded for purposes of this Registration Statement and each of the prospectuses for the Company's 401(k) Plan for Collective Bargaining Unit Employees and the Company's Union Retirement Savings Plan to the extent that a statement contained herein or therein or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference herein or therein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement and each of the prospectuses for the Company's 401(k) Plan for Collective Bargaining Unit Employees and the Company's Union Retirement Savings Plan. II-1 All information appearing in this Registration Statement and each of the prospectuses for the Company's 401(k) Plan for Collective Bargaining Unit Employees and the Company's Union Retirement Savings Plan is qualified in its entirety by the detailed information, including financial statements, appearing in the documents incorporated herein or therein by reference. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. As permitted by Pennsylvania corporation law, Genesis' bylaws provide that a director will not be personally liable for monetary damages for any action taken, or any failure to take any action, unless the director breaches or fails to perform the duties of his or her office under Pennsylvania corporation law, and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. These provisions of Genesis' bylaws, however, do not apply to the responsibility or liability of a director pursuant to any criminal statute, or to the liability of a director for the payment of taxes pursuant to local, Pennsylvania or federal law. Genesis' bylaws provide that Genesis must indemnify its directors and officers to the fullest extent permitted by law against expenses reasonably incurred by them in connection with any threatened, pending or completed action, suit or proceeding to which they are or were a party, or are threatened to be made a party, by reason of being or having been a director or officer of Genesis, or serving or having served any other business enterprise or trust as a director, officer, employee, general partner, agent or fiduciary at Genesis' request. Genesis' bylaws also permit Genesis to indemnify any person in any situation not covered by Genesis' bylaws to the extent permitted by applicable law. However, under Genesis' bylaws, no indemnification will be provided to any of Genesis' directors or officers (i) for liabilities arising under Section 16(b) of the Exchange Act; (ii) if a final unappealable judgment or award establishes that such director or officer engaged in self-dealing, willful misconduct or recklessness; (iii) for expenses or liabilities which have been paid directly to such person by an insurance carrier and (iv) for amounts paid in settlement of any action, suit, or proceeding without the written consent of Genesis. Sections 1741 through 1750 of Subchapter 17D of Pennsylvania corporation law contain provisions for mandatory and discretionary indemnification of a representative of the corporation, including, but not limited to, its directors and officers. Under Section 1741, subject to certain limitations, a corporation has the power to indemnify directors and officers under certain prescribed circumstances against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with an action or proceeding, whether civil, criminal, administrative or investigative (excluding derivative actions) to which any of them is a party by reason of his or her being a representative of the corporation or serving at the request of the corporation as a representative of another corporation, partnership, joint venture, trust or other enterprise, if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. II-2 Section 1742 provides for indemnification in derivative actions except in respect of any claim, issue or matter as to which an officer or director has been adjudged to be liable to the corporation unless and only to the extent that the proper court determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for the expenses that the court deems proper. Under Section 1743, indemnification is mandatory to the extent that an officer or director has been successful on the merits or otherwise in defense of any action or proceeding referred to in Section 1741 or 1742 above if the appropriate standards of conduct are met. Section 1744 provides that, unless ordered by a court, any indemnification under Section 1741 or 1742 will be made by the corporation only as authorized in the specific case upon a determination that an officer or director met the applicable standard of conduct set forth in those sections, and such determination will be made by (i) the board of directors by a majority vote of a quorum of directors not parties to the action or proceeding; (ii) if a quorum is not obtainable, or if obtainable and a majority of disinterested directors so directs, by independent legal counsel; or (iii) by the shareholders. Section 1745 provides that expenses incurred by an officer or director in defending any action or proceeding referred to in Subchapter 17D of Pennsylvania corporation law may be paid by a corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it is ultimately determined that he or she is not entitled to be indemnified by the corporation. Section 1746 provides generally that, except in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness, the indemnification and advancement of expenses provided by Subchapter 17D of Pennsylvania corporation law will not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding that office. Section 1747 grants to a corporation the power to purchase and maintain insurance on behalf of its directors and officers against any liability incurred by them in their capacity as such directors or officers, whether or not the corporation would have the power to indemnify such person against that liability under the provisions of Subchapter 17D of Pennsylvania corporation law. Sections 1748 and 1749 extend the indemnification and advancement of expenses provisions of Subchapter 17D to successor corporations in fundamental changes and to representatives serving as fiduciaries of employee benefit plans. Section 1750 provides that the indemnification and advancement of expenses provided by, or granted pursuant to, Subchapter 17D will, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be an officer or director of the corporation and will inure to the benefit of the heirs and personal representative of such person. Genesis provides insurance coverage to its directors and officers for up to $50.0 million. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. II-3 ITEM 8. EXHIBITS. 4.1* Amended and Restated Articles of Incorporation of Genesis Health Ventures, Inc. 4.2** Amended and Restated Bylaws of Genesis Health Ventures, Inc. 5.1 The registrant hereby undertakes that it will submit the 401(k) Plan for Collective Bargaining Unit Employees and the Union Retirement Savings Plan (and any amendments thereto) to the Internal Revenue Service in a timely manner and will make all changes required by the Internal Revenue Service in order to qualify the 401(k) Plan for Collective Bargaining Unit Employees and the Union Retirement Savings Plan. 23.1 Consent of Independent Auditors. 24.1 Power of Attorney (included on signature page of this registration statement). 99.1 Genesis Health Ventures, Inc. 401(k) Plan for Collective Bargaining Unit Employees, including the Adoption Agreement and Basic Plan Document. 99.2 EGTRA Amendment to the Genesis Health Ventures, Inc. 401(k) Plan for Collective Bargaining Unit Employees, including the Adoption Agreement and Basic Plan Document. 99.3 Union Retirement Savings Plan. 99.4 Amendment No. 1 to Union Retirement Savings Plan. - --------------------------- * Incorporated by reference to an exhibit to the Annual Report on Form 10-K for the fiscal year ended September 30, 2001 and filed with the Securities and Exchange Commission on December 28, 2001. ** Incorporated by reference to an exhibit to the Quarterly Report on Form 10-Q for the quarter ended December 31, 2001. 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: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any events or facts arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; II-4 (iii) 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; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this 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 further 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 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to 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 that time shall be deemed to be the initial bona fide offering thereof. (c) 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 Securities Act of 1933 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 Securities Act of 1933 and will be governed by the final adjudication of such issue. II-5 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 registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Kennett Square, Commonwealth of Pennsylvania, on October 28, 2002. GENESIS HEALTH VENTURES, INC. By: /s/ George V. Hager, Jr. ---------------------------------------------------- George V. Hager, Jr. Executive Vice President and Chief Financial Officer KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Robert H. Fish and George V. Hager, Jr., and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documentation in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons, in the capacities indicated, as of October 28, 2002. SIGNATURE TITLE(S) /s/ Robert H. Fish - --------------------------- Chief Executive Officer (Principal Robert H. Fish Executive Officer) and Director /s/ Michael R. Walker - --------------------------- Chairman of the Board Michael R. Walker /s/ James H. Bloem - --------------------------- Director James H. Bloem - --------------------------- Director James E. Dalton, Jr. /s/ James D. Dondero - --------------------------- Director James D. Dondero /s/ Dr. Philip P. Gerbino - --------------------------- Director Dr. Philip P. Gerbino /s/ Joseph A. LaNasa, III - --------------------------- Director Joseph A. LaNasa, III /s/ George V. Hager, Jr. - --------------------------- Chief Financial Officer (Principal George V. Hager, Jr. Accounting Officer and Principal Financial Officer) Pursuant to the requirements of the Securities Act of 1933, the trustees (or other persons who administer the employee benefit plan) have duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Kennett Square, Commonwealth of Pennsylvania, on October 28, 2002. GENESIS HEALTH VENTURES INC. 401(K) PLAN FOR COLLECTIVE BARGAINING UNIT EMPLOYEES By: Genesis Health Ventures, Inc. as administrator By: /s/ George V. Hager, Jr. Name: George V. Hager, Jr. Title: CFO & Executive Vice President GENESIS HEALTH VENTURES, INC. UNION RETIREMENT SAVINGS PLAN By: Genesis Health Ventures, Inc. as administrator and primary employer By: /s/ George V. Hager, Jr. Name: George V. Hager, Jr. Title: CFO & Executive Vice President II-6 INDEX TO EXHIBITS Exhibit No. Description of Exhibit - ----------- ---------------------- 4.1* Amended and Restated Articles of Incorporation of Genesis Health Ventures, Inc. 4.2** Amended and Restated Bylaws of Genesis Health Ventures, Inc. 5.1 The registrant hereby undertakes that it will submit the 401(k) Plan for Collective Bargaining Unit Employees and the Union Retirement Savings Plan (and any amendments thereto) to the Internal Revenue Service in a timely manner and will make all changes required by the Internal Revenue Service in order to qualify the 401(k) Plan for Collective Bargaining Unit Employees and the Union Retirement Savings Plan. 23.1 Consent of Independent Auditors. 24.1 Power of Attorney (included on signature page to this registration statement). 99.1 Genesis Health Ventures, Inc. 401(k) Plan for Collective Bargaining Unit Employees, including the Adoption Agreement and Basic Plan Document. 99.2 EGTRA Amendment to the Genesis Health Ventures, Inc. 401(k) Plan for Collective Bargaining Unit Employees, including the Adoption Agreement and Basic Plan Document. 99.3 Union Retirement Savings Plan. 99.4 Amendment No. 1 to Union Retirement Savings Plan. - --------------------------- * Incorporated by reference to an exhibit to the Annual Report on Form 10-K for the fiscal year ended September 30, 2001 and filed with the Securities and Exchange Commission on December 28, 2001. ** Incorporated by reference to an exhibit to the Quarterly Report on Form 10-Q for the quarter ended December 31, 2001. II-7 EX-23 3 ex23-1.txt EXHIBIT 23-1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS Independent Auditors' Consent The Board of Directors Genesis Health Ventures, Inc. and subsidiaries: We consent to the use of our reports dated December 19, 2001 with respect to the consolidated balance sheet of Genesis Health Ventures, Inc. and subsidiaries (the "Company") as of September 30, 2001 (Successor Company) and the accompanying consolidated balance sheet of Genesis Health Ventures, Inc. and subsidiaries as of September 30, 2000 and related consolidated statements of operations, shareholders' equity (deficit), and cash flows for each of the years in the three year period ended September 30, 2001 (Predecessor Company) and the related financial statement schedule, incorporated herein by reference. Our reports dated December 19, 2001 contain an explanatory paragraph that refers to a change in accounting for the costs of start-up activities effective October 1, 1999. In addition, our reports contain an explanatory paragraph that states that on October 2, 2001 the Company consummated a Joint Plan of Reorganization (the "Plan") which had been confirmed by the United State Bankruptcy Court. The Plan resulted in change in ownership of the Predecessor Company and accordingly, effective September 30, 2001 the Company accounted for the change in ownership through "fresh-start" reporting. As a result, the consolidated information prior to September 30, 2001 is presented on a different cost basis than that as of September 30, 2001 and, therefore, is not comparable. /s/KPMG LLP Philadelphia, Pennsylvania October 23, 2002 EX-99 4 ex99-1.txt EXHIBIT 99-1 GENESIS HEALTH VENTURES, INC. 401(K) PLAN FOR COLLECTIVE BARGAINING UNIT EMPLOYEES ADOPTION AGREEMENT #005 NONSTANDARDIZED 401(k) PROFIT SHARING PLAN The undersigned, Genesis Health Ventures, Inc. ("Employer"), by executing this Adoption Agreement, elects to establish a retirement plan and trust ("Plan") under the Wachovia Bank, National Association (basic plan document # 01 ). The Employer, subject to the Employer's Adoption Agreement elections, adopts fully the Prototype Plan and Trust provisions. This Adoption Agreement, the basic plan document and any attached appendices or addenda, constitute the Employer's entire plan and trust document. All section references within this Adoption Agreement are Adoption Agreement section references unless the Adoption Agreement or the context indicate otherwise. All article references are basic plan document and Adoption Agreement references as applicable. Numbers in parenthesis which follow headings are references to basic plan document sections. The Employer makes the following elections granted under the corresponding provisions of the basic plan document. ARTICLE I DEFINITIONS 1. PLAN (1.21). The name of the Plan as adopted by the Employer is Genesis Health Ventures, Inc. 401(k) Plan for Collective Bargaining Unit Employees. 2. TRUSTEE (1.33). The Trustee executing this Adoption Agreement is: (Choose one of (a), (b) or (c)) [ ] (a) A discretionary Trustee. See Plan Section 10.03[A]. [X] (b) A nondiscretionary Trustee. See Plan Section 10.03[B]. [ ] (c) A Trustee under a separate trust agreement. See Plan Section 10.03[G]. 3. EMPLOYEE (1.11). The following Employees are not eligible to participate in the Plan: (Choose (a) or one or more of (b) through (g) as applicable) [ ] (a) No exclusions. [ ] (b) Collective bargaining Employees. [X] (c) Nonresident aliens. [X] (d) Leased Employees. [X] (e) Reclassified Employees. [X] (f) Classifications: See attached. [ ] (g) Exclusions by types of contributions. The following classification(s) of Employees are not eligible for the specified contributions: Employee classification:_____ Contribution type:_____ 4. COMPENSATION (1.07). The Employer makes the following election(s) regarding the definition of Compensation for purposes of the contribution allocation formula under Article III: (Choose one of (a), (b) or (c)) [ ] (a) W-2 wages increased by Elective Contributions. [ ] (b) Code ss.3401(a) federal income tax withholding wages increased by Elective Contributions. [X] (c) 415 compensation. [Note: Each of the Compensation definitions in (a), (b) and (c) includes Elective Contributions. See Plan Section 1.07(D). To exclude Elective Contributions, the Employer must elect (g).] Compensation taken into account. For the Plan Year in which an Employee first becomes a Participant, the Plan Administrator will determine the allocation of Employer contributions (excluding deferral contributions) by taking into account: (Choose one of (d) or (e)) [ ] (d) Plan Year. The Employee's Compensation for the entire Plan Year. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 1 [X] (e) Compensation while a Participant. The Employee's Compensation only for the portion of the Plan Year in which the Employee actually is a Participant. Modifications to Compensation definition. The Employer elects to modify the Compensation definition elected in (a), (b) or (c) as follows. (Choose one or more of (f) through (n) as applicable. If the Employer elects to allocate its nonelective contribution under Plan Section 3.04 using permitted disparity, (i), (j), (k) and (l) do not apply): [ ] (f) Fringe benefits. The Plan excludes all reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation and welfare benefits. [ ] (g) Elective Contributions. The Plan excludes a Participant's Elective Contributions. See Plan Section 1.07(D). [ ] (h) Exclusion. The Plan excludes Compensation in excess of:_____. [ ] (i) Bonuses. The Plan excludes bonuses. [ ] (j) Overtime. The Plan excludes overtime. [ ] (k) Commissions. The Plan excludes commissions. [ ] (l) Nonelective contributions. The following modifications apply to the definition of Compensation for nonelective contributions:_____. [ ] (m) Deferral contributions. The following modifications apply to the definition of Compensation for deferral contributions:_____. [ ] (n) Matching contributions. The following modifications apply to the definition of Compensation for matching contributions:_____. 5. PLAN YEAR/LIMITATION YEAR (1.24). Plan Year and Limitation Year mean the 12-consecutive month period (except for a short Plan Year) ending every: (Choose (a) or (b). Choose (c) if applicable) [X] (a) December 31. [ ] (b) Other:_____. [ ] (c) Short Plan Year: commencing on: and ending on:_____. 6. EFFECTIVE DATE (1.10). The Employer's adoption of the Plan is a: (Choose one of (a) or (b)) [X] (a) New Plan. The Effective Date of the Plan is: July 1, 2002. [ ] (b) Restated Plan. The restated Effective Date is:_____. This Plan is an amendment and restatement of an existing retirement plan(s) originally established effective as of:_____. 7. HOUR OF SERVICE/ELAPSED TIME METHOD (1.15). The crediting method for Hours of Service is: (Choose one or more of (a) through (d) as applicable) [X] (a) Actual Method. See Plan Section 1.15(B). [ ] (b) Equivalency Method. The Equivalency Method is:___. [Note: Insert "daily," "weekly," "semi-monthly payroll periods" or "monthly."] See Plan Section 1.15(C). [ ] (c) Combination Method. In lieu of the Equivalency Method specified in (b), the Actual Method applies for purposes of:_____. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 2 [ ] (d) Elapsed Time Method. In lieu of crediting Hours of Service, the Elapsed Time Method applies for purposes of crediting Service for: (Choose one or more of (1), (2) or (3) as applicable) [ ] (1) Eligibility under Article II. [ ] (2) Vesting under Article V. [ ] (3) Contribution allocations under Article III. 8. PREDECESSOR EMPLOYER SERVICE (1.30). In addition to the predecessor service the Plan must credit by reason of Section 1.30 of the Plan, the Plan credits as Service under this Plan service with the following predecessor employer(s): See attachment. [Note: If the Plan does not credit any additional predecessor service under this Section 1.30, insert "N/A" in the blank line. The Employer also may elect to credit predecessor service with specified Participating Employers only. See the Participation Agreement.] Service with the designated predecessor employer(s) applies: (Choose one or more of (a) through (d) as applicable) [X] (a) Eligibility. For eligibility under Article II. See Plan Section 1.30 for time of Plan entry. [X] (b) Vesting. For vesting under Article V. [X] (c) Contribution allocation. For contribution allocations under Article III. [ ] (d) Exceptions. Except for the following Service:_____. ARTICLE II ELIGIBILITY REQUIREMENTS 9. ELIGIBILITY (2.01). Eligibility conditions. To become a Participant in the Plan, an Employee must satisfy the following eligibility conditions: (Choose one or more of (a) through (e) as applicable) [Note: If the Employer does not elect (c), the Employer's elections under (a) and (b) apply to all types of contributions. The Employer as to deferral contributions may not elect (b)(2) and may not elect more than 12 months in (b)(4) and (b)(5).] [ ] (a) Age. Attainment of age _____ (not to exceed age 21). [X] (b) Service. Service requirement. (Choose one of (1) through (5)) [X] (1) One Year of Service. [ ] (2) Two Years of Service, without an intervening Break in Service. See Plan Section 2.03(A). [ ] (3) One Hour of Service (immediate completion of Service requirement). The Employee satisfies the Service requirement on his/her Employment Commencement Date. [ ] (4) _____ months (not exceeding 24). [ ] (5) An Employee must complete _____ Hours of Service within the _____ time period following the Employee's Employment Commencement Date. If an Employee does not complete the stated Hours of Service during the specified time period (if any), the Employee is subject to the One Year of Service requirement. [Note: The number of hours may not exceed 1,000 and the time period may not exceed 24 months. If the Plan does not require the Employee to satisfy the Hours of Service requirement within a specified time period, insert "N/A" in the second blank line.] [X] (c) Alternative 401(k)/401(m) eligibility conditions. In lieu of the elections in (a) and (b), the Employer elects the following eligibility conditions for the following types of contributions: (Choose (1) or (2) or both if the Employer wishes to impose less restrictive eligibility conditions for deferral/Employee contributions or for matching contributions) (1) [X] Deferral/Employee contributions: (Choose one of a. through d. Choose e. if applicable) a. [ ] One Year of Service b. [ ] One Hour of Service (immediate completion of Service requirement) c. [ ] _____months (not exceeding 12) d. [X] An Employee must complete 1,000 Hours of Service within the 12 month time period following an Employee's Employment Commencement Date. If an Employee does not (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 3 complete the stated Hours of Service during the specified time period (if any), the Employee is subject to the One Year of Service requirement. [Note: The number of hours may not exceed 1,000 and the time period may not exceed 12 months. If the Plan does not require the Employee to satisfy the Hours of Service requirement within a specified time period, insert "N/A" in the second blank line.] e. [ ] Age _____ (not exceeding age 21) (2) [X] Matching contributions: (Choose one of f. through i. Choose j. if applicable) f. [ ] One Year of Service g. [ ] One Hour of Service (immediate completion of Service requirement) h. [X] 12 months (not exceeding 24) i. [ ] An Employee must complete ___ Hours of Service within the ___ time period following an Employee's Employment Commencement Date. If an Employee does not complete the stated Hours of Service during the specified time period (if any), the Employee is subject to the One Year of Service requirement. [Note: The number of hours may not exceed 1,000 and the time period may not exceed 24 months. If the Plan does not require the Employee to satisfy the Hours of Service requirement within a specified time period, insert "N/A" in the second blank line.] j. [ ] Age_____ (not exceeding age 21) [ ] (d) Service requirements:_____. [Note: Any Service requirement the Employer elects in (d) must be available under other Adoption Agreement elections or a combination thereof.] [ ] (e) Dual eligibility. The eligibility conditions of this Section 2.01 apply solely to an Employee employed by the Employer after___. If the Employee was employed by the Employer by the specified date, the Employee will become a Participant on the latest of: (i) the Effective Date; (ii) the restated Effective Date; (iii) the Employee's Employment Commencement Date; or (iv) on the date the Employee attains age ___ (not exceeding age 21). Plan Entry Date. "Plan Entry Date" means the Effective Date and: (Choose one of (f) through (j). Choose (k) if applicable) [Note: If the Employer does not elect (k), the elections under (f) through (j) apply to all types of contributions. The Employer must elect at least one Entry Date per Plan Year.] [ ] (f) Semi-annual Entry Dates. The first day of the Plan Year and the first day of the seventh month of the Plan Year. [ ] (g) The first day of the Plan Year. [ ] (h) Employment Commencement Date (immediate eligibility). [X] (i) The first day of each: month (e.g., "Plan Year quarter"). [ ] (j) The following Plan Entry Dates:_____. [ ] (k) Alternative 401(k)/401(m) Plan Entry Date(s). For the alternative 401(k)/401(m) eligibility conditions under (c), Plan Entry Date means: (Choose (1) or (2) or both as applicable)
(1) [ ] Deferral/Employee contributions (2) [ ] Matching contributions (Choose one of a. through d.) (Choose one of e. through h.) a. [ ] Semi-annual Entry Dates e. [ ] Semi-annual Entry Dates b. [ ] The first day of the Plan Year f. [ ] The first day of the Plan Year c. [ ] Employment Commencement Date g. [ ] Employment Commencement Date (immediate eligibility) (immediate eligibility) d. [ ] The first day of each: h. [ ] The first day of each: _____ _____
Time of participation. An Employee will become a Participant, unless excluded under Section 1.11, on the Plan Entry Date (if employed on that date): (Choose one of (l), (m) or (n). Choose (o) if applicable): [Note: If the Employer does not elect (o), the election under (l), (m) or (n) applies to all types of contributions.] [X] (l) Immediately following or coincident with [ ] (m) Immediately preceding or coincident with [ ] (n) Nearest (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 4 [ ] (o) Alternative 401(k)/401(m) election(s): (Choose (1) or (2) or both as applicable) (1) [ ] Deferral contributions (2) [ ] Matching contributions (Choose one of b., c. or d.) a. [ ] Immediately following b. [ ] Immediately following or coincident with or coincident with c. [ ] Immediately preceding or coincident with d. [ ] Nearest the date the Employee completes the eligibility conditions described in this Section 2.01. [Note: Unless otherwise excluded under Section 1.11, an Employee must become a Participant by the earlier of: (1) the first day of the Plan Year beginning after the date the Employee completes the age and service requirements of Code ss.410(a); or (2) 6 months after the date the Employee completes those requirements.] 10. YEAR OF SERVICE - ELIGIBILITY (2.02). (Choose (a) and (b) as applicable): [Note: If the Employer does not elect a Year of Service condition or elects the Elapsed Time Method, the Employer should not complete (a) or (b).] [X] (a) Year of Service. An Employee must complete 1,000 Hour(s) of Service during an eligibility computation period to receive credit for a Year of Service under Article II: [Note: The number may not exceed 1,000. If left blank, the requirement is 1,000.] [X] (b) Eligibility computation period. After the initial eligibility computation period described in Plan Section 2.02, the Plan measures the eligibility computation period as: (Choose one of (1) or (2)) [ ] (1) The Plan Year beginning with the Plan Year which includes the first anniversary of the Employee's Employment Commencement Date. [X] (2) The 12-consecutive month period beginning with each anniversary of the Employee's Employment Commencement Date. 11. PARTICIPATION - BREAK IN SERVICE (2.03). The one year hold-out rule described in Plan Section 2.03(B): (Choose one of (a), (b) or (c)) [ ] (a) Not applicable. Does not apply to the Plan. [ ] (b) Applicable. Applies to the Plan and to all Participants. [X] (c) Limited application. Applies to the Plan, but only to a Participant who has incurred a Separation from Service. 12. ELECTION NOT TO PARTICIPATE (2.06). The Plan: (Choose one of (a) or (b)) [X] (a) Election not permitted. Does not permit an eligible Employee to elect not to participate. [ ] (b) Irrevocable election. Permits an Employee to elect not to participate if the Employee makes a one-time irrevocable election prior to the Employee's Plan Entry Date. ARTICLE III EMPLOYER CONTRIBUTIONS, DEFERRAL CONTRIBUTIONS AND FORFEITURES 13. AMOUNT AND TYPE (3.01). The amount and type(s) of the Employer's contribution to the Trust for a Plan Year or other specified period will equal: (Choose one or more of (a) through (f) as applicable) [X] (a) Deferral contributions (401(k) arrangement). The dollar or percentage amount by which each Participant has elected to reduce his/her Compensation, as provided in the Participant's salary reduction agreement and in accordance with Section 3.02. [X] (b) Matching contributions (other than safe harbor matching contributions under Section 3.01(d)). The matching contributions made in accordance with Section 3.03. [X] (c) Nonelective contributions (profit sharing). The following nonelective contribution (Choose (1) or (2) or both as applicable): [Note: The Employer may designate as a qualified nonelective contribution, all or any portion of its nonelective contribution. See Plan Section 3.04(F).] [X] (1) Discretionary. An amount the Employer in its sole discretion may determine. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 5 [ ] (2) Fixed. The following amount: ______ [ ] (d) 401(k) safe harbor contributions. The following 401(k) safe harbor contributions described in Plan Section 14.02(D): (Choose one of (1), (2) or (3). Choose (4), if applicable) [ ] (1) Safe harbor nonelective contribution. The safe harbor nonelective contribution equals ______% of a Participant's Compensation [Note: the amount in the blank must be at least 3%]. [ ] (2) Basic safe harbor matching contribution. A matching contribution equal to 100% of each Participant's deferral contributions not exceeding 3% of the Participant's Compensation, plus 50% of each Participant's deferral contributions in excess of 3% but not in excess of 5% of the Participant's Compensation. For this purpose, "Compensation" means Compensation for:___. [Note: The Employer must complete the blank line with the applicable time period for computing the Employer's basic safe harbor match, such as "each payroll period," "each month," "each Plan Year quarter" or "the Plan Year"]. [ ] (3) Enhanced safe harbor matching contribution. (Choose one of a. or b.). [ ] a. Uniform percentage. An amount equal to ___ % of each Participant's deferral contributions not exceeding ___ % of the Participant's Compensation. For this purpose, "Compensation" means Compensation for:___. [See the Note in (d)(2).] [ ] b. Tiered formula. An amount equal to the specified matching percentage for the corresponding level of each Participant's deferral contribution percentage. For this purpose, "Compensation" means Compensation for:___. [See the Note in (d)(2).] Deferral Contribution Percentage Matching Percentage -------------------------------- ------------------- ________ _________ ________ _________ ________ _________ [Note: The matching percentage may not increase as the deferral contribution percentage increases and the enhanced matching formula otherwise must satisfy the requirements of Code ss.ss.401(k)(12)(B)(ii) and (iii). If the Employer wishes to avoid ACP testing on its enhanced safe harbor matching contribution, the Employer also must limit deferral contributions taken into account (the "Deferral Contribution Percentage") for the matching contribution to 6% of Plan Year Compensation.] [ ] (4) Another plan. The Employer will satisfy the 401(k) safe harbor contribution in the following plan:______. [ ] (e) Davis-Bacon contributions. The amount(s) specified for the applicable Plan Year or other applicable period in the Employer's Davis-Bacon contract(s). The Employer will make a contribution only to Participants covered by the contract and only with respect to Compensation paid under the contract. If the Participant accrues an allocation of nonelective contributions (including forfeitures) under the Plan in addition to the Davis-Bacon contribution, the Plan Administrator will: (Choose one of (1) or (2)) [ ] (1) Not reduce the Participant's nonelective contribution allocation by the Davis-Bacon contribution. [ ] (2) Reduce the Participant's nonelective contribution allocation by the Davis-Bacon contribution. [ ] (f) Frozen Plan. This Plan is a frozen Plan effective: ___. For any period following the specified date, the Employer will not contribute to the Plan, a Participant may not contribute and an otherwise eligible Employee will not become a Participant in the Plan. 14. DEFERRAL CONTRIBUTIONS (3.02). The following limitations and terms apply to an Employee's deferral contributions: (If the Employer elects Section 3.01(a), the Employer must elect (a). Choose (b) or (c) as applicable) [X] (a) Limitation on amount. An Employee's deferral contributions are subject to the following limitation(s) in addition to those imposed by the Code: (Choose (1), (2) or (3) as applicable) [X] (1) Maximum deferral amount: 50%. [X] (2) Minimum deferral amount: 1%. [ ] (3) No limitations. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 6 For the Plan Year in which an Employee first becomes a Participant, the Plan Administrator will apply any percentage limitation the Employer elects in (1) or (2) to the Employee's Compensation: (Choose one of (4) or (5) unless the Employer elects (3)) [X] (4) Only for the portion of the Plan Year in which the Employee actually is a Participant. [ ] (5) For the entire Plan Year. [ ] (b) Negative deferral election. The Employer will withhold ___% from the Participant's Compensation unless the Participant elects a lesser percentage (including zero) under his/her salary reduction agreement. See Plan Section 14.02(C). The negative election will apply to: (Choose one of (1) or (2)) [ ] (1) All Participants who have not deferred at least the automatic deferral amount as of:_____. [ ] (2) Each Employee whose Plan Entry Date is on or following the negative election effective date. [ ] (c) Cash or deferred contributions. For each Plan Year for which the Employer makes a designated cash or deferred contribution under Plan Section 14.02(B), a Participant may elect to receive directly in cash not more than the following portion (or, if less, the 402(g) limitation) of his/her proportionate share of that cash or deferred contribution: (Choose one of (1) or (2)) [ ] (1) All or any portion. [ ] (2) ___%. Modification/revocation of salary reduction agreement. A Participant prospectively may modify or revoke a salary reduction agreement, or may file a new salary reduction agreement following a prior revocation, at least once per Plan Year or during any election period specified by the basic plan document or required by the Internal Revenue Service. The Plan Administrator also may provide for more frequent elections in the Plan's salary reduction agreement form. 15. MATCHING CONTRIBUTIONS (INCLUDING ADDITIONAL SAFE HARBOR MATCH UNDER PLAN SECTION 14.02(D)(3)) (3.03). The Employer matching contribution is: (If the Employer elects Section 3.01(b), the Employer must elect one or more of (a), (b) or (c) as applicable. Choose (d) if applicable) [ ] (a) Fixed formula. An amount equal to ___% of each Participant's deferral contributions. [X] (b) Discretionary formula. An amount (or additional amount) equal to a matching percentage the Employer from time to time may deem advisable of the Participant's deferral contributions. The Employer, in its sole discretion, may designate as a qualified matching contribution, all or any portion of its discretionary matching contribution. The portion of the Employer's discretionary matching contribution for a Plan Year not designated as a qualified matching contribution is a regular matching contribution. [ ] (c) Multiple level formula. An amount equal to the following percentages for each level of the Participant's deferral contributions. [Note: The matching percentage only will apply to deferral contributions in excess of the previous level and not in excess of the stated deferral contribution percentage.] Deferral Contributions Matching Percentage ---------------------- ------------------- ________ _________ ________ _________ ________ _________ [ ] (d) Related Employers. If two or more Related Employers contribute to this Plan, the Plan Administrator will allocate matching contributions and matching contribution forfeitures only to the Participants directly employed by the contributing Employer. The matching contribution formula for the other Related Employer(s) is:___. [Note: If the Employer does not elect (d), the Plan Administrator will allocate all matching contributions and matching forfeitures without regard to which contributing Related Employer directly employs the Participant.] Time period for matching contributions. The Employer will determine its matching contribution based on deferral contributions made during each: (Choose one of (e) through (h)) [X] (e) Plan Year. [ ] (f) Plan Year quarter. [ ] (g) Payroll period. [ ] (h) Alternative time period:___ . [Note: Any alternative time period the Employer elects in (h) must be the same for all Participants and may not exceed the Plan Year.] (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 7 Deferral contributions taken into account. In determining a Participant's deferral contributions taken into account for the above-specified time period under the matching contribution formula, the following limitations apply: (Choose one of (i), (j) or (k)) [ ] (i) All deferral contributions. The Plan Administrator will take into account all deferral contributions. [ ] (j) Specific limitation. The Plan Administrator will disregard deferral contributions exceeding ___% of the Participant's Compensation. [Note: To avoid the ACP test in a safe harbor 401(k) plan, the Employer must limit deferrals and Employee contributions which are subject to match to 6% of Plan Year Compensation.] [X] (k) Discretionary. The Plan Administrator will take into account the deferral contributions as a percentage of the Participant's Compensation as the Employer determines. Other matching contribution requirements. The matching contribution formula is subject to the following additional requirements: (Choose (l) or (m) or both if applicable) [ ] (l) Matching contribution limits. A Participant's matching contributions may not exceed: (Choose one of (1) or (2)) [ ] (1) ____. [Note: The Employer may elect (1) to place an overall dollar or percentage limit on matching contributions.] [ ] (2) 4% of a Participant's Compensation for the Plan Year under the discretionary matching contribution formula. [Note: The Employer must elect (2) if it elects a discretionary matching formula with the safe harbor 401(k) contribution formula and wishes to avoid the ACP test.] [ ] (m) Qualified matching contributions. The Plan Administrator will allocate as qualified matching contributions, the matching contributions specified in Adoption Agreement Section:___. The Plan Administrator will allocate all other matching contributions as regular matching contributions. [Note: If the Employer elects two matching formulas, the Employer may use (m) to designate one of the formulas as a qualified matching contribution.] 16. CONTRIBUTION ALLOCATION (3.04). Employer nonelective contributions (3.04(A)).The Plan Administrator will allocate the Employer's nonelective contribution under the following contribution allocation formula: (Choose one of (a), (b) or (c). Choose (d) if applicable) [X] (a) Nonintegrated (pro rata) allocation formula. [ ] (b) Permitted disparity. The following permitted disparity formula and definitions apply to the Plan: (Choose one of (1) or (2). Also choose (3)) [ ] (1) Two-tiered allocation formula. [ ] (2) Four-tiered allocation formula. [ ] (3) For purposes of Section 3.04(b), "Excess Compensation" means Compensation in excess of: (Choose one of a. or b.) [ ] a. ___% of the taxable wage base in effect on the first day of the Plan Year, rounded to the next highest $___ (not exceeding the taxable wage base). [ ] b. The following integration level:___. [Note: The integration level cannot exceed the taxable wage base in effect for the Plan Year for which this Adoption Agreement first is effective.] [ ] (c) Uniform points allocation formula. Under the uniform points allocation formula, a Participant receives: (Choose (1) or both (1) and (2) as applicable) [ ] (1) ___ point(s) for each Year of Service. Year of Service means:___. [ ] (2) One point for each $___ [not to exceed $200] increment of Plan Year Compensation. [ ] (d) Incorporation of contribution formula. The Plan Administrator will allocate the Employer's nonelective contribution under Section(s) 3.01(c)(2), (d)(1) or (e) in accordance with the contribution formula adopted by the Employer under that Section. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 8 Qualified nonelective contributions. (3.04(F)). The Plan Administrator will allocate the Employer's qualified nonelective contributions to: (Choose one of (e) or (f)) [X] (e) Nonhighly compensated Employees only. [ ] (f) All Participants. Related Employers. (Choose (g) if applicable) [ ] (g) Allocate only to directly employed Participants. If two or more Related Employers adopt this Plan, the Plan Administrator will allocate all nonelective contributions and forfeitures attributable to nonelective contributions only to the Participants directly employed by the contributing Employer. If a Participant receives Compensation from more than one contributing Employer, the Plan Administrator will determine the allocations under this Section 3.04 by prorating the Participant's Compensation between or among the participating Related Employers. [Note: If the Employer does not elect 3.04(g), the Plan Administrator will allocate all nonelective contributions and forfeitures without regard to which contributing Related Employer directly employs the Participant. The Employer may not elect 3.04(g) under a safe harbor 401(k) Plan.] 17. FORFEITURE ALLOCATION (3.05). The Plan Administrator will allocate a Participant forfeiture: (Choose one or more of (a), (b) or (c) as applicable) [Note: Even if the Employer elects immediate vesting, the Employer should complete Section 3.05. See Plan Section 9.11.] [X] (a) Matching contribution forfeitures. To the extent attributable to matching contributions: (Choose one of (1) through (4)) [ ] (1) As a discretionary matching contribution. [X] (2) To reduce matching contributions. [ ] (3) As a discretionary nonelective contribution. [ ] (4) To reduce nonelective contributions. [X] (b) Nonelective contribution forfeitures. To the extent attributable to Employer nonelective contributions: (Choose one of (1) through (4)) [ ] (1) As a discretionary nonelective contribution. [ ] (2) To reduce nonelective contributions. [ ] (3) As a discretionary matching contribution. [X] (4) To reduce matching contributions. [ ] (c) Reduce administrative expenses. First to reduce the Plan's ordinary and necessary administrative expenses for the Plan Year and then allocate any remaining forfeitures in the manner described in Sections 3.05(a) or (b) as applicable. Timing of forfeiture allocation. The Plan Administrator will allocate forfeitures under Section 3.05 in the Plan Year: (Choose one of (d) or (e)) [ ] (d) In which the forfeiture occurs. [X] (e) Immediately following the Plan Year in which the forfeiture occurs. 18. ALLOCATION CONDITIONS (3.06). Allocation conditions. The Plan does not apply any allocation conditions to deferral contributions, 401(k) safe harbor contributions (under Section 3.01(d)) or to Davis-Bacon contributions (except as the Davis-Bacon contract provides). To receive an allocation of matching contributions, nonelective contributions, qualified nonelective contributions or Participant forfeitures, a Participant must satisfy the following allocation condition(s): (Choose one or more of (a) through (i) as applicable) [X] (a) Hours of Service condition. The Participant must complete at least the specified number of Hours of Service (not exceeding 1,000) during the Plan Year: 1,000 hours. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 9 [X] (b) Employment condition. The Participant must be employed by the Employer on the last day of the Plan Year (designate time period). [ ] (c) No allocation conditions. [ ] (d) Elapsed Time Method. The Participant must complete at least the specified number (not exceeding 182) of consecutive calendar days of employment with the Employer during the Plan Year:___. [ ] (e) Termination of Service/501 Hours of Service coverage rule. The Participant either must be employed by the Employer on the last day of the Plan Year or must complete at least 501 Hours of Service during the Plan Year. If the Plan uses the Elapsed Time Method of crediting Service, the Participant must complete at least 91 consecutive calendar days of employment with the Employer during the Plan Year. [X] (f) Special allocation conditions for matching contributions. The Participant must complete at least 1 Hours of Service during the Plan Year (designate time period) for the matching contributions made for that time period. [X] (g) Death, Disability or Normal Retirement Age. Any condition specified in Section 3.06 a, b, f applies if the Participant incurs a Separation from Service during the Plan Year on account of: death, disability, normal retirement age (e.g., death, Disability or Normal Retirement Age). [X] (h) Suspension of allocation conditions for coverage. The suspension of allocation conditions of Plan Section 3.06(E) applies to the Plan. [ ] (i) Limited allocation conditions. The Plan does not impose an allocation condition for the following types of contributions:___. [Note: Any election to limit the Plan's allocation conditions to certain contributions must be the same for all Participants, be definitely determinable and not discriminate in favor of Highly Compensated Employees.] ARTICLE IV PARTICIPANT CONTRIBUTIONS 19. EMPLOYEE (AFTER TAX) CONTRIBUTIONS (4.02). The following elections apply to Employee contributions: (Choose one of (a) or (b). Choose (c) if applicable) [X] (a) Not permitted. The Plan does not permit Employee contributions. [ ] (b) Permitted. The Plan permits Employee contributions subject to the following limitations:___. [Note: Any designated limitation(s) must be the same for all Participants, be definitely determinable and not discriminate in favor of Highly Compensated Employees.] [ ] (c) Matching contribution. For each Plan Year, the Employer's matching contribution made with respect to Employee contributions is:___. ARTICLE V VESTING REQUIREMENTS 20. NORMAL/EARLY RETIREMENT AGE (5.01). A Participant attains Normal Retirement Age (or Early Retirement Age, if applicable) under the Plan on the following date: (Choose one of (a) or (b). Choose (c) if applicable) [X] (a) Specific age. The date the Participant attains age 65. [Note: The age may not exceed age 65.] [ ] (b) Age/participation. The later of the date the Participant attains ___ years of age or the ___ anniversary of the first day of the Plan Year in which the Participant commenced participation in the Plan. [Note: The age may not exceed age 65 and the anniversary may not exceed the 5th.] [ ] (c) Early Retirement Age. Early Retirement Age is the later of: (i) the date a Participant attains age ___ or (ii) the date a Participant reaches his/her ___ anniversary of the first day of the Plan Year in which the Participant commenced participation in the Plan. 21. PARTICIPANT'S DEATH OR DISABILITY (5.02). The 100% vesting rule under Plan Section 5.02 does not apply to: (Choose (a) or (b) or both as applicable) [ ] (a) Death. [ ] (b) Disability. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 10 22. VESTING SCHEDULE (5.03). A Participant has a 100% Vested interest at all times in his/her deferral contributions, qualified nonelective contributions, qualified matching contributions, 401(k) safe harbor contributions and Davis-Bacon contributions (unless otherwise indicated in (f)). The following vesting schedule applies to Employer regular matching contributions and to Employer nonelective contributions: (Choose (a) or choose one or more of (b) through (f) as applicable) [ ] (a) Immediate vesting. 100% Vested at all times. [Note: The Employer must elect (a) if the Service condition under Section 2.01 exceeds One Year of Service or more than twelve months.] [X] (b) Top-heavy vesting schedules. [Note: The Employer must choose one of (b)(1), (2) or (3) if it does not elect (a).]
[X] (1) 6-year graded as specified in the Plan. [ ] (3) Modified top-heavy schedule [ ] (2) 3-year cliff as specified in the Plan. Years of Vested Service Percentage ------- ---------- Less than 1%................... ___% 1 .......................... ___% 2 .......................... ___% 3 .......................... ___% 4 .......................... ___% 5 .......................... ___% 6 or more................... 100%
[X] (c) Non-top-heavy vesting schedules. [Note: The Employer may elect one of (c)(1), (2) or (3) in addition to (b).]
[ ] (1) 7-year graded as specified in the Plan. [X] (3) Modified non-top-heavy schedule [ ] (2) 5-year cliff as specified in the Plan. Years of Vested Service Percentage ------- ---------- Less than 1%................... 0% 1 .......................... 0% 2 .......................... 20% 3 .......................... 40% 4 .......................... 60% 5 .......................... 80% 6 .......................... 100% 7 or more .................. 100%
If the Employer does not elect (c), the vesting schedule elected in (b) applies to all Plan Years. [Note: The modified top-heavy schedule of (b)(3) must satisfy Code ss.416. If the Employer elects (c)(3), the modified non-top-heavy schedule must satisfy Code ss.411(a)(2).] [ ] (d) Separate vesting election for regular matching contributions. In lieu of the election under (a), (b) or (c), the following vesting schedule applies to a Participant's regular matching contributions: (Choose one of (1) or (2)) [ ] (1) 100% Vested at all times. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 11 [ ] (2) Regular matching vesting schedule:___. [Note: The vesting schedule completed under (d)(2) must comply with Code ss.411(a)(4).] [X] (e) Application of top-heavy schedule. The non-top-heavy schedule elected under (c) applies in all Plan Years in which the Plan is not a top-heavy plan. [Note: If the Employer does not elect (e), the top-heavy vesting schedule will apply for the first Plan Year in which the Plan is top-heavy and then in all subsequent Plan Years.] [ ] (f) Special vesting provisions:___. [Note: Any special vesting provision must satisfy Code ss.411(a). Any special vesting provision must be definitely determinable, not discriminate in favor of Highly Compensated Employees and not violate Code ss.401(a)(4).] 23. YEAR OF SERVICE - VESTING (5.06). (Choose (a) and (b)): [Note: If the Employer elects the Elapsed Time Method or elects immediate vesting, the Employer should not complete (a) or (b).] [X] (a) Year of Service. An Employee must complete at least 1,000 Hours of Service during a vesting computation period to receive credit for a Year of Service under Article V. [Note: The number may not exceed 1,000. If left blank, the requirement is 1,000.] [X] (b) Vesting computation period. The Plan measures a Year of Service on the basis of the following 12-consecutive month period: (Choose one of (1) or (2)) [X] (1) Plan Year. [ ] (2) Employment year (anniversary of Employment Commencement Date). 24. EXCLUDED YEARS OF SERVICE - VESTING (5.08). The Plan excludes the following Years of Service for purposes of vesting: (Choose (a) or choose one or more of (b) through (f) as applicable) [ ] (a) None. None other than as specified in Plan Section 5.08(a). [ ] (b) Age 18. Any Year of Service before the Year of Service during which the Participant attained the age of 18. [X] (c) Prior to Plan establishment. Any Year of Service during the period the Employer did not maintain this Plan or a predecessor plan. [ ] (d) Parity Break in Service. Any Year of Service excluded under the rule of parity. See Plan Section 5.10. [X] (e) Prior Plan terms. Any Year of Service disregarded under the terms of the Plan as in effect prior to this restated Plan. [ ] (f) Additional exclusions. Any Year of Service before:___ . [Note: Any exclusion specified under (f) must comply with Code ss.411(a)(4). Any exclusion must be definitely determinable, not discriminate in favor of Highly Compensated Employees and not violate Code ss.401(a)(4). If the Employer elects immediate vesting, the Employer should not complete Section 5.08.] ARTICLE VI DISTRIBUTION OF ACCOUNT BALANCE 25. TIME OF PAYMENT OF ACCOUNT BALANCE (6.01). The following time of distribution elections apply to the Plan: Separation from Service/Vested Account Balance not exceeding $5,000. Subject to the limitations of Plan Section 6.01(A)(1), the Trustee will distribute in a lump sum (regardless of the Employer's election under Section 6.04) a separated Participant's Vested Account Balance not exceeding $5,000: (Choose one of (a) through (d)) [X] (a) Immediate. As soon as administratively practicable following the Participant's Separation from Service. [ ] (b) Designated Plan Year. As soon as administratively practicable in the ___ Plan Year beginning after the Participant's Separation from Service. [ ] (c) Designated Plan Year quarter. As soon as administratively practicable in the ___ Plan Year quarter beginning after the Participant's Separation from Service. [ ] (d) Designated distribution. As soon as administratively practicable in the: ___ following the Participant's Separation from Service. [Note: The designated distribution time must be the same for all Participants, be definitely determinable, not discriminate in favor of Highly Compensated Employees and not violate Code ss.401(a)(4).] (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 12 Separation from Service/Vested Account Balance exceeding $5,000. A separated Participant whose Vested Account Balance exceeds $5,000 may elect to commence distribution of his/her Vested Account Balance no earlier than: (Choose one of (e) through (i). Choose (j) if applicable) [X] (e) Immediate. As soon as administratively practicable following the Participant's Separation from Service. [ ] (f) Designated Plan Year. As soon as administratively practicable in the ___ Plan Year beginning after the Participant's Separation from Service. [ ] (g) Designated Plan Year quarter. As soon as administratively practicable in the ___ Plan Year quarter following the Plan Year quarter in which the Participant elects to receive a distribution. [ ] (h) Normal Retirement Age. As soon as administratively practicable after the close of the Plan Year in which the Participant attains Normal Retirement Age and within the time required under Plan Section 6.01(A)(2). [ ] (i) Designated distribution. As soon as administratively practicable in the: ___ following the Participant's Separation from Service. [Note: The designated distribution time must be the same for all Participants, be definitely determinable, not discriminate in favor of Highly Compensated Employees and not violate Codess.401(a)(4).] [ ] (j) Limitation on Participant's right to delay distribution. A Participant may not elect to delay commencement of distribution of his/her Vested Account Balance beyond the later of attainment of age 62 or Normal Retirement Age. [Note: If the Employer does not elect (j), the Plan permits a Participant who has Separated from Service to delay distribution until his/her required beginning date. See Plan Section 6.01(A)(2).] Participant elections prior to Separation from Service. A Participant, prior to Separation from Service may elect any of the following distribution options in accordance with Plan Section 6.01(C). (Choose (k) or choose one or more of (l) through (o) as applicable). [Note: If the Employer elects any in-service distributions option, a Participant may elect to receive one in-service distribution per Plan Year unless the Plan's in-service distribution form provides for more frequent in-service distributions.] [ ] (k) None. A Participant does not have any distribution option prior to Separation from Service, except as may be provided under Plan Section 6.01(C). [X] (l) Deferral contributions. Distribution of all or any portion (as permitted by the Plan) of a Participant's Account Balance attributable to deferral contributions if: (Choose one or more of (1), (2) or (3) as applicable) [X] (1) Hardship (safe harbor hardship rule). The Participant has incurred a hardship in accordance with Plan Sections 6.09 and 14.11(A). [X] (2) Age. The Participant has attained age 59 1/2 (Must be at least age 59 1/2). [ ] (3) Disability. The Participant has incurred a Disability. [ ] (m) Qualified nonelective contributions/qualified matching contributions/safe harbor contributions. Distribution of all or any portion of a Participant's Account Balance attributable to qualified nonelective contributions, to qualified matching contributions, or to 401(k) safe harbor contributions if: (Choose (1) or (2) or both as applicable) [ ] (1) Age. The Participant has attained age ___ (Must be at least age 59 1/2). [ ] (2) Disability. The Participant has incurred a Disability. [ ] (n) Nonelective contributions/regular matching contributions. Distribution of all or any portion of a Participant's Vested Account Balance attributable to nonelective contributions or to regular matching contributions if: (Choose one or more of (1) through (5) as applicable) [ ] (1) Age/Service conditions. (Choose one or more of a. through d. as applicable): [ ] a. Age. The Participant has attained age ___. [ ] b. Two-year allocations. The Plan Administrator has allocated the contributions to be distributed for a period of not less than _____ Plan Years before the distribution date. [Note: The minimum number of years is 2.] [ ] c. Five years of participation. The Participant has participated in the Plan for at least ___ Plan Years. [Note: The minimum number of years is 5.] (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 13 [ ] d. Vested. The Participant is ___% Vested in his/her Account Balance. See Plan Section 5.03(A). [Note: If an Employer makes more than one election under Section 6.01(n)(1), a Participant must satisfy all conditions before the Participant is eligible for the distribution.] [ ] (2) Hardship. The Participant has incurred a hardship in accordance with Plan Section 6.09. [ ] (3) Hardship (safe harbor hardship rule). The Participant has incurred a hardship in accordance with Plan Sections 6.09 and 14.11(A). [ ] (4) Disability. The Participant has incurred a Disability. [ ] (5) Designated condition. The Participant has satisfied the following condition(s):___. [Note: Any designated condition(s) must be the same for all Participants, be definitely determinable and not discriminate in favor of Highly Compensated Employees.] [X] (o) Participant contributions. Distribution of all or any portion of a Participant's Account Balance attributable to the following Participant contributions described in Plan Section 4.01: (Choose one of (1), (2) or (3)) [ ] (1) All Participant contributions. [ ] (2) Employee contributions only. [X] (3) Rollover contributions only. Participant loan default/offset. See Section 6.08 of the Plan. 26. DISTRIBUTION METHOD (6.03). A separated Participant whose Vested Account Balance exceeds $5,000 may elect distribution under one of the following method(s) of distribution described in Plan Section 6.03: (Choose one or more of (a) through (d) as applicable) [X] (a) Lump sum. [X] (b) Installments. [ ] (c) Installments for required minimum distributions only. [ ] (d) Annuity distribution option(s): ___. [Note: Any optional method of distribution may not be subject to Employer, Plan Administrator or Trustee discretion.] 27. JOINT AND SURVIVOR ANNUITY REQUIREMENTS (6.04). The joint and survivor annuity distribution requirements of Plan Section 6.04: (Choose one of (a) or (b)) [X] (a) Profit sharing plan exception. Do not apply to a Participant, unless the Participant is a Participant described in Section 6.04(H) of the Plan. [ ] (b) Applicable. Apply to all Participants. ARTICLE IX PLAN ADMINISTRATOR - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS 28. ALLOCATION OF NET INCOME, GAIN OR LOSS (9.08). For each type of contribution provided under the Plan, the Plan allocates net income, gain or loss using the following method: (Choose one or more of (a) through (e) as applicable) [X] (a) Deferral contributions/Employee contributions. (Choose one or more of (1) through (5) as applicable) [X] (1) Daily valuation method. Allocate on each business day of the Plan Year during which Plan assets for which there is an established market are valued and the Trustee is conducting business. [ ] (2) Balance forward method. Allocate using the balance forward method. [ ] (3) Weighted average method. Allocate using the weighted average method, based on the following weighting period:___. See Plan Section 14.12. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 14 [ ] (4) Balance forward method with adjustment. Allocate pursuant to the balance forward method, except treat as part of the relevant Account at the beginning of the valuation period ___% of the contributions made during the following valuation period:___. [X] (5) Individual account method. Allocate using the individual account method. See Plan Section 9.08. [X] (b) Matching contributions. (Choose one or more of (1) through (5) as applicable) [X] (1) Daily valuation method. Allocate on each business day of the Plan Year during which Plan assets for which there is an established market are valued and the Trustee is conducting business. [ ] (2) Balance forward method. Allocate using the balance forward method. [ ] (3) Weighted average method. Allocate using the weighted average method, based on the following weighting period:___. See Plan Section 14.12. [ ] (4) Balance forward method with adjustment. Allocate pursuant to the balance forward method, except treat as part of the relevant Account at the beginning of the valuation period ___% of the contributions made during the following valuation period:___. [X] (5) Individual account method. Allocate using the individual account method. See Plan Section 9.08. [X] (c) Employer nonelective contributions. (Choose one or more of (1) through (5) as applicable) [X] (1) Daily valuation method. Allocate on each business day of the Plan Year during which Plan assets for which there is an established market are valued and the Trustee is conducting business. [ ] (2) Balance forward method. Allocate using the balance forward method. [ ] (3) Weighted average method. Allocate using the weighted average method, based on the following weighting period:___. See Plan Section 14.12. [ ] (4) Balance forward method with adjustment. Allocate pursuant to the balance forward method, except treat as part of the relevant Account at the beginning of the valuation period ___% of the contributions made during the following valuation period:___. [X] (5) Individual account method. Allocate using the individual account method. See Plan Section 9.08. [ ] (d) Specified method. Allocate pursuant to the following method:___. [Note: The specified method must be a definite predetermined formula which is not based on Compensation, which satisfies the nondiscrimination requirements of Treas. Reg. ss.1.401(a)(4) and which is applied uniformly to all Participants.] [ ] (e) Interest rate factor. In accordance with Plan Section 9.08(E), the Plan includes interest at the following rate on distributions made more than 90 days after the most recent valuation date:___. ARTICLE X TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 29. INVESTMENT POWERS (10.03). The following additional investment options or limitations apply under Plan Section 10.03: N/A. [Note: Enter "N/A" if not applicable.] 30. VALUATION OF TRUST (10.15). In addition to the last day of the Plan Year, the Trustee must value the Trust Fund on the following valuation date(s): (Choose one of (a) through (d)) [X] (a) Daily valuation dates. Each business day of the Plan Year on which Plan assets for which there is an established market are valued and the Trustee is conducting business. [ ] (b) Last day of a specified period. The last day of each ___ of the Plan Year. [ ] (c) Specified dates:___. [ ] (d) No additional valuation dates. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 15 Execution Page The Trustee (and Custodian, if applicable), by executing this Adoption Agreement, accepts its position and agrees to all of the obligations, responsibilities and duties imposed upon the Trustee (or Custodian) under the Prototype Plan and Trust. The Employer hereby agrees to the provisions of this Plan and Trust, and in witness of its agreement, the Employer by its duly authorized officers, has executed this Adoption Agreement, and the Trustee (and Custodian, if applicable) has signified its acceptance, on: June 17, 2002. Name of Employer: Genesis Health Ventures, Inc. ---------------------------------------- Employer's EIN: 06-1132947 ------------------------------------------ Signed: /s/ Richard Pell, Jr. --------------------------------------------------- Richard Pell, Jr., Senior Vice President Administration ----------------------------------------------- [Name/Title] Name(s) of Trustee: Wachovia Bank, National Association ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ Trust EIN (Optional): ------------------------------------------------ Signed: /s/ James Woolam --------------------------------------------------- James Woolam/Vice President ----------------------------------------------- [Name/Title] Signed: --------------------------------------------------- ----------------------------------------------- [Name/Title] Signed: --------------------------------------------------- ----------------------------------------------- [Name/Title] Signed: --------------------------------------------------- ----------------------------------------------- [Name/Title] Signed: --------------------------------------------------- ----------------------------------------------- [Name/Title] Name of Custodian (Optional): ----------------------------------------------- Signed: --------------------------------------------------- ----------------------------------------------- [Name/Title] 31. Plan Number. The 3-digit plan number the Employer assigns to this Plan for ERISA reporting purposes (Form 5500 Series) is: 004. Use of Adoption Agreement. Failure to complete properly the elections in this Adoption Agreement may result in disqualification of the Employer's Plan. The Employer only may use this Adoption Agreement in conjunction with the basic plan document referenced by its document number on Adoption Agreement page one. Execution for Page Substitution Amendment Only. If this paragraph is completed, this Execution Page documents an amendment to Adoption Agreement Section(s)_____ effective ______________ , by substitute Adoption Agreement page number(s)____. Prototype Plan Sponsor. The Prototype Plan Sponsor identified on the first page of the basic plan document will notify all adopting employers of any amendment of this Prototype Plan or of any abandonment or discontinuance by the Prototype Plan Sponsor of its maintenance of this Prototype Plan. For inquiries regarding the adoption of the Prototype Plan, the Prototype Plan Sponsor's intended meaning of any Plan provisions or the effect of the opinion letter issued to the Prototype Plan Sponsor, please contact the Prototype Plan Sponsor at the following address and telephone number: 101 East State Street, Kennett Square, PA 19348, 610-444-6350. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 16 Reliance on Sponsor Opinion Letter. The Prototype Plan Sponsor has obtained from the IRS an opinion letter specifying the form of this Adoption Agreement and the basic plan document satisfy, as of the date of the opinion letter, Code ss.401. An adopting Employer may rely on the Prototype Sponsor's IRS opinion letter only to the extent provided in Announcement 2001-77, 2001-30 I.R.B. The Employer may not rely on the opinion letter in certain other circumstances or with respect to certain qualification requirements, which are specified in the opinion letter and in Announcement 2001-77. In order to have reliance in such circumstances or with respect to such qualification requirements, the Employer must apply for a determination letter to Employee Plans Determinations of the Internal Revenue Service. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 17 PARTICIPATION AGREEMENT [ ] Check here if not applicable and do not complete this page. The undersigned Employer, by executing this Participation Agreement, elects to become a Participating Employer in the Plan identified in Section 1.21 of the accompanying Adoption Agreement, as if the Participating Employer were a signatory to that Adoption Agreement. The Participating Employer accepts, and agrees to be bound by, all of the elections granted under the provisions of the Prototype Plan as made by the Signatory Employer to the Execution Page of the Adoption Agreement, except as otherwise provided in this Participation Agreement. 32. EFFECTIVE DATE (1.10). The Effective Date of the Plan for the Participating Employer is: 7/1/02. 33. NEW PLAN/RESTATEMENT. The Participating Employer's adoption of this Plan constitutes: (Choose one of (a) or (b)) [X] (a) The adoption of a new plan by the Participating Employer. [ ] (b) The adoption of an amendment and restatement of a plan currently maintained by the Participating Employer, identified as:___________________, and having an original effective date of:__________________________________. 34. PREDECESSOR EMPLOYER SERVICE (1.30). In addition to the predecessor service credited by reason of Section 1.30 of the Plan, the Plan credits as Service under this Plan, service with this Participating Employer. (Choose one or more of (a) through (d) as applicable): [Note: If the Plan does not credit any additional predecessor service under Section 1.30 for this Participating Employer, do not complete this election.] [X] (a) Eligibility. For eligibility under Article II. See Plan Section 1.30 for time of Plan entry. [X] (b) Vesting. For vesting under Article V. [X] (c) Contribution allocation. For contribution allocations under Article III. [ ] (d) Exceptions. Except for the following Service:___.
Name of Plan: Name of Participating Employer: Genesis Health Ventures, Inc. 401(k) Plan for Collective ElderCare Resources Corp. Bargaining Unit Employees ------------------------------------------- - -------------------------------------------------------- Signed: /s/ Richard Pell, Jr. ------------------------------------ [Name/Title] 6/7/02 ------------------------------------ [Date] Participating Employer's EIN: 23-3024672 ----------
Acceptance by the Signatory Employer to the Execution Page of the Adoption Agreement and by the Trustee.
Name of Signatory Employer: Name(s) of Trustee: Genesis Health Ventures, Inc. Wachovia Bank, N.A. - --------------------------------------------------- ------------------------------------------- Richard Pell/Sr.VP Administration James Woolam/Vice President - --------------------------------------------------- ------------------------------------------- [Name/Title] [Name/Title] Signed: /s/ Richard Pell, Jr. Signed: /s/ James Woolam -------------------------------------------- ------------------------------------ 6/7/02 6/19/02 - --------------------------------------------------- ------------------------------------------- [Date] [Date]
[Note: Each Participating Employer must execute a separate Participation Agreement. If the Plan does not have a Participating Employer, the Signatory Employer may delete this page from the Adoption Agreement.] (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 18 APPENDIX A TESTING ELECTIONS/EFFECTIVE DATE ADDENDUM 35. The following testing elections and special effective dates apply: (Choose one or more of (a) through (n) as applicable) [ ] (a) Highly Compensated Employee (1.14). For Plan Years beginning after____, the Employer makes the following election(s) regarding the definition of Highly Compensated Employee: (1) [ ] Top paid group election. (2) [ ] Calendar year data election (fiscal year plan). [ ] (b) 401(k) current year testing. The Employer will apply the current year testing method in applying the ADP and ACP tests effective for Plan Years beginning after:___. [Note: For Plan Years beginning on or after the Employer's execution of its "GUST" restatement, the Employer must use the same testing method within the same Plan Year for both the ADP and ACP tests.] [ ] (c) Compensation. The Compensation definition under Section 1.07 will apply for Plan Years beginning after:___. [ ] (d) Election not to participate. The election not to participate under Section 2.06 is effective:___. [ ] (e) 401(k) safe harbor. The 401(k) safe harbor provisions under Section 3.01(d) are effective:___. [ ] (f) Negative election. The negative election provision under Section 3.02(b) is effective:___. [ ] (g) Contribution/allocation formula. The specified contribution(s) and allocation method(s) under Sections 3.01 and 3.04 are effective:___. [ ] (h) Allocation conditions. The allocation conditions of Section 3.06 are effective:___. [ ] (i) Benefit payment elections. The distribution elections of Section(s)_____ are effective:___. [ ] (j) Election to continue pre-SBJPA required beginning date. A Participant may not elect to defer commencement of the distribution of his/her Vested Account Balance beyond the April 1 following the calendar year in which the Participant attains age 70 1/2. See Plan Section 6.02(A). [ ] (k) Elimination of age 70 1/2 in-service distributions. The Plan eliminates a Participant's (other than a more than 5% owner) right to receive in-service distributions on April 1 of the calendar year following the year in which the Participant attains age 70 1/2 for Plan Years beginning after:___. [ ] (l) Allocation of earnings. The earnings allocation provisions under Section 9.08 are effective:___. [ ] (m) Elimination of optional forms of benefit. The Employer elects prospectively to eliminate the following optional forms of benefit: (Choose one or more of (1), (2) and (3) as applicable) [ ] (1) QJSA and QPSA benefits as described in Plan Sections 6.04, 6.05 and 6.06 effective:___. [ ] (2) Installment distributions as described in Section 6.03 effective:___. [ ] (3) Other optional forms of benefit (Any election to eliminate must be consistent with Treas. Reg. ss.1.411(d)-4):___. [ ] (n) Special effective date(s):___. For periods prior to the above-specified special effective date(s), the Plan terms in effect prior to its restatement under this Adoption Agreement will control for purposes of the designated provisions. A special effective date may not result in the delay of a Plan provision beyond the permissible effective date under any applicable law. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 19 APPENDIX B GUST Remedial Amendment Period Elections 36. The following GUST restatement elections apply: (Choose one or more of (a) through (j) as applicable) [ ] (a) Highly Compensated Employee elections. The Employer makes the following remedial amendment period elections with respect to the Highly Compensated Employee definition:
(1) 1997: [ ] Top paid group election. [ ] Calendar year election. [ ] Calendar year data election. (2) 1998: [ ] Top paid group election. [ ] Calendar year data election. (3) 1999: [ ] Top paid group election. [ ] Calendar year data election. (4) 2000: [ ] Top paid group election. [ ] Calendar year data election. (5) 2001: [ ] Top paid group election. [ ] Calendar year data election. (6) 2002: [ ] Top paid group election. [ ] Calendar year data election.
[ ] (b) 401(k) testing methods. The Employer makes the following remedial amendment period elections with respect to the ADP test and the ACP test: [Note: The Employer may use a different testing method for the ADP and ACP tests through the end of the Plan Year in which the Employer executes its GUST restated Plan.]
ADP test ACP test (1) 1997: [ ] prior year [ ] current year 1997: [ ] prior year [ ] current year (2) 1998: [ ] prior year [ ] current year 1998: [ ] prior year [ ] current year (3) 1999: [ ] prior year [ ] current year 1999: [ ] prior year [ ] current year (4) 2000: [ ] prior year [ ] current year 2000: [ ] prior year [ ] current year (5) 2001: [ ] prior year [ ] current year 2001: [ ] prior year [ ] current year (6) 2002: [ ] prior year [ ] current year 2002: [ ] prior year [ ] current year
[ ] (c) Delayed application of SBJPA required beginning date. The Employer elects to delay the effective date for the required beginning date provision of Plan Section 6.02 until Plan Years beginning after:___. [ ] (d) Model Amendment for required minimum distributions. The Employer adopts the IRS Model Amendment in Plan Section 6.02(E) effective___. [Note: The date must not be earlier than January 1, 2001.] Defined Benefit Limitation [ ] (e) Code ss.415(e) repeal. The repeal of the Code ss.415(e) limitation is effective for Limitation Years beginning after___. [Note: If the Employer does not make an election under (e), the repeal is effective for Limitation Years beginning after December 31, 1999.] Code ss.415(e) limitation. To the extent necessary to satisfy the limitation under Plan Section 3.17 for Limitation Years beginning prior to the repeal of Code ss.415(e), the Employer will reduce: (Choose one of (f) or (g)) [ ] (f) The Participant's projected annual benefit under the defined benefit plan. [ ] (g) The Employer's contribution or allocation on behalf of the Participant to the defined contribution plan and then, if necessary, the Participant's projected annual benefit under the defined benefit plan. Coordination with top-heavy minimum allocation. The Plan Administrator will apply the top-heavy minimum allocation provisions of Article XII with the following modifications: (Choose (h) or choose (i) or (j) or both as applicable) [ ] (h) No modifications. [ ] (i) For Non-Key Employees participating only in this Plan, the top-heavy minimum allocation is the minimum allocation determined by substituting ___% (not less than 4%) for "3%," except: (Choose one of (1) or (2)) [ ] (1) No exceptions. [ ] (2) Plan Years in which the top-heavy ratio exceeds 90%. [ ] (j) For Non-Key Employees also participating in the defined benefit plan, the top-heavy minimum is: (Choose one of (1) or (2)) [ ] (1) 5% of Compensation irrespective of the contribution rate of any Key Employee: (Choose one of a. or b.) [ ] a. No exceptions. [ ] b. Substituting "7 1/2%" for "5%" if the top-heavy ratio does not exceed 90%. [ ] (2) 0%. [Note: The defined benefit plan must satisfy the top-heavy minimum benefit requirement for these Non-Key Employees.] Actuarial assumptions for top-heavy calculation. To determine the top-heavy ratio, the Plan Administrator will use the following interest rate and mortality assumptions to value accrued benefits under a defined benefit plan:___. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 20 CHECKLIST OF EMPLOYER INFORMATION AND EMPLOYER ADMINISTRATIVE ELECTIONS Commencing with the 7/1/02 Plan Year The Prototype Plan permits the Employer to make certain administrative elections not reflected in the Adoption Agreement. This form lists those administrative elections and provides a means of recording the Employer's elections. This checklist is not part of the Plan document. 37. Employer Information. Genesis Health Ventures, Inc. ---------------------------------------------------------------------------- [Employer Name] 101 East State Street ---------------------------------------------------------------------------- [Address] Kennett Square, Pennsylvania 19348 610-444-6350 -------------------------------------------- -------------------- [City, State and Zip Code] [Telephone Number] 38. Form of Business. (a) [X] Corporation (b) [ ] S Corporation (c) [ ] Limited Liability Company (d) [ ] Sole Proprietorship (e) [ ] Partnership (f) [ ] _____ 39. Section 1.07(F) - Nondiscriminatory definition of Compensation. When testing nondiscrimination under the Plan, the Plan permits the Employer to make elections regarding the definition of Compensation. [Note: This election solely is for purposes of nondiscrimination testing. The election does not affect the Employer's elections under Section 1.07 which apply for purposes of allocating Employer contributions and Participant forfeitures.] (a) [X] The Plan will "gross up" Compensation for Elective Contributions. (b) [ ] The Plan will exclude Elective Contributions. 40. Section 4.04 - Rollover contributions. (a) [X] The Plan accepts rollover contributions. (b) [ ] The Plan does not accept rollover contributions. 41. Section 8.06 - Participant direction of investment/404(c). The Plan authorizes Participant direction of investment with Trustee consent. If the Trustee permits Participant direction of investment, the Employer and the Trustee should adopt a policy which establishes the applicable conditions and limitations, including whether they intend the Plan to comply with ERISA ss.404(c). (a) [X] The Plan permits Participant direction of investment and is a 404(c) plan. (b) [ ] The Plan does not permit Participant direction of investment or is a non-404(c) plan. 42. Section 9.04[A] - Participant loans. The Plan authorizes the Plan Administrator to adopt a written loan policy to permit Participant loans. (a) [X] The Plan permits Participant loans subject to the following conditions: (1) [X] Minimum loan amount: $1,000. (2) [X] Maximum number of outstanding loans: 1. (3) [X] Reasons for which a Participant may request a loan: a. [X] Any purpose. b. [ ] Hardship events. c. [ ] Other:___. (4) [X] Suspension of loan repayments: a. [ ] Not permitted. b. [ ] Permitted for non-military leave of absence. c. [X] Permitted for military service leave of absence. (5) [ ] The Participant must be a party in interest. (b) [ ] The Plan does not permit Participant loans. 43. Section 11.01 - Life insurance. The Plan with Employer approval authorizes the Trustee to acquire life insurance. (a) [ ] The Plan will invest in life insurance contracts. (b) [X] The Plan will not invest in life insurance contracts. 44. Surety bond company: CNA. Surety bond amount: $10,000,000 (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 21 PARTICIPATION AGREEMENT [ ] Check here if not applicable and do not complete this page. The undersigned Employer, by executing this Participation Agreement, elects to become a Participating Employer in the Plan identified in Section 1.21 of the accompanying Adoption Agreement, as if the Participating Employer were a signatory to that Adoption Agreement. The Participating Employer accepts, and agrees to be bound by, all of the elections granted under the provisions of the Prototype Plan as made by the Signatory Employer to the Execution Page of the Adoption Agreement, except as otherwise provided in this Participation Agreement. 45. EFFECTIVE DATE (1.10). The Effective Date of the Plan for the Participating Employer is: 7/1/02. 46. NEW PLAN/RESTATEMENT. The Participating Employer's adoption of this Plan constitutes: (Choose one of (a) or (b)) [X] (a) The adoption of a new plan by the Participating Employer. [ ] (b) The adoption of an amendment and restatement of a plan currently maintained by the Participating Employer, identified as:___________________, and having an original effective date of:__________________________________. 47. PREDECESSOR EMPLOYER SERVICE (1.30). In addition to the predecessor service credited by reason of Section 1.30 of the Plan, the Plan credits as Service under this Plan, service with this Participating Employer (Choose one or more of (a) through (d) as applicable): [Note: If the Plan does not credit any additional predecessor service under Section 1.30 for this Participating Employer, do not complete this election.] [X] (a) Eligibility. For eligibility under Article II. See Plan Section 1.30 for time of Plan entry. [ ] (b) Vesting. For vesting under Article V. [ ] (c) Contribution allocation. For contribution allocations under Article III. [ ] (d) Exceptions. Except for the following Service:______.
Name of Plan: Name of Participating Employer: Genesis Health Ventures, Inc. 401(k) Plan for Collective Geriatric and Medical Services, Inc. Bargaining Unit Employees ------------------------------------------- - -------------------------------------------------------- Signed: /s/ Richard Pell, Jr. ------------------------------------ [Name/Title] 6/7/02 ------------------------------------ [Date] Participating Employer's EIN: 22-1948394 ----------
Acceptance by the Signatory Employer to the Execution Page of the Adoption Agreement and by the Trustee.
Name of Signatory Employer: Name(s) of Trustee: Genesis Health Ventures, Inc. Wachovia Bank, N.A. - --------------------------------------------------- ------------------------------------------- Richard Pell/Sr. VP of Administration James Woolam/Vice President - --------------------------------------------------- ------------------------------------------- [Name/Title] [Name/Title] Signed: /s/ Richard Pell, Jr. Signed: /s/ James Woolam -------------------------------------------- ------------------------------------ 6/7/02 6/19/02 - --------------------------------------------------- ------------------------------------------- [Date] [Date]
[Note: Each Participating Employer must execute a separate Participation Agreement. If the Plan does not have a Participating Employer, the Signatory Employer may delete this page from the Adoption Agreement.] (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 22 FIRST UNION NATIONAL BANK DEFINED CONTRIBUTON MASTER PLAN AND TRUST AGREEMENT Defined Contribution Plan TABLE OF CONTENTS ARTICLE I, DEFINITIONS 1.01 Account ........................................ 2 1.02 Account Balance or Accrued Benefit ............. 2 1.03 Accounting Date ................................ 2 1.04 Adoption Agreement ............................. 3 1.05 Beneficiary .................................... 3 1.06 Code ........................................... 3 1.07 Compensation ................................... 3 1.08 Disability ..................................... 4 1.09 Earned Income .................................. 4 1.10 Effective Date ................................. 4 1.11 Employee ....................................... 4 1.12 Employer ....................................... 5 1.13 ERISA .......................................... 5 1.14 Highly Compensated Employee .................... 5 1.15 Hour of Service ................................ 5 1.16 Leased Employee ................................ 6 1.17 Nonhighly Compensated Employee ................. 6 1.18 Nontransferable Annuity ........................ 6 1.19 Paired Plans ................................... 6 1.20 Participant .................................... 7 1.21 Plan ........................................... 7 1.22 Plan Administrator ............................. 7 1.23 Plan Entry Date ................................ 7 1.24 Plan Year ...................................... 7 1.25 Protected Benefit .............................. 7 1.26 Related Group/Related Employer ................. 7 1.27 Self-Employed Individual / Owner- Employee/ Shareholder-Employee. ................ 7 1.28 Separation from Service ........................ 8 1.29 Service ........................................ 8 1.30 Service with a Predecessor Employer ............ 8 1.31 Trust .......................................... 8 1.32 Trust Fund ..................................... 8 1.33 Trustee ........................................ 8 1.34 Vested ......................................... 8 ARTICLE II, ELIGIBILITY AND PARTICIPATION 2.01 Eligibility .................................... 9 2.02 Age and Service Conditions ..................... 9 2.03 Break in Service - Participation ............... 9 2.04 Participation upon Re-employment ............... 10 2.05 Change in Employment Status .................... 10 2.06 Election Not to Participate .................... 10 ARTICLE III, EMPLOYER CONTRIBUTIONS AND FORFEITURES 3.01 Employer Contributions ......................... 11 3.02 Deferral Contributions ......................... 11 3.03 Matching Contributions ......................... 11 3.04 Employer Contribution Allocation ............... 11 3.05 Forfeiture Allocation .......................... 13 3.06 Allocation Conditions .......................... 14 3.07 Annual Additions Limitation .................... 15 3.08 Estimating Compensation ........................ 15 3.09 Determination Based on Actual Compensation ................................... 15 3.10 Disposition of Allocated Excess Amount ......... 15 3.11 Combined Plans Annual Additions Limitation ..................................... 16 3.12 Estimating Compensation ........................ 16 3.13 Determination Based on Actual Compensation ................................... 16 3.14 Ordering of Annual Addition Allocations ........ 16 3.15 Disposition of Allocated Excess Amount Attributable to Plan ........................... 16 3.16 Other Defined Contribution Plans Limitation . 16 3.17 Defined Benefit Plan Limitation ............. 17 3.18 Definitions - Article III ................... 17 ARTICLE IV, PARTICIPANT CONTRIBUTIONS 4.01 Participant Contributions ................... 19 4.02 Employee Contributions ...................... 19 4.03 DECs ........................................ 19 4.04 Rollover Contributions ...................... 19 4.05 Participant Contributions - Vesting ......... 19 4.06 Participant Contributions - Distribution .... 19 4.07 Participant Contributions - Investment and Accounting .................................. 19 ARTICLE V, VESTING 5.01 Normal/Early Retirement Age ................. 20 5.02 Participant Death or Disability ............. 20 5.03 Vesting Schedule ............................ 20 5.04 Cash-out Distributions to Partially-Vested Participants/Restoration of Forfeited Account Balance ............................. 20 5.05 Accounting for Cash-Out Repayment ........... 21 5.06 Year of Service - Vesting ................... 21 5.07 Break in Service and Forfeiture Break in Service - Vesting ........................... 21 5.08 Included Years of Service - Vesting ......... 22 5.09 Forfeiture Occurs ........................... 22 5.10 Rule of Parity - Vesting .................... 22 5.11 Amendment to Vesting Schedule ............... 22 5.12 Deferral Contributions Taken into Account ... 22 ARTICLE VI, DISTRIBUTIONS 6.01 Timing of Distributions ..................... 23 6.02 Required Minimum Distributions .............. 24 6.03 Method of Distribution ...................... 26 6.04 Annuity Distributions to Participants and to Surviving Spouses ........................ 27 6.05 Waiver Election - QJSA ...................... 28 6.06 Waiver Election - QPSA ...................... 28 6.07 Distributions Under Qualified Domestic Relations Orders (QDRO) ..................... 28 6.08 Defaulted Loan - Timing of Offset ........... 29 6.09 Hardship Distribution ....................... 29 6.10 Direct Rollover of Eligible Rollover Distributions ............................... 29 6.11 TEFRA Elections ............................. 30 ARTICLE VII, EMPLOYER ADMINISTRATIVE PROVISIONS 7.01 Information to Plan Administrator ........... 31 7.02 No Responsibility for Others ................ 31 7.03 Indemnity of Certain Fiduciaries ............ 31 7.04 Employer Direction of Investment ............ 31 7.05 Evidence .................................... 31 7.06 Plan Contributions .......................... 31 7.07 Employer Action ............................. 31 7.08 Fiduciaries Not Insurers .................... 31 7.09 Plan Terms Binding .......................... 31 7.10 Word Usage .................................. 31 7.11 State Law ................................... 31 7.12 Prototype Plan Status ....................... 31 7.13 Employment Not Guaranteed ................... 32 ARTICLE VIII, PARTICIPANT ADMINISTRATIVE PROVISIONS 8.01 Beneficiary Designation ..................... 33 8.02 No Beneficiary Designation/Death of Beneficiary ................................. 33 8.03 Assignment or Alienation .................... 33 (C) Copyright 2001 First Union National Bank i Defined Contribution Plan 8.04 Information Available ...................... 33 8.05 Claims Procedure for Denial of Benefits .... 34 8.06 Participant Direction of Investment ........ 34 ARTICLE IX, PLAN ADMINISTRATOR 9.01 Compensation and Expenses .................. 35 9.02 Resignation and Removal .................... 35 9.03 General Powers and Duties .................. 35 9.04 Plan Loans ................................. 35 9.05 Funding Policy ............................. 35 9.06 Individual Accounts ........................ 35 9.07 Value of Participant's Account Balance ..... 36 9.08 Allocation and Distribution of Net Income, Gain or Loss ............................... 36 9.09 Individual Statement ....................... 37 9.10 Account Charged ............................ 37 9.11 Lost Participants .......................... 37 9.12 Plan Correction ............................ 38 9.13 No Responsibility for Others ............... 38 9.14 Notice, Designation, Election, Consent and Waiver ..................................... 38 ARTICLE X, TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 10.01 Acceptance ................................. 39 10.02 Receipt of Contributions ................... 39 10.03 Investment Powers .......................... 39 10.04 Records and Statements ..................... 42 10.05 Fees and Expenses from Fund ................ 42 10.06 Parties to Litigation ...................... 43 10.07 Professional Agents ........................ 43 10.08 Distribution of Cash or Property ........... 43 10.09 Participant or Beneficiary Incapacitated ... 43 10.10 Distribution Directions .................... 43 10.11 Third Party Reliance ....................... 43 10.12 Multiple Trustees .......................... 43 10.13 Resignation and Removal .................... 43 10.14 Successor Trustee Acceptance ............... 44 10.15 Valuation of Trust ......................... 44 10.16 Limitation on Liability - If Investment Manager, Ancillary Trustee or Independent Fiduciary Appointed ........................ 44 10.17 Investment in Group Trust Fund ............. 44 10.18 Appointment of Ancillary Trustee or Independent Fiduciary ...................... 44 ARTICLE XI, PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY 11.01 Insurance Benefit .......................... 46 11.02 Limitation on Life Insurance Protection .... 46 11.03 Definitions ................................ 47 11.04 Dividend Plan .............................. 47 11.05 Insurance Company Not a Party to Agreement .................................. 47 11.06 No Responsibility for Others ............... 47 11.07 Duties of Insurance Company ................ 47 ARTICLE XII, TOP-HEAVY PROVISIONS 12.01 Determination of Top-Heavy Status .......... 48 12.02 Definitions ................................ 48 12.03 Top-Heavy Minimum Allocation ............... 49 12.04 Determining Top-Heavy Contribution Rates ... 49 12.05 Plan Which Will Satisfy Top-Heavy .......... 49 12.06 Top-Heavy Vesting .......................... 49 ARTICLE XIII, EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION 13.01 Exclusive Benefit .......................... 50 13.02 Amendment by Employer ...................... 50 13.03 Amendment by Prototype Plan Sponsor ........ 50 13.04 Plan Termination or Suspension ............. 51 13.05 Full Vesting on Termination ................ 51 13.06 Post Termination Procedure and Distribution. 51 13.07 Merger/Direct Transfer ..................... 51 ARTICLE XIV, CODE ss.401(k) AND CODE ss.401(m) ARRANGEMENTS 14.01 Application ................................ 53 14.02 401(k) Arrangement ......................... 53 14.03 Definitions ................................ 56 14.04 Matching Contributions/ Employee Contributions .............................. 57 14.05 Deferral Deposit Timing/Employer Contribution Status ........................ 58 14.06 Special Accounting and Allocation Provisions ................................. 58 14.07 Annual Elective Deferral Limitation ........ 59 14.08 Actual Deferral Percentage (ADP) Test ...... 59 14.09 Actual Contribution Percentage (ACP) Test .. 60 14.10 Multiple Use Limitation .................... 62 14.11 Distribution Restrictions .................. 62 14.12 Special Allocation and Valuation Rules ..... 63 FIRST UNION NATIONAL BANK DEFINED CONTRIBUTION MASTER PLAN AND TRUST AGREEMENT BASIC PLAN DOCUMENT # 01 First Union National Bank, in its capacity as Prototype Plan Sponsor, establishes this Prototype Plan intended to conform to and qualify under ss.401 and ss.501 of the Internal Revenue Code of 1986, as amended. An Employer establishes a Plan and Trust under this Prototype Plan by executing an Adoption Agreement. If the Employer adopts this Plan as a restated Plan in substitution for, and in amendment of, an existing plan, the provisions of this Plan, as a restated Plan, apply solely to an Employee whose employment with the Employer terminates on or after the restated Effective Date of the Plan. If an Employee's employment with the Employer terminates prior to the restated Effective Date, that Employee is entitled to benefits under the Plan as the Plan existed on the date of the Employee's termination of employment. ARTICLE I DEFINITIONS 1.01 "Account" means the separate Account(s) which the Plan Administrator or the Trustee maintains under the Plan for a Participant. 1.02 "Account Balance" or "Accrued Benefit" means the amount standing in a Participant's Account(s) as of any date derived from Employer contributions and from Participant contributions, if any. 1.03 "Accounting Date" means the last day of the Plan Year. The Plan Administrator will allocate Employer (C) Copyright 2001 First Union National Bank ii Defined Contribution Plan contributions and forfeitures for a particular Plan Year as of the Accounting Date of that Plan Year, and on such other dates, if any, as the Plan Administrator determines, consistent with the Plan's allocation conditions and other provisions. 1.04 "Adoption Agreement" means the document executed by each Employer adopting this Plan. References to Adoption Agreement within this basic plan document are to the Adoption Agreement as completed and executed by a particular Employer unless the context clearly indicates otherwise. An adopting Employer's Adoption Agreement and this basic plan document together constitute a single Plan and Trust of the Employer. Each elective provision of the Adoption Agreement corresponds (by its parenthetical section reference) to the section of the Plan which grants the election. Each Adoption Agreement offered under this Plan is either a Nonstandardized Plan or a Standardized Plan, as identified in that Adoption Agreement. The provisions of this Plan apply in the same manner to Nonstandardized Plans and to Standardized Plans unless otherwise specified. All section references within an Adoption Agreement are Adoption Agreement section references unless the context clearly indicates otherwise. 1.05 "Beneficiary" means a person designated by a Participant or by the Plan 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 to the Beneficiary his/her Plan benefit. A Beneficiary's right to (and the Plan Administrator's or a Trustee's duty to provide to the Beneficiary) information or data concerning the Plan does not arise until the Beneficiary first becomes entitled to receive a benefit under the Plan. 1.06 "Code" means the Internal Revenue Code of 1986, as amended and includes applicable Treasury regulations. 1.07 "Compensation" means a Participant's W-2 wages, Code ss.3401(a) wages, or 415 compensation except, in the case of a Self-Employed Individual, Compensation means Earned Income as defined in Section 1.09. The Employer in its Adoption Agreement must specify which definition of Compensation (Section 1.07(A), (B) or (C)) applies under the Plan and any modifications thereto, for purposes of contribution allocations under Article III. Any reference in the Plan to Compensation is a reference to the definition in this Section 1.07, unless the Plan reference, or the Employer in its Adoption Agreement, modifies this definition. The Plan Administrator will take into account only Compensation actually paid during (or as permitted under the Code, paid for) the relevant period. A Compensation payment includes Compensation paid by the Employer through another person under the common paymaster provisions in Code ss.ss.3121 and 3306. Compensation, unless otherwise specified in the Adoption Agreement, does not include any form of remuneration (including severance pay and vacation pay) paid to the Participant after the Participant incurs a Separation from Service. (A) W-2 Wages. W-2 wages means wages for federal income tax withholding purposes, as defined under Code ss.3401(a), plus all other 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 ss.ss.6041, 6051 and 6052, but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or services performed (such as the exception for agricultural labor in Code ss.3401(a)(2)). (B) Code ss.3401(a) Wages. Code ss.3401(a) wages means wages within the meaning of Code ss.3401(a) for the purposes of income tax withholding at the source, but determined without regard to any rules that limit the remuneration included in wages based on the nature or the location of the employment or the services performed (such as the exception for agricultural labor in Code ss.3401(a)(2)). (C) Code ss.415 Compensation (current income definition). Code ss.415 compensation means the Employee's wages, salaries, fees for professional service and other amounts received for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includible in gross income (including, but not limited to, commissions paid salespersons, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits and reimbursements or other expense allowances under a nonaccountable plan as described in Treas. Reg. ss.1.62-2(c)). Code ss.415 compensation does not include: (a) Employer contributions to a plan of deferred compensation to the extent the contributions are not included in the gross income of the Employee for the taxable year in which contributed, Employer contributions on behalf of an Employee to a Simplified Employee Pension Plan to the extent such contributions are excludible from the Employee's gross income, and any distributions from a plan of deferred compensation, regardless of whether such amounts are includible in the gross income of the Employee when distributed. (b) Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by an Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture. (c) Amounts realized from the sale, exchange or other disposition of stock acquired under a stock option described in Part II, Subchapter D, Chapter 1, Subtitle A of the Code. (d) Other amounts which receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are not includible in the gross income of the Employee), or contributions made by an Employer (whether or not under a salary reduction agreement) toward the purchase of an annuity contract described in Code ss.403(b) (whether or not the contributions are excludible from the gross income of the Employee). (C) Copyright 2001 First Union National Bank 3 Defined Contribution Plan (D) Elective Contributions. Compensation under Sections 1.07(A), 1.07(B) and 1.07(C) includes Elective Contributions unless the Employer in its Adoption Agreement elects to exclude Elective Contributions. "Elective Contributions" are amounts excludible from the Employee's gross income under Code ss.ss.125, 132(f)(4), 402(e)(3), 402(h)(2), 403(b), 408(p) or 457, and contributed by the Employer, at the Employee's election, to a cafeteria plan, a qualified transportation fringe benefit plan, a 401(k) arrangement, a SARSEP, a tax-sheltered annuity, a SIMPLE plan or a Code ss.457 plan. Notwithstanding the preceding sentence, amounts described in ss.132(f)(4) are not Elective Contributions until Plan Years beginning on or after January 1, 2001, unless the Plan Administrator operationally has included such amounts effective as of an earlier Plan Year beginning no earlier than January 1, 1998. (E) Compensation Dollar Limitation. For any Plan Year, the Plan Administrator in allocating contributions under Article III or in testing the Plan for nondiscrimination, cannot take into account more than $150,000 (or such larger or smaller amount as the Commissioner of Internal Revenue may prescribe) of any Participant's Compensation. Notwithstanding the foregoing, an Employee under a 401(k) arrangement may make elective deferrals with respect to Compensation which exceeds the Plan Year Compensation limitation, provided such deferrals otherwise satisfy Code ss.402(g) and other applicable limitations. (F) Nondiscrimination. For purposes of determining whether the Plan discriminates in favor of Highly Compensated Employees, Compensation means Compensation as defined in this Section 1.07, except: (1) the Employer annually may elect operationally to include or to exclude Elective Contributions, irrespective of the Employer's election in its Adoption Agreement regarding Elective Contributions; and (2) the Plan Administrator will disregard any elections made in the "modifications to Compensation definition" section of Adoption Agreement Section 1.07. The Employer's election described in clause (1) must be consistent and uniform with respect to all Employees and all plans of the Employer for any particular Plan Year. The Employer, irrespective of clause (2), may elect to exclude from this nondiscrimination definition of Compensation any items of Compensation excludible under Code ss.414(s) and the applicable Treasury regulations, provided such adjusted definition conforms to the nondiscrimination requirements of those regulations. Furthermore, for nondiscrimination purposes, including the computation of an Employee's actual deferral percentage ("ADP") or actual contribution percentage ("ACP"), the Plan Administrator may limit Compensation taken into account to Compensation received only for the portion of the Plan Year in which the Employee was a Participant and only for the portion of the Plan Year in which the Plan or the 401(k) arrangement was in effect. 1.08 "Disability" means the Participant, because of a physical or mental disability, will be unable to perform the duties of his/her customary position of employment (or is unable to engage in any substantial gainful activity) for an indefinite period which the Plan Administrator considers will be of long continued duration. A Participant also is disabled if he/she incurs the permanent loss or loss of use of a member or function of the body, or is permanently disfigured, and incurs a Separation from Service. A Participant is disabled on the date the Plan Administrator determines the Participant satisfies the definition of Disability. The Plan Administrator may require a Participant to submit to a physical examination in order to confirm Disability. The Plan Administrator will apply the provisions of this Section 1.08 in a nondiscriminatory, consistent and uniform manner. The Employer may provide an alternative definition of Disability in an Addendum to its Adoption Agreement. 1.09 "Earned Income" means net earnings from self-employment in the trade or business with respect to which the Employer has established the Plan, provided personal services of the Self-Employed Individual are a material income producing factor. The Plan Administrator will determine net earnings without regard to items excluded from gross income and the deductions allocable to those items. The Plan Administrator will determine net earnings after the deduction allowed to the Self-Employed Individual for all contributions made by the Employer to a qualified plan and after the deduction allowed to the Self-Employed Individual under Code ss.164(f) for self-employment taxes. 1.10 "Effective Date" of this Plan is the date specified in the Adoption Agreement unless otherwise for a specified purpose provided within this basic plan document or within (as part of the Adoption Agreement) a Participation Agreement, an Addendum, or within Appendices A or B. 1.11 "Employee" means any common law employee, Self-Employed Individual, Leased Employee or other person the Code treats as an employee of the Employer for purposes of the Employer's qualified plan. The Employer in its Adoption Agreement must elect or specify any Employee, or class of Employees, not eligible to participate in the Plan (an "excluded Employee"). (A) Collective Bargaining Employees. If the Employer elects in its Adoption Agreement to exclude collective bargaining Employees from eligibility to participate, the exclusion applies to any Employee included in a unit of Employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, if: (1) retirement benefits were the subject of good faith bargaining; and (2) two percent or less of the employees covered by the agreement are "professionals" as defined in Treas. Reg. ss.1.410(b)-9, unless the collective bargaining agreement requires the Employee to be included within the Plan. The term "employee representatives" does not include any organization more than half the members of which are owners, officers, or executives of the Employer. (B) Nonresident Aliens. If the Employer elects in its Adoption Agreement to exclude nonresident aliens from eligibility to participate, the exclusion applies to any nonresident alien Employee who does not receive any earned income, as defined in Code ss.911(d)(2), from the Employer which constitutes United States source income, as defined in Code ss.861(a)(3). (C) Copyright 2001 First Union National Bank 4 Defined Contribution Plan (C) Reclassified Employees. If the Employer elects in its Adoption Agreement to exclude reclassified Employees from eligibility to participate, the exclusion applies to any person the Employer does not treat as an Employee (including, but not limited to, independent contractors, persons the Employer pays outside of its payroll system and out-sourced workers) for federal income tax withholding purposes under Code ss.3401(a), but for whom there is a binding determination the individual is an Employee or a Leased Employee of the Employer. 1.12 "Employer" means each employer who establishes a Plan under this Prototype Plan by executing an Adoption Agreement and includes to the extent described in Section 1.26 a Related Employer and a Participating Employer. The Employer for purposes of acting as Plan Administrator, making Plan amendments, terminating the Plan or performing other ERISA settlor functions, means the signatory Employer to the Adoption Agreement Execution Page and does not include any Related Employer or Participating Employer. 1.13 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and includes applicable Department of Labor regulations. 1.14 "Highly Compensated Employee" means an Employee who: (a) during the Plan Year or during the preceding Plan Year, is a more than 5% owner of the Employer (applying the constructive ownership rules of Code ss.318, and applying the principles of Code ss.318, for an unincorporated entity); or (b) during the preceding Plan Year had Compensation in excess of $80,000 (as adjusted by the Commissioner of Internal Revenue for the relevant year) and, if the Employer under its Adoption Agreement Appendices A or B, makes the top-paid group election, was part of the top-paid 20% group of Employees (based on Compensation for the preceding Plan Year). For purposes of this Section 1.14, "Compensation" means Compensation as defined in Section 1.07, except any exclusions from Compensation the Employer elects in Adoption Agreement Section 1.07 do not apply, and Compensation specifically includes Elective Contributions. The Plan Administrator 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, consistent with Code ss.414(q) and regulations issued under that Code section. The Employer in its Adoption Agreement Appendices A or B may make a calendar year data election to determine the Highly Compensated Employees for the Plan Year, as prescribed by Treasury regulations or by other guidance published in the Internal Revenue Bulletin. A calendar year data election must apply to all plans of the Employer which reference the highly compensated employee definition in Code ss.414(q). For purposes of this Section 1.14, if the current Plan Year is the first year of the Plan, then the term "preceding Plan Year" means the 12-consecutive month period immediately preceding the current Plan Year. 1.15 "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 Plan Administrator 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 Plan Administrator 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 Plan Administrator 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 Plan Administrator credits Hours of Service under this Paragraph (c) in accordance with the rules of paragraphs (b) and (c) of Labor Reg. ss.2530.200b-2, which the Plan, by this reference, specifically incorporates in full within this Paragraph (c). The Plan Administrator will not credit an Hour of Service under more than one of the above Paragraphs (a), (b) or (c). A computation period for purposes of this Section 1.15 is the Plan Year, Year of Service period, Break in Service period or other period, as determined under the Plan provision for which the Plan Administrator is measuring an Employee's Hours of Service. The Plan Administrator 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 must elect in its Adoption Agreement the method the Plan Administrator will use in crediting an Employee with Hours of Service and the purpose for which the elected method will apply. (B) Actual Method. Under the Actual Method as determined from records, an Employee receives credit for Hours of Service for hours worked and hours for which the Employer makes payment or for which payment is due from the Employer. (C) Equivalency Method. Under an Equivalency Method, for each equivalency period for which the Plan (C) Copyright 2001 First Union National Bank 5 Defined Contribution Plan Administrator would credit the Employee with at least one Hour of Service, the Plan Administrator will credit the Employee with: (i) 10 Hours of Service for a daily equivalency; (ii) 45 Hours of Service for a weekly equivalency; (iii) 95 Hours of Service for a semimonthly payroll period equivalency; and (iv) 190 Hours of Service for a monthly equivalency. (D) Elapsed Time Method. Under the Elapsed Time Method, an Employee receives credit for Service for the aggregate of all time periods (regardless of the Employee's actual Hours of Service) commencing with the Employee's Employment Commencement Date, or with his/her Re-employment Commencement Date, and ending on the date a Break in Service begins. An Employee's Employment Commencement Date or his/her Re-employment Commencement Date begins on the first day he/she performs an Hour of Service following employment or re-employment. In applying the Elapsed Time Method, the Plan Administrator will credit an Employee's Service for any Period of Severance of less than 12-consecutive months and will express fractional periods of Service in days. Under the Elapsed Time Method, a Break in Service is a Period of Severance of at least 12 consecutive months. A Period of Severance is a continuous period of time during which the Employee is not employed by the Employer. The continuous period begins on the date the Employee retires, quits, is discharged, or dies or if earlier, the first 12-month anniversary of the date on which the Employee otherwise is absent from Service for any other reason (including disability, vacation, leave of absence, layoff, etc.). In the case of an Employee who is absent from work for maternity or paternity reasons, the 12-consecutive month period beginning on the first anniversary of the first date the Employee is otherwise absent from Service does not constitute a Break in Service. (E) Maternity/Paternity Leave/Family and Medical Leave Act. Solely for purposes of determining whether an Employee incurs a Break in Service under any provision of this Plan, the Plan Administrator must credit Hours of Service during the Employee's unpaid absence period: (i) due to maternity or paternity leave; or (ii) as required under the Family and Medical Leave Act. An Employee is 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 Plan Administrator credits Hours of Service under this Section 1.15(E) on the basis of the number of Hours of Service for which the Employee normally would receive credit or, if the Plan Administrator cannot determine the number of Hours of Service the Employee would receive credit for, on the basis of 8 hours per day during the absence period. The Plan Administrator will credit only the number (not exceeding 501) of Hours of Service necessary to prevent an Employee's Break in Service. The Plan Administrator credits all Hours of Service described in this Section 1.15(E) 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/her absence period begins, the Plan Administrator credits these Hours of Service to the immediately following computation period. (F) Qualified Military Service. Hour of Service also includes any Service the Plan must credit for contributions and benefits in order to satisfy the crediting of Service requirements of Code ss.414(u). The provisions of this Section 1.15(F) apply beginning December 12, 1994, or if the Employer's Plan is effective after that date, as of the Plan's Effective Date. 1.16 "Leased Employee" means an individual (who otherwise is not an Employee of the Employer) who, pursuant to an 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 ss.144(a)(3)) on a substantially full time basis for at least one year and who performs such services under primary direction or control of the Employer within the meaning of Code ss.414(n)(2). Except as described in Section 1.16(A), a Leased Employee is an Employee for purposes of the Plan. If a Leased Employee is an Employee, "Compensation" includes Compensation from the leasing organization which is attributable to services performed for the Employer. (A) Safe Harbor Plan Exception. A Leased Employee is not 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 ss.415(c)(3) including Elective Contributions. (B) Other Requirements. The Plan Administrator must apply this Section 1.16 in a manner consistent with Code ss.ss.414(n) and 414(o) and the regulations issued under those Code sections. If a Participant is a Leased Employee covered by a plan maintained by the leasing organization, the Plan Administrator will determine the allocation of Employer contributions and Participant forfeitures on behalf of the Participant under the Employer's Plan without taking into account the Leased Employee's allocation, if any, under the leasing organization's plan. 1.17 "Nonhighly Compensated Employee" means any Employee who is not a Highly Compensated Employee. 1.18 "Nontransferable Annuity" means an annuity contract which by its terms provides that it may not be sold, assigned, discounted, pledged as collateral for a loan or security for the performance of an obligation or for any purpose to any person other than the insurance company. If the Plan distributes an annuity contract, the contract must be a Nontransferable Annuity. 1.19 "Paired Plans" means the Employer has adopted two Standardized Plan Adoption Agreements offered with (C) Copyright 2001 First Union National Bank 6 Defined Contribution Plan this Prototype Plan, one Adoption Agreement being a Paired Profit Sharing Plan and one Adoption Agreement being a Paired Pension Plan. A Paired Profit Sharing Plan may include a 401(k) arrangement. A Paired Pension Plan must be a money purchase pension plan, defined benefit plan or a target benefit pension plan. Paired Plans must be the subject of a favorable opinion letter issued by the National Office of the Internal Revenue Service. If an Employer adopts paired plans, only one of the plans may provide for permitted disparity. 1.20 "Participant" means an eligible Employee who becomes a Participant in accordance with the provisions of Section 2.01. An eligible Employee means an Employee who is not an excluded Employee under Adoption Agreement Section 1.11. 1.21 "Plan" means the retirement plan established or continued by the Employer in the form of this Prototype Plan, including the Adoption Agreement under which the Employer has elected to establish this Plan. The Employer must designate the name of the Plan in its Adoption Agreement. An Employer may execute more than one Adoption Agreement offered under this Plan, each of which will constitute a separate Plan and Trust established or continued by that Employer. The Plan and the Trust created by each adopting Employer is a separate Plan and a separate Trust, independent from the plan and the trust of any other employer adopting this Prototype Plan. All section references within this basic plan document are Plan section references unless the context clearly indicates otherwise. The Plan includes any Addendum or Appendix permitted by the basic plan document or by the Employer's Adoption Agreement and which the Employer attaches to its Adoption Agreement. An Addendum must correspond by section reference to the section of the basic plan document or Adoption Agreement permitting the Addendum. 1.22 "Plan Administrator" means the Employer unless the Employer designates another person or persons to hold the position of Plan Administrator. Any person(s) the Employer appoints as Plan Administrator may or may not be Participants in the Plan. In addition to its other duties, the Plan Administrator has full responsibility for the Plan's compliance with the reporting and disclosure rules under ERISA. 1.23 "Plan Entry Date" means the date(s) the Employer elects in Adoption Agreement Section 2.01. 1.24 "Plan Year" means the consecutive month period the Employer specifies in its Adoption Agreement. The Employer also must specify in its Adoption Agreement the "Limitation Year" applicable to the limitations on allocations described in Article III. If the Employer maintains Paired Plans, each Plan must have the same Plan Year. 1.25 "Protected Benefit" means any accrued benefit described in Treas. Reg. ss.1.411(d)-4, including any optional form of benefit provided under the Plan which may not (except in accordance with such Regulations) be reduced, eliminated or made subject to Employer discretion. 1.26 "Related Group"/"Related Employer" A Related Group is a controlled group of corporations (as defined in Code ss.414(b)), trades or businesses (whether or not incorporated) which are under common control (as defined in Code ss.414(c)), an affiliated service group (as defined in Code ss.414(m)) or an arrangement otherwise described in Code ss.414(o). Each Employer/member of the Related Group is a Related Employer. The term "Employer" includes every Related Employer for purposes of crediting Service and Hours of Service, determining Years of Service and Breaks in Service under Articles II and V, determining Separation from Service, applying the Coverage Test under Section 3.06(E), applying the limitations on allocations in Part 2 of Article III, applying the top-heavy rules and the minimum allocation requirements of Article XII, applying the definitions of Employee, Highly Compensated Employee, Compensation and Leased Employee, applying the safe harbor 401(k) provisions of Section 14.02(D), applying the SIMPLE 401(k) provisions of Section 14.02(E) and for any other purpose the Code or the Plan require. (A) Participating Employer. An Employer may contribute to the Plan only by being a signatory to the Execution Page of the Adoption Agreement or to a Participation Agreement to the Adoption Agreement. If a Related Employer executes a Participation Agreement to the Adoption Agreement, the Related Employer is a Participating Employer. A Participating Employer is an Employer for all purposes of the Plan except as provided in Section 1.12. (B) Standardized/Nonstandardized Plan. If the Employer's Plan is a Standardized Plan, all Employees of the Employer or of any Related Employer, are eligible to participate in the Plan, irrespective of whether the Related Employer directly employing the Employee is a Participating Employer. Notwithstanding the immediately preceding sentence, individuals who become Employees of a Related Employer as a result of a transaction described in Code ss.410(b)(6)(C) are not eligible to participate in the Plan during the Plan Year in which such transaction occurs nor in the following Plan Year, unless the Related Employer which employs such Employees becomes during such period a Participating Employer, by executing a Participation Agreement to the Adoption Agreement. If the Plan is a Nonstandardized Plan, the Employees of a Related Employer are not eligible to participate in the Plan unless the Related Employer is a Participating Employer. 1.27 "Self-Employed Individual"/"Owner- Employee"/"Shareholder-Employee" "Self-Employed Individual" means an individual who has Earned Income (or who would have had Earned Income but for the fact that the trade or business did not have net profits) for the taxable year from the trade or business for which the Plan is established. "Owner-Employee" means a Self-Employed Individual who is the sole proprietor in the case of a sole proprietorship. If the Employer is a partnership, or a limited liability company taxed for federal income tax purposes as a partnership, "Owner-Employee" means a Self-Employed Individual who is a partner or member and owns more than 10% of either the capital or the profits interest of the partnership or of the limited liability company. "Shareholder-Employee" means an employee or officer of an "S" corporation who owns (or is considered as owning (C) Copyright 2001 First Union National Bank 7 Defined Contribution Plan under Code ss.318(a)(1)) more than 5% of the outstanding stock of the corporation on any day of the corporation's taxable year. 1.28 "Separation from Service" means an event after which the Employee no longer has an employment relationship with the Employer maintaining this Plan or with a Related Employer. 1.29 "Service" means any period of time the Employee is in the employ of the Employer, including any period the Employee is on an unpaid leave of absence authorized by the Employer under a uniform, nondiscriminatory policy applicable to all Employees. 1.30 "Service with a Predecessor Employer" If the Employer maintains the plan of a predecessor employer, service of the Employee with the predecessor employer is Service with the Employer. If the Employer does not maintain the plan of a predecessor employer, the Plan does not credit service with the predecessor employer, unless the Employer in its Adoption Agreement (or in a Participation Agreement, if applicable) elects to credit designated predecessor employer service and specifies the purposes for which the Plan will credit service with that predecessor employer. Unless the Employer under its Adoption Agreement Section 2.01 provides for this purpose specific Plan Entry Dates, an Employee who satisfies the Plan's eligibility condition(s) by reason of the crediting of predecessor service will enter the Plan in accordance with the provisions of Section 2.04 as if the Employee were a re-employed Employee on the first day the Plan credits predecessor service. 1.31 "Trust" means the separate Trust created under the Plan. 1.32 "Trust Fund" means all property of every kind acquired by the Plan and held by the Trust, other than incidental benefit insurance contracts. 1.33 "Trustee" means the person or persons who as Trustee execute the Adoption Agreement, or any successor in office who in writing accepts the position of Trustee. The Employer must designate in its Adoption Agreement whether the Trustee will administer the Trust as a discretionary Trustee or as a nondiscretionary Trustee. If a person acts as a discretionary Trustee, the Employer also may appoint a Custodian. See Article X. If the Prototype Plan Sponsor is a bank, savings and loan association, credit union, mutual fund, insurance company, or other institution qualified to serve as Trustee, a person other than the Prototype Plan Sponsor (or its affiliate) may not serve as Trustee or as Custodian of the Plan without the written consent of the Prototype Plan Sponsor. 1.34 "Vested" means a Participant or a Beneficiary has an unconditional claim, legally enforceable against the Plan, to the Participant's Account Balance or Accrued Benefit. (C) Copyright 2001 First Union National Bank 8 Defined Contribution Plan ARTICLE II ELIGIBILITY AND PARTICIPATION 2.01 ELIGIBILITY. Each eligible Employee becomes a Participant in the Plan in accordance with the eligibility provisions the Employer elects in its Adoption Agreement. If this Plan is a restated Plan, each Employee who was a Participant in the Plan on the day before the restated Effective Date continues as a Participant in the restated Plan, irrespective of whether he/she satisfies the eligibility conditions of the restated Plan, unless the Employer provides otherwise in its Adoption Agreement. If the Employer contributes to the Plan under a Davis-Bacon contract, except as the contract provides, the Employer's Adoption Agreement elections imposing age and service eligibility conditions do not apply with respect to an Employee performing Davis-Bacon contract Service. 2.02 AGE AND SERVICE CONDITIONS. For purposes of an Employee's participation in the Plan, the Plan: (1) may not impose an age condition exceeding age 21; and (2) takes into account all of the Employee's Years of Service with the Employer, except as provided in Section 2.03. "Year of Service" for purposes of an Employee's participation in the Plan, means a 12-consecutive month eligibility computation period during which the Employee completes the number of Hours of Service (not exceeding 1,000) the Employer specifies in its Adoption Agreement. The initial eligibility computation period is the first 12-consecutive month period measured from the Employee's Employment Commencement Date. The Plan measures succeeding 12-consecutive month eligibility computation periods in accordance with the Employer's election in its Adoption Agreement. If the Employer elects to measure subsequent periods on a Plan Year basis, an Employee who receives credit for the required number of Hours of Service during the initial eligibility computation period and also during the first applicable Plan Year receives credit for two Years of Service under Article II. "Employment Commencement Date" means the date on which the Employee first performs an Hour of Service for the Employer. If the Employer under Adoption Agreement Section 2.01 elects an alternative Service condition to one Year of Service or two Years of Service, the Employer must elect in the Adoption Agreement the Hour of Service and any other requirement(s), if any, after the Employee completes one Hour of Service. Under any alternative Service condition election, the Plan may not require an Employee to complete more than one Year of Service (1,000 Hours of Service in 12-consecutive months) or two Years of Service if applicable. If the Employer in its Adoption Agreement elects to apply the Equivalency Method or the Elapsed Time Method in applying the Plan's eligibility Service condition, the Plan Administrator will credit Service in accordance with Sections 1.15(D) and (D). 2.03 BREAK IN SERVICE - PARTICIPATION. An Employee incurs a "Break in Service" if during any applicable 12-consecutive month period he/she does not complete more than 500 Hours of Service with the Employer. The "12-consecutive month period" under this Section 2.03 is the same 12-consecutive month period for which the Plan measures a "Year of Service" under Section 2.02. If the Plan applies the Elapsed Time Method of crediting Service under Section 1.15(D), a Participant incurs a "Break in Service" if the Participant has a Period of Severance of at least 12 consecutive months. (A) Two Year Eligibility. If the Employer under Adoption Agreement Section 2.01 elects a two Years of Service condition for eligibility purposes, an Employee who incurs a one year Break in Service prior to completing two Years of Service is a new Employee on the date he/she first performs an Hour of Service for the Employer after the Break in Service, and the Employee establishes a new Employment Commencement Date for purposes of the initial eligibility computation period under Section 2.02. (B) One Year Hold-Out Rule. The Employer must elect in its Adoption Agreement whether to apply the one year hold-out rule under Code ss.410(a)(5)(C). Under this rule, a Participant will incur a suspension of participation in the Plan after incurring a one year Break in Service and the Plan disregards a Participant's Service completed prior to a Break in Service until the Participant completes one Year of Service following the Break in Service. The Plan suspends the Participant's participation in the Plan as of the first day of the Plan Year following the Plan Year in which the Participant incurs the Break in Service. If the Participant completes one Year of Service following his/her Break in Service, the Plan restores that Participant's pre-Break Service (and the Participant resumes active participation in the Plan) retroactively to the first day of the computation period in which the Participant first completes one Year of Service following his/her Break in Service. The initial computation period under this Section 2.03(B) is the 12-consecutive month period measured from the date the Participant first receives credit for an Hour of Service following the one year Break in Service. The Plan measures any subsequent computation periods, if necessary, in a manner consistent with the Employer's eligibility computation period election in Adoption Agreement Section 2.02. If the Employer elects to apply the one year hold-out rule, the Employer also must elect in its Adoption Agreement whether to limit application of the rule only to a Participant who has incurred a Separation from Service. The Plan Administrator also will apply the one-year hold out rule, if applicable, to an Employee who satisfies the Plan's eligibility conditions but who incurs a Separation from Service and a one year Break in Service prior to becoming a Participant. This Section 2.03(B) does not affect a Participant's vesting credit under Article V and, during a suspension period, the Participant's Account continues to share fully in Trust Fund allocations under Article IX. Furthermore, the Plan Administrator in applying this Section 2.03(B) does not restore any Service disregarded under the Break in Service rule of Section 2.03(A). (C) No Application to 401(k) Arrangement. If the Plan (C) Copyright 2001 First Union National Bank 9 Defined Contribution Plan includes a 401(k) arrangement and the Employer in its Adoption Agreement elects to apply the Section 2.03(B) one year hold-out rule, the Plan Administrator will apply the provisions of Section 2.04 to the deferral contributions portion of the Plan without regard to Section 2.03(B). (D) No Rule of Parity - Participation. For purposes of Plan participation, the Plan does not apply the "rule of parity" under Code ss.410(a)(5)(D). 2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant who incurs a Separation from Service will re-enter the Plan as a Participant on the date of his/her re-employment with the Employer, subject to the one year hold-out rule, if applicable, under Section 2.03(B). An Employee who satisfies the Plan's eligibility conditions but who incurs a Separation from Service prior to becoming a Participant will become a Participant on the later of the Plan Entry Date on which he/she would have entered the Plan had he/she not incurred a Separation from Service or the date of his/her re-employment, subject to the one year hold-out rule, if applicable, under Section 2.03(B). Any Employee who incurs a Separation from Service prior to satisfying the Plan's eligibility conditions becomes a Participant in accordance with Adoption Agreement Section 2.01. 2.05 CHANGE IN EMPLOYMENT STATUS. The Employer in its Adoption Agreement Section 1.11 may elect to exclude certain Employees from Plan participation ("excluded Employees"). If a Participant has not incurred a Separation from Service but becomes an excluded Employee, during the period of exclusion the excluded Employee will not share in the allocation of any Employer contributions or Participant forfeitures, and may not make deferral contributions if the Plan includes a 401(k) arrangement, with respect to Compensation paid to the excluded Employee during the period of exclusion. 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 share fully in Trust Fund allocations under Article IX. If a Participant who becomes an excluded Employee subsequently resumes status as an eligible Employee, the Participant will participate in the Plan immediately upon resuming eligible status, subject to the one year hold-out rule, if applicable, under Section 2.03(B). If an excluded Employee who is not a Participant becomes an eligible Employee, he/she will participate immediately in the Plan if he/she has satisfied the eligibility conditions of Adoption Agreement Section 2.01 and would have been a Participant had he/she not been an excluded Employee during his/her period of Service. Furthermore, the excluded Employee receives credit for vesting under Article V for each included vesting Year of Service notwithstanding the Employee's excluded Employee status. 2.06 ELECTION NOT TO PARTICIPATE. If the Plan is a Standardized Plan, the Plan does not permit an otherwise eligible Employee nor any Participant to elect not to participate in the Plan ("opt-out"). If the Plan is a Nonstandardized Plan, the Employer in its Adoption Agreement must elect whether any eligible Employee may elect irrevocably to opt-out. The Employee prior to his/her Plan Entry Date must file an opt-out election in writing with the Plan Administrator on a form provided by the Plan Administrator for this purpose. (C) Copyright 2001 First Union National Bank 10 Defined Contribution Plan ARTICLE III EMPLOYER CONTRIBUTIONS AND FORFEITURES Part 1. Amount of Employer Contributions and Plan Allocations: Sections 3.01 through 3.06 3.01 EMPLOYER CONTRIBUTIONS. (A) Amount and Types of Contribution. The Employer in its Adoption Agreement will elect the amount and type(s) of Employer Plan contribution(s). The Employer will not make a contribution to the Trust for any Plan Year to the extent the contribution would exceed the Participants' Maximum Permissible Amounts. Unless otherwise provided in an Addendum to its Adoption Agreement, the Employer need not have net profits to make a contribution under the Plan. If the Employer's Plan is a money purchase pension plan and the Employer also maintains a defined benefit pension plan, notwithstanding the money purchase pension plan formula in the Employer's Adoption Agreement, the Employer's required contribution to its money purchase pension plan for a Plan Year is limited to the amount which the Employer may deduct under Code ss.404(a)(7). If the Employer under Code ss.404(a)(7) must reduce its money purchase pension plan contribution, the Plan Administrator will reduce each Participant's allocation in the same ratio as the reduced total Employer contribution bears to the original (unreduced) Employer contribution. (B) Form of Contribution/Related Employer. Subject to the consent of the Trustee, the Employer may make its contribution in property instead of cash, provided the contribution of property is not a prohibited transaction under the Code or under ERISA. Unless the Employer in its Adoption Agreement makes a contrary election, the Plan Administrator will allocate all Employer contributions and forfeitures without regard to which contributing Related Employer directly employs the affected Participants. (C) Time of Payment of Contribution. The Employer may pay its contribution for any Plan Year in one or more installments without interest. Unless otherwise required by contract, by the Code or by ERISA, the Employer may make its contribution to the Plan for a particular Plan Year at such time(s) as the Employer in its sole discretion determines. If the Employer makes a contribution for a particular Plan Year after the close of that Plan Year, the Employer will designate in writing to the Trustee the Plan Year for which the Employer is making its contribution. (D) Return of Employer Contribution. The Employer contributes to the Plan on the condition its contribution is not due to a mistake of fact and the Internal Revenue Service will not disallow the deduction of the Employer's 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 ss.404. The Trustee will not return any portion of the Employer's contribution under the provisions of this Section 3.01(D) more than one year after: (1) The Employer made the contribution by mistake of fact; or (2) 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 3.01(D) for any earnings attributable to the contribution, but the Trustee will decrease the Employer contribution returnable for any losses attributable to the contribution. The Trustee may require the Employer to furnish the Trustee 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. 3.02 DEFERRAL CONTRIBUTIONS. If the Plan includes a 401(k) arrangement, the Employer in its Adoption Agreement must elect the Plan limitations and restrictions, if any, which apply to deferral contributions or to cash or deferred contributions, if applicable. Under Adoption Agreement Section 3.02, for purposes of applying any Plan limit the Employer has elected on deferral contributions, the Employer must elect to take into account the Employee's entire Plan Year Compensation or to limit Compensation to the portion of the Plan Year in which the Employee actually is a Participant. 3.03 MATCHING CONTRIBUTIONS. If the Plan includes a 401(k) arrangement, the Employer in its Adoption Agreement must elect the type(s) of matching contributions, the time period applicable to any matching contribution formula, and as applicable, the amount of matching contributions and the Plan limitations and restrictions, if any, which apply to matching contributions. 3.04 EMPLOYER CONTRIBUTION ALLOCATION. (A) Method of Allocation. The Employer in its Adoption Agreement must specify, subject to this Section 3.04, the manner of allocating Employer contributions to the Trust. For purposes of this Section 3.04, Employer contributions include as applicable, the Employer's nonelective contributions, money purchase pension and target benefit contributions, but do not include deferral contributions or, except under Section 3.04(B), matching contributions. (B) Compensation Taken into Account. The Employer in its Adoption Agreement Section 1.07 must specify the Compensation the Plan Administrator is to take into account in allocating an Employer contribution to a Participant's Account. For the Plan Year in which the Employee first becomes a Participant in the Plan (or in any portion of the Plan), the Employer may elect to take into account the Employee's entire Plan Year Compensation or to limit Compensation to the portion of the Plan Year in which the Employee actually is a Participant. For all other Plan Years, the Plan Administrator will take into account only the Compensation determined for the portion of the Plan Year in which the Employee actually is a Participant. The Plan Administrator must take into account the Employee's entire Compensation for the Plan Year to determine whether the Plan satisfies the top-heavy minimum allocation requirements of Article XII. The (C) Copyright 2001 First Union National Bank 11 Defined Contribution Plan Employer, in its Adoption Agreement, may elect to measure Compensation for allocating its Employer contribution for a Plan Year on the basis of a specified period other than the Plan Year. (C) Top-Heavy Minimum Allocation. Unless the Employer in an Addendum to its Adoption Agreement elects to satisfy any top-heavy minimum allocation requirement in another plan (not maintained under this basic plan document), the Employer in this Plan must satisfy the top-heavy requirements of Article XII. (D) Allocation Conditions. Subject to any restoration allocation required under the Plan, the Plan Administrator will allocate and credit Employer contributions to the Account of each Participant who satisfies the allocation conditions of Section 3.06. (E) Alternative Allocation Formulas. The Plan Administrator will allocate Employer contributions for the Plan Year or other applicable period in accordance with the allocation formula the Employer elects in its Adoption Agreement. The Plan Administrator, in allocating under any allocation formula which is based in whole or in part on Compensation, only will take into account Compensation of those Participants entitled to an allocation. The Employer in its Adoption Agreement must elect, one or more as applicable of the following allocation formulas: (1) Nonintegrated (pro rata) allocation formula. The Plan Administrator will allocate the Employer contributions for a Plan Year in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (2) Two-tiered permitted disparity allocation formula. Under the first tier, the Plan Administrator will allocate the Employer contributions for a Plan Year in the same ratio that each Participant's Compensation plus Excess Compensation (as defined in Adoption Agreement Section 3.04) for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan Year. The allocation under this first tier, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under Section 3.04(D)(4). Under the second tier, the Plan Administrator will allocate any remaining Employer contributions for a Plan Year in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (3) Four-tiered permitted disparity allocation formula. Under the first tier, the Plan Administrator will allocate the Employer contributions for a Plan Year in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year, but not exceeding 3% of each Participant's Compensation. Solely for purposes of this first tier allocation, a "Participant" means, in addition to any Participant who satisfies the allocation conditions of Section 3.06 for the Plan Year, any other Participant entitled to a top-heavy minimum allocation under the Plan. Under the second tier, the Plan Administrator will allocate the Employer contributions for a Plan Year in the same ratio that each Participant's Excess Compensation (as defined in Adoption Agreement Section 3.04) for the Plan Year bears to the total Excess Compensation of all Participants for the Plan Year, but not exceeding 3% of each Participant's Excess Compensation. Under the third tier, the Plan Administrator will allocate the Employer contributions for a Plan Year in the same ratio that each Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan Year. The allocation under this third tier, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (2.7%, 2.4% or 1.3%) listed under Section 3.04(D)(4). Under the fourth tier, the Plan Administrator will allocate any remaining Employer contributions for a Plan Year, in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (4) Maximum disparity table. For purposes of the permitted disparity allocation formulas under this Section 3.04, the applicable percentage is: Integration level % Applicable % Applicable % of taxable for 2-tiered for 4-tiered wage base formula formula --------- ------- ------- 100% 5.7% 2.7% More than 80% but less than 100% 5.4% 2.4% More than 20% (but not less than $10,001) and not more than 80% 4.3% 1.3% 20% (or $10,000, if greater) or less 5.7% 2.7% (5) Overall permitted disparity limits. (i) Annual overall permitted disparity limit. Notwithstanding Sections 3.04(D)(2) and (3), for any Plan Year the Plan benefits any Participant who benefits under another qualified plan or under a simplified employee pension plan (as defined in Code ss.408(k)) maintained by the Employer that provides for permitted disparity (or imputes disparity), the Plan Administrator will allocate Employer contributions to the Account of each Participant in the same ratio that each Participant's Compensation bears to the total (C) Copyright 2001 First Union National Bank 13 Defined Contribution Plan Compensation of all Participants for the Plan Year. (ii) Cumulative permitted disparity limit. Effective for Plan Years beginning after December 31, 1994, the cumulative permitted disparity limit for a Participant is 35 total cumulative permitted disparity years. "Total cumulative permitted disparity years" means the number of years credited to the Participant for allocation or accrual purposes under the Plan, any other qualified plan or simplified employee pension plan (whether or not terminated) ever maintained by the Employer. For purposes of determining the Participant's cumulative permitted disparity limit, the Plan Administrator will treat all years ending in the same calendar year as the same year. If the Participant has not benefited under a defined benefit plan or under a target benefit plan of the Employer for any year beginning after December 31, 1993, the Participant does not have a cumulative permitted disparity limit. For purposes of this Section 3.04(D)(5), a Participant "benefits" under the Plan for any Plan Year during which the Participant receives, or is deemed to receive, a contribution allocation in accordance with Treas. Reg. ss.1.410(b)-3(a). (6) Uniform points allocation formula. The Plan Administrator will allocate the Employer contributions for a Plan Year in the same ratio that each Participant's points (as elected in Adoption Agreement Section 3.04) bear to the total points of all Participants for the Plan Year. (7) Incorporation of contribution formula. The Plan Administrator will allocate the Employer's contributions for a Plan Year in accordance with the contribution formula the Employer has elected under Section 3.01. (8) Target benefit allocation formula. The Plan Administrator will allocate the Employer contributions for a Plan Year as provided in the Employer's target benefit Adoption Agreement. (9) Davis-Bacon contract allocation formula. The Plan Administrator will allocate the Employer contributions for a Plan Year in accordance with the applicable Davis-Bacon contract pursuant to which the Employer has made its contributions for the Plan Year. The Employer's contributions will take into account each Participant's hourly rate, employment category, employment classification and such other factors the Davis-Bacon contract may specify. For purposes of the Plan, "Davis-Bacon contract" includes a contract under any state prevailing wage law. (F) Qualified Nonelective Contributions. The Employer operationally may designate all or any portion of its nonelective contributions as a qualified nonelective contribution. The Employer, to facilitate the Plan Administrator's correction of test failures under Sections 14.08, 14.09 and 14.10, also may make qualified nonelective contributions to the Plan irrespective of whether the Employer in its Adoption Agreement has elected to provide nonelective contributions. The Employer in its Adoption Agreement must elect whether the Plan Administrator will allocate the Employer contributions designated as a qualified nonelective contribution to all Participants or solely to Nonhighly Compensated Employee Participants. The Employer operationally must elect whether the Plan Administrator will allocate qualified nonelective contributions: (1) to eligible Participants pro rata in relation to Compensation; (2) to eligible Participants in the same amount without regard to Compensation (flat dollar); or (3) under the reverse allocation or other similar method. Under the reverse allocation method, the Plan Administrator, subject to Section 3.06, will allocate a qualified nonelective contribution first to the Nonhighly Compensated Employee Participant(s) with the lowest Compensation for the Plan Year not exceeding the Maximum Permissible Amount for each Participant, with any remaining amounts allocated to the next highest paid Nonhighly Compensated Employee Participant(s) not exceeding his/her Maximum Permissible Amount and continuing in this manner until the Plan Administrator has fully allocated the qualified nonelective contribution. (G) Qualified Replacement Plan. The Employer may establish or maintain this Plan as a qualified replacement plan as described in Code ss.4980 under which the Plan may receive a transfer from a terminating qualified plan the Employer also maintains. The Plan Administrator will credit the transferred amounts to a suspense account under the Plan and thereafter the Plan Administrator will allocate the transferred amounts under this Section 3.04(G) in the same manner as the Plan Administrator allocates Employer nonelective contributions, unless the Employer specifies in an Addendum to its Adoption Agreement: (1) to apply such transferred amounts to the Plan's administrative expenses; or (2) if the Plan includes a 401(k) arrangement, the Employer in its Addendum designates such transferred amounts as matching contributions. 3.05 FORFEITURE ALLOCATION. The amount of a Participant's Account forfeited under the Plan is a Participant forfeiture. The Plan Administrator, subject to Section 3.06, will allocate Participant forfeitures at the time and in the manner the Employer specifies in its Adoption Agreement. The Plan Administrator will continue to hold the undistributed, non-Vested portion of the Account of a Participant who has separated from Service solely for his/her benefit until a forfeiture occurs at the time specified in Section 5.09 or if applicable, until the time specified in Section 9.11. Except as provided under Section 5.04, a Participant will not share in the allocation of a forfeiture of any portion of his/her Account. If the Plan includes a 401(k) arrangement, the Plan Administrator first will determine if a Participant's forfeitures are attributable to nonelective or to matching contributions, and the Plan Administrator then will allocate the forfeitures in the manner the Employer has elected in its Adoption Agreement. If the Employer elects to allocate forfeitures to reduce nonelective or matching contributions and the forfeitures exceed the amount of the contribution to which the Plan Administrator will apply the forfeitures, the Plan Administrator will allocate the remaining forfeitures as an additional discretionary nonelective or discretionary matching contribution or the Plan Administrator will apply (C) Copyright 2001 First Union National Bank 13 Defined Contribution Plan the forfeitures to the Employer's nonelective or matching contribution in the succeeding Plan Year. A Participant's forfeiture is attributable to matching contributions if the forfeiture is: (1) a non-Vested matching Account forfeited in accordance with Section 5.09 or, if applicable, Section 9.11; (2) a non-Vested excess aggregate contribution (adjusted for earnings) forfeited in correcting for nondiscrimination failures under Section 14.09 or Section 14.10; or (3) an "associated matching contribution," which includes any Vested or non-Vested matching contribution (adjusted for earnings) made with respect to elective deferrals or Employee contributions the Plan Administrator distributes in correction of Code ss.402(g), Code ss.415 or nondiscrimination failures under Sections 14.07, 14.08, 14.09 or 14.10. An Employee forfeits an associated matching contribution unless the matching contribution is a Vested excess aggregate contribution distributed in accordance with Sections 14.09 or 14.10. 3.06 ALLOCATION CONDITIONS. The Plan Administrator will determine the allocation conditions which apply to Employer contributions (including matching contributions) and Participant forfeitures on the basis of the Plan Year (or on any other basis representing a reasonable division of the Plan Year) in accordance with the Employer's elections in its Adoption Agreement. A Participant does not accrue an Employer contribution with respect to a Plan Year or other applicable period until the Participant satisfies the allocation conditions described in this Section 3.06. The Plan under a 401(k) arrangement may not impose any allocation conditions with respect to deferral contributions, safe harbor contributions or SIMPLE contributions. (A) Hours of Service Requirement. Except as required to satisfy the top-heavy minimum allocation requirement of Article XII, the Plan Administrator will not allocate any portion of an Employer contribution for a Plan Year to any Participant's Account if the Participant does not complete the applicable minimum Hours of Service or consecutive calendar days of employment requirement the Employer specifies in its Adoption Agreement for the relevant period. The Employer in its Standardized Adoption Agreement must elect whether to require a Participant to complete during a Plan Year 501 Hours of Service or to be employed for at least 91 consecutive calendar days under the Elapsed Time Method, to share in the allocation of Employer contributions for that Plan Year where the Participant is not employed by the Employer on the Accounting Date of that Plan Year, including the Plan Year in which the Employer terminates the Plan. (B) "Last Day" Employment Requirement. If the Plan is a Standardized Plan, a Participant who is employed by the Employer on the Accounting Date of a Plan Year will share in the allocation of Employer contributions for that Plan Year without regard to the Participant's Hours of Service completed during that Plan Year. If the Plan is a Nonstandardized Plan, the Employer must specify in its Adoption Agreement whether the Participant will benefit under the Plan if the Participant is not employed by the Employer on the Accounting Date of the Plan Year or other specified date. If the Plan is a Nonstandardized money purchase Plan or target benefit Plan, the Plan conditions Employer contribution allocations on a Participant's employment with the Employer on the last day of the Plan Year for the Plan Year in which the Employer terminates the Plan. (C) Death, Disability or Normal Retirement Age. Unless the Employer otherwise elects in its Adoption Agreement, any allocation condition elected under Adoption Agreement Section 3.06 does not apply for a Plan Year if a Participant incurs a Separation from Service during the Plan Year on account of the Participant's death, Disability or attainment of Normal Retirement Age in the current Plan Year or on account of the Participant's Disability or attainment of Normal Retirement Age in a prior Plan Year. (D) Other Conditions. In allocating Employer contributions under the Plan, the Plan Administrator will not apply any other conditions except those the Employer elects in its Adoption Agreement or otherwise as the Plan may require. (E) Suspension of Allocation Conditions Under a Nonstandardized Plan. The suspension provisions of this Section 3.06(E) do not apply unless the Employer elects in its Nonstandardized Adoption Agreement to apply them. If Section 3.06(E) applies, the Plan suspends for a Plan Year the Adoption Agreement Section 3.06 allocation conditions if the Plan fails in that Plan Year to satisfy coverage under the Ratio Percentage Test, unless in an Addendum to its Adoption Agreement, the Employer specifies the Plan Administrator will apply this Section 3.06(E) using the Average Benefit Percentage Test described in Code ss.410(b)(2). A Plan satisfies coverage under the Ratio Percentage Test if, on the last day of the Plan Year, the Plan's benefiting ratio of the Nonhighly Compensated Includible Employees is at least 70% of the benefiting ratio of the Highly Compensated Includible Employees. The benefiting ratio of the Nonhighly Compensated Includible Employees is the number of Nonhighly Compensated Includible Employees benefiting under the Plan over the number of the Includible Employees who are Nonhighly Compensated Employees. "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 or the nonresident alien exclusions under Code ss.410(b)(3) or by reason of the age and service requirements of Article II; and (2) those Employees who incur a Separation from Service during the Plan Year and for the Plan Year fail to complete more than 500 Hours of Service or at least 91 consecutive calendar days under the Elapsed Time Method. For purposes of coverage, an Employee is benefiting under the Plan on a particular date if, under Section 3.04 of the Plan, he/she is entitled to an Employer contribution or to a Participant forfeiture allocation for the Plan Year. If this Section 3.06(E) applies for a Plan Year, the Plan Administrator will suspend the allocation conditions for the Nonhighly Compensated Includible Employees who are Participants, beginning first with the Includible Employee(s) employed by 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 the allocation conditions for each Includible Employee who incurred an earlier (C) Copyright 2001 First Union National Bank 14 Defined Contribution Plan Separation from Service, from the latest to the earliest Separation from Service date, until the Plan satisfies coverage for the Plan Year. If two or more Includible Employees have a Separation from Service on the same day, the Plan Administrator will suspend the allocation conditions for all such Includible Employees, irrespective of whether the Plan can satisfy coverage by accruing benefits for fewer than all such Includible Employees. If the Plan for any Plan Year suspends the allocation conditions for an Includible Employee, that Employee will share in the allocation for that Plan Year of the Employer contribution and Participant forfeitures, if any, without regard to whether he/she has satisfied the allocation conditions of this Section 3.06. If the Plan includes Employer matching contributions subject to ACP testing, this Section 3.06(E) applies separately to the Code ss.401(m) portion of the Plan. Part 2. Limitations On Allocations: Sections 3.07 through 3.18 [Note: Sections 3.07 through 3.10 apply only to Participants in this Plan who do not participate, and who have never participated, in another qualified plan, individual medical account (as defined in Code ss.415(l)(2)), simplified employee pension plan (as defined in Code ss.408(k)) or welfare benefit fund (as defined in Code ss.419(e)) maintained by the Employer, which provides an Annual Addition.] 3.07 ANNUAL ADDITIONS LIMITATION. The amount of Annual Additions which the Plan Administrator may allocate under this Plan to a Participant's Account for a Limitation Year may not exceed the Maximum Permissible Amount. If the Annual Additions the Plan Administrator otherwise would allocate under the Plan to a Participant's Account would for the Limitation Year exceed the Maximum Permissible Amount, the Plan Administrator will not allocate the Excess Amount, but will instead take any reasonable, uniform and nondiscriminatory action the Plan Administrator determines necessary to avoid allocation of an Excess Amount. Such actions include, but are not limited to, those described in this Section 3.07. If the Plan includes a 401(k) arrangement, the Plan Administrator may apply this Section 3.07 in a manner which maximizes the allocation to a Participant of Employer contributions (exclusive of the Participant's deferral contributions). Notwithstanding any contrary Plan provision, the Plan Administrator, for the Limitation Year, may: (1) suspend or limit a Participant's additional Employee contributions or deferral contributions; (2) notify the Employer to reduce the Employer's future Plan contribution(s) as necessary to avoid allocation to a Participant of an Excess Amount; or (3) suspend or limit the allocation to a Participant of any Employer contribution previously made to the Plan (exclusive of deferral contributions) or of any Participant forfeiture. If an allocation of Employer contributions previously made (excluding a Participant's deferral contributions) or of Participant forfeitures would result in an Excess Amount to a Participant's Account, the Plan Administrator will allocate 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 Plan Administrator will make this allocation in accordance with the Plan's allocation method as if the Participant whose Account otherwise would receive the Excess Amount, is not eligible for an allocation of Employer contributions. If the Plan Administrator allocates to a Participant an Excess Amount, Plan Administrator must dispose of the Excess Amount in accordance with Section 3.10 (relating to certain "reasonable errors" and allocation of forfeitures) or, if Section 3.10 does not apply, the Plan Administrator will dispose of the Excess Amount under Section 9.12. 3.08 ESTIMATING COMPENSATION. Prior to the determination of the Participant's actual Compensation for a Limitation Year, the Plan Administrator may determine the Maximum Permissible Amount on the basis of the Participant's estimated annual Compensation for such Limitation Year. The Plan Administrator must make this determination on a reasonable and uniform basis for all Participants similarly situated. The Plan Administrator must reduce the allocation of any Employer contributions (including any allocation of forfeitures) based on estimated annual Compensation by any Excess Amounts carried over from prior Limitation Years. 3.09 DETERMINATION BASED ON ACTUAL COMPENSATION. As soon as is administratively feasible after the end of the Limitation Year, the Plan Administrator will determine the Maximum Permissible Amount for the Limitation Year on the basis of the Participant's actual Compensation for such Limitation Year. 3.10 DISPOSITION OF ALLOCATED EXCESS AMOUNT. If, because of a reasonable error in estimating a Participant's actual Limitation Year Compensation, because of the allocation of forfeitures, because of a reasonable error in determining a Participant's deferral contributions or because of any other facts and circumstances the Internal Revenue Service ("Revenue Service") considers to constitute reasonable error, a Participant receives an allocation of an Excess Amount for a Limitation Year, the Plan Administrator will dispose of such Excess Amount as follows: (a) The Plan Administrator first will return to the Participant any Employee contributions (adjusted for earnings) and then any Participant deferral contributions (adjusted for earnings) to the extent necessary to reduce or eliminate 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, the Plan Administrator then 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. If the Employer's Plan is a profit sharing plan, a Participant who is a Highly Compensated Employee may elect to limit his/her Compensation for allocation purposes to the extent necessary to reduce his/her allocation for the Limitation Year to the Maximum Permissible Amount and to eliminate the Excess Amount. (c) If, after the application of Paragraph (a), an Excess Amount still exists and the Plan does not cover (C) Copyright 2001 First Union National Bank 15 Defined Contribution Plan the Participant at the end of the Limitation Year, the Plan Administrator then will hold the Excess Amount unallocated in a suspense account. The Plan Administrator will apply the suspense account to reduce Employer Contributions (including the 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). Amounts held unallocated in a suspense account will not share in any allocation of Trust Fund net income, gain or loss. (d) The Plan Administrator under Paragraphs (b) or (c) will not distribute any Excess Amount(s) to Participants or to former Participants. [Note: Sections 3.11 through 3.15 apply only to Participants who, in addition to this Plan, participate in one or more M&P defined contribution plans (including Paired Plans), welfare benefit funds (as defined in Code ss.419(e)), individual medical accounts (as defined in Code ss.415(l)(2), or simplified employee pension plans (as defined in Code ss.408(k)) maintained by the Employer and which provide an Annual Addition during the Limitation Year (collectively "Code ss.415 aggregated plans").] 3.11 COMBINED PLANS ANNUAL ADDITIONS LIMITATION. The amount of Annual Additions which the Plan Administrator may allocate under this Plan to a Participant's Account for a Limitation Year may not exceed the Maximum Permissible Amount, reduced by the sum of any Annual Additions allocated to the Participant's accounts for the same Limitation Year under the Code ss.415 aggregated plans. If the amount the Employer otherwise would allocate to the Participant's Account under this Plan would cause the Annual Additions for the Limitation Year to exceed this Section 3.11 combined plans limitation, the Employer will reduce the amount of its allocation to that Participant's Account in the manner described in Section 3.07, so the Annual Additions under all of the Code ss.415 aggregated plans for the Limitation Year will equal the Maximum Permissible Amount. If the Plan Administrator allocates to a Participant an amount attributed to this Plan under Section 3.14 which exceeds this Section 3.11 combined plans limitation, the Plan Administrator must dispose of the Excess Amount in accordance with Section 3.15 (relating to certain "reasonable errors" and allocation of forfeitures) or, if Section 3.15 does not apply, the Plan Administrator will dispose of the Excess Amount under Section 9.12. 3.12 ESTIMATING COMPENSATION. Prior to the determination of the Participant's actual Compensation for the Limitation Year, the Plan Administrator may determine the Section 3.11 combined plans limitation on the basis of the Participant's estimated annual Compensation for such Limitation Year. The Plan Administrator will make this determination on a reasonable and uniform basis for all Participants similarly situated. The Plan Administrator must reduce the allocation of any Employer contribution (including the allocation of Participant forfeitures) based on estimated annual Compensation by any Excess Amounts carried over from prior years. 3.13 DETERMINATION BASED ON ACTUAL COMPENSATION. As soon as is administratively feasible after the end of the Limitation Year, the Plan Administrator will determine the Section 3.11 combined plans limitation on the basis of the Participant's actual Compensation for such Limitation Year. 3.14 ORDERING OF ANNUAL ADDITION ALLOCATIONS. If, because of a reasonable error in estimating a Participant's actual Limitation Year Compensation, because of the allocation of forfeitures, because of a reasonable error in determining a Participant's deferral contributions or because of any other facts and circumstances the Revenue Service considers to constitute reasonable error, a Participant's Annual Additions under this Plan and the Code ss.415 aggregated plans result in an Excess Amount, such Excess Amount will consist of the Amounts last allocated. The Plan Administrator will determine the Amounts last allocated by treating the Annual Additions attributable to a simplified employee pension as allocated first, followed by allocation to a welfare benefit fund or individual medical account, irrespective of the actual allocation date. If the Plan Administrator allocates an Excess Amount to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, unless the Employer specifies otherwise in an Addendum to its Adoption Agreement, the Excess Amount attributed to this Plan will equal the product of: (a) the total Excess Amount allocated as of such date, multiplied by (b) the ratio of (i) the Annual Additions allocated to the Participant as of such date for the Limitation Year under the Plan to (ii) the total Annual Additions allocated to the Participant as of such date for the Limitation Year under this Plan and the Code ss.415 aggregated plans. 3.15 DISPOSITION OF ALLOCATED EXCESS AMOUNT ATTRIBUTABLE TO PLAN. The Plan Administrator will dispose of any allocated Excess Amounts described in and attributed to this Plan under Section 3.14 as provided in Section 3.10 or, as applicable under Section 9.12. [Note: Section 3.16 applies only to Participants who, in addition to this Plan, participate in one or more qualified defined contribution plans maintained by the Employer during the Limitation Year, but which are not M&P plans described in Sections 3.11 through 3.15.] 3.16 OTHER DEFINED CONTRIBUTION PLANS LIMITATION. If a Participant is a participant in another defined contribution plan maintained by the Employer, but which plan is not an M&P plan described in Sections 3.11 through 3.15, the Plan Administrator must limit the allocation to the Participant of Annual Additions under this Plan as provided in Sections 3.11 through 3.15, as though the other defined contribution plan were an M&P plan, unless the Employer specifies otherwise in an Addendum to its Adoption Agreement. (C) Copyright 2001 First Union National Bank 16 Defined Contribution Plan 3.17 DEFINED BENEFIT PLAN LIMITATION. If the Employer maintains a defined benefit plan, or has ever maintained a defined benefit plan which the Employer has terminated, then the sum of the defined benefit plan fraction and the defined contribution plan fraction for any Participant for any Limitation Year beginning before January 1, 2000, must not exceed 1.0. The 1.0 limitation of the immediately preceding sentence does not apply for Limitation Years beginning after December 31, 1999, unless the Employer in Appendix B to its Adoption Agreement specifies a later effective date. To the extent necessary to satisfy the 1.0 limitation, if the Employer still maintains the defined benefit plan as an active plan, the Employer in its Adoption Agreement Appendix B will elect whether to reduce the Participant's projected annual benefit under the defined benefit plan under which the Participant participates, or to reduce its contribution or allocation on behalf of the Participant to the defined contribution plan(s) under which the Participant participates. If the Employer has frozen or terminated the defined benefit plan, the Employer will reduce its contribution or allocation on behalf of the Participant to the defined contribution plan(s) under which the Participant participates. The Employer must provide in Appendix B to its Adoption Agreement the manner in which the Plan will satisfy the top-heavy requirements of Code ss.416 after taking into account the existence (or prior maintenance) of the defined benefit plan. 3.18 DEFINITIONS - ARTICLE III. For purposes of Article III: (a) "Annual Additions" means the sum of the following amounts allocated to a Participant's Account for a Limitation Year: (i) all Employer contributions (including Participant deferral contributions); (ii) all forfeitures; (iii) all Employee contributions; (iv) Excess Amounts reapplied to reduce Employer contributions under Section 3.10 or Section 3.15; (v) amounts allocated after March 31, 1984, to an individual medical account (as defined in Code ss.415(l)(2)) included as part of a pension or annuity plan maintained by the Employer; (vi) 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 ss.419A(d)(3)) under a welfare benefit fund (as defined in Code ss.419(e)) maintained by the Employer; (vii) amounts allocated under a Simplified Employee Pension Plan; and (viii) corrected excess contributions described in Code ss.401(k) and corrected excess aggregate contributions described in Code ss.401(m). Excess deferrals described in Code ss.402(g), which the Plan Administrator corrects by distribution by April 15 of the following calendar year, are not Annual Additions. (b) "Compensation" for purposes of applying the limitations of Part 2 of this Article III, means Compensation as defined in Section 1.07, except, for Limitation Years beginning after December 31, 1997, Compensation includes Elective Contributions, irrespective of whether the Employer has elected to include these amounts as Compensation under Section 1.07 of its Adoption Agreement and any exclusion the Employer has elected in Section 1.07 of the Adoption Agreement does not apply. (c) "Employer" means the Employer and any Related Employer. Solely for purposes of applying the limitations of Part 2 of this Article III, the Plan Administrator will determine Related Employer by modifying Code ss.ss.414(b) and (c) in accordance with Code ss.415(h). (d) "Excess Amount" means the excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount. (e) "Limitation Year" means the period the Employer elects in its Adoption Agreement Section 1.24. All qualified plans of the Employer must use the same Limitation 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. (f) "M&P Plan" means a prototype plan the form of which is the subject of a favorable opinion letter (or prior to Revenue Procedure 2000-20, a favorable notification or favorable opinion letter) from the Revenue Service. (g) "Maximum Permissible Amount" means the lesser of: (i) $30,000 (or, if greater, the $30,000 amount as adjusted under Code ss.415(d)), 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 Plan Administrator will multiply the $30,000 (or adjusted) limitation by the following fraction: Number of months in the short Limitation Year --------------------------------------------- 12 The 25% limitation does not apply to any contribution for medical benefits within the meaning of Code ss.401(h) or Code ss.419A(f)(2) which otherwise is an Annual Addition. (h) "Defined contribution plan" means 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 Plan Administrator 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 Part 2 of this Article III, employee contributions made to a defined benefit plan maintained by the Employer is a separate defined contribution plan. The Plan Administrator also will treat as a defined contribution plan an individual medical account (as defined in Code ss.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 ss.419(e) maintained by the Employer to the extent there are post-retirement medical benefits (C) Copyright 2001 First Union National Bank 17 Defined Contribution Plan allocated to the separate account of a key employee (as defined in Code ss.419A(d)(3)). (i) "Defined benefit plan" means a retirement plan which does not provide for individual accounts for Employer contributions. All defined benefit plans (whether or not terminated) maintained by the Employer are a single plan. [Note: The definitions in Paragraphs (j), (k) and (l) apply only if the limitation described in Section 3.17 applies to the Plan.] (j) "Defined benefit plan fraction" means the following fraction: Projected annual benefit of the Participant under the defined benefit plan(s) ------------------------------------------------------------ The lesser of: (i) 125% (subject to the "100% limitation" in Paragraph (l)) of the dollar limitation in effect under Code ss.415(b)(1)(A) for the Limitation Year, or (ii) 140% of the Participant's average Compensation for his/her high three (3) consecutive Years of Service To determine the denominator of this fraction, the Plan Administrator will make any adjustment required under Code ss.415(b) and will determine a Year of Service, unless the Employer provides otherwise in an Addendum to its Adoption Agreement, as a Plan Year in which the Employee completed at least 1,000 Hours of Service. The "projected annual benefit" is the annual retirement benefit (adjusted to an actuarially equivalent straight life annuity if the defined benefit plan expresses such benefit in a form other than a straight life annuity or qualified joint and survivor annuity) of the Participant under the terms of the defined benefit plan on the assumptions he/she continues employment until his/her normal retirement age (or current age, if later) as stated in the defined benefit plan, his/her compensation continues at the same rate as in effect in the Limitation Year under consideration until the date of his/her normal retirement age and all other relevant factors used to determine benefits under the defined benefit plan remain constant as of the current Limitation Year for all future Limitation Years. Current Accrued Benefit. If the Participant accrued benefits in one or more defined benefit plans maintained by the Employer which were in existence on May 6, 1986, the dollar limitation used in the denominator of this fraction will not be less than the Participant's Current Accrued Benefit. A Participant's Current Accrued Benefit is the sum of the annual benefits under such defined benefit plans which the Participant had accrued as of the end of the 1986 Limitation Year (the last Limitation Year beginning before January 1, 1987), determined without regard to any change in the terms or conditions of the defined benefit plan made after May 5, 1986, and without regard to any cost of living adjustment occurring after May 5, 1986. This Current Accrued Benefit rule applies only if the defined benefit plans individually and in the aggregate satisfied the requirements of Code ss.415 as in effect at the end of the 1986 Limitation Year. (k) "Defined contribution plan fraction" means the following fraction: The sum, as of the close of the Limitation Year, of the Annual Additions for all Limitation Years to the Participant's Account under the defined contribution plan(s) --------------------------------------------------------- The sum of the lesser of the following amounts determined for the Limitation Year and for each prior Limitation Year of service with the Employer: (i) 125% (subject to the "100% limitation" in Paragraph (l)) of the dollar limitation in effect under Code ss.415(c)(1)(A) for the Limitation Year (determined without regard to the special dollar limitations for employee stock ownership plans), or (ii) 35% of the Participant's Compensation for the Limitation Year For purposes of determining the defined contribution plan fraction, the Plan Administrator will not recompute Annual Additions in Limitation Years beginning prior to January 1, 1987, to treat all Employee contributions as Annual Additions. If the Plan satisfied Code ss.415 for Limitation Years beginning prior to January 1, 1987, the Plan Administrator will redetermine the defined contribution plan fraction and the defined benefit plan fraction as of the end of the 1986 Limitation Year, in accordance with this Section 3.18. If the sum of the redetermined fractions exceeds 1.0, the Plan Administrator will subtract permanently from the numerator of the defined contribution plan fraction an amount equal to the product of: (1) the excess of the sum of the fractions over 1.0, times (2) the denominator of the defined contribution plan fraction. In making the adjustment, the Plan Administrator must disregard any accrued benefit under the defined benefit plan which is in excess of the Current Accrued Benefit. This Plan continues any transitional rules applicable to the determination of the defined contribution plan fraction under the Plan as of the end of the 1986 Limitation Year. (l) "100% limitation" means the limitation in Code ss.416(h) which applies if the plan is top-heavy. If the 100% limitation applies, the Plan Administrator must determine the denominator of the defined benefit plan fraction and the denominator of the defined contribution plan fraction by substituting 100% for 125%. If this Plan is a Standardized Plan, the 100% limitation applies in all Limitation Years, unless the Employer specifies otherwise in an Addendum to its Adoption Agreement. If the Employer overrides the 100% limitation under a Standardized Plan, the Employer must specify in its Addendum the manner in which the Plan satisfies the extra minimum benefit requirement of Code ss.416(h) and the 100% limitation must continue to apply if the Plan's top-heavy ratio exceeds 90%. If this Plan is a Nonstandardized Plan, the 100% limitation applies only if: (i) the Plan's top-heavy ratio exceeds 90%; or (ii) the Plan's top-heavy ratio is greater than 60%, and the Employer does not specify in its Adoption Agreement to provide extra minimum benefits which satisfy Code ss.416(h)(2). (C) Copyright 2001 First Union National Bank 18 Defined Contribution Plan ARTICLE IV PARTICIPANT CONTRIBUTIONS 4.01 PARTICIPANT CONTRIBUTIONS. For purposes of this Article IV, Participant contributions means all Employee contributions described in Section 4.02, deductible Participant contributions described in Section 4.03 ("DECs") and rollover contributions described Section 4.04. 4.02 EMPLOYEE CONTRIBUTIONS. An Employee contribution is a nondeductible contribution which a Participant makes to the Trust as permitted under this Section 4.02. A deferral contribution made by a Participant under a 401(k) arrangement is not an Employee contribution. Employee contributions must satisfy the nondiscrimination requirements of Code ss.401(m). See Section 14.09. An Employer must elect in its Adoption Agreement whether to permit Employee contributions. If the Employer elects to permit Employee contributions, the Employer also must specify in its Adoption Agreement any conditions or limitations which may apply to Employee contributions. If the Employer permits Employee contributions, the Employer operationally will determine if a Participant will make Employee contributions through payroll deduction or by other means. The Employer must elect in its Adoption Agreement whether the Employer will make matching contributions with respect to any Employee contributions and any conditions or limitations which may apply to those matching contributions. Any matching contribution must satisfy the nondiscrimination requirements of Code ss.401(m). See Section 14.09. 4.03 DECs. A DEC is a deductible Participant contribution made to the Plan for a taxable year commencing prior to 1987. If a Participant has made DECs to the Plan, the Plan Administrator must maintain a separate Account for the Participant's DECs as adjusted for earnings, including DECs which are part of a rollover contribution described in Section 4.04. The DECs Account is part of the Participant's Account for all purposes of the Plan, except for purposes of determining the top-heavy ratio under Article XII. The Plan Administrator may not use a Participant's DECs Account to purchase life insurance on the Participant's behalf. 4.04 ROLLOVER CONTRIBUTIONS. A rollover contribution is an amount of cash or property which the Code permits an eligible Employee or Participant to transfer directly or indirectly to this Plan from another qualified plan. A rollover contribution excludes Employee contributions, as adjusted for earnings. An Employer operationally and on a nondiscriminatory basis, may elect to permit or not to permit rollover contributions to this Plan or may elect to limit an eligible Employee's right or a Participant's right to make a rollover contribution. If an Employer permits rollover contributions, any Participant (or as applicable, any eligible Employee), with the Employer's written consent and after filing with the Trustee the form prescribed by the Plan Administrator, may make a rollover contribution to the Trust. Before accepting a rollover contribution, the Trustee may require a Participant (or eligible Employee) to furnish satisfactory evidence the proposed transfer is in fact a "rollover contribution" which the Code permits an employee to make to a qualified plan. The Trustee, in its sole discretion, may decline to accept a rollover contribution of property which could: (1) generate unrelated business taxable income; (2) create difficulty or undue expense in storage, safekeeping or valuation; or (3) create other practical problems for the Trust. A rollover contribution is not an Annual Addition under Part 2 of Article III. If an eligible Employee makes a rollover contribution to the Trust prior to satisfying the Plan's eligibility conditions, the Plan Administrator and Trustee must treat the Employee as a limited Participant (as described in Rev. Rul. 96-48 or in any successor ruling). A limited Participant does not share in the Plan's allocation of Employer contributions nor Participant forfeitures and may not make deferral contributions if the Plan includes a 401(k) arrangement until he/she actually becomes a Participant in the Plan. If a limited Participant has a Separation from Service prior to becoming a Participant in the Plan, the Trustee will distribute his/her rollover contributions Account to him/her in accordance with Article VI as if it were an Employer contributions Account. 4.05 PARTICIPANT CONTRIBUTIONS VESTING. A Participant's Participant contributions Account is, at all times, 100% Vested. 4.06 PARTICIPANT CONTRIBUTIONS DISTRIBUTION. Subject to any contrary Employer election in its Adoption Agreement Appendix A, an Employee, after attaining age 70 1/2 may elect to receive distribution prior to Separation from Service ("in-service distribution") of all or any part of his/her Participant contributions Account. The Employer in its Adoption Agreement Section 6.01 must elect the additional in-service distribution election rights, if any, a Participant has with respect to his/her Participant contributions Account. For purposes of the Employer's Adoption Agreement elections regarding in-service distribution of Participant contributions, a Participant's Employee contributions also includes DECs. A Participant will not incur a forfeiture of any Account under the Plan solely as a result of the distribution of his/her Participant contributions. The Trustee, following a Participant's Separation from Service, will distribute to the Participant his/her Participant contributions Account in accordance with Article VI in the same manner as the Trustee distributes the Participant's Employer contributions Account. 4.07 PARTICIPANT CONTRIBUTIONS INVESTMENT AND ACCOUNTING. The Plan Administrator must maintain a separate Account in the name of each Participant to reflect his/her Participant contributions (including, if applicable, the different types of Participant contributions), as adjusted for earnings. The Trustee will invest all Participant contributions as part of the Trust Fund. (C) Copyright 2001 First Union National Bank 19 Defined Contribution Plan ARTICLE V VESTING 5.01 NORMAL/EARLY RETIREMENT AGE. The Employer in its Adoption Agreement must specify the Plan's Normal Retirement Age. An Employer in its Adoption Agreement may specify an Early Retirement Age. A Participant's Account Balance derived from Employer contributions is 100% Vested upon and after his/her attaining Normal Retirement Age (or if applicable, Early Retirement Age) if the Participant is employed by the Employer on or after that date. 5.02 PARTICIPANT DEATH OR DISABILITY. Unless the Employer elects otherwise in its Adoption Agreement, a Participant's Account Balance derived from Employer contributions is 100% Vested if the Participant's Separation from Service is a result of his/her death or his/her Disability. 5.03 VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02, for each Year of Service as described in Section 5.06, a Participant's Vested percentage of his/her Account Balance derived from Employer contributions equals the percentage under the vesting schedule the Employer has elected in its Adoption Agreement. For purposes of Adoption Agreement Section 5.03, "6-year graded," "3-year cliff," "7-year graded" or "5-year cliff" means an Employee's Vested percentage, based on each included Year of Service, under the following applicable schedule: 6-year graded 7-year graded 0-1 year / 0% 0-2 years / 0% 2 years / 20% 3 years / 20% 3 years / 40% 4 years / 40% 4 years / 60% 5 years / 60% 5 years / 80% 6 years / 80% 6 years / 100% 7 years / 100% 3-year cliff 5-year cliff 0-2 years / 0% 0-4 years / 0% 3 years / 100% 5 years / 100% (A) "Grossed-Up" Vesting Formula. If the Trustee makes a distribution (other than a cash-out distribution described in Section 5.04) to a partially-Vested Participant, and the Participant has not incurred a Forfeiture Break in Service at the relevant time, the provisions of this Section 5.03(A) apply to the Participant's Account Balance. At any relevant time following the distribution, the Plan Administrator will determine the Participant's Vested Account Balance derived from Employer contributions in accordance with the following formula: P(AB + D) - D. To apply this formula, "P" is the Participant's current vesting percentage at the relevant time, "AB" is the Participant's Employer-derived Account Balance at the relevant time and "D" is the amount of the earlier distribution. If, under a restated Plan, the Plan has made distribution to a partially-Vested Participant prior to its restated Effective Date and is unable to apply the cash-out provisions of Section 5.04 to that prior distribution, this special vesting formula also applies to that Participant's remaining Account Balance. The Employer, in an Addendum to its Adoption Agreement, may elect to modify this formula to read as follows: P(AB + (R x D)) - (R x D). For purposes of this alternative formula, "R" is the ratio of "AB" to the Participant's Employer-derived Account Balance immediately following the earlier distribution. (B) Special Vesting Elections. The Employer in its Adoption Agreement may elect other specified vesting provisions which are consistent with Code ss.411 and applicable Treasury regulations. 5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/ RESTORATION OF FORFEITED ACCOUNT BALANCE. If, pursuant to Article VI, a partially-Vested Participant receives a cash-out distribution before he/she incurs a Forfeiture Break in Service, the Participant will incur an immediate forfeiture of the non-Vested portion of his/her Account Balance. If a partially-Vested Participant's Account is entitled to an allocation of Employer contributions or Participant forfeitures for the Plan Year in which he/she otherwise would incur a forfeiture by reason of a cash-out distribution, the Plan Administrator will apply the cash-out forfeiture rule as if the partially-Vested Participant received a cash-out distribution on the first day of the immediately following Plan Year. A partially-Vested Participant is a Participant whose Vested percentage determined under Section 5.03 is more than 0% but is less than 100%. A cash-out distribution is a distribution to the Participant (whether involuntary or with required consent as described in Article VI), of his/her entire Vested Account Balance due to the Participant's Separation from Service. (A) Forfeiture Restoration and Conditions for Restoration. A partially-Vested Participant re-employed by the Employer after receiving a cash-out distribution of the Vested percentage of his/her Account Balance may repay to the Trust the entire amount of the cash-out distribution attributable to Employer contributions without any adjustment for gains and losses, unless the Participant no longer has a right to restoration under this Section 5.04(A). If a re-employed Participant repays his/her cash-out distribution, the Plan Administrator, subject to the conditions of this Section 5.04(A), must restore the Participant's Account Balance attributable to Employer contributions to the same dollar amount as the dollar amount of his/her Account Balance 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 Account Balance includes restoration of all Protected Benefits with respect to that restored Account Balance, in accordance with applicable Treasury regulations. The Plan Administrator will not restore a re-employed Participant's Account Balance under this Section 5.04 (A) if: (C) Copyright 2001 First Union National Bank 20 Defined Contribution Plan (1) 5 years have elapsed since the Participant's first re-employment date with the Employer following the cash-out distribution; (2) The Participant is not in the Employer's Service on the date the Participant repays his/her cash-out distribution; or (3) The Participant has incurred a Forfeiture Break in Service. This condition also applies if the Participant makes repayment within the Plan Year in which he/she incurs the Forfeiture Break in Service and that Forfeiture Break in Service would result in a complete forfeiture of the amount the Plan Administrator otherwise would restore. (B) Time and Method of Forfeiture Restoration. If none of the conditions in Section 5.04(A) preventing restoration of the Participant's Account Balance applies, the Plan Administrator will restore the Participant's Account Balance as of the Plan Year Accounting Date coincident with or immediately following the repayment. To restore the Participant's Account Balance, the Plan Administrator, to the extent necessary, will allocate to the Participant's Account: (1) First, the amount, if any, of Participant forfeitures the Plan Administrator otherwise would 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. In an Addendum to its Adoption Agreement, the Employer may eliminate as a means of restoration any of the amounts described in clauses (1), (2) and (3) or may change the order of priority of these amounts. To the extent the amounts described in clauses (1), (2) and (3) are insufficient to enable the Plan Administrator to make the required restoration, the Employer must contribute, without regard to any requirement or condition of Article III, the additional amount necessary to enable the Plan Administrator to make the required restoration. If, for a particular Plan Year, the Plan Administrator must restore the Account Balance of more than one re-employed Participant, the Plan Administrator will make the restoration allocations from the amounts described in clauses (1), (2) and (3) 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. A cash-out restoration allocation is not an Annual Addition under Part 2 of Article III. (C) Deemed Cash-out of 0% Vested Participant. Except as the Employer may provide in an Addendum to its Adoption Agreement, the deemed cash-out rule of this Section 5.04(C) applies to any 0% Vested Participant. A "0% Vested Participant" is a Participant whose Account Balance derived from Employer contributions is entirely forfeitable at the time of his/her Separation from Service. If a 0% Vested Participant's Account is not entitled to an allocation of Employer contributions for the Plan Year in which the Participant has a Separation from Service, the Plan Administrator will apply the deemed cash-out rule as if the 0% Vested Participant received a cash-out distribution on the date of the Participant's Separation from Service. If a 0% Vested Participant's Account is entitled to an allocation of Employer contributions or Participant forfeitures for the Plan Year in which the Participant has a Separation from Service, the Plan Administrator will apply the deemed cash-out rule as if the 0% Vested Participant received a cash-out distribution on the first day of the first Plan Year beginning after his/her Separation from Service. For purposes of applying the restoration provisions of this Section 5.04, the Plan Administrator will treat a re-employed 0% Vested Participant as repaying his/her cash-out "distribution" on the date of the Participant's re-employment with the Employer. 5.05 ACCOUNTING FOR CASH-OUT REPAYMENT. As soon as is administratively practicable, the Plan Administrator will credit to the Participant's Account the cash-out amount a Participant has repaid to the Plan. Pending the restoration of the Participant's Account Balance, the Plan Administrator under Section 9.08(B) may direct the Trustee to place the Participant's cash-out repayment in a temporary segregated investment Account. Unless the cash-out repayment qualifies as a Participant rollover contribution, the Plan Administrator will direct the Trustee to repay to the Participant as soon as is administratively practicable, the full amount of the Participant's cash-out repayment if the Plan Administrator determines any 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 determining a Participant's vesting under Section 5.03, "Year of Service" means the 12-consecutive month vesting computation period the Employer elects in its Adoption Agreement during which an Employee completes the number of Hours of Service (not exceeding 1,000) specified in the Adoption Agreement or, if the Plan applies the Elapsed Time Method of crediting Vesting Service, the vesting computation period for which the Employee receives credit for a Year of Service under the Service crediting rules of Section 1.15(D). A Year of Service includes any Year of Service completed prior to the Effective Date of the Plan, except as provided in Section 5.08. 5.07 BREAK IN SERVICE AND FORFEITURE BREAK IN SERVICE - VESTING. For purposes of this Article V, a Participant incurs a "Break in Service" if during any vesting computation period he/she does not complete more than 500 Hours of Service or, if the Plan applies the Elapsed Time Method of crediting Service, the Participant has a Period of Severance of at least 12 consecutive months. If, pursuant to Section 5.06, the Plan does not require more than 500 Hours of Service to receive credit for a Year of Service, a Participant incurs a Break in Service in a vesting computation period in which he/she fails to complete a Year of Service. A Participant incurs a Forfeiture Break in Service when he/she incurs 5 consecutive Breaks in Service. The Plan does not apply the Break in Service (one year hold-out) rule for vesting under Code ss.411(a)(6)(B). Therefore, an Employee need not (C) Copyright 2001 First Union National Bank 21 Defined Contribution Plan complete a Year of Service after a Break in Service before the Plan takes into account the Employee's otherwise includible pre-Break Years of Service under this Article V. 5.08 INCLUDED YEARS OF SERVICE - VESTING. 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: (a) For the sole purpose of determining a Participant's Vested percentage of his/her Account Balance derived from Employer contributions which accrued for his/her benefit prior to a Forfeiture Break in Service or receipt of a cash-out distribution, the Plan disregards any Year of Service after the Participant first incurs a Forfeiture Break in Service or receives a cash-out distribution (except where the Plan Administrator restores the Participant's Account under Section 5.04(A)). (b) Consistent with Code ss.411(a)(4), any Year of Service the Employer elects to exclude under its Adoption Agreement. 5.09 FORFEITURE OCCURS. A Participant's forfeiture of his/her non-Vested Account Balance 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 Plan Administrator determines the percentage of a Participant's Account Balance forfeiture, if any, under this Section 5.09 solely by reference to the vesting schedule the Employer elected in its Adoption Agreement. A Participant does not forfeit any portion of his/her Account Balance for any other reason or cause except as expressly provided by this Section 5.09 or as provided under Section 9.11. 5.10 RULE OF PARITY - VESTING. The Employer may elect in its Adoption Agreement to apply the "rule of parity" under Code ss.411(a)(6)(D) for purposes of determining vesting Years of Service. Under the rule of parity, the Plan Administrator excludes a Participant's Years of Service before a Break in Service if: (a) the number of the Participant's consecutive Breaks in Service equals or exceeds 5; and (b) the Participant is 0% Vested in his/her Account Balance derived from Employer contributions at the time he/she has the Breaks in Service. 5.11 AMENDMENT TO VESTING SCHEDULE. The Employer under Section 13.02 may amend the Plan's vesting schedule(s) under Section 5.03 at any time. However, the Plan Administrator will not apply the amended vesting schedule to reduce any Participant's existing Vested percentage (determined on the later of the date the Employer adopts the amendment, or the date the amendment becomes effective) in the Participant's existing and future Account Balance attributable to Employer contributions, to a percentage less than the Vested percentage computed under the Plan without regard to the amendment. Furthermore, 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 vesting schedule becomes effective. If the Employer amends the Plan's vesting schedule, each Participant having completed at least 3 Years of Service (as described in Section 5.06) with the Employer prior to the expiration of the election period described below, may irrevocably elect to have the Plan Administrator determine the Vested percentage of his/her Account Balance without regard to the amendment. The Participant must file his/her election with the Plan Administrator within 60 days of the latest of: (a) the Employer's adoption of the amendment; (b) the effective date of the amendment; or (c) the Participant's receipt of a copy of the amendment. The Plan Administrator, as soon as practicable, must forward a true copy of any amendment to the vesting schedule to each affected Participant, together with a written explanation of the effect of the amendment, the appropriate form upon which the Participant may make an election to remain under the pre-amendment vesting schedule and notice of the time within which the Participant must make an election to remain under the pre-amendment vesting schedule. The election described in this Section 5.11 does not apply to a Participant if the amended vesting schedule provides for vesting at least as rapid at any time as the vesting schedule in effect prior to the amendment. For purposes of this Section 5.11, an amendment to the vesting schedule includes any Plan amendment which directly or indirectly affects the computation of the Vested percentage of a Participant's Account Balance. Furthermore, any shift in the Plan's vesting schedule under Article XII, due to a change in the Plan's top-heavy status, is an amendment to the vesting schedule for purposes of this Section 5.11. 5.12 DEFERRAL CONTRIBUTIONS TAKEN INTO ACCOUNT. If the Plan includes a 401(k) arrangement, the vesting rules described in Article V must take into account a Participant's deferral contributions for purposes of determining: (1) if a Participant's distribution is of his/her entire Vested Account balance as required for a cash-out distribution under Section 5.04; (2) if a Participant repays the entire amount of a prior cash-out distribution so the Participant is entitled to restoration under Section 5.04(A); and (3) if a Participant is 0% vested under Section 5.04(C) and under Section 5.10. (C) Copyright 2001 First Union National Bank 22 Defined Contribution Plan ARTICLE VI DISTRIBUTIONS 6.01 TIMING OF DISTRIBUTION. The Plan Administrator will direct the Trustee to commence distribution of a Participant's Vested Account Balance in accordance with this Section 6.01 upon the Participant's Separation from Service for any reason, or if the Participant exercises an in-Service distribution right under the Plan. The Trustee may make Plan distributions on any administratively practicable date during the Plan Year, consistent with the Employer's elections in its Adoption Agreement. (A) Distribution upon Separation from Service (other than death). (1) Participant's Vested Account Balance not exceeding $5,000. Upon the Participant's Separation from Service for any reason other than death, the Plan Administrator (without any requirement of Participant or spousal consent) will direct the Trustee to distribute the Participant's Vested Account Balance (determined in accordance with Section 6.01(A)(6)) not exceeding $5,000 in a lump sum (without regard to Section 6.04), at the time specified in the Adoption Agreement, but in no event later than the 60th day following the close of the Plan Year in which the later of the following events occur: (a) the Participant attains Normal Retirement Age; or (b) the Participant Separates from Service. (2) Participant's Vested Account Balance exceeds $5,000. Upon the Participant's Separation from Service for any reason other than death, the Plan Administrator, subject to the Participant's election to postpone distribution under this Section 6.01(A)(2) and the consent requirements of Section 6.01(A)(5), will direct the Trustee to commence distribution of the Participant's Vested Account Balance (determined in accordance with Section 6.01(A)(6)) exceeding $5,000, at the time specified in the Adoption Agreement and in a form under Section 6.03 elected by the Participant. Any election under this Section 6.01(A)(2) is subject to the requirements of Section 6.02 and of Section 6.04. A Participant eligible to make an election under this Section 6.01(A)(2) may elect to postpone distribution beyond the time the Employer has elected in its Adoption Agreement, to any specified date including, but not beyond the Participant's Required Beginning Date, unless the Employer, in its Adoption Agreement, specifically limits a Participant's right to postpone distribution of his/her Account Balance to the later of the date the Participant attains age 62 or Normal Retirement Age. The Plan Administrator will reapply the notice and consent requirements of Section 6.01(A)(4) and Section 6.01(A)(5) to any distribution postponed under this Section 6.01(A)(2). In the absence of a Participant's consent and distribution election (as described in Section 6.01(A)(5)) or in the absence of the Participant's election to postpone distribution prior to his/her annuity starting date, the Plan Administrator, consistent with the Employer's elections in its Adoption Agreement, will treat the Participant as having elected to postpone his/her distribution until the 60th day following the close of the Plan Year in which the latest of the following events occurs: (a) the Participant attains Normal Retirement Age; (b) the Participant attains age 62; or (c) the Participant Separates from Service. At the applicable date, the Plan Administrator then will direct the Trustee to distribute the Participant's Vested Account Balance in a lump sum (or, if applicable, the annuity form of distribution required under Section 6.04). (3) Disability. If the Participant's Separation from Service is because of his/her Disability, the Plan Administrator will direct the Trustee to pay the Participant's Vested Account Balance in the same manner as if the Participant had incurred a Separation from Service without Disability. (4) Distribution notice/annuity starting date. At least 30 days and not more than 90 days prior to the Participant's annuity starting date, the Plan Administrator must provide a written notice (or a summary notice as permitted under Treasury regulations) to a Participant who is eligible to make an election under Section 6.01(A)(2) ("distribution notice"). The distribution 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 postpone distribution until the applicable date described in Section 6.01(A)(2). For all purposes of this Article VI, the term "annuity starting date" means the first day of the first period for which the Plan pays an amount as an annuity or in any other form but in no event is the "annuity starting date" earlier than a Participant's Separation from Service. (5) Consent requirements/Participant distribution election. A Participant must consent, in writing, following receipt of the distribution notice, to any distribution under this Section 6.01, if at the time of the distribution to the Participant, the Participant's Vested Account Balance exceeds $5,000 and the Participant has not attained the later of Normal Retirement Age or age 62. Accounts which are distributable prior to the foregoing applicable age are "immediately distributable." Furthermore, the Participant's spouse also must consent, in writing, to any distribution, for which Section 6.04 requires the spouse's consent. The Participant may reconsider his/her distribution election at any time prior to the annuity starting date and elect to commence distribution as of any other distribution date permitted under the Plan or under the Adoption Agreement. A Participant may elect to receive distribution at any administratively practicable time which is earlier than 30 days following the Participant's receipt of the distribution notice, by waiving in writing the balance of the 30 days. However, if the requirements of Section 6.04 apply, the Participant may not elect to commence distribution less than 7 days following the Participant's receipt of the distribution notice. The consent requirements of this Section 6.01(A)(5) do not apply with respect to defaulted loans described in Section 10.03(E). (6) Determination of Vested Account Balance. For purposes of the consent requirements under this Article VI, the Plan Administrator determines a Participant's Vested Account Balance as of the most recent valuation date immediately prior to the distribution date, and takes (C) Copyright 2001 First Union National Bank 23 Defined Contribution Plan into account the Participant's entire Account, including deferral contributions. The Plan Administrator in determining the Participant's Vested Account Balance at the relevant time, will disregard a Participant's Vested Account Balance existing on any prior date, except as the Code otherwise may require. (7) Consent to cash-out/forfeiture. If a Participant is partially-Vested in his/her Account Balance, a Participant's election under Section 6.01(A)(2) to receive distribution prior to the Participant's incurring a Forfeiture Break in Service, must be in the form of a cash-out distribution as defined in Section 5.04. (8) Return to employment. A Participant may not receive a distribution by reason of Separation from Service, or continue any installment distribution based on a prior Separation from Service, if, prior to the time the Trustee actually makes the distribution, the Participant returns to employment with the Employer. (B) Distribution upon Death. In the event of the Participant's Separation from Service on account of death, the Plan Administrator will direct the Trustee, in accordance with this Section 6.01(B) and subject to Section 6.02(D), to distribute to the Participant's Beneficiary the Participant's Vested Account Balance remaining in the Trust at the time of the Participant's death. The Plan Administrator, subject to the requirements of Sections 6.04 and 6.02(D) or to a Beneficiary's written election (if authorized by the next paragraph of this Section 6.01(B)), must direct the Trustee to distribute or commence distribution of the deceased Participant's Vested Account Balance, as soon as administratively practicable following the Participant's death or, if later, the date on which the Plan Administrator receives notification of, or otherwise confirms, the Participant's death. If the Participant's Vested Account Balance determined in accordance with Section 6.01(A)(6) does not exceed $5,000, the Trustee will distribute the balance in a lump sum without regard to Section 6.04. If the Participant's Vested Account Balance exceeds $5,000, the Trustee will distribute the balance subject to Section 6.02(D). If the Participant's death benefit is payable in full to the Participant's surviving spouse, the surviving spouse may elect distribution at any time and in any form (except a joint and survivor annuity) the Plan would permit a Participant to elect upon Separation from Service. The Participant, on a form prescribed by the Plan Administrator, may (subject to the requirements of Section 6.04) elect the payment method or the payment term or both, which will apply to any Beneficiary, including his/her surviving spouse. The Participant's election may limit any Beneficiary's right to increase the frequency or the amount of any payments. Any payment term elected by the Participant must not exceed the payment term the Code otherwise would permit the Beneficiary to elect upon the Participant's death. (C) In-Service Distribution. The Employer must elect in its Adoption Agreement the distribution election rights, if any, a Participant has prior to his/her Separation from Service ("in-service distribution"). Subject to any contrary Employer election in Appendix A to its Adoption Agreement, a Participant upon attaining age 70 1/2, until he/she incurs a Separation from Service, has a continuing election to receive all or any portion of his/her Account Balance, including Employer contributions and Participant contributions. If the Employer elects in its Adoption Agreement additional in-service distribution of any Employer contribution (including deferral contributions), the Employer in its Adoption Agreement must specify events or conditions, if any, applicable to such in-service distributions. For special requirements regarding hardship distributions, see Section 6.09. The Employer also must elect in its Adoption Agreement the additional in-service distribution rights, if any, a Participant has with respect to Participant contributions as defined in Section 4.01. If a Participant receives an in-service distribution as to a partially-Vested Account, and the Participant has not incurred a Forfeiture Break in Service, the Plan Administrator will apply the vesting provisions of Section 5.03(A). A Participant must make any permitted in-service distribution election under this Section 6.01(C) in writing and on a form prescribed by the Plan Administrator which specifies the percentage or dollar amount of the distribution and the Participant's Plan Account (Employer contributions or Participant contributions and type) to which the election applies. If the Plan permits in-service distributions, a Participant only may elect to receive one in-service distribution per Plan Year under this Section 6.01(C) unless the election form prescribed by the Plan Administrator provides for more frequent distributions. The Trustee, as directed by the Plan Administrator and subject to Sections 6.01(A)(4), 6.01(A)(5) and 6.04, will distribute the amount(s) a Participant elects in single sum, as soon as administratively practicable after the Participant files his/her in-service distribution election with the Plan Administrator. The Trustee will distribute the Participant's remaining Account Balance in accordance with the other provisions of this Article VI. The Trustee, prior to a Participant's Normal Retirement Age or Disability may not make any in-service distribution to the Participant with respect to his/her Account Balance attributable to assets (including post-transfer earnings on those assets) and liabilities transferred, within the meaning of Code ss.414(l), to a profit sharing plan from a money purchase pension plan or from a target benefit plan qualified under Code ss.401(a) (other than any portion of those assets and liabilities attributable to Employee contributions). 6.02 REQUIRED MINIMUM DISTRIBUTIONS. (A) Priority of Required Minimum Distribution. If any distribution under this Article VI (by Plan provision or by Participant election or nonelection), would commence later than the Participant's required beginning date ("RBD"), the Plan Administrator instead must direct the Trustee to make distribution on the Participant's RBD, subject only to the TEFRA election, if applicable, under Section 6.11. The Employer in its Adoption Agreement Appendix B may elect to apply a special effective date to the RBD definition or may elect in Appendix A to continue to apply the RBD definition in effect prior to 1997 ("pre-SBJPA RBD"). The Employer in its Adoption Agreement also may elect to require distribution earlier than the RBD. (C) Copyright 2001 First Union National Bank 24 Defined Contribution Plan (1) RBD - more than 5% owner. A Participant's RBD is the April 1 following the close of the calendar year in which the Participant attains age 70 1/2 if the Participant is a more than 5% owner (as defined in Code ss.416) with respect to the Plan Year ending in that calendar year. If a Participant is a more than 5% owner at the close of the relevant calendar year, the Participant may not discontinue required minimum distributions notwithstanding the Participant's subsequent change in ownership status. (2) RBD - non 5% owners. If the Participant is not a more than 5% owner, his/her RBD is the April 1 following the close of the calendar year in which the Participant incurs a Separation from Service or, if later, the April 1 following the close of the calendar year in which the Participant attains age 70 1/2. If a Participant is not a more than 5% owner, his/her pre-SBJPA RBD (if applicable) is April 1 following the close of the calendar year in which the Participant attains age 70 1/2. (3) Form of distribution. The Trustee will make a required minimum distribution at the Participant's RBD in a lump sum (or, if applicable, the annuity form of distribution required under Section 6.04) unless the Participant, pursuant to the provisions of this Article VI, makes a valid election to receive an alternative form of payment. (B) Participant Transitional Elections. (1) Election to discontinue distributions. A Participant who: (a) is not a more than 5% owner; (b) had attained age 70 1/2 prior to 1997; (c) had commenced prior to 1997 required minimum distributions under the pre-SBJPA RBD; and (d) has not incurred a Separation from Service, has a continuing election to discontinue receiving distributions from the Plan (which previously were required minimum distributions under the Plan). A Participant who makes an election under this Section 6.02(B)(1) must establish a new annuity starting date when he/she recommences payment of his/her Account Balance under the Plan. A married Participant who is subject to Section 6.04 must obtain spousal consent: (a) to discontinue his/her distributions under this Section 6.04(B)(1) if distributions are in QJSA form; and (b) to recommence benefits in a form other than a QJSA. A Participant may not make any election under this Section 6.02(B)(1) which is inconsistent with any QDRO applicable to the Participant's Account. (2) Election to postpone distributions. A Participant who: (a) is not a more than 5% owner; and (b) attained age 70 1/2 after 1996 (or who attained age 70 1/2 in 1996, but who had not commenced his/her required minimum distributions in 1996) may elect under this Section 6.02(B)(2) to postpone distribution of required minimum distributions until the Participant's RBD established under Section 6.02(A). If the Participant attained age 70 1/2 in 1996, he/she must have elected under this Section 6.02(B)(2) to postpone distributions by December 31, 1997. If the Participant attained age 70 1/2 after 1996, he/she must make the election to postpone distribution under this Section 6.01(B)(2) not later than April 1 of the calendar year following the year in which the Participant attains age 70 1/2. (3) Election requirements. All Participant elections made under this Section 6.01(B) are subject to and must be consistent with the Employer's RBD elections in its Adoption Agreement Appendices A and B. A Participant makes his/her election under this Section 6.02(B) in writing on a form prescribed by the Plan Administrator. (C) Minimum Distribution Requirements for Participants. The Plan Administrator may not direct the Trustee to distribute the Participant's Vested Account Balance, nor may the Participant elect to have the Trustee distribute his/her Vested Account Balance, under a method of payment which, as of the Participant's RBD, does not satisfy the minimum distribution requirements under Code ss.401(a)(9) and the applicable Treasury regulations. (1) Calculation of amount. The required minimum distribution for a calendar year ("distribution calendar year") equals the Participant's Vested Account Balance as of the latest valuation date preceding the beginning of the distribution calendar year (such valuation date being within the "valuation calendar year") divided by the Participant's life expectancy or, if applicable, the joint and last survivor expectancy of the Participant and his/her designated Beneficiary (as determined under Article VIII, subject to the requirements of Code ss.401(a)(9)). The Plan Administrator will increase the Participant's Vested Account Balance, 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, any portion of the required minimum distribution for the first distribution calendar year made after the close of that year is a distribution occurring in that first distribution calendar year. (2) Recalculation. In computing a required minimum distribution, the Plan Administrator must use the unisex life expectancy multiples under Treas. Reg. ss.1.72-9. The Plan Administrator, only upon the Participant's timely election, will compute the required minimum distribution for a distribution calendar year subsequent to the first distribution calendar year by redetermining ("recalculation" of) the Participant's life expectancy or the Participant's and spouse designated Beneficiary's life expectancies as elected. However, the Plan Administrator 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. A Participant must elect recalculation under this Section 6.02(C)(2) in writing and on a form the Plan Administrator prescribes, not later than the Participant's RBD. (3) Minimum distribution incidental benefit (MDIB). If the Participant's spouse is not his/her designated Beneficiary, a method of payment to the Participant (whether by Participant election or by Plan Administrator direction) must satisfy the MDIB requirement under Code ss.401(a)(9) for distributions made on or after the Participant's RBD and before the Participant's death. To satisfy the MDIB requirement, the Plan Administrator will compute the Participant's required (C) Copyright 2001 First Union National Bank 25 Defined Contribution Plan minimum distribution 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 Plan Administrator will compute the minimum distribution required by Section 6.02(D) solely on the basis of the applicable life expectancy factor and will disregard the MDIB factor. (4) Payment due date. The required minimum distribution for the first distribution calendar year is due by the Participant's RBD. The required minimum distribution for each subsequent distribution calendar year, including the calendar year in which the Participant's RBD occurs, is due by December 31 of that year. (5) Nontransferable annuity. If the Participant receives distribution in the form of a Nontransferable Annuity, the distribution satisfies this Section 6.02(C) if the contract complies with the requirements of Code ss.401(a)(9). (D) Minimum Distribution Requirements for Beneficiaries. The method of distribution to the Participant's Beneficiary must satisfy Code ss.401(a)(9). (1) Death after RBD. If the Participant's death occurs after his/her RBD (or earlier, if the Participant had commenced an irrevocable annuity pursuant to Section 6.04), the Trustee must distribute the Participant's remaining benefit to the Beneficiary at least as rapidly as under the method in effect for the Participant, determined without regard to the MDIB requirements of Section 6.02(C)(3). (2) Death prior to RBD. If the Participant's death occurs prior to his/her RBD (and the Participant had not commenced an irrevocable annuity pursuant to Section 6.04), the method of payment to the Beneficiary, subject to Section 6.04, must provide for completion of payment to the Beneficiary over a period not exceeding: (a) 5 years after the date of the Participant's death; or (b) if the Beneficiary is a designated Beneficiary, the designated Beneficiary's life expectancy. A designated Beneficiary is a Beneficiary designated by the Participant or determined under Section 8.02. The Plan Administrator may not direct payment of the Participant's Vested Account Balance over a period described in clause (b) 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 (b) of this Section 6.02(D)(2), the minimum distribution for a distribution calendar year equals the Participant's Vested Account Balance as of the latest valuation date preceding the beginning of the distribution calendar year divided by the designated Beneficiary's life expectancy. The Plan Administrator must use the unisex life expectancy multiples under Treas. Reg. ss.1.72-9 for purposes of applying this Section 6.02(D). (3) Recalculation. The Plan Administrator, only upon the Participant's election (under Section 6.02(C)(2)) or the Participant's surviving spouse designated Beneficiary's election, will recalculate the life expectancy of the Participant's surviving spouse not more frequently than annually. However, the Plan Administrator may not recalculate the life expectancy of a nonspouse designated Beneficiary after the Trustee commences payment to the designated Beneficiary. The Plan Administrator will apply this Section 6.02(D) 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. A surviving spouse designated Beneficiary must elect recalculation under this ss.6.02(D)(3) in writing and on a form the Plan Administrator prescribes not later than the last day of the spouse's first distribution year. (4) Beneficiary election. If the Participant under Section 6.01(B) had not elected the payment method or payment term, the Participant's Beneficiary must elect the method of distribution no later than the date specified above upon which the Trustee must commence distribution to the Beneficiary. If the Beneficiary fails to elect timely a distribution method, the Plan Administrator must commence distribution within the time required for a Participant who dies without a designated Beneficiary. (E) Model Amendment. The employer in Appendix B to its Adoption Agreement may elect to apply the following IRS Model Amendment: With respect to distributions under the Plan made on or after the effective date the Employer specifies in Appendix B to its Adoption Agreement, for calendar years beginning on or after January 1, 2001, the Plan will apply the minimum distribution requirements of section 401(a)(9) of the Internal Revenue Code in accordance with the regulations under section 401(a)(9) that were proposed on January 17, 2001, (the "2001 Proposed Regulations"), notwithstanding any provision of the Plan to the contrary. If the total amount of required minimum distributions made to a Participant for 2001 prior to the Appendix B effective date are equal to or greater than the amount of required minimum distributions determined under the 2001 Proposed Regulations, then no additional distributions are required for such Participant for 2001 on or after such date. If the total amount of required minimum distributions made to a Participant for 2001 prior to the Appendix B effective date are less than the amount determined under the 2001 Proposed Regulations, then the amount of required minimum distributions for 2001 on or after such date will be determined so that the total amount of required minimum distributions for 2001 is the amount determined under the 2001 Proposed Regulations. This amendment shall continue in effect until the last calendar year beginning before the effective date of final regulations under section 401(a)(9) or such other date as may be published by the Internal Revenue Service. 6.03 METHOD OF DISTRIBUTION. Subject to any contrary requirements imposed by Sections 6.01 (including 6.01(C) regarding in-service distributions), 6.02 or 6.04, a Participant or a Beneficiary may elect distribution under one, or any combination, of the following methods: (a) by (C) Copyright 2001 First Union National Bank 26 Defined Contribution Plan payment in a lump sum; or (b) by payment in monthly, quarterly or annual installments over a fixed reasonable period of time, not exceeding the life expectancy of the Participant, or the joint life and last survivor expectancy of the Participant and his/her designated Beneficiary. The Employer may elect in its Adoption Agreement to modify the methods of payment available under this Section 6.03. If the Employer's Plan is a restated Plan, the Employer in its Adoption Agreement and in accordance with Treas. Reg. ss.1.411(d)-4, may elect to eliminate from the prior Plan certain Protected Benefits. If the Employer elects or is required to provide an annuity, the annuity must: (1) be a Nontransferable Annuity; and (2) otherwise comply with the Plan terms. The distribution options permitted under this Section 6.03 are available only if the Participant's Vested Account Balance, as determined under Section 6.01(A)(6), exceeds $5,000. To facilitate installment payments under this Article VI, the Plan Administrator under Section 9.08(B) may direct the Trustee to segregate all or any part of the Participant's Account Balance in a segregated investment Account. Under an installment distribution, the Participant or the Beneficiary, at any time, may elect to accelerate the payment of all, or any portion, of the Participant's unpaid Vested Account Balance. Pending final accounting for a valuation date, the Plan Administrator may make a partial distribution to a Participant who has incurred a Separation from Service or to a Beneficiary. 6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND TO SURVIVING SPOUSES. (A) Qualified Joint and Survivor Annuity (QJSA). The Plan Administrator must direct the Trustee to distribute a married or unmarried Participant's Vested Account Balance in the form of a QJSA, unless the Participant, and spouse if the Participant is married, waive the QJSA in accordance with Section 6.05. If, as of the annuity starting date, the Participant is married (even if the Participant has not been married throughout the one year period ending on the annuity starting date), a QJSA is an immediate annuity which is purchasable with the Participant's Vested Account Balance and which provides a life annuity for the Participant and a survivor annuity payable for the remaining life of the Participant's surviving spouse equal to 50% of the amount of the annuity payable during the life of the Participant. If, as of the annuity starting date, the Participant is not married, a QJSA is an immediate life annuity for the Participant which is purchasable with the Participant's Vested Account Balance. A life annuity means an annuity payable in equal installments for the life of the Participant that terminates upon the Participant's death. (B) Qualified Preretirement Survivor Annuity (QPSA). If a married Participant dies prior to his/her annuity starting date, the Plan Administrator will direct the Trustee to distribute a portion of the Participant's Vested Account Balance to the Participant's surviving spouse in the form of a QPSA, unless: (1) the Participant has a valid waiver election (as described in Section 6.06) in effect; or (2) the Participant and his/her spouse were not married throughout the one year period ending on the date of the Participant's death. The Employer in an Addendum to its Adoption Agreement may elect not to apply the one year of marriage requirement in clause (2). A QPSA is an annuity which is purchasable with 50% of the Participant's Vested Account Balance (determined as of the date of the Participant's death) and which is payable for the life of the Participant's surviving spouse. The value of the QPSA is attributable to Employer contributions and to Participant contributions in the same proportion as the Participant's Vested Account Balance is attributable to those contributions. The portion of the Participant's Vested Account Balance not payable as a QPSA is payable to the Participant's Beneficiary, in accordance with the remaining provisions of this Article VI. (C) Surviving Spouse Elections. If the Participant's Vested Account Balance which the Trustee would apply to purchase the QPSA exceeds $5,000, the Participant's surviving spouse may elect to have the Trustee commence payment of the QPSA at any time following the date of the Participant's death, but not later than the mandatory distribution periods described in Section 6.02, and may elect any of the forms of payment described in Section 6.03, in lieu of the QPSA. In the absence of an election by the surviving spouse, the Plan Administrator must direct the Trustee to distribute the QPSA on the earliest administratively practicable date following the close of the Plan Year in which the latest of the following events occurs: (1) the Participant's death; (2) the date the Plan Administrator receives notification of or otherwise confirms the Participant's death; (3) the date the Participant would have attained Normal Retirement Age; or (4) the date the Participant would have attained age 62. (D) Effect of Waiver. If the Participant has in effect a valid waiver election regarding the QJSA or the QPSA, the Plan Administrator must direct the Trustee to distribute the Participant's Vested Account Balance in accordance with Sections 6.01, 6.02 and 6.03. (E) Loan Offset. The Plan Administrator will reduce the Participant's Vested Account Balance by any security interest (pursuant to any offset rights authorized by Section 10.03(E)) held by the Plan by reason of a Participant loan, to determine the value of the Participant's Vested Account Balance distributable in the form of a QJSA or QPSA, provided the loan satisfied the spousal consent requirement described in Section 10.03(E). (F) Effect of QDRO. For purposes of applying this Article VI, a former spouse (in lieu of the Participant's current spouse) is the Participant's spouse or surviving spouse to the extent provided under a QDRO described in Section 6.07. The provisions of this Section 6.04, and of Sections 6.05 and 6.06, apply separately to the portion of the Participant's Vested Account Balance subject to a QDRO and to the portion of the Participant's Vested Account Balance not subject to the QDRO. (G) Vested Account Balance Not Exceeding $5,000. The Trustee must distribute in a lump sum, a Participant's Vested Account Balance which the Trustee otherwise under Section 6.04 would apply to provide a QJSA or QPSA benefit, where the Participant's Vested Account Balance determined under Section 6.01(A)(6) does not exceed $5,000. (C) Copyright 2001 First Union National Bank 27 Defined Contribution Plan (H) Profit Sharing Plan Exception. If this Plan is a profit sharing plan, the Employer in its Adoption Agreement must elect the extent to which the preceding provisions of Section 6.04 apply. The Employer may elect to exempt from the provisions of Section 6.04, all Participants ("Exempt Participants") except the following Participants to whom Section 6.04 must be applied: (1) a Participant as respects whom the Plan is a direct or indirect transferee from a plan subject to the Code ss.417 requirements and the Plan received the transfer after December 31, 1984, unless the transfer is an elective transfer described in Section 13.07; (2) a Participant who elects a life annuity distribution (if Section 13.02 of the Plan requires the Plan to provide a life annuity distribution option); and (3) a Participant whose benefits under a defined benefit plan maintained by the Employer are offset by benefits provided under this Plan. If the Employer elects to apply this Section 6.04 to all Participants, the preceding provisions of this Section 6.04 apply to all Participants without regard to the limitations of this Section 6.04(H). Sections 6.05 and 6.06 only apply to Participants to whom the provisions of this Section 6.04 apply. 6.05 WAIVER ELECTION - QJSA. At least 30 days and not more than 90 days before the Participant's annuity starting date, the Plan Administrator must provide the Participant a written explanation of the terms and conditions of the QJSA, the Participant's right to make, and the effect of, an election to waive the QJSA benefit, the rights of the Participant's spouse regarding the waiver election and the Participant's right to make, and the effect of, a revocation of a waiver election ("QJSA notice"). The Plan does not limit the number of times the Participant may revoke a waiver of the QJSA or make a new waiver during the election period. The Participant (and his/her spouse, if the Participant is married), may revoke an election to receive a particular form of benefit at any time until the annuity starting date. A married Participant's QJSA waiver election is not valid unless: (a) the Participant's spouse (to whom the survivor annuity is payable under the QJSA), after the Participant has received the QJSA notice, has consented in writing to the waiver election, the spouse's consent acknowledges the effect of the election, and a notary public or the Plan Administrator (or his/her representative) witnesses the spouse's consent; (b) the spouse consents to the alternative form of payment designated by the Participant or to any change in that designated form of payment; and (c) unless the spouse is the Participant's sole primary Beneficiary, the spouse consents to the Participant's Beneficiary designation or to any change in the Participant's Beneficiary designation. The spouse's consent to a waiver of the QJSA is irrevocable, unless the Participant revokes the waiver election. The spouse may execute a blanket consent to the Participant's future payment form election or Beneficiary designation, if the spouse acknowledges the right to limit his/her consent to a specific designation but, in writing, waives that right. The Plan Administrator will accept as valid a waiver election which does not satisfy the spousal consent requirements if the Plan Administrator establishes the Participant does not have a spouse, the Plan Administrator is not able to locate the Participant's spouse, the Participant is legally separated or has been abandoned (within the meaning of applicable state law) and the Participant has a court order to that effect, or other circumstances exist under which the Secretary of the Treasury will excuse the spousal 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. 6.06 WAIVER ELECTION - QPSA. The Plan Administrator must provide a written explanation of the QPSA to each married Participant ("QPSA notice"), within the following period which ends last: (1) the period beginning on the first day of the Plan Year in which the Participant attains age 32 and ending on the last day of the Plan Year in which the Participant attains age 34; (2) a reasonable period after an Employee becomes a Participant; (3) a reasonable period after Section 6.04 of the Plan becomes applicable to the Participant; or (4) a reasonable period after the Plan no longer satisfies the requirements for a fully subsidized benefit. A "reasonable period" described in clauses (2), (3) and (4) is the period beginning one year before and ending one year after the applicable event. If the Participant separates from Service before attaining age 35, clauses (1), (2), (3) and (4) do not apply and the Plan Administrator must provide the QPSA notice within the period beginning one year before and ending one year after the Separation from Service. The QPSA notice must describe, in a manner consistent with Treasury regulations, the terms and conditions of the QPSA and of the waiver of the QPSA, comparable to the QJSA notice required under Section 6.05. The Plan does not limit the number of times the Participant may revoke a waiver of the QPSA or make a new waiver during the election period. The election period for waiver of the QPSA ends on the date of the Participant's death. A Participant's QPSA waiver election is not valid unless: (a) the Participant makes the waiver election after the Participant has received the QPSA notice and no earlier than the first day of the Plan Year in which he/she attains age 35; and (b) the Participant's spouse (to whom the QPSA is payable) satisfies or is excused from the consent requirements as described in Section 6.05, except the spouse need not consent to the form of benefit payable to the designated Beneficiary. The spouse's consent to the waiver of the QPSA is irrevocable, unless the Participant revokes the waiver election. The spouse also may execute a blanket consent as described in Section 6.05. Irrespective of the time of election requirement described in clause (a), if the Participant separates from Service prior to the first day of the Plan Year in which he/she attains age 35, the Plan Administrator will accept a waiver election as respects the Participant's Account Balance attributable to his/her Service prior to his/her Separation from Service. Furthermore, if a Participant who has not separated from Service makes a valid waiver election, except for the timing requirement of clause (a), the Plan Administrator will accept that election as valid, but only until the first day of the Plan Year in which the Participant attains age 35. 6.07 DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS (QDRO). Notwithstanding any other provision of this Plan, the Trustee, in accordance with the direction of the Plan Administrator, must comply with the provisions of a QDRO, as defined in Code ss.414(p), which is issued with respect to the Plan. This Plan specifically permits (C) Copyright 2001 First Union National Bank 28 Defined Contribution Plan distribution to an alternate payee under a QDRO at any time, irrespective of whether the Participant has attained his/her earliest retirement age (as defined under Code ss.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 QDRO 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 $5,000, and the QDRO requires, the alternate payee consents to any distribution occurring prior to the Participant's attainment of earliest retirement age. Nothing in this Section 6.07 gives a Participant a right to receive distribution at a time the Plan otherwise does not permit nor does Section 6.07 authorize the alternate payee to receive a form of payment the Plan does not permit. The Plan Administrator must establish reasonable procedures to determine the qualified status of a domestic relations order. Upon receiving a domestic relations order, the Plan Administrator 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 Plan Administrator must determine the qualified status of the order and must notify the Participant and each alternate payee, in writing, of the Plan Administrator's determination. The Plan Administrator 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 DOL regulations. If any portion of the Participant's Vested Account Balance is payable under the domestic relations order during the period the Plan Administrator is making its determination of the qualified status of the domestic relations order, the Plan Administrator must maintain a separate accounting of the amounts payable. If the Plan Administrator determines the order is a QDRO within 18 months of the date amounts first are payable following receipt of the domestic relations order, the Plan Administrator will direct the Trustee to distribute the payable amounts in accordance with the QDRO. If the Plan Administrator does not make its determination of the qualified status of the order within the 18-month determination period, the Plan Administrator 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 Plan Administrator later determines the order is a QDRO. To the extent it is not inconsistent with the provisions of the QDRO, the Plan Administrator under Section 9.08(B) may direct the Trustee to segregate the QDRO amount in a segregated investment account. The Trustee will make any payments or distributions required under this Section 6.07 by separate benefit checks or other separate distribution to the alternate payee(s). 6.08 DEFAULTED LOAN - TIMING OF OFFSET. If a Participant or a Beneficiary defaults on a Plan loan, the Plan Administrator will determine the timing of the reduction (offset) of the Participant's Vested Account Balance in accordance with this Section 6.08 and the Plan Administrator's loan policy. If, under the loan policy a loan default also is a distributable event under the Plan, the Trustee, at the time of the loan default, will offset the Participant's Vested Account Balance by the lesser of the amount in default (including accrued interest) or the Plan's security interest in that Vested Account Balance. If the loan is from a money purchase pension plan or from a target benefit plan and the loan default is a distributable event under the loan policy, the Trustee will offset the Participant's Account Balance in the manner described above, only if the Participant has incurred a Separation from Service or has attained Normal Retirement Age. If the loan is under a 401(k) arrangement, to the extent the loan is attributable to the Participant's deferral contributions Account, qualified matching contributions Account, qualified nonelective contributions Account or safe harbor contributions Account, the Trustee will not offset the Participant's Vested Account Balance unless the Participant has incurred a Separation from Service or unless the Participant has attained age 59 1/2. 6.09 HARDSHIP DISTRIBUTION. For purposes of this Plan, unless the Employer in its Adoption Agreement Section 6.01 elects otherwise, a hardship distribution is a distribution on account of one or more of the following immediate and heavy financial needs: (1) expenses for medical care described in Code ss.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) costs directly related to the purchase (excluding mortgage payments) of a principal residence of the Participant; (3) payment of post-secondary education tuition and related educational fees (including room and board), 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 ss.152); (4) payments necessary to prevent the eviction of the Participant from his/her principal residence or the foreclosure on the mortgage of the Participant's principal residence; or (5) any need the Revenue Service prescribes in a revenue ruling, notice or other document of general applicability which satisfies the safe harbor definition of hardship under Treas. Reg. ss.1.401(k)-1(d)(2)(iv)(A). See Section 14.11(A) if a hardship distribution is from a Participant's elective deferral Account in a 401(k) arrangement. The Employer in its Adoption Agreement Section 6.01 may elect to apply Section 14.11(A) to all Plan hardship distributions. If the Plan permits a hardship distribution from more than one Account type, the Plan Administrator may determine any ordering of a Participant's hardship distribution from the hardship distribution eligible Accounts. 6.10 DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS. (A) Participant Election. A Participant (including for this purpose, a former Employee) may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of his/her eligible rollover distribution from the Plan paid directly to an eligible retirement plan specified by the Participant in a direct rollover election. For purposes of this Section 6.10, a Participant includes as to their respective interests, a Participant's surviving spouse and the Participant's spouse or former spouse who is an alternate payee under a QDRO. (C) Copyright 2001 First Union National Bank 29 Defined Contribution Plan (B) Rollover and Withholding Notice. At least 30 days and not more than 90 days prior to the Trustee's distribution of an eligible rollover distribution, the Plan Administrator must provide a written notice (including a summary notice as permitted under applicable Treasury regulations) explaining to the distributee the rollover option, the applicability of mandatory 20% federal withholding to any amount not directly rolled over, and the recipient's right to roll over within 60 days after the date of receipt of the distribution ("rollover notice"). If applicable, the rollover notice also must explain the availability of income averaging and the exclusion of net unrealized appreciation. A recipient of an eligible rollover distribution (whether he/she elects a direct rollover or elects to receive the distribution), also may elect to receive distribution at any administratively practicable time which is earlier than 30 days (but not less than 7 days if Section 6.04 applies) following receipt of the rollover notice. (C) Default rollover. The Plan Administrator, in the case of a Participant who does not respond timely to the notice described in Section 6.10(B), may make a direct rollover of the Participant's Account (as described in Revenue Ruling 2000-36 or in any successor guidance) in lieu of distributing the Participant's Account. (D) Definitions. The following definitions apply to this Section 6.10: (1) Eligible rollover distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the Participant, except an eligible rollover distribution does not include: (a) any distribution which is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Participant or the joint lives (or joint life expectancies) of the Participant and the Participant's designated beneficiary, or for a specified period of ten years or more; (b) any Code ss.401(a)(9) required minimum distribution; (c) the portion of any distribution which is not includible in gross income (determined without regard to the exclusion of net unrealized appreciation with respect to employer securities); (d) any hardship distribution made after December 31, 1998, from a Participant's deferral contributions Account (except where the Participant also satisfies a non-hardship distribution event described in Section 14.03(d)); and (e) any distribution which otherwise would be an eligible rollover distribution, but where the total distributions to the Participant during that calendar year are reasonably expected to be less than $200. (2) Eligible retirement plan. An eligible retirement plan is an individual retirement account described in Code ss.408(a), an individual retirement annuity described in Code ss.408(b), an annuity plan described in Code ss.403(a), or a qualified trust described in Code ss.401(a), which accepts the Participant's or alternate payee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is either an individual retirement account or individual retirement annuity. (3) Direct rollover. A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. 6.11 TEFRA ELECTIONS. Notwithstanding the provisions of Sections 6.01, 6.02 and 6.03, if the Participant (or Beneficiary) signed a written distribution designation prior to January 1, 1984, ("TEFRA election") the Plan Administrator must direct the Trustee to distribute the Participant's Vested Account Balance in accordance with that election, subject however, to the survivor annuity requirements, if applicable, of Sections 6.04, 6.05 and 6.06. This Section 6.11 does not apply to a TEFRA election, and the Plan Administrator will not comply with that election, if any of the following applies: (1) the elected method of distribution would have disqualified the Plan under Code ss.401(a)(9) as in effect on December 31, 1983; (2) the Participant did not have an Account Balance as of December 31, 1983; (3) the election does not specify the timing and form of the distribution and the death Beneficiaries (in order of priority); (4) the substitution of a Beneficiary modifies the distribution payment period; or, (5) the Participant (or Beneficiary) modifies or revokes the election. In the event of a revocation, the Trustee must distribute, no later than December 31 of the calendar year following the year of revocation, the amount which the Participant would have received under Section 6.02 if the distribution designation had not been in effect or, if the Beneficiary revokes the distribution designation, the amount which the Beneficiary would have received under Section 6.02 if the distribution designation had not been in effect. The Plan Administrator will apply this Section 6.11 to rollovers and transfers in accordance with Part J of the Code ss.401(a)(9) Treasury regulations. (C) Copyright 2001 First Union National Bank 30 Defined Contribution Plan ARTICLE VII EMPLOYER ADMINISTRATIVE PROVISIONS 7.01 INFORMATION TO PLAN ADMINISTRATOR. The Employer must supply current information to the Plan Administrator as to the name, date of birth, date of employment, Compensation, leaves of absence, Years of Service and date of Separation from Service of each Employee who is, or who will be eligible to become, a Participant under the Plan, together with any other information which the Plan Administrator considers necessary to administer properly the Plan. The Employer's records as to the current information the Employer furnishes to the Plan Administrator are conclusive as to all persons. 7.02 NO RESPONSIBILITY FOR OTHERS. Except as required under ERISA, the Employer has no responsibility or obligation under the Plan to Employees, Participants or Beneficiaries for any act (unless the Employer also serves in such capacities) required of the Plan Administrator, the Trustee, the Custodian, or of any other service provider to the Plan. 7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer will indemnify, defend and hold harmless the Plan Administrator from and against any and all loss resulting from liability to which the Plan Administrator may be subjected by reason of any act or omission (except willful misconduct or gross negligence) in its official capacities in the administration of this Trust or Plan or both, including attorneys' fees and all other expenses reasonably incurred in the Plan Administrator's defense, in case the Employer fails to provide such defense. The indemnification provisions of this Section 7.03 do not relieve the Plan Administrator from any liability the Plan Administrator may have under ERISA for breach of a fiduciary duty. Furthermore, the Plan Administrator and the Employer may execute a written agreement further delineating the indemnification agreement of this Section 7.03, provided the agreement is consistent with and does not violate ERISA. The indemnification provisions of this Section 7.03 extend to any Trustee, third party administrator, Custodian or other Plan service provider solely to the extent provided by a written agreement executed by such persons and the Employer. 7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to direct the Trustee with respect to the investment and re-investment of assets comprising the Trust Fund only if and to the extent the Trustee consents in writing to permit such direction. 7.05 EVIDENCE. Anyone including the Employer, required to give data, statements or other information relevant under the terms of the Plan ("evidence") may do so by certificate, affidavit, document or other form which the person to act in reliance may consider pertinent, reliable and genuine, and to have been signed, made or presented by the proper party or parties. The Plan Administrator and the Trustee are protected fully in acting and relying upon any evidence described under the immediately preceding sentence. 7.06 PLAN CONTRIBUTIONS. The Employer is solely responsible to determine the proper amount of any Employer contribution it makes to the Plan and for the timely deposit to the Trust of the Employer's Plan contributions. 7.07 EMPLOYER ACTION. The Employer must take any action under the Plan in accordance with applicable Plan provisions and with proper authority such that the action is valid and under applicable law and is binding upon the Employer. 7.08 FIDUCIARIES NOT INSURERS. The Trustee, 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 Employer, the Plan Administrator 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. 7.09 PLAN TERMS BINDING. The Plan is binding upon the Employer, Trustee, Plan Administrator, Custodian (and all other service providers to the Plan), upon Participants, Beneficiaries and all other persons entitled to benefits, and upon the successors and assigns of the foregoing persons. 7.10 WORD USAGE. Words used in the masculine also apply to the feminine where applicable, and wherever the context of the Plan dictates, the plural includes the singular and the singular includes the plural. Titles of Plan and Adoption Agreement sections are for reference only. 7.11 STATE LAW. The law of the state of the Employer's principal place of business will determine all questions arising with respect to the provisions of the Plan, except to the extent superseded by ERISA or other federal law. The Employer in an Addendum to its Adoption Agreement and subject to applicable law, may elect to apply the law of another state. 7.12 PROTOTYPE PLAN STATUS. If the Plan fails initially to qualify or to maintain qualification or if the Employer makes any amendment or modification to a provision of the Plan (other than a proper completion of an elective provision under the Adoption Agreement or the attachment of an Addendum authorized by the Plan or by the Adoption Agreement), the Employer no longer may participate under this Prototype Plan. The Employer also may not participate (or continue to participate) in this Prototype Plan if the Trustee or Custodian does not have the written consent of the Prototype Plan Sponsor required under Section 1.33 to serve in the capacity of Trustee or Custodian. If the Employer is not entitled to participate under this Prototype Plan, the Plan is an individually-designed plan and the reliance procedures specified in the applicable Adoption Agreement no longer apply. (C) Copyright 2001 First Union National Bank 31 Defined Contribution Plan 7.13 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or with respect to the establishment of the Trust, or any modification or any amendment to the Plan or Trust, or in the creation of any Account, or with respect to the payment of any benefit, gives any Employee, Participant or any Beneficiary any right to employment or to continued employment by the Employer, or any legal or equitable right against the Employer, the Trustee, the Plan Administrator or any employee or agent thereof, except as expressly provided by the Plan, the Trust, ERISA or other applicable law. (C) Copyright 2001 First Union National Bank 32 Defined Contribution Plan ARTICLE VIII PARTICIPANT ADMINISTRATIVE PROVISIONS 8.01 BENEFICIARY DESIGNATION. A Participant from time to time may designate, in writing, any person(s) (including a trust or other entity), contingently or successively, to whom the Trustee will pay the Participant's Vested Account Balance (including any life insurance proceeds payable to the Participant's Account) in the event of death. A Participant also may designate the form and method of payment of his/her Account. The Plan Administrator will prescribe the form for the Participant's written designation of Beneficiary and, upon the Participant's filing the form with the Plan Administrator, the form effectively revokes all designations filed prior to that date by the same Participant. A divorce decree, or a decree of legal separation, revokes the Participant's designation, if any, of his/her spouse as his/her Beneficiary under the Plan unless: (1) the decree or a QDRO provides otherwise; or (2) the Employer provides otherwise in an Addendum to its Adoption Agreement. The foregoing revocation provision (if applicable) applies only with respect to a Participant whose divorce or legal separation becomes effective on or following the date the Employer executes this Plan, unless the Employer in its Adoption Agreement specifies a different effective date. (A) Coordination with Survivor Annuity Requirements. If Section 6.04 applies to the Participant, this Section 8.01 does not impose any special spousal consent requirements on the Participant's Beneficiary designation unless the Participant waives the QJSA or QPSA benefit. If the Participant waives the QJSA or QPSA benefit without spousal consent to the Participant's Beneficiary designation: (1) any waiver of the QJSA or of the QPSA is not valid; and (2) if the Participant dies prior to his/her annuity starting date, the Participant's Beneficiary designation will apply only to the portion of the death benefit which is not payable as a QPSA. Regarding clause (2), if the Participant's surviving spouse is a primary Beneficiary under the Participant's Beneficiary designation, the Trustee will satisfy the spouse's interest in the Participant's death benefit first from the portion which is payable as a QPSA. (B) Profit Sharing Plan Exception. If the Plan is a profit sharing plan, the Beneficiary designation of a married Exempt Participant, as described in Section 6.04(H), is not valid unless the Participant's spouse consents (in a manner described in Section 6.05) to the Beneficiary designation. The spousal consent requirement in this Section 8.01(B) does not apply if the Participant's spouse is the Participant's sole primary Beneficiary, or if the Exempt Participant and his/her spouse are not married throughout the one-year period ending on the date of the Participant's death. (C) Incapacity of Beneficiary. If, in the opinion of the Plan Administrator, a Beneficiary is not able to care for his/her affairs because of a mental condition, physical condition or by reason of age, the Plan Administrator will apply the provisions of Section 10.09. 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 the Participant, then the Trustee will pay the Participant's Vested Account Balance in accordance with Section 6.03 in the following order of priority (unless the Employer specifies a different order of priority in an Addendum to its Adoption Agreement), to: (a) The Participant's surviving spouse (without regard to the one-year marriage rule of Sections 6.04(B) and 8.01(B); and if no surviving spouse to (b) The Participant's children (including adopted children), in equal shares by right of representation (one share for each surviving child and one share for each child who predeceases the Participant with living descendents); and if none to (c) The Participant's surviving parents, in equal shares; and if none to (d) The Participant's estate. If the Beneficiary survives the Participant, but dies prior to distribution of the Participant's entire Vested Account Balance, the Trustee will pay the remaining Vested Account Balance to the Beneficiary's estate unless: (1) the Participant's Beneficiary designation provides otherwise; (2) the Beneficiary has properly designated a beneficiary; or (3) the Employer provides otherwise in an Addendum to its Adoption Agreement. A Beneficiary only may designate a beneficiary for the Participant's Account Balance remaining at the Beneficiary's death, if the Participant has not previously designated a successive contingent beneficiary and the Beneficiary's designation otherwise complies with the Plan terms. If the Plan is a profit sharing plan, and the Plan includes Exempt Participants, the Employer may not specify a different order of priority in an Addendum unless the Participant's surviving spouse will be the sole primary Beneficiary in the different order of priority. The Plan Administrator will direct the Trustee as to the method and to whom the Trustee will make payment under this Section 8.02. 8.03 ASSIGNMENT OR ALIENATION. Except as provided in Code ss.414(p) relating to QDROs and in Code ss.401(a)(13) relating to certain voluntary, revocable assignments, judgments and settlements, 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, except as provided by Code ss.401(a)(13) or other applicable law, a benefit under the Plan is not subject to attachment, garnishment, levy, execution or other legal or equitable process. 8.04 INFORMATION AVAILABLE. Any Participant or Beneficiary may examine copies of the Plan description, latest annual report, any bargaining agreement, this Plan and Trust, and any contract or any other instrument which relates to the establishment or administration of the Plan or Trust. The Plan Administrator will maintain all of the items listed in this Section 8.04 in its office, or in such other place or places as it may designate from time to time in (C) Copyright 2001 First Union National Bank 33 Defined Contribution Plan order to comply with the regulations issued under ERISA, for examination during reasonable business hours. Upon the written request of a Participant or a Beneficiary, the Plan Administrator must furnish the Participant or Beneficiary with a copy of any item listed in this Section 8.04. The Plan Administrator may make a reasonable copying charge to the requesting person. 8.05 CLAIMS PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a Beneficiary may file with the Plan Administrator a written claim for benefits, if the Participant or the Beneficiary disputes the Plan Administrator's determination regarding the Participant's or Beneficiary's Plan benefit. However, the Plan will distribute only such Plan benefits to Participants or Beneficiaries as the Plan Administrator in its discretion determines a Participant or Beneficiary is entitled to. The Plan Administrator will maintain a separate written document as part of (or which accompanies) the Plan's summary plan description explaining the Plan's claims procedure. This Section 8.05 specifically incorporates the written claims procedure as from time to time published by the Plan Administrator as a part of the Plan. If the Plan Administrator pursuant to the Plan's written claims procedure makes a final written determination denying a Participant's or Beneficiary's benefit claim, the Participant or Beneficiary to preserve the claim must file an action with respect to the denied claim not later than 180 days following the date of the Plan Administrator's final determination. 8.06 PARTICIPANT DIRECTION OF INVESTMENT. A Participant's direction of the investment of his/her Account is subject to the provisions of this Section 8.06. For purposes of this Section 8.06, a Participant shall also include a Beneficiary where the Beneficiary has succeeded to the Participant's Account and the Plan affords the Beneficiary the same self-direction or loan rights as a Participant. (A) Trustee Authorization and Procedures. A Participant has the right to direct the Trustee with respect to the investment or re-investment of the assets comprising the Participant's individual Account only if the Trustee consents in writing to permit such direction. If the Trustee consents to Participant direction of investment, the Trustee only will accept direction from each Participant on a written direction of investment form the Plan Administrator provides for this purpose. The Trustee, or with the Trustee's consent, the Plan Administrator, may establish written procedures relating to Participant direction of investment under this Section 8.06, including procedures or conditions for electronic transfers or for changes in investments by Participants. The Plan Administrator will maintain, or direct the Trustee to maintain, an appropriate individual investment Account to the extent a Participant's Account is subject to Participant self-direction. (B) ERISA ss.404(c). No Plan fiduciary (including the Employer and Trustee) is liable for any loss or for any breach resulting from a Participant's direction of the investment of any part of his/her directed Account to the extent the Participant's exercise of his/her right to direct the investment of his/her Account satisfies the requirements of ERISA ss.404(c). (C) Participant Loans. The Plan Administrator, to the extent provided in a written loan policy adopted under Section 9.04, will treat a Plan loan made to a Participant as a Participant direction of investment under this Section 8.06, even if the Plan otherwise does not permit a Participant to direct his/her Account investments. Where a loan is treated as a directed investment, the borrowing Participant's Account alone shares in any interest paid on the loan, and it alone bears any expense or loss it incurs in connection with the loan. The Trustee may retain any principal or interest paid on the borrowing Participant's loan in a segregated Account (as described in Section 9.08(B)) on behalf of the borrowing Participant until the Trustee (or the Named Fiduciary, in the case of a nondiscretionary Trustee) deems it appropriate to add the loan payments to the Participant's Account under the Plan. (D) Collectibles. If the Trustee consents to Participant direction of investment of his/her Account, any post-December 31, 1981, investment by a Participant's directed Account in collectibles (as defined by Code ss.408(m)) is a deemed distribution to the Participant for Federal income tax purposes. (C) Copyright 2001 First Union National Bank 34 Defined Contribution Plan ARTICLE IX PLAN ADMINISTRATOR 9.01 COMPENSATION AND EXPENSES. The Plan Administrator (and any individuals serving as Plan Administrator) will serve without compensation for services as such, but the Employer will pay all expenses of the Plan Administrator, except to the extent the Trustee properly pays for such expenses, pursuant to Article X. 9.02 RESIGNATION AND REMOVAL. If the Employer appoints one or more persons to serve as Plan Administrator, such person(s) shall serve until they resign by written notice to the Employer or until the Employer removes them by written notice. In case of a vacancy in the position of Plan Administrator, the Employer will exercise any and all of the powers, authority, duties and discretion conferred upon the Plan Administrator pending the filling of the vacancy. 9.03 GENERAL POWERS AND DUTIES. The Plan Administrator has the following general powers and duties which are in addition to those the Plan otherwise accords to the Plan Administrator: (a) To determine the rights of eligibility of an Employee to participate in the Plan, all factual questions that arise in the course of administering the Plan, the value of a Participant's Account Balance (based on the value of the Trust assets, as determined by the Trustee) and the Vested percentage of each Participant's Account Balance; (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, the Code, ERISA or other applicable law; (c) To construe and enforce the terms of the Plan and the rules and regulations the Plan Administrator adopts, including interpretation of the basic plan document, the Adoption Agreement and any document related to the Plan's operation; (d) To direct the Trustee regarding the crediting and distribution of the Trust Fund and to direct the Trustee to conduct interim valuations under Section 10.15; (e) To review and render decisions regarding 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; (g) To engage the service of agents whom the Plan Administrator may deem advisable to assist it with the performance of its duties; (h) To engage the services of an Investment Manager or Managers (as defined in ERISA ss.3(38)), each of whom will 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 such Manager's control; (i) To make any other determinations and undertake any other actions the Plan Administrator believes are necessary or appropriate for the administration of the Plan; and (j) To establish and maintain a funding standard account and to make credits and charges to the account to the extent required by and in accordance with the provisions of the Code. The Plan Administrator must exercise all of its powers, duties and discretion under the Plan in a uniform and nondiscriminatory manner. The Plan Administrator shall have total and complete discretion to interpret and construe the Plan and to determine all questions arising in the administration, interpretation and application of the Plan. Any determination the Plan Administrator makes under the Plan is final and binding upon any affected person. 9.04 PLAN LOANS. The Plan Administrator may, in its sole discretion, in accordance with Section 10.03(E) establish, amend or terminate from time to time, a nondiscriminatory policy which the Trustee must observe in making Plan loans, if any, to Participants and to Beneficiaries. If the Plan Administrator adopts a loan policy, the loan policy must be a written document and must include: (1) the identity of the person or positions authorized to administer the participant loan program; (2) the procedure for applying for a loan; (3) the criteria for approving or denying a loan; (4) the limitations, if any, on the types and amounts of loans available; (5) the procedure for determining a reasonable rate of interest; (6) the types of collateral which may secure the loan; and (7) the events constituting default and the steps the Plan will take to preserve Plan assets in the event of default. A loan policy the Plan Administrator adopts under this Section 9.04 is part of the Plan, except that the Plan Administrator may amend or terminate the policy without regard to Section 13.02. 9.05 FUNDING POLICY. The Plan Administrator 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 Plan Administrator must communicate periodically, as it deems appropriate, to the Trustee and to any Plan Investment Manager the Plan's short-term and long-term financial needs for the coordination of the Plan's investment policy with Plan financial requirements. 9.06 INDIVIDUAL ACCOUNTS. The Plan Administrator 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 Account Balance under the Plan. (A) Forfeitures. If a Participant re-enters the Plan subsequent to his/her having a Forfeiture Break in Service, the Plan Administrator, or the Trustee, must maintain a separate Account for the Participant's pre-Forfeiture Break in Service Account Balance and a separate Account for his (C) Copyright 2001 First Union National Bank 35 Defined Contribution Plan post-Forfeiture Break in Service Account Balance, unless the Participant's entire Account Balance under the Plan is 100% Vested. If the Plan is subject to Participant direction of investment under Section 8.06, the Plan Administrator may maintain, or may direct the Trustee to maintain, a separate temporary forfeiture Account in the name of the Plan to account for Participant forfeitures which occur during the Plan Year. The Trustee will direct the investment of any separate temporary forfeiture Account. As of each Accounting Date, or interim valuation date, if applicable, the Plan Administrator will allocate the net income, gain or loss from the temporary forfeiture Account, if any, to the Accounts of the Participants in accordance with the provisions of Section 9.08. (B) Net Income, Gain or Loss. The Plan Administrator will make its allocations of net income, gain or loss or request the Trustee to make its allocations, to the Accounts of the Participants in accordance with the provisions of Section 9.08. The Plan Administrator may direct the Trustee under Section 9.08(B) to maintain a temporary segregated investment Account in the name of a Participant to prevent a distortion of income, gain or loss allocations. The Plan Administrator must maintain records of its activities. 9.07 VALUE OF PARTICIPANT'S ACCOUNT BALANCE. If any or all Plan investment accounts are pooled, each Participant's Account has an undivided interest in the assets comprising the pooled account. In a pooled account, the value of each Participant's Account Balance consists of that proportion of the net worth (at fair market value) of the Trust Fund which the net credit balance in his/her Account (exclusive of the cash value of incidental benefit insurance contracts) bears to the total net credit balance in the Accounts (exclusive of the cash value of the incidental benefit insurance contracts) of all Participants plus the cash surrender value of any incidental benefit insurance contracts held by the Trustee on the Participant's life. If any or all Plan investment accounts are Participant directed, the directing Participant's Account Balance is comprised of the assets held within the Account and the value of the Account is the fair market value of such assets. For purposes of a distribution under the Plan, the value of a Participant's Account Balance is its value as of the valuation date immediately preceding the date of the distribution. 9.08 ALLOCATION AND DISTRIBUTION OF NET INCOME, GAIN OR LOSS. This Section 9.08 applies solely to the allocation of net income, gain or loss of the Trust Fund. The Plan Administrator will allocate Employer contributions and Participant forfeitures, if any, in accordance with Article III. A "valuation date" under this Plan is each: (1) Accounting Date; (2) valuation date the Employer elects in its Adoption Agreement Section 10.15; or (3) valuation date the Plan Administrator establishes under Section 9.03. The Employer in its Adoption Agreement Section 10.15 or the Plan Administrator may elect alternative valuation dates for the different Account types which the Plan Administrator maintains under the Plan. As of each valuation date, the Plan Administrator must adjust Accounts to reflect net income, gain or loss since the last valuation date. The valuation period is the period beginning on the day after the last valuation date and ending on the current valuation date. The Plan Administrator will allocate net income, gain or loss to the Participant Accounts in accordance with the daily valuation method, balance forward method, weighted average method, or other method the Employer elects under its Adoption Agreement. The Employer in its Adoption Agreement may elect alternative methods under which the Plan Administrator will allocate the net income, gain or loss to the different Account types which the Plan Administrator maintains under the Plan. If the Employer in its Adoption Agreement elects to apply a weighted average allocation method, the Plan Administrator will treat a weighted portion of the applicable contributions as if includible in the Participant's Account as of the beginning of the valuation period. The weighted portion is a fraction, the numerator of which is the number of months in the valuation period, excluding each month in the valuation period which begins prior to the contribution date of the applicable contributions, and the denominator of which is the number of months in the valuation period. The Employer in its Adoption Agreement may elect to substitute a weighting period other than months for purposes of this weighted average allocation. If the Employer in its Adoption Agreement elects to apply the daily valuation method, the Plan Administrator will allocate the net income, gain or loss on each day of the Plan Year for which Plan assets are valued on an established market and the Trustee is conducting business. If the Employer in its Adoption Agreement elects to apply the balance forward method, the Plan Administrator 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 the Plan, for amounts charged during the valuation period to the Accounts in accordance with Section 9.10 (relating to distributions and to loan disbursement payments) and Section 11.01 (relating to insurance premiums), and for the cash value of incidental benefit insurance contracts. The Plan Administrator then, subject to the restoration allocation requirements of the Plan, 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. (A) Trust Fund (Pooled) Investment Accounts. A pooled investment account is an Account which is not a segregated investment Account or an individual investment Account. (B) Segregated Investment Accounts. A segregated investment Account receives all income it earns and bears all expense or loss it incurs. Pursuant to the Plan Administrator's direction, the Trustee may establish for a Participant a segregated investment Account to prevent a distortion of Plan income, gain or loss allocations or for such other purposes as the Plan Administrator may direct. The Trustee will invest the assets of a segregated investment Account consistent with such purposes. As of each valuation date, the Plan Administrator must reduce a segregated Account for any forfeiture arising under Section 5.09 after the Plan Administrator has made all other (C) Copyright 2001 First Union National Bank 36 Defined Contribution Plan allocations, changes or adjustments to the Account for the valuation period. (C) Individual (Directed) Investment Accounts. An individual investment Account is an Account which is subject to Participant or Beneficiary self-direction under Section 8.06. An individual investment Account receives all income it earns and bears all expense or loss it incurs. As of each valuation date, the Plan Administrator must reduce an individual Account for any forfeiture arising from Section 5.09 after the Plan Administrator has made all other allocations, changes or adjustment to the Account for the valuation period. (D) Code ss.415 Excess Amounts. An Excess Amount or suspense account described in Part 2 of Article III does not share in the allocation of net income, gain or loss described in this Section 9.08. (E) Interest Adjustment. Any distribution (other than a distribution from a segregated or individual Account) made to a Participant or Beneficiary more than 90 days after the most recent valuation date may include interest on the amount of the distribution as an expense of the Trust Fund. The interest, if any, accrues from such valuation date to the date of the distribution at the rate the Employer specifies in its Adoption Agreement. (F) Contributions Prior to Accrual. If the Employer in its Adoption Agreement elects to impose one or more allocation conditions under Section 3.06 and the Employer contributes to the Plan amounts which at the time of the contribution have not accrued under the Plan terms ("pre-accrual contributions"), the Trustee will hold the pre-accrual contributions in the Trust and will invest such contributions as the Trustee determines, pending accrual and allocation to Participant Accounts. When the Plan Administrator allocates to Participants who have satisfied the Plan's allocation conditions the Employer's pre-accrual contributions, the Plan Administrator also will allocate the net income, gain or loss thereon pro rata in relation to each Participant's share of the pre-accrual contribution. 9.09 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting Date 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/her Account Balance in the Trust as of that date and such other information ERISA requires be furnished the Participant or the Beneficiary. No Participant, except the Plan Administrator, has the right to inspect the records reflecting the Account of any other Participant. 9.10 ACCOUNT CHARGED. The Plan Administrator will charge a Participant's Account for all distributions made from that Account to the Participant, to his/her Beneficiary or to an alternate payee, including a disbursement payment for a Participant loan. The Plan Administrator, except as prohibited by the Code or ERISA, also will charge a Participant's Account for any reasonable administrative expenses incurred by the Plan directly related to that Account. 9.11 LOST PARTICIPANTS. If the Plan Administrator is unable to locate any Participant or Beneficiary whose Account becomes distributable under Article VI or under Section 13.06 (a "lost Participant"), the Plan Administrator will apply the provisions of this Section 9.11. (A) Attempt to Locate. The Plan Administrator will use one or more of the following methods to attempt to locate a lost Participant: (1) provide a distribution notice to the lost Participant at his/her last known address by certified or registered mail; (2) use of the IRS letter forwarding program under Rev. Proc. 94-22; (3) use of a commercial locator service, the internet or other general search method; or (4) use of the Social Security Administration search program. (B) Failure to Locate. If a lost Participant remains unlocated for 6 months following the date of the Plan Administrator first attempts to locate the lost Participant using one or more of the methods described in Section 9.11(A), the Plan Administrator may forfeit the lost Participant's Account. If the Plan Administrator will forfeit the lost Participant's Account, the forfeiture occurs at the end of the above-described 6 month period and the Plan Administrator will allocate the forfeiture in accordance with Section 3.05. If a lost Participant whose Account was forfeited thereafter at any time but before the Plan has been terminated makes a claim for his/her forfeited Account, the Plan Administrator will restore the forfeited Account to the same dollar amount as the amount forfeited, unadjusted for net income, gains or losses occurring subsequent to the forfeiture. The Plan Administrator will make the restoration in the Plan Year in which the lost Participant makes the claim, first from the amount, if any, of Participant forfeitures the Plan Administrator otherwise would allocate for the Plan Year, then from the amount, if any, of Trust net income or gain for the Plan Year and last from the amount or additional amount the Employer contributes to the Plan for the Plan Year. The Plan Administrator will distribute the restored Account to the lost Participant not later than 60 days after the close of the Plan Year in which the Plan Administrator restores the forfeited Account. The Plan Administrator under this Section 9.11(B) will forfeit the entire Account of the lost Participant, including deferral contributions and Participant contributions. (C) Nonexclusivity and Uniformity. The provisions of Section 9.11 are intended to provide permissible but not exclusive means for the Plan Administrator to administer the Accounts of lost Participants. The Plan Administrator may utilize any other reasonable method to locate lost Participants and to administer the Accounts of lost Participants, including the default rollover under Section 6.10(C) and such other methods as the Revenue Service or the U.S. Department of Labor ("DOL") may in the future specify. The Plan Administrator will apply Section 9.11 in a reasonable, uniform and nondiscriminatory manner, but may in determining a specific course of action as to a particular Account, reasonably take into account differing circumstances such as the amount of a lost Participant's Account, the expense in attempting to locate a lost Participant, the Plan Administrator's ability to establish and the expense of establishing a rollover IRA, and other factors. The Plan Administrator may charge to the Account of a lost Participant the reasonable expenses incurred under (C) Copyright 2001 First Union National Bank 37 Defined Contribution Plan this Section 9.11 and which are associated with the lost Participant's Account. 9.12 PLAN CORRECTION. The Plan Administrator in conjunction with the Employer may undertake such correction of Plan errors as the Plan Administrator deems necessary, including correction to preserve tax qualification of the Plan under Code ss.401(a) or to correct a fiduciary breach under ERISA. Without limiting the Plan Administrator's authority under the prior sentence, the Plan Administrator, as it determines to be reasonable and appropriate, may undertake correction of Plan document, operational, demographic and employer eligibility failures under a method described in the Plan or under the Employee Plans Compliance Resolution System ("EPCRS") or any successor program to EPCRS. The Plan Administrator, as it determines to be reasonable and appropriate, also may undertake or assist the appropriate fiduciary or plan official in undertaking correction of a fiduciary breach, including correction under the Voluntary Fiduciary Correction Program ("VFC") or any successor program to VFC. If the Plan includes a 401(k) arrangement, the Plan Administrator to correct an operational error may require the Trustee to distribute from the Plan elective deferrals or vested matching contributions, including earnings, where such amounts result from an operational error other than a failure of Code ss.415, Code ss.402(g), a failure of the ADP or ACP tests, or a failure of the multiple use limitation. 9.13 NO RESPONSIBILITY FOR OTHERS. Except as required under ERISA, the Plan Administrator has no responsibility or obligation under the Plan to Participants or Beneficiaries for any act (unless the Plan Administrator also serves in such capacities) required of the Employer, the Trustee, the Custodian or of any other service provider to the Plan. The Plan Administrator is not responsible to collect any required plan contribution or to determine the correctness or deductibility or any Employer contribution. The Plan Administrator in administering the Plan is entitled to, but is not required to rely upon, information which a Participant, Beneficiary, Trustee, Custodian, the Employer, a Plan service provider or representatives thereof provide to the Plan Administrator. 9.14 NOTICE, DESIGNATION, ELECTION, CONSENT AND WAIVER. All notices under the Plan and all Participant or Beneficiary designations, elections, consents or waivers must be in writing and made in a form the Plan Administrator specifies or otherwise approves. To the extent permitted by Treasury regulations or other applicable guidance, any Plan notice, election, consent or waiver may be transmitted electronically. Any person entitled to notice under the Plan may waive the notice or shorten the notice period except as otherwise required by the Code or ERISA. (C) Copyright 2001 First Union National Bank 38 Defined Contribution Plan ARTICLE X TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan and agrees to perform the obligations imposed. The Trustee must provide bond for the faithful performance of its duties under the Trust to the extent required by ERISA. 10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the Employer for the Plan contributions made by the Employer, but the Trustee does not have any duty to ensure that the contributions received comply with the provisions of the Plan. The Trustee is not obliged to collect any contributions from the Employer, nor is the Trustee obliged to ensure that funds deposited with it are deposited according to the provisions of the Plan. 10.03 INVESTMENT POWERS. (A) Discretionary Trustee Designation. If the Employer, in its Adoption Agreement, designates the Trustee to administer the Trust as a discretionary Trustee, then the Trustee has full discretion and authority with regard to the investment of the Trust Fund, except with respect to a Plan asset under the control or the direction of a properly appointed Investment Manager or with respect to a Plan asset properly subject to Employer, or to Participant direction of investment. The Trustee must coordinate its investment policy with Plan financial needs as communicated to it by the Plan Administrator. The Trustee is authorized and empowered, but not by way of limitation, with the following powers, rights and duties: (a) To invest consistent with and subject to applicable law any part or all of the Trust Fund in any common or preferred stocks, open-end or closed-end mutual funds (including proprietary funds), put and call options traded on a national exchange, United States retirement plan bonds, corporate bonds, debentures, convertible debentures, commercial paper, U.S. Treasury bills, U.S. Treasury notes and other direct or indirect obligations of the United States Government or its agencies, improved or unimproved real estate situated in the United States, limited partnerships, insurance contracts of any type, mortgages, notes or other property of any kind, real or personal, to buy or sell options on common stock on a nationally recognized exchange with or without holding the underlying common stock, to open and to maintain margin accounts, to engage in short sales, to buy and sell commodities, commodity options and contracts for the future delivery of commodities, and to make any other investments the Trustee deems appropriate, as a prudent person would do under like circumstances with due regard for the purposes of this Plan. Any investment made or retained by the Trustee in good faith is proper but must be of a kind constituting a diversification considered by law suitable for trust investments. (b) To retain in cash so much of the Trust Fund as it may deem advisable to satisfy liquidity needs of the Plan and to deposit any cash held in the Trust Fund in a bank account at reasonable interest. (c) To invest, if the Trustee is a bank or similar financial institution supervised by the United States or by a state, in any type of deposit of the Trustee (or of a bank related to the Trustee within the meaning of Code ss.414(b)) at a reasonable rate of interest or in a common trust fund, as described in Code ss.584, or in a collective investment fund, the provisions of which govern the investment of such assets and which the Plan incorporates by this reference, which the Trustee (or its affiliate, as defined in Code ss.1504) maintains exclusively for the collective investment of money contributed by the bank (or the affiliate) in its capacity as trustee and which conforms to the rules of the Comptroller of the Currency. (d) To manage, sell, contract to sell, grant options to purchase, convey, exchange, transfer, abandon, improve, repair, insure, lease for any term even though commencing in the future or extending beyond the term of the Trust, and otherwise deal with all property, real or personal, in such manner, for such considerations and on such terms and conditions as the Trustee decides. (e) To credit and distribute the Trust Fund as directed by the Plan Administrator. The Trustee is not obliged to inquire as to whether any payee or distributee is entitled to any payment or whether the distribution is proper or within the terms of the Plan, or as to the manner of making any payment or distribution. The Trustee is accountable only to the Plan Administrator for any payment or distribution made by it in good faith on the order or direction of the Plan Administrator. (f) To borrow money, to assume indebtedness, extend mortgages and encumber by mortgage or pledge. (g) To compromise, contest, arbitrate or abandon claims and demands, in the Trustee's discretion. (h) To have with respect to the Trust all of the rights of an individual owner, including the power to exercise any and all voting rights associated with Trust assets, to give proxies, to participate in any voting trusts, mergers, consolidations or liquidations, to tender shares and to exercise or sell stock subscriptions or conversion rights. (i) To lease for oil, gas and other mineral purposes and to create mineral severances by grant or reservation; to pool or unitize interests in oil, gas and other minerals; and to enter into operating agreements and to execute division and transfer orders. (j) To hold any securities or other property in the name of the Trustee or its nominee, with depositories or agent depositories or in another form as it may deem best, with or without disclosing the trust relationship. (C) Copyright 2001 First Union National Bank 39 Defined Contribution Plan (k) To perform any and all other acts in its judgment necessary or appropriate for the proper and advantageous management, investment and distribution of the Trust. (l) To retain any funds or property subject to any dispute without liability for the payment of interest, and to decline to make payment or delivery of the funds or property until a court of competent jurisdiction makes final adjudication. (m) To file all information and tax returns required of the Trustee. (n) To furnish to the Employer and to the Plan Administrator an annual statement of account showing the condition of the Trust Fund and all investments, receipts, disbursements and other transactions effected by the Trustee during the Plan Year covered by the statement and also stating the assets of the Trust held at the end of the Plan Year, which accounts are conclusive on all persons, including the Employer and the Plan Administrator, except as to any act or transaction concerning which the Employer of the Plan Administrator files with the Trustee written exceptions or objections within 90 days after the receipt of the accounts or for which ERISA authorizes a longer period within which to object. (o) To begin, maintain or defend any litigation necessary in connection with the administration of the Plan, except the Trustee is not obliged nor required to do so unless indemnified to its satisfaction. (B) Nondiscretionary Trustee Designation/ Appointment of Custodian. If the Employer, in its Adoption Agreement, designates the Trustee to administer the Trust as a nondiscretionary Trustee, then the Trustee will not have any discretion or authority with regard to the investment of the Trust Fund, but must act solely as a directed trustee of the funds contributed to it. A nondiscretionary Trustee, as directed trustee of the funds held by it under the Plan, is authorized and empowered, by way of limitation, with the following powers, rights and duties, each of which the nondiscretionary Trustee exercises solely as directed trustee in accordance with the written direction of the Named Fiduciary (except to the extent a Plan asset is subject to the control and the management of a properly appointed Investment Manager or subject to Employer or Participant direction of investment): (a) To invest any part or all of the Trust Fund in any common or preferred stocks, open-end or closed-end mutual funds (including proprietary funds), put and call options traded on a national exchange, United States retirement plan bonds, corporate bonds, debentures, convertible debentures, commercial paper, U.S. Treasury bills, U.S. Treasury notes and other direct or indirect obligations of the United States Government or its agencies, improved or unimproved real estate situated in the United States, limited partnerships, insurance contracts of any type, mortgages, notes or other property of any kind, real or personal, to buy or sell options on common stock on a nationally recognized options exchange with or without holding the underlying common stock, to open and to maintain margin accounts, to engage in short sales, to buy and sell commodities, commodity options and contracts for the future delivery of commodities, and to make any other investments the Named Fiduciary deems appropriate. (b) To retain in cash so much of the Trust Fund as the Named Fiduciary may direct in writing to satisfy liquidity needs of the Plan and to deposit any cash held in the Trust Fund in a bank account at reasonable interest. (c) To invest, if the Trustee is a bank or similar financial institution supervised by the United States or by a State, in any type of deposit of the Trustee (or of a bank related to the Trustee within the meaning of Code ss.414(b)) at a reasonable rate of interest or in a common trust fund, as described in Code ss.584, or in a collective investment fund, the provisions of which govern the investment of such assets and which the Plan incorporates by this reference, which the Trustee (or its affiliate, as defined in Code ss.1504) maintains exclusively for the collective investment of money contributed by the bank (or the affiliate) in its capacity as trustee and which conforms to the rules of the Comptroller of the Currency. (d) To sell, contract to sell, grant options to purchase, convey, exchange, transfer, abandon, improve, repair, insure, lease for any term even though commencing in the future or extending beyond the term of the Trust, and otherwise deal with all property, real or personal, in such manner, for such considerations and on such terms and conditions as the Named Fiduciary directs in writing. (e) To credit and distribute the Trust Fund as directed by the Plan Administrator. The Trustee is not obliged to inquire as to whether any payee or distributee is entitled to any payment or whether the distribution is proper or within the terms of the Plan, or as to the manner of making any payment or distribution. The Trustee is accountable only to the Plan Administrator for any payment or distribution made by it in good faith on the order or the direction of the Plan Administrator. (f) To borrow money, to assume indebtedness, extend mortgages and encumber by mortgage or pledge in accordance with and at the written direction of the Named Fiduciary. (g) To have with respect to the Trust all of the rights of an individual owner, including the power to exercise any and all voting rights associated with Trust assets, to give proxies, to participate in any voting trusts, mergers, consolidations or liquidations, to tender shares and to exercise or sell stock subscriptions or conversion rights, provided the exercise of any such powers is in accordance with and at the written direction of the Named Fiduciary. (h) To lease for oil, gas and other mineral purposes and to create mineral severances by grant or reservation; to pool or unitize interests in oil, gas and (C) Copyright 2001 First Union National Bank 40 Defined Contribution Plan other minerals; and to enter into operating agreements and to execute division and transfer orders, provided the exercise of any such powers is in accordance with and at the written direction of the Named Fiduciary. (i) To hold any securities or other property in the name of the nondiscretionary Trustee or its nominee, with depositories or agent depositories or in another form as the Named Fiduciary may direct in writing, with or without disclosing the custodial relationship. (j) To retain any funds or property subject to any dispute without liability for the payment of interest, and to decline to make payment or delivery of the funds or property until a court of competent jurisdiction makes final adjudication. (k) To file all information and tax returns required of the Trustee. (l) To furnish to the Named Fiduciary, the Employer and the Plan Administrator an annual statement of account showing the condition of the Trust Fund and all investments, receipts, disbursements and other transactions effected by the nondiscretionary Trustee during the Plan Year covered by the statement and also stating the assets of the Trust held at the end of the Plan Year, which accounts are conclusive on all persons, including the Named Fiduciary, the Employer and the Plan Administrator, except as to any act or transaction concerning which the Named Fiduciary, the Employer or the Plan Administrator files with the nondiscretionary Trustee written exceptions or objections within 90 days after the receipt of the accounts or for which ERISA authorizes a longer period within which to object. (m) To begin, maintain or defend any litigation necessary in connection with the administration of the Plan, except the Trustee is not obliged nor required to do so unless indemnified to its satisfaction. Appointment of Custodian. The Employer may appoint a Custodian under the Plan, the acceptance by the Custodian indicated on the execution page of the Adoption Agreement. If the Employer appoints a Custodian, the Plan must have a discretionary Trustee, as described in Section 10.03(A). A Custodian has the same powers, rights and duties as a nondiscretionary Trustee, as described in this Section 10.03(B). The Custodian accepts the terms of the Plan and Trust by executing the Adoption Agreement. Any reference in the Plan to a Trustee also is a reference to a Custodian where the context of the Plan dictates. A limitation of the Trustee's liability by Plan provision also acts as a limitation of the Custodian's liability. Any action taken by the Custodian at the discretionary Trustee's direction satisfies any provision in the Plan referring to the Trustee's taking that action. Modification of Powers/Limited Responsibility. The Employer and the nondiscretionary Trustee (or the Custodian), in writing, may limit the powers of the Custodian or the nondiscretionary Trustee to any combination of powers listed within this Section 10.03(B). If there is a Custodian or a nondiscretionary Trustee under the Plan, then the Employer, in adopting this Plan acknowledges the Custodian or the nondiscretionary Trustee does not have any discretion with respect to the investment or the re-investment of the Trust Fund and the Custodian or the nondiscretionary Trustee is acting solely as a custodian or as a directed trustee with respect to the assets comprising the Trust Fund. (C) Limitation of Powers of Certain Custodians. If a Custodian is a bank which, under its governing state law, does not possess trust powers, then Paragraphs (a), (c) as it relates to common trust funds or collective investment funds, (d), (f), (g) and (h) of Section 10.03(B), Section 10.17 and Article XI do not apply to that bank and that bank only has the power and the authority to exercise the remaining powers, rights and duties under Section 10.03(B). (D) Named Fiduciary/Limitation of Liability of Nondiscretionary Trustee or Custodian. The Named Fiduciary under the Plan has the sole responsibility for the management and the control of the Trust Fund, except with respect to a Plan asset under the control or the direction of a properly appointed Investment Manager or with respect to a Plan asset properly subject to Participant or Employer direction of investment. If the Employer appoints a discretionary Trustee, the Named Fiduciary is the discretionary Trustee. If the Employer appoints a Custodian, the Named Fiduciary is the discretionary Trustee. Under a nondiscretionary Trustee designation, unless the Employer designates in writing another person or persons to serve as Named Fiduciary, the Named Fiduciary under the Plan is the president of a corporate Employer, the managing partner of a partnership Employer, the managing member of a limited liability company Employer or the sole proprietor, as appropriate. The Named Fiduciary will exercise its management and control of the Trust Fund through its written direction to the nondiscretionary Trustee or to the Custodian, whichever applies to the Plan. The nondiscretionary Trustee or the Custodian does not have any duty to review or to make recommendations regarding investments made at the written direction of the Named Fiduciary. The nondiscretionary Trustee or the Custodian must retain any investment obtained at the written direction of the Named Fiduciary until further directed in writing by the Named Fiduciary to dispose of such investment. The nondiscretionary Trustee or the Custodian is not liable in any manner or for any reason for making, retaining or disposing of any investment pursuant to any written direction of the Named Fiduciary. The Employer will indemnify, defend and hold the nondiscretionary Trustee or the Custodian harmless from any damages, costs or expenses, including reasonable attorneys' fees, which the nondiscretionary Trustee or the Custodian may incur as a result of any claim asserted against the nondiscretionary Trustee, the Custodian or the Trust arising out of the nondiscretionary Trustee's or Custodian's full and timely compliance with any written direction of the Named Fiduciary. (E) Participant Loans. This Section 10.03(E) specifically authorizes the Trustee to make loans on a nondiscriminatory basis to a Participant or to a Beneficiary in accordance with the loan policy established by the Plan Administrator, provided: (1) the loan policy satisfies the requirements of Section 9.04; (2) loans are available to all (C) Copyright 2001 First Union National Bank 41 Defined Contribution Plan Participants and Beneficiaries on a reasonably equivalent basis and are not available in a greater amount for Highly Compensated Employees than for Nonhighly Compensated Employees; (3) any loan is adequately secured and bears a reasonable rate of interest; (4) the loan provides for repayment within a specified time (however, the loan policy may suspend loan payments pursuant to Code ss.414(u)(4)) or otherwise in accordance with applicable Treasury Regulations); (5) the default provisions of the note permit offset of the Participant's Vested Account Balance only at the time when the Participant has a distributable event under the Plan, but without regard to whether the Participant consents to distribution as otherwise may be required under Section 6.01(A)(5); (6) the amount of the loan does not exceed (at the time the Plan extends the loan) the present value of the Participant's Vested Account Balance; and (7) the loan otherwise conforms to the exemption provided by Code ss.4975(d)(1). The loan policy may provide a Participant's loan default is a distributable event with respect to the defaulted amount, irrespective of whether the Participant otherwise has incurred a distributable event at the time of default, except as to amounts which the Participant used to secure his/her loan which remain subject to distribution restrictions under Section 14.11 or are money purchase pension plan or target benefit plan balances which may not be distributed in-service at the time of default. If the joint and survivor requirements of Article VI apply to the Participant, the Participant may not pledge any portion of his/her Account Balance as security for a loan unless, within the 90 day period ending on the date the pledge becomes effective, the Participant's spouse, if any, consents (in a manner described in Section 6.05 other than the requirement relating to the consent of a subsequent spouse) to the security or, by separate consent, to an increase in the amount of security. A Participant who is an Owner-Employee (including other persons described in Code ss.4975(f)(6)), or who is a Shareholder-Employee may not receive a loan from the Plan, unless he/she has obtained a prohibited transaction exemption from the DOL. (F) Investment in Qualifying Employer Securities and Qualifying Employer Real Property. The Trustee (or as applicable, Investment Manager, Employer or Participant) may invest in qualifying Employer securities or in qualifying Employer real property, as defined in and as limited by ERISA. If the Employer's Plan is a profit sharing plan, the aggregate investments in qualifying Employer securities and in qualifying Employer real property may exceed 10% of the value of Plan assets, unless the Employer elects in its Adoption Agreement to restrict such investments to 10% (or to some other percentage which is less than 100%). Notwithstanding the foregoing, except where permitted under ERISA ss.407(b)(2), if the Plan includes a 401(k) arrangement, a participant's Deferral Contributions Account accumulated in Plan Years beginning after December 31, 1998, including earnings thereon, may not be invested more than 10% in qualifying employer securities and qualifying employer real property, unless such investments are directed by the Participant or the Participant's Beneficiary. (G) Modifications to or Substitution of Trust. The Employer in its Standardized Adoption Agreement may not amend any provision of Article X (or any other provision of the Plan related to the Trust) except to specify the Trust year, the names of the Plan, the Employer, the Trustee, the Custodian, the Plan Administrator, other fiduciaries or the name of any pooled trust in which the Trust will participate. The Employer in its Nonstandardized Adoption Agreement, in addition to the foregoing amendments, may amend or override the administrative provisions of Article X (or any other provision of the Plan related to the Trust), including provisions relating to Trust investment and Trustee duties. Any such amendment: (1) must not conflict with any other provisions of the Plan (except as expressly are intended to override an existing Trust provision); (2) must not cause the Plan to violate Code ss.401(a); and (3) must be made in accordance with Rev. Proc. 2000-20 or any successor thereto. The Employer using either a Standardized or Nonstandardized Adoption Agreement to establish its Plan, subject to the conditions (1), (2) and (3) described above, may elect to substitute in place of Article X and the remaining trust provisions of the basic plan document, any other trust or custodial account agreement. All Section 10.03(G) Trust modifications or substitutions are subject to Section 13.02 and require the written consent or signature of the Trustee. (H) Cofiduciary Liability. Each fiduciary under the Plan is responsible solely for his/her or its own acts or omissions. A fiduciary does not have any liability for another fiduciary's breach of fiduciary responsibility with respect to the Plan and the Trust unless the fiduciary: (1) participates knowingly in or undertakes to conceal the breach; (2) has actual knowledge of the breach and fails to take reasonable remedial action to remedy the breach; or (3) through negligence in performing his/her or its own specific fiduciary responsibilities that give rise to fiduciary status, the fiduciary has enabled the other fiduciary to commit a breach of the latter's fiduciary responsibility. 10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to the Plan must be open to the inspection of the Plan Administrator and the Employer at all reasonable times and may be audited from time to time by any person or persons as the Employer or Plan Administrator may specify in writing. The Trustee must furnish the Plan Administrator with whatever information relating to the Trust Fund the Plan Administrator considers necessary to perform its duties as Plan Administrator. 10.05 FEES AND EXPENSES FROM FUND. A Trustee or a Custodian will receive reasonable compensation as may be agreed upon from time to time between the Employer and the Trustee or the Custodian. No person who is receiving full pay from the Employer may receive compensation (except for reimbursement of Plan expenses) for services as Trustee or as Custodian. The Trustee will pay from the Trust Fund all fees and reasonable expenses incurred by the Plan, to the extent such fees and expenses are for the ordinary and necessary administration and operation of the Plan and are not "settlor expenses" as determined by the DOL unless the Employer pays such fees and expenses. Any fee or expense paid, directly or indirectly, by the Employer is not an Employer contribution to the Plan, provided the fee or the expense relates to the ordinary and necessary administration of the Trust Fund. (C) Copyright 2001 First Union National Bank 42 Defined Contribution Plan 10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, a Participant or a Beneficiary is not a necessary party or required to receive notice of process in any court proceeding involving the Plan, the Trust Fund or any fiduciary of the Plan. Any final judgment entered in any such proceeding will be binding upon the Employer, the Plan Administrator, the Trustee, Custodian, Participants and Beneficiaries and upon their successors and assigns. 10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the Trust Fund reasonable compensation to agents, attorneys, accountants and other persons to advise the Trustee as in its opinion may be necessary. The Trustee reasonably may delegate to any agent, attorney, accountant or other person selected by it any non-Trustee power or duty vested in it by the Plan, and the Trustee may reasonably act or refrain from acting on the advice or opinion of any agent, attorney, accountant or other person so selected. 10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee will make Plan distributions in the form of cash except where: (1) the required form of distribution is a QJSA or QPSA which has not been waived; (2) the Plan is a restated Plan and under the prior Plan, distribution in the form of property ("in-kind distribution") is a Protected Benefit; (3) the Plan Administrator adopts a written policy which provides for in-kind distribution; or (4) the Employer is terminating the Plan, and in the reasonable judgement of the Trustee, some or all Plan assets may not within a reasonable time for making final distribution of Plan assets, be liquidated to cash or may not be so liquidated without undue loss in value. The Plan Administrator's policy under clause (3) may restrict in-kind distributions to certain types of Trust investments or specify any other reasonable and nondiscriminatory condition or restriction applicable to in-kind distributions. Under clause (4), the Trustee will make Plan termination distributions to Participants and Beneficiaries in cash, in-kind or in a combination of these forms, in a reasonable and nondiscriminatory manner which may take into account the preferences of the distributees. All in-kind distributions will be made based on the current fair market value of the property, as determined by the Trustee. 10.09 PARTICIPANT OR BENEFICIARY INCAPACITATED. If, in the opinion of the Plan Administrator or of the Trustee, a Participant or Beneficiary entitled to a Plan distribution is not able to care for his/her affairs because of a mental condition, a physical condition, or by reason of age, at the direction of the Plan Administrator the Trustee may make the distribution to the Participant's or Beneficiary's guardian, conservator, trustee, custodian (including under a Uniform Transfers or Gifts to Minors Act) or to his/her attorney-in-fact or to other legal representative upon furnishing evidence of such status satisfactory to the Plan Administrator and to the Trustee. The Plan Administrator and the Trustee do not have any liability with respect to payments so made and neither the Plan Administrator nor the Trustee has any duty to make inquiry as to the competence of any person entitled to receive payments under the Plan. 10.10 DISTRIBUTION DIRECTIONS. The Trustee must promptly notify the Plan Administrator of any unclaimed Plan distribution and then dispose of the distribution in accordance with the Plan Administrator's subsequent direction. 10.11 THIRD PARTY RELIANCE. A person dealing with the Trustee is not obligated to see to the proper application of any money paid or property delivered to the Trustee, or to inquire whether the Trustee has acted pursuant to any of the terms of the Plan. Each person dealing with the Trustee may act upon any notice, request or representation in writing by the Trustee, or by the Trustee's duly authorized agent, and is not liable to any person in so acting. The certificate of the Trustee that it is acting in accordance with the Plan is conclusive in favor of any person relying on the certificate. 10.12 MULTIPLE TRUSTEES. If more than two persons act as Trustee, a decision of the majority of such persons controls with respect to any decision regarding the administration or the investment of the Trust Fund or of any portion of the Trust Fund with respect to which such persons act as Trustee. If there is more than one Trustee, the Trustees jointly will manage and control the assets of the Trust Fund. However, the Trustees may allocate among themselves specific responsibilities or obligations or may authorize one or more of them, either individually or in concert, to exercise any or all of the powers granted to the Trustee under Article X. In addition, the signature of only one Trustee is necessary to effect any transaction on behalf of the Trust. 10.13 RESIGNATION AND REMOVAL. The Trustee or the Custodian may resign its position by giving written notice to the Employer and to the Plan Administrator. The Trustee's notice must specify the effective date of the Trustee's resignation, which date must be at least 30 days following the date of the Trustee's notice, unless the Employer consents in writing to shorter notice. The Employer may remove a Trustee or a Custodian by giving written notice to the effected party. The Employer's notice must specify the effective date of removal which date must be at least 30 days following the date of the Employer's notice, except where the Employer reasonably determines a shorter notice period or immediate removal is necessary to protect Plan assets. In the event of the resignation or the removal of a Trustee, where no other Trustee continues to service, the Employer must appoint a successor Trustee if it intends to continue the Plan. If two or more persons hold the position of Trustee, in the event of the removal of one such person, during any period the selection of a replacement is pending, or during any period such person is unable to serve for any reason, the remaining person or persons will act as the Trustee. If the Employer fails to appoint a successor Trustee as of the effective date of the Trustee resignation or removal and no other Trustee remains, the Trustee will treat the Employer as having appointed itself as Trustee and as having filed the Employer's acceptance of appointment as successor Trustee with the former Trustee. If state law prohibits the Employer from serving as successor Trustee, the appointed successor Trustee is the president of a corporate Employer, the managing partner of a partnership Employer, the managing member of a limited liability (C) Copyright 2001 First Union National Bank 43 Defined Contribution Plan company Employer or the sole proprietor, as appropriate. If the Employer removes and does not replace a Custodian, the discretionary Trustee will assume possession of Plan assets held by the former Custodian. 10.14 SUCCESSOR TRUSTEE ACCEPTANCE. Each successor Trustee succeeds its predecessor Trustee by accepting in writing its appointment as successor Trustee and by filing the acceptance with the former Trustee and the Plan Administrator without the signing or filing of any further statement. The resigning or removed Trustee, upon receipt of acceptance in writing of the Trust by the successor Trustee, must execute all documents and do all acts necessary to vest the title of record in any successor Trustee. Each successor Trustee has and enjoys all of the powers, both discretionary and ministerial, conferred under the Plan upon its predecessor. A successor Trustee is not personally liable for any act or failure to act of any predecessor Trustee, except as required under ERISA. With the approval of the Employer and the Plan Administrator, a successor Trustee, with respect to the Plan, may accept the account rendered and the property delivered to it by a predecessor Trustee without liability. 10.15 VALUATION OF TRUST. The Trustee must value the Trust Fund as of each Accounting Date to determine the fair market value of each Participant's Account Balance in the Trust. The Trustee also must value the Trust Fund on such other valuation dates as directed in writing by the Plan Administrator or as the Adoption Agreement may require. 10.16 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for the acts or omissions of any Investment Manager the Plan Administrator may appoint, nor is the Trustee under any obligation to invest or otherwise to manage any asset of the Trust Fund which is subject to the management of a properly appointed Investment Manager. The Plan Administrator, the Trustee and any properly appointed Investment Manager may execute a written agreement as a part of this Plan delineating the duties, responsibilities and liabilities of the Investment Manager with respect to any part of the Trust Fund under the control of the Investment Manager. The limitation on liability described in this Section 10.16 also applies to the acts or omissions of any ancillary trustee or independent fiduciary properly appointed under Section 10.18. However, if a discretionary Trustee, pursuant to the delegation described in Section 10.18, appoints an ancillary trustee, the discretionary Trustee is responsible for the periodic review of the ancillary trustee's actions and must exercise its delegated authority in accordance with the terms of the Plan and in a manner consistent with ERISA. The Employer, the discretionary Trustee and an ancillary trustee may execute a written agreement as a part of this Plan delineating any indemnification agreement among the parties. 10.17 INVESTMENT IN GROUP TRUST FUND. The Employer, by adopting this Plan, specifically authorizes the Trustee to invest all or any portion of the assets comprising the Trust Fund in any group trust fund which at the time of the investment provides for the pooling of the assets of plans qualified under Code ss.401(a). This authorization applies solely to a group trust fund exempt from taxation under Code ss.501(a) and the trust agreement of which satisfies the requirements of Revenue Ruling 81-100, or any successor thereto. The provisions of the group trust fund agreement, as amended from time to time, are by this reference incorporated within this Plan and Trust. The provisions of the group trust fund will govern any investment of Plan assets in that fund. The Employer must specify in an Addendum to its Adoption Agreement the group trust fund(s) to which this authorization applies. If the Trustee is acting as a nondiscretionary Trustee, the investment in the group trust fund is available only in accordance with a proper direction, by the Named Fiduciary, in accordance with Section 10.03(B). Pursuant to Paragraph (c) of Section 10.03(A), a Trustee has the authority to invest in certain common trust funds and collective investment funds without the need for the authorizing Addendum described in this Section 10.17. Furthermore, at the Employer's direction, the Trustee, for collective investment purposes, may combine into one trust fund the Trust created under this Plan with the trust created under any other qualified retirement plan the Employer maintains. However, the Trustee must maintain separate records of account for the assets of each Trust in order to reflect properly each Participant's Account Balance under the qualified plans in which he/she is a participant. 10.18 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The Employer, in writing, may appoint any qualified person in any state to act as ancillary trustee with respect to a designated portion of the Trust Fund, subject to any consent required under Section 1.33. An ancillary trustee must acknowledge in writing its acceptance of the terms and conditions of its appointment as ancillary trustee and its fiduciary status under ERISA. The ancillary trustee has the rights, powers, duties and discretion as the Employer may delegate, subject to any limitations or directions specified in the agreement appointing the ancillary trustee and to the terms of the Plan or of ERISA. The investment powers delegated to the ancillary trustee may include any investment powers available under Section 10.03. The delegated investment powers may include the right to invest any portion of the assets of the Trust Fund in a common trust fund, as described in Code ss.584, or in any collective investment fund, the provisions of which govern the investment of such assets and which the Plan incorporates by this reference, but only if the ancillary trustee is a bank or similar financial institution supervised by the United States or by a state and the ancillary trustee (or its affiliate, as defined in Code ss.1504) maintains the common trust fund or collective investment fund exclusively for the collective investment of money contributed by the ancillary trustee (or its affiliate) in a trustee capacity and which conforms to the rules of the Comptroller of the Currency. The Employer also may appoint as an ancillary trustee, the trustee of any group trust fund designated for investment pursuant to the provisions of Section 10.17. The ancillary trustee may resign its position and the Employer may remove an ancillary trustee as provided in Section 10.13 regarding resignation and removal of the Trustee or Custodian. In the event of such resignation or removal, the Employer may appoint another ancillary (C) Copyright 2001 First Union National Bank 44 Defined Contribution Plan trustee or may return the assets to the control and management of the Trustee. The Employer may delegate its responsibilities under this Section 10.18 to a discretionary Trustee under the Plan, but not to a nondiscretionary Trustee or to a Custodian, subject to the acceptance by the discretionary Trustee of that delegation. If the DOL requires engagement of an independent fiduciary to have control or management of all or a portion of the Trust Fund, the Employer will appoint such independent fiduciary, as directed by the DOL. The independent fiduciary will have the duties, responsibilities and powers prescribed by the DOL and will exercise those duties, responsibilities and powers in accordance with the terms, restrictions and conditions established by the DOL and, to the extent not inconsistent with ERISA, the terms of the Plan. The independent fiduciary must accept its appointment in writing and must acknowledge its status as a fiduciary of the Plan. (C) Copyright 2001 First Union National Bank 45 Defined Contribution Plan ARTICLE XI PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY 11.01 INSURANCE BENEFIT. The Employer may elect to provide incidental life insurance benefits for insurable Participants who consent to life insurance benefits by executing the appropriate insurance company application form. The Trustee will not purchase any incidental life insurance benefit for any Participant prior to a contribution allocation to the Participant's Account. At an insured Participant's written direction, the Trustee will use all or any portion of the Participant's Employee contributions, if any, to pay insurance premiums covering the Participant's life. This Section 11.01 also authorizes (except if the Plan is a money purchase pension plan) the purchase of life insurance, for the benefit of the Participant, on the life of a family member of the Participant or on any person in whom the Participant has an insurable interest. However, if the policy is on the joint lives of the Participant and another person, the Trustee may not maintain that policy if the other person predeceases the Participant. The Employer will direct the Trustee as to the insurance company and insurance agent through which the Trustee is to purchase the insurance contracts, the amount of the coverage and the applicable dividend plan. Each application for a policy, and the policies themselves, must designate the Trustee as sole owner, with the right reserved to the Trustee to exercise any right or option contained in the policies, subject to the terms and provisions of this Plan. The Trustee must be the named beneficiary for the Account of the insured Participant. Proceeds of insurance contracts paid to the Participant's Account under this Article XI are subject to the distribution requirements of Article VI. The Trustee will not retain any such proceeds for the benefit of the Trust. The Trustee will charge the premiums on any incidental benefit insurance contract covering the life of a Participant against the Account of that Participant and will treat the insurance contract as a directed investment of the Participant's Account, even if the Plan otherwise does not permit a Participant to direct the investment of his/her own Account. The Trustee will hold all incidental benefit insurance contracts issued under the Plan as assets of the Trust created and maintained under the Plan. (A) Incidental insurance benefits. The aggregate of life insurance premiums paid for the benefit of a Participant, at all times, may not exceed the following percentages of the aggregate of the Employer's contributions (including Deferral Contributions and forfeitures) allocated to any Participant's Account: (i) 49% in the case of the purchase of ordinary life insurance contracts; or (ii) 25% in the case of the purchase of term life insurance or universal life insurance contracts. If the Trustee purchases a combination of ordinary life insurance contract(s) and term life insurance or universal life insurance contract(s), then the sum of one-half of the premiums paid for the ordinary life insurance contract(s) and the premiums paid for the term life insurance or universal life insurance contract(s) may not exceed 25% of the Employer contributions allocated to any Participant's Account. (B) Exception for certain profit sharing plans. If the Plan is a profit sharing plan, the incidental insurance benefits requirement does not apply to the Plan if the Plan purchases life insurance benefits only from Employer contributions accumulated in the Participant's Account for at least two years (measured from the allocation date). (C) Exception for other amounts. The incidental insurance benefits requirement does not apply to life insurance purchased with Employee contributions, rollover contributions, or earnings on Employer contributions. 11.02 LIMITATION ON LIFE INSURANCE PROTECTION. The Trustee will not continue any life insurance protection for any Participant beyond his/her annuity starting date as defined in Section 6.01(A)(4). If the Trustee holds any incidental benefit insurance contract(s) for the benefit of a Participant when he/she terminates his/her employment (other than by reason of death), the Trustee must proceed as follows: (a) If the entire cash value of the contract(s) is Vested in the terminating Participant, or if the contract(s) will not have any cash value at the end of the policy year in which Separation from Service occurs, the Trustee will transfer the contract(s) to the Participant endorsed so as to vest in the transferee all right, title and interest to the contract(s), free and clear of the Trust; subject however, to restrictions as to surrender or payment of benefits as the issuing insurance company may permit and as the Plan Administrator directs; (b) If only part of the cash value of the contract(s) is Vested in the terminating Participant, the Trustee, to the extent the Participant's interest in the cash value of the contract(s) is not Vested, may adjust the Participant's interest in the value of his/her Account attributable to Trust assets other than incidental benefit insurance contracts and proceed as in (a), or the Trustee must effect a loan from the issuing insurance company on the sole security of the contract(s) for an amount equal to the difference between the cash value of the contract(s) at the end of the policy year in which termination of employment occurs and the amount of the cash value that is Vested in the terminating Participant, and the Trustee must transfer the contract(s) endorsed so as to vest in the transferee all right, title and interest to the contract(s), free and clear of the Trust; subject however, to the restrictions as to surrender or payment of benefits as the issuing insurance company may permit and the Plan Administrator directs; (c) If no part of the cash value of the contract(s) is Vested in the terminating Participant, the Trustee must surrender the contract(s) for cash proceeds as may be available. In accordance with the written direction of the Plan Administrator, the Trustee will make any transfer of contract(s) under this Section 11.02 on the Participant's annuity starting date (or as soon as administratively practicable after that date). The Trustee may not transfer any contract under this Section 11.02 which contains a method of payment not specifically authorized by Article VI or which fails to comply with the joint and survivor annuity requirements, if applicable, of Article VI. In this (C) Copyright 2001 First Union National Bank 46 Defined Contribution Plan regard, the Trustee either must convert such a contract to cash and distribute the cash instead of the contract, or before making the transfer, must require the issuing company to delete the unauthorized method of payment option from the contract. 11.03 DEFINITIONS. For purposes of this Article XI: (a) "Policy" means an ordinary life, term life or universal life insurance contract issued by an insurer on the life of a Participant. (b) "Issuing insurance company" is any life insurance company which has issued a policy upon application by the Trustee under the terms of this Plan. (c) "Contract" or "Contracts" means a policy of insurance. In the event of any conflict between the provisions of this Plan and the terms of any contract or policy of insurance issued in accordance with this Article XI, the provisions of the Plan control. (d) "Insurable Participant" means a Participant to whom an insurance company, upon an application being submitted in accordance with the Plan, will issue insurance coverage, either as a standard risk or as a risk in an extra mortality classification. 11.04 DIVIDEND PLAN. The dividend plan is premium reduction unless the Plan Administrator directs the Trustee to the contrary. The Trustee must use all dividends for a contract to purchase insurance benefits or additional insurance benefits for the Participant on whose life the insurance company has issued the contract. Furthermore, the Trustee must arrange, where possible, for all policies issued on the lives of Participants under the Plan to have the same premium due date and all ordinary life insurance contracts to contain guaranteed cash values with as uniform basic options as are possible to obtain. The term "dividends" includes policy dividends, refunds of premiums and other credits. 11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance company, solely in its capacity as an issuing insurance company, is a party to this Plan nor is the company responsible for its validity. 11.06 NO RESPONSIBILITY FOR OTHERS. Except as required by ERISA, an issuing insurance company has no responsibility or obligation under the Plan to Participants or Beneficiaries for any act (unless the insurance company also serves in such capacities) required of the Employer, the Plan Administrator, the Trustee, the Custodian or any other service provider to the Plan. No insurance company, solely in its capacity as an issuing insurance company, need examine the terms of this Plan. For the purpose of making application to an insurance company and in the exercise of any right or option contained in any policy, the insurance company may rely upon the signature of the Trustee and is held harmless and completely discharged in acting at the direction and authorization of the Trustee. An insurance company is discharged from all liability for any amount paid to the Trustee or paid in accordance with the direction of the Trustee, and is not obliged to see to the distribution or further application of any moneys the insurance company so pays. 11.07 DUTIES OF INSURANCE COMPANY. Each insurance company must keep such records, make such identification of contracts, funds and accounts within funds, and supply such information as may be necessary for the proper administration of the Plan under which it is carrying insurance benefits. Note: The provisions of this Article XI are not applicable, and the Plan may not invest in insurance contracts, if a Custodian signatory to the Adoption Agreement is a bank which does not have trust powers from its governing state banking authority. (C) Copyright 2001 First Union National Bank 47 Defined Contribution Plan ARTICLE XII TOP-HEAVY PROVISIONS 12.01 DETERMINATION OF 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 Account Balances of all Key Employees as of the Determination Date and the denominator of which is a similar sum determined for all Employees. The Plan Administrator must include in the top-heavy ratio, as part of the Account Balances, any contribution not made as of the Determination Date but includible under Code ss.416 and the applicable Treasury regulations, and distributions made within the Determination Period. The Plan Administrator must calculate the top-heavy ratio by disregarding the Account Balance (and distributions, if any, of the Account Balance) of any Non-Key Employee who was formerly a Key Employee, and by disregarding the Account Balance (including distributions, if any, of the Account Balance) of an individual who has not received credit for at least one Hour of Service with the Employer during the Determination Period. The Plan Administrator must calculate the top-heavy ratio, including the extent to which it must take into account distributions, rollovers and transfers, in accordance with Code ss.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 now 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 Plan Administrator will calculate the top-heavy ratio in the same manner as required by the first two paragraphs of this Section 12.01, taking into account all plans within the Aggregation Group. To the extent the Plan Administrator must take into account distributions to a Participant, the Plan Administrator 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 Plan Administrator will calculate the present value of accrued benefits under defined benefit plans or the account balances under simplified employee pension plans included within the group in accordance with the terms of those plans, Code ss.416 and the regulations under that Code section. If a Participant in a defined benefit plan is a Non-Key Employee, the Plan Administrator will determine his/her 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 ss.411(b)(1)(C). If the Employer maintains a defined benefit plan, the Plan Administrator will use the actuarial assumptions (interest and mortality only) stated in that plan to calculate the present value of benefits from that defined benefit plan. If an aggregated plan does not have a valuation date coinciding with the Determination Date, the Plan Administrator must value the Account Balance 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 ss.416 and applicable Treasury regulations require for the first and for the second plan year of a defined benefit plan. The Plan Administrator will calculate the top-heavy ratio with reference to the Determination Dates that fall within the same calendar year. The top-heavy provisions of the Plan apply only for Plan Years in which Code ss.416 requires application of the top-heavy rules. 12.02 DEFINITIONS. For purposes of applying the top-heavy provisions of the Plan: (a) "Compensation" means Compensation as determined under Section 3.18(b) for Code ss.415 purposes and includes Compensation for the entire Plan Year. (b) "Determination Date" means for any Plan Year, 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. (c) "Determination Period" means the 5-year period ending on the Determination Date. (d) "Employer" means the Employer that adopts this Plan and any Related Employer. (e) "Key Employee" means, as of any Determination Date, any Employee or former Employee (or Beneficiary of such Employee) who, at any time during the Determination Period: (i) has Compensation in excess of 50% of the dollar amount prescribed in Code ss.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 ss.415(c)(1)(A) (relating to defined contribution plans), owns a more than 1/2% interest in the Employer 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 ss.318 (or the principles of that Code 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 ss.414(q) exclusions) of Employees, but no more than 50 officers. The Plan Administrator will make the determination of who is a Key Employee in accordance with Code ss.416(i)(1) and the regulations under that Code section. (f) "Non-Key Employee" means an Employee who does not meet the definition of Key Employee. (g) "Participant" means any Employee otherwise eligible to participate in the Plan but who is not entitled to receive any allocation under the Plan (or would have received a lesser allocation) for the Plan Year because of his/her Compensation level or because of his/her failure: (i) (C) Copyright 2001 First Union National Bank 48 Defined Contribution Plan to make elective deferrals under a 401(k) arrangement; (ii) to make Employee contributions; or (iii) to complete 1,000 Hours of Service or any other service requirement the Employer specifies in its Adoption Agreement as a condition to receive an allocation except for employment on the last day of the Plan Year. (h) "Permissive Aggregation Group" means the Required Aggregation Group plus any other qualified plans maintained by the Employer, but only if such group would satisfy in the aggregate the nondiscrimination requirements of Code ss.401(a)(4) and the coverage requirements of Code ss.410. The Plan Administrator will determine the Permissive Aggregation Group. (i) "Required Aggregation Group" means: (i) each qualified plan of the Employer in which at least one Key Employee participates or participated at any time during the Determination Period (including terminated plans); and (ii) any other qualified plan of the Employer which enables a plan described in clause (i) to meet the requirements of Code ss.401(a)(4) or of Code ss.410. 12.03 TOP-HEAVY MINIMUM ALLOCATION. The top-heavy minimum allocation requirement applies to the Plan only in a Plan Year for which the Plan is top-heavy. If the Plan is top-heavy in any Plan Year: (a) Each Non-Key Employee who is a Participant (as described in Section 12.02(g)) and employed by the Employer on the last day of the Plan Year will receive a top-heavy minimum allocation for that Plan Year. (b) The top-heavy minimum allocation is equal to 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 nondiscrimination rules of Code ss.401(a)(4) or the coverage rules of Code ss.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. (c) If, for a Plan Year, there are no allocations of Employer contributions or of 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. 12.04 DETERMINING TOP-HEAVY CONTRIBUTION RATES. In determining under Section 12.03(b) the highest contribution rate for any Key Employee, the Plan Administrator takes into account all Employer contributions (including deferral contributions and including matching contributions but not including Employer contributions to Social Security) and forfeitures allocated to the Participant's Account for the Plan Year, divided by his/her Compensation for the entire Plan Year. For purposes of satisfying the Employer's top-heavy minimum allocation requirement, the Plan Administrator disregards the elective deferrals and matching contributions allocated to a Non-Key Employee's Account in determining the Non-Key Employee's contribution rate. However, the Plan Administrator operationally may include in the contribution rate of a Non-Key Employee any matching contributions not necessary to satisfy the nondiscrimination requirements of Code ss.401(k) or of Code ss.401(m). To determine a Participant's contribution rate, the Plan Administrator must treat all qualified top-heavy defined contribution plans maintained by the Employer (or by any Related Employer) as a single plan. 12.05 PLAN WHICH WILL SATISFY TOP-HEAVY. The Plan will satisfy the top-heavy minimum allocation requirement in accordance with the following requirements: (a) If the Employer makes the top-heavy minimum allocation to this Plan, the Employer will make any necessary additional contribution to this Plan. The Plan Administrator first will allocate the Employer contributions (and Participant forfeitures, if any) for the Plan Year in accordance with the provisions of Adoption Agreement Section 3.04. The Employer then will contribute an additional amount for the Account of any Participant entitled under Section 12.03 to a top-heavy minimum allocation and whose contribution rate for the Plan Year, under this Plan and any other plan aggregated under Section 12.02, 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 Plan Administrator will allocate the additional contribution to the Account of the Participant on whose behalf the Employer makes the contribution. (b) If the Employer makes the top-heavy minimum allocation under another plan, this Plan does not provide the top-heavy minimum allocation and the Plan Administrator will allocate the annual Employer contributions (and Participant forfeitures) under the Plan solely in accordance with the allocation method selected under Adoption Agreement Section 3.04. 12.06 TOP-HEAVY VESTING. If the Plan is top-heavy and the Employer in its Adoption Agreement does not elect immediate vesting, the Employer must elect a top-heavy (or modified top-heavy) vesting schedule. The specified top-heavy vesting schedule applies to the Plan's first top-heavy Plan Year and to all subsequent Plan Years, except as the Employer otherwise elects in its Adoption Agreement. If the Employer elects in its Adoption Agreement to apply the specified top-heavy vesting schedule only in Plan Years in which the Plan is top-heavy, any change in the Plan's vesting schedule resulting from this election is subject to Section 5.11. (C) Copyright 2001 First Union National Bank 49 Defined Contribution Plan ARTICLE XIII EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION 13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the Employer does not have any beneficial interest in any asset of the Trust Fund and no part of any asset in the Trust Fund may ever revert to or be repaid to the 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 Fund, be (at any time) used for, or diverted to, purposes other than the exclusive benefit of the Participants or their Beneficiaries and for defraying reasonable expenses of administering the Plan. However, if the Commissioner of Internal Revenue, upon the Employer's application for initial approval of this Plan, determines the Trust created under the Plan is not a qualified trust exempt from Federal income tax, then (and only then) the Trustee, upon written notice from the Employer, will return the Employer's contributions (and the earnings thereon) to the Employer. The immediately preceding sentence applies only if the Employer makes the application for the determination by the time prescribed by law for filing the Employer's tax return for the taxable year in which the Employer adopted the Plan, or by such later date as the Internal Revenue Service may prescribe. The Trustee must make the return of the Employer contribution under this Section 13.01 within one year of a final disposition of the Employer's request for initial approval of the Plan. The Employer's Plan and Trust will terminate upon the Trustee's return of the Employer's contributions. 13.02 AMENDMENT BY EMPLOYER. The Employer, consistent with this Section 13.02 and other applicable Plan provisions, has the right, at any time: (a) To amend the elective provisions of the Adoption Agreement in any manner it deems necessary or advisable; (b) To add overriding language in the Adoption Agreement to satisfy Code ss.ss.415 or 416 because of the required aggregation of multiple plans; and (c) To add model amendments published by the Revenue Service (the adoption of which the Revenue Service provides will not cause the Plan to be individually designed). (A) Amendment Formalities. The Employer must make all Plan amendments in writing by means of substituted Adoption Agreement pages or by restatement of the Adoption Agreement. The Employer (and Trustee if the Trustee's written consent to the amendment is required under Section 10.03(G)), must execute a new Adoption Agreement Execution Page each time the Employer amends the Plan. Each amendment must specify the date as of which the amendment is either retroactively or prospectively effective. See Section 7.12 for the effect of certain amendments adopted by the Employer which will result in the Employer's Plan losing Prototype Plan status. (B) Impermissible Amendment/Protected Benefits. An amendment may not authorize or permit any of the Trust Fund (other than the part required to pay taxes and reasonable administration expenses) to be used for or diverted to purposes other than for the exclusive benefit of the Participants or their Beneficiaries or estates. An amendment may not cause or permit any portion of the Trust Fund to revert to or become a property of the Employer. Furthermore, the Employer may not make any amendment which affects the rights, duties or responsibilities of the Trustee or of the Plan Administrator without the written consent of the affected Trustee or the Plan Administrator. An amendment (including the adoption of this Plan as a restatement of an existing plan) may not decrease a Participant's Account Balance, except to the extent permitted under Code ss.412(c)(8), and except as provided in Treasury regulations, may not reduce or eliminate Protected Benefits determined immediately prior to the adoption date (or, if later, the effective date) of the amendment. An amendment reduces or eliminates 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 Plan Administrator must disregard an amendment to the extent application of the amendment would fail to satisfy this Section 13.02(B). If the Plan Administrator must disregard an amendment because the amendment would violate clause (1) or clause (2), the Plan Administrator must maintain a schedule of the early retirement option or other optional forms of benefit the Plan must continue for the affected Participants. 13.03 AMENDMENT BY PROTOTYPE PLAN SPONSOR. The Prototype Plan Sponsor (or the mass submitter, as agent of the Prototype Plan Sponsor), without the Employer's consent, may amend the Plan and Trust, from time to time, in order to conform the Plan and Trust to any requirement for qualification of the Plan and Trust under the Internal Revenue Code. The Prototype Plan Sponsor may not amend the Plan in any manner which would modify any election made by the Employer under the Plan without the Employer's written consent. Furthermore, the Prototype Plan Sponsor may not amend the Plan in any manner which would violate the proscriptions of Section 13.02(B). If the Prototype Plan Sponsor does not adopt the amendments made by the mass submitter, it will no longer be the sponsor of an identical or minor modifier Prototype Plan of the mass submitter. (C) Copyright 2001 First Union National Bank 50 Defined Contribution Plan 13.04 PLAN TERMINATION OR SUSPENSION. The Employer subject to Section 13.02(B) and by proper Employer action has the right, at any time, to suspend or discontinue its contributions under the Plan and thereafter to continue to maintain the Plan (subject to such suspension or discontinuance) until the Employer terminates the Plan. The Employer subject to Section 13.02(B) and by proper Employer action has the right, at any time, to terminate this Plan and the Trust created and maintained under the Plan. The Plan will terminate upon the first to occur of the following: (a) The date terminated by proper action of the Employer; or (b) The dissolution or merger of the Employer, unless a 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. 13.05 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/her Account Balance is 100% Vested, irrespective of the Vested percentage which otherwise would apply under Article V. 13.06 POST TERMINATION PROCEDURE AND DISTRIBUTION. (A) General Procedure. Upon termination of the Plan, the distribution provisions of Article VI remain operative, with the following exceptions: (1) if the Participant's Vested Account Balance does not exceed $5,000 (or exceeds $5,000 but is not "immediately distributable" in accordance with Section 6.01(A)(5)), the Plan Administrator will direct the Trustee to distribute in cash (subject to Section 10.08) the Participant's Vested Account Balance to him/her in lump sum as soon as administratively practicable after the Plan terminates; and (2) if the present value of the Participant's Vested Account Balance exceeds $5,000 and is immediately distributable, the Participant or the Beneficiary, may elect to have the Trustee commence distribution in cash (subject to Section 10.08) of his/her Vested Account Balance in a lump sum as soon as administratively practicable after the Plan terminates. If a Participant with consent rights under this paragraph (2) does not elect an immediate lump sum distribution with spousal consent if required, to liquidate the Trust, the Plan Administrator will purchase a deferred annuity contract for each Participant which protects the Participant's distribution rights under the Plan. (B) Profit Sharing Plan. If the Plan is a profit sharing plan, in lieu of applying Section 13.06(A) and the distribution provisions of Article VI, the Plan Administrator will direct the Trustee to distribute in cash (subject to Section 10.08) each Participant's Vested Account Balance, in lump sum, as soon as administratively practicable after the termination of the Plan, irrespective of the Participant's Vested Account Balance, the Participant's age and whether the Participant consents to that distribution. This paragraph does not apply if: (1) the Plan at termination provides an annuity option which is a Protected Benefit and which the Employer may not eliminate by Plan amendment; or (2) as of the period between the Plan termination date and the final distribution of assets, the Employer maintains any other defined contribution plan (other than an ESOP). The Employer, in an Addendum to its Adoption Agreement, may elect not to have this paragraph apply. (C) Distribution restrictions under Code ss.401(k). If the Plan includes a 401(k) arrangement or if the Plan holds transferred assets described in Section 13.07 such that in either case, the distribution restrictions of Sections 14.03(d) and 14.11 apply, a Participant's restricted balances are distributable on account of Plan termination, as described in this Section 13.06, only if: (a) the Employer does not maintain a successor plan and the Plan Administrator distributes the Participant's entire Vested Account Balance in a lump sum; or (b) the Participant otherwise is entitled under the Plan to a distribution of his/her Vested Account Balance. 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 distribution of assets. However, a plan is not a successor plan if less than 2% of the Employees eligible to participate in the terminating Plan are eligible to participate (beginning 12 months prior to and ending 12 months after the Plan's termination date) in the potential successor plan. (D) "Lost Participants." If the Plan Administrator is unable to locate any Participant or Beneficiary whose Account becomes distributable upon Plan termination, the Plan Administrator will apply Section 9.11 except Section 9.11(B) does not apply. (E) Continuing Trust Provisions. The Trust will continue until the Trustee in accordance with the direction of the Plan Administrator has distributed all of the benefits under the Plan. On each valuation date, the Plan Administrator will credit any part of a Participant's Account Balance retained in the Trust with its share of the Trust net income, gains or losses. 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 an amendment to discontinue all future benefit accrual but otherwise to continue maintenance of this Plan, is not a termination for purposes of this Section 13.06. 13.07 MERGER/DIRECT 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 (C) Copyright 2001 First Union National Bank 51 Defined Contribution Plan ss.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. Except as provided in Section 13.07(A), 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 (or from the other plan to this 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 transferring plan terminated immediately before the merger or the consolidation or the transfer. 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. The Trustee may accept a direct transfer of plan assets on behalf of an Employee prior to the date the Employee satisfies the Plan's eligibility conditions. If the Trustee accepts such a direct transfer of plan assets, the Plan Administrator and the Trustee must treat the Employee as a limited Participant as described in Section 4.04. Sections 13.07(A) and (B) are effective for elective transfers made on or following September 6, 2000. Under an elective transfer which is made pursuant to Section 13.07(A) or (B), the Protected Benefits in the transferring plan are not required to be preserved under Section 13.02(B), except as provided in Section 13.07(B). (A) Distributable Event Elective Transfer. The Trustee may consent to, or be a party to, a merger, consolidation or transfer of assets with another qualified plan in accordance with this Section 13.07(A). A transfer between qualified plans is a distributable event elective transfer if: (1) the Participant has a right to immediate distribution from the transferor plan; (2) the transfer is voluntary, under a fully informed election by the Participant; (3) the Participant has an alternative that retains his/her Protected Benefits (including an option to leave his/her benefit in the transferor plan, if that plan is not terminating); (4) the transferor plan satisfies applicable consent and joint and survivor annuity requirements of the Code; (5) the amount transferred, together with the amount of any contemporaneous direct rollover of the Participant's remaining Vested Account Balance, constitutes the Participant's entire Vested Account Balance; (6) the Participant has a 100% Vested interest in the transferred benefit in the transferee plan; and (7) if the transfer is from this Plan to a defined benefit plan, the transferee plan provides a benefit for the affected Participant equal to the benefit (expressed as an annuity payable at normal retirement age) derived solely with respect to the transferred assets. An elective transfer under this Section 13.07(A) may occur between qualified plans of any type. Any direct transfer of assets from a defined benefit plan to this Plan which does not satisfy the requirements of this Section 13.07(A) renders the Plan individually-designed. See Section 7.12. Commencing January 1, 2002, the Trustee may not undertake an elective transfer of a Participant's Account under this Section 13.07(A) if the Participant is eligible to receive an immediate distribution of his/her entire Vested Account Balance which would consist entirely of an eligible rollover distribution as described in Section 6.10(D). (B) Transaction/Employment Change Elective Transfer. The Trustee may consent to, or be a party to, a merger, consolidation or transfer of assets with another qualified defined contribution plan in accordance with this Section 13.07(B). A transfer is a transaction or employment change transfer irrespective of whether the Participant has a right to an immediate distribution from the transferor plan provided: (1) the transfer satisfies requirements (2) and (3) of Section 13.07(A); (2) the transfer only may occur as between plans described in applicable Treasury regulations; (3) the transfer must occur in connection with a merger, asset or stock acquisition, or change in employment resulting in the participant's loss of right to additional allocations in the transferor plan or in such other circumstances as described in applicable Treasury regulations; (4) the transfer must consist of the Participant's entire Vested and non-Vested Account Balance within the transferor plan; and (5) the transferee plan must protect the QJSA and QPSA benefits (if any) in the transferor plan. (C) Other Transfers. Any transfer which is not an elective transfer under Sections 13.07(A) or 13.07(B) and which includes Protected Benefits is subject to Section 13.02(B). The trustee of the transferee plan in receipt of assets which are Protected Benefits must preserve the Protected Benefits in accordance with applicable Treasury regulations. If the transferor plan contains a 401(k) arrangement with restricted balances as described in Section 14.11, such balances remain subject in the transferee plan to the distribution restrictions described in Section 14.03(d). Any transfer under this Section 13.07(C) from a defined benefit plan to this Plan must be in the form of the transfer of a paid up individual annuity contract which guarantees the payment of benefits in accordance with the transferor plan. Notwithstanding any Plan language to the contrary, if this Plan is a target benefit or money purchase pension plan, and the Trustee merges or the Employer converts by amendment the Plan into another type of defined contribution plan, the Employer operationally may elect whether to vest immediately the Participants' Account Balances. (C) Copyright 2001 First Union National Bank 52 Defined Contribution Plan ARTICLE XIV CODE SECTION 401(k) AND CODE SECTION 401(m) ARRANGEMENTS 14.01 APPLICATION. This Article XIV applies to the Plan only if the Employer is maintaining its Plan under a Code ss.401(k) Adoption Agreement. 14.02 401(k) ARRANGEMENT. The Employer under Article III of its Adoption Agreement will elect the terms of the 401(k) arrangement as described in Code ss.401(k)(2), if any, under the Plan. If the Plan is a Standardized Plan, the 401(k) arrangement must be a salary reduction arrangement. If the Plan is a Nonstandardized Plan, the 401(k) arrangement may be a salary reduction arrangement or a cash or deferred arrangement, or both. (A) Salary Reduction Arrangement. If the Employer in its Adoption Agreement Section 3.01 elects a salary reduction arrangement, a Participant (or an Employee in anticipation of becoming a Participant) may file a salary reduction agreement with the Plan Administrator. The salary reduction agreement may not be effective earlier than the following date which occurs last: (1) the Participant's Plan Entry Date (or, in the case of a re-employed Employee, his/her re-participation date under Article II); (2) the execution date of the Participant's salary reduction agreement; (3) the date the Employer adopts the 401(k) arrangement by executing the Adoption Agreement; or (4) the effective date of the 401(k) arrangement, as specified in the Adoption Agreement. A salary reduction agreement must specify the dollar amount of Compensation or percentage of Compensation the Participant wishes to defer. The salary reduction agreement will apply only to Compensation which becomes currently available to the Participant after the effective date of the salary reduction agreement. The Employer will apply a salary reduction election to the Participant's Compensation as determined under Section 1.07 (and to increases in such Compensation) unless the Participant elects in his/her salary reduction agreement to limit the reduction to certain Compensation. The Plan Administrator in the Plan's salary reduction agreement form, subject to the Plan terms and applicable Revenue Service guidance, will specify additional rules and restrictions applicable to a Participant's salary reduction agreement. (B) Cash or Deferred Arrangement. If the Employer in its Adoption Agreement Section 3.02 elects a cash or deferred arrangement, a Participant may elect to make a cash election against his/her proportionate share of the Employer's cash or deferred contribution, in accordance with the Employer's Adoption Agreement elections. A Participant's proportionate share of the Employer's cash or deferred contribution is the percentage of the total cash or deferred contribution which bears the same ratio that the Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. For purposes of determining each Participant's proportionate share of the cash or deferred contribution, a Participant's Compensation is his/her Compensation as determined under Section 1.07, excluding any effect the proportionate share may have on the Participant's Compensation for the Plan Year. The Plan Administrator will determine the proportionate share prior to the Employer's actual contribution to the Trust, to provide the Participants the opportunity to file cash elections. The Employer will pay directly to the Participant the portion of his/her proportionate share the Participant has elected to receive in cash. (C) Negative Election. The Employer in its Adoption Agreement may elect to apply prospectively to its Plan the negative election provisions of this Section 14.02(C). Under a negative election, the Employer automatically will reduce the Compensation of each Participant who is not deferring an amount at least equal to the negative election amount, by the required election amount, except those Participants who timely make a contrary election under Section 14.02(C)(1). Participants deferring an amount equal to or greater than the negative election amount are not subject to the Plan's negative election provisions. Amounts deferred under negative election are treated as elective deferrals for all purposes under the Plan. An Employer in its Adoption Agreement must elect whether the negative election applies to all Participants as of the effective date of the negative election or only to Employees whose Plan Entry Date is on or following the effective date of the negative election. (1) Participant's contrary election. A Participant may at any time elect not to defer any Compensation or to defer an amount which is less than the negative election amount ("contrary election"). A Participant's contrary election generally is effective as of the first payroll period for the month which follows the Participant's contrary election. However, a Participant may make a contrary election which is effective: (1) for the first payroll period in which he/she becomes a Participant if the Participant makes a contrary election within a reasonable period following the Participant's Entry Date and before the Compensation to which the election applies becomes currently available; or (2) for the first payroll period following the effective date of the Employer's adoption of the negative election, if the Participant makes contrary election not later than the effective date of the negative election. A Participant's contrary election continues in effect until the Participant subsequently changes his/her Salary Reduction Agreement. (2) Negative election notice. If the Employer in its Adoption Agreement adopts the negative election provision, the Plan Administrator must provide a notice to each Eligible Employee which explains the effect of the negative election and a Participant's right to make a contrary election, including the procedure and timing applicable to the contrary election. The Plan Administrator must provide the notice to an Eligible Employee a reasonable period prior to that Employee's commencement of participation in the Plan subject to the negative election. A Plan Administrator also must notify annually those Participants then subject to the negative election of the existing negative election deferral percentage and the Participant's right to make a contrary election, including the procedure and timing applicable to the contrary election. (D) Safe Harbor 401(k) Plan. The Employer in its Adoption Agreement may elect to apply to its Plan the safe harbor provisions of this Section 14.02(D). Except as otherwise provided in this Plan, in the Code or in other (C) Copyright 2001 First Union National Bank 53 Defined Contribution Plan applicable guidance, an Employer must elect the safe harbor plan provisions of this Section 14.02(D) and must satisfy the applicable notice requirements prior to the beginning of the Plan Year to which the safe harbor provisions apply. In addition, except as otherwise indicated, the electing Employer must apply the safe harbor provisions for the entire safe harbor Plan Year, including any short Plan Year. The provisions of this Section 14.02(D) apply to an electing Employer notwithstanding any contrary provision of the Plan and all other remaining Plan terms continue to apply to the Employer's safe harbor plan. An Employer which elects and operationally satisfies the safe harbor provisions of this Section 14.02(D) is not subject to the nondiscrimination provisions of Section 14.08 (ADP test). An electing Employer which provides additional matching contributions as described in Section 14.02(D)(3) is subject to the nondiscrimination provisions of Section 14.09 (ACP test), unless the additional matching contributions satisfy the ACP test safe harbor described in Section 14.02(D)(3). (1) Safe Harbor - Compensation. For purposes of this Section 14.02(D), Compensation is limited as described in Section 1.07(E) and for purposes of allocating the Employer's safe harbor contribution and safe harbor matching contribution, the Employer must elect under its Adoption Agreement a nondiscriminatory definition of Compensation as described in Section 1.07(F). An Employer in its Adoption Agreement also may elect to limit the amount of Compensation which is subject to deferral to any reasonable definition which: (a) permits a Participant to receive the maximum matching contribution, if any, available under the Plan; or (b) limits deferrals under the Plan to a whole percentage or dollar amount. (2) Safe Harbor Contributions/ADP test safe harbor. An Employer which elects under this Section 14.02(D) to apply the safe harbor provisions, must make a contribution to the Plan which will satisfy the ADP test safe harbor ("safe harbor contribution"). The Employer in its Adoption Agreement must elect whether the Employer will make its safe harbor contribution in the form of: (a) a safe harbor nonelective contribution; (b) a basic matching contribution; or (c) an enhanced matching contribution. A safe harbor nonelective contribution is a fixed nonelective contribution in an amount the Employer elects in its Adoption Agreement and must equal at least 3% of each Participant's Compensation. A basic matching contribution is a fixed matching contribution equal to 100% of a Participant's elective deferrals which do not exceed 3% of Compensation, plus 50% of elective deferrals which exceed 3%, but which do not exceed 5% of Compensation. An enhanced matching contribution is a fixed matching contribution made in accordance with any formula the Employer elects in its Adoption Agreement under which, at any rate of elective deferrals, a Participant receives a matching contribution which is at least equal to the match the Participant would receive under the basic matching contribution formula and under which the rate of match does not increase as the rate of deferrals increases. Under a basic or enhanced safe harbor match, a Highly Compensated Employee may not receive a greater rate of match than any Nonhighly Compensated Employee. The Employer in its Adoption Agreement must elect the applicable time period for computing the Employer's safe harbor basic or enhanced matching contributions. The Plan Administrator must allocate the Employer's safe harbor contribution without regard to the Section 3.06 allocation conditions, but the Plan Administrator will not allocate a safe harbor contribution where the allocation would exceed a Participant's Code ss.ss.415 or 402(g) limitation or where the Participant is suspended from making deferrals under Section 14.11(A)(1). The Plan Administrator must allocate the safe harbor contribution to all Participants unless the Employer in an Addendum to its Adoption Agreement elects to limit the safe harbor allocation to Nonhighly Compensated Employees. A Participant's Account Balance attributable to safe harbor contributions at all times 100% Vested and subject to the distribution restrictions described in Section 14.03(d). An Employer's safe harbor contribution is not subject to nondiscrimination testing under Section 14.08 (ADP test) and if the safe harbor contribution is in the form of a basic matching contribution, it is not subject to nondiscrimination testing under Section 14.09 (ACP test). The Employer in its Adoption Agreement must elect whether to satisfy the ACP test safe harbor Section 14.02(D)(3)(a) amount limitation with respect to the Employer's enhanced matching contributions or to test, using current year testing, its enhanced matching contributions under Section 14.09 (ACP test). An Employer electing Section 14.02(D) which in its Adoption Agreement also elects to apply permitted disparity in allocating the Employer's nonelective contributions, may not include within the permitted disparity formula allocation, any of the Employer's safe harbor contributions. An Employer in its Adoption Agreement may elect to make the safe harbor contribution to another defined contribution plan maintained by the Employer provided: (i) the Employer maintains its safe harbor 401(k) Plan using a Nonstandardized 401(k) Adoption Agreement; or (ii) the Employer makes its safe harbor contribution to another defined contribution plan paired with the Employer's safe harbor 401(k) Plan. (3) Additional Matching Contributions/ACP test safe harbor. An Employer which satisfies the ADP test safe harbor under Section 14.02(D)(2), in its Adoption Agreement may elect to make matching contributions to the Plan which are in addition to the Employer's safe harbor contributions and which the Employer does not use to satisfy the ADP test safe harbor ("additional matching contributions"). The Employer in its Adoption Agreement must elect whether to subject the additional matching contributions to the ACP test safe harbor requirements of this Section 14.02(D)(3), or for the Plan Administrator to test, using current year testing, the additional matching contributions for nondiscrimination under Section 14.09 (ACP test). Under the ACP test safe harbor: (a) the Employer may not make matching contributions with respect to a Participant's deferral contributions which exceed 6% of Plan Year Compensation; (b) the amount of any discretionary matching contribution allocated to any Participant in Plan Years commencing after 1999 may not exceed 4% of the Participant's Plan Year Compensation; (c) the rate of matching contributions may not increase as the rate of deferrals increases; and (d) subject to application of any Section 3.06 allocation conditions, a Highly Compensated Employee may not receive a greater rate of match than any Nonhighly Compensated Employee. The Employer must elect in its Adoption Agreement the vesting schedule, allocation conditions and distribution provisions (C) Copyright 2001 First Union National Bank 54 Defined Contribution Plan applicable to the Employer's additional matching contributions described in this Section 14.02(D)(3). If the Employer in its Adoption Agreement has elected to permit Employee contributions under the Plan: (i) any Employee contributions do not satisfy the ACP test safe harbor and the Plan Administrator must test the Employee contributions under Section 14.09 (ACP test) using current year testing; and (ii) if the Employer in its Adoption Agreement elects to match the Employee contributions, the Plan Administrator in applying the 6% amount limit in clause (a) must aggregate a Participant's deferral contribution and Employee contributions which are subject to the 6% limit. (4) Safe Harbor notice. The Plan Administrator annually must provide a safe harbor notice to each Participant a reasonable period prior to each Plan Year for which the Employer in its Adoption Agreement has elected to apply the safe harbor provisions. For this purpose, the Plan Administrator is deemed to provide timely notice if the Plan Administrator provides the safe harbor notice at least 30 days and not more than 90 days prior to the beginning of the safe harbor Plan Year. The safe harbor notice must provide comprehensive information regarding the Participants' rights and obligations under the Plan and must be written in a manner calculated to be understood by the average Participant. If an Employee becomes eligible to participate in the Plan after the Plan Administrator has provided the annual safe harbor notice, the Plan Administrator must provide the safe harbor notice no later than the Employee's Plan Entry Date. A Participant may make or modify a salary reduction agreement under the Employer's safe harbor 401(k) Plan for 30 days following receipt of the safe harbor notice, or if greater, for the period the Plan Administrator specifies in the salary reduction agreement. (5) Mid-year changes in safe harbor status. The Employer may amend its 401(k) Plan during any Plan Year to become a safe harbor plan under this Section 14.02(D) for that Plan Year, provided: (a) the Plan then is using current year testing; (b) the Employer amends the Plan to add the safe harbor provisions not later than 30 days prior to the end of the Plan Year and to apply the safe harbor provisions for the entire Plan Year; (c) the Employer elects to satisfy the safe harbor contribution requirement using the safe harbor nonelective contribution; and (d) the Plan Administrator provides a notice to Participants prior to the beginning of the Plan Year for which the safe harbor amendment may become effective, that the Employer later may amend the Plan to a safe harbor plan for that Plan Year using the safe harbor nonelective contribution and if the Employer so amends the Plan, the Plan Administrator will provide a supplemental notice to Participants at least 30 days prior to the end of that Plan Year informing Participants of the amendment. The Plan Administrator then must timely provide any supplemental notice required under this Section 14.02(D)(5). Except as otherwise specified, the Participant notices described in this Section 14.02(D)(5) also must satisfy the requirements applicable to safe harbor notices under Section 14.02(D)(4). The Employer may amend its safe harbor 401(k) Plan during a Plan Year to reduce or eliminate prospectively, any safe harbor contribution which is a basic matching or enhanced matching contribution (under Section 14.02(D)(2)) provided: (i) the Plan Administrator provides a notice to the Participants which explains the effect of the amendment, specifies the amendment's effective date and informs Participants they will have a reasonable opportunity to modify their salary reduction agreements, and if applicable, Employee contributions; (ii) Participants have a reasonable opportunity and period prior to the effective date of the amendment to modify their salary reduction agreements, and if applicable, Employee contributions; and (iii) the amendment is not effective earlier than the later of: (a) 30 days after the Plan Administrator gives notice of the amendment; or (b) the date the Employer adopts the amendment. An Employer which amends its safe harbor Plan to eliminate or reduce the safe harbor matching contribution under this Section 14.02(D)(5), or which terminates the Plan under Section 13.04 effective during the Plan Year, must continue to apply all of the safe harbor requirements of this Section 14.02(D) until the amendment or termination becomes effective and also must apply for the entire Plan Year, using current year testing, the nondiscrimination test under Section 14.08 (ADP test), and if applicable, the nondiscrimination test under Section 14.09 (ACP test). An Employer maintaining a profit sharing plan, stock bonus plan or pre-ERISA money purchase pension plan may during a Plan Year amend prospectively its Plan to become a safe harbor 401(k) plan provided: (a) the Employer's Plan is not a successor plan as described in Notice 98-1 or any subsequent applicable guidance; (b) the 401(k) arrangement is in effect for at least 3 months during the Plan Year; (c) the Plan Administrator provides the safe harbor notice described in Section 14.02(D)(4) a reasonable time prior to and not later than the effective date of the amendment; and (d) the Plan satisfies commencing on the effective date of the amendment, all of the safe harbor requirements of this Section 14.02(D). (E) SIMPLE 401(k) Plan. The Employer in its Standardized Code ss.401(k) Adoption Agreement may elect to apply prospectively to its Plan the SIMPLE 401(k) provisions of this Section 14.02(E) if: (1) the Plan Year is the calendar year; (2) the Employer (including Related Employers under Section 1.26) has no more than 100 Employees who received Compensation of at least $5,000 in the immediately preceding calendar year; and (3) the Employer does not maintain any other plan as described in Code ss.219(g)(5), with respect to which contributions were made or benefits were accrued for Service by an eligible Employee in the Plan Year to which the SIMPLE 401(k) provisions apply. If an electing Employer fails for any subsequent calendar year to satisfy all of the foregoing requirements, including where the Employer is involved in an acquisition, disposition or similar transaction under which the Employer satisfies Code ss.410(b)(6)(C)(1), the Employer remains eligible to maintain the SIMPLE 401(k) Plan for two additional calendar years following the last year in which the Employer satisfied the requirements. The provisions of this Section 14.02(E) apply to an electing Employer notwithstanding any contrary provision in the Plan. (1) SIMPLE - Compensation. For purposes of this Section 14.02(E), Compensation is limited as described in Section 1.07(E) and: (a) in the case of an Employee, means W-2 wages but increased by the Employee's elective (C) Copyright 2001 First Union National Bank 55 Defined Contribution Plan deferrals under a 401(k) arrangement, SIMPLE IRA, SARSEP or 403(b) annuity; and (b) in the case of a Self Employed Individual, means Earned Income determined without regard to contributions made to this Plan. (2) Participant deferral contributions. Each eligible Employee may enter into a salary reduction agreement to make deferral contributions into the SIMPLE 401(k) Plan in an amount not exceeding $6,000 per calendar year, or such other amount as in effect under Code ss.408(p)(2)(E). A Participant may elect to make deferral contributions or modify a salary reduction agreement at any time in accordance with the Plan Administrator's SIMPLE 401(k) salary reduction agreement form, but must be provided at least 60 days prior to the beginning of each SIMPLE Plan Year or commencement of participation for this purpose. A Participant also may at any time terminate prospectively, his/her salary reduction agreement applicable to the Employer's SIMPLE 401(k) Plan. (3) Employer SIMPLE 401(k) contributions. An Employer which elects under this Section 14.02(E) to apply the SIMPLE 401(k) provisions, annually must make a SIMPLE 401(k) contribution to the Plan as described in this Section 14.02(E)(3). The Employer operationally must elect whether the Employer will contribute: (1) a matching contribution equal to each Participant's deferral contributions but not exceeding 3% of Plan Year Compensation or such lower percentage as the Employer may elect under Code ss.408(p)(2)(C)(ii)(II); or (2) a nonelective contribution equal to 2% of Plan Year Compensation for each Participant whose Compensation is at least $5,000. The Employer in its Adoption Agreement may not elect to apply any Section 3.06 allocation conditions to the Plan Administrator's allocation of Employer SIMPLE contributions. (4) SIMPLE 401(k) notice. The Plan Administrator must provide notice to each Participant a reasonable period of time before the 60th day prior to the beginning of each SIMPLE 401(k) Plan Year, describing the Participant's deferral election rights and the Employer's matching or nonelective contributions which the Employer will make for the Plan Year described in the notice. (5) Application of remaining Plan provisions. All contributions to the SIMPLE 401(k) Plan are Annual Additions subject to the limitations set forth in Article III. No contributions other than those described in this Section 14.02(E) or rollover contributions described in Section 4.04 may be made to the SIMPLE 401(k) Plan. All contributions to the SIMPLE 401(k) Plan are 100% Vested at all times and in the event of a conversion of a non SIMPLE Plan into a SIMPLE 401(k) Plan, all Account Balances in existence on the first day of the Plan Year to which the SIMPLE 401(k) provisions apply, become 100% Vested. A SIMPLE 401(k) Plan is not subject to nondiscrimination testing under Section 14.08 (ADP test) or Section 14.09 (ACP test) of the Plan and is not subject to the top heavy provisions of Article XII. Except as otherwise described in this Section 14.03(E), if an Employer has elected in its Adoption Agreement to apply the SIMPLE 401(k) provisions of this Section 14.03(E), the Plan Administrator will apply the remaining Plan provisions to Employer's Plan. (F) Election not to participate. A Participant's or Employee's election not to participate, pursuant to Section 2.06, includes his/her right to enter into a salary reduction agreement or to share in the allocation of a cash or deferred contribution. 14.03 DEFINITIONS. For purposes of this Article XIV: (a) "Compensation" means, except as otherwise provided in this Article XIV, Compensation as defined for nondiscrimination purposes in Section 1.07(F). (b) "Current year testing" means for purposes of the ADP test described in Section 14.08 and the ACP test described in Section 14.09, the use of data from the testing year in determining the ADP or ADP for the Nonhighly Compensated Group. (c) "Deferral contributions" are salary reduction contributions and cash or deferred contributions the Employer contributes to the Trust on behalf of an eligible Employee, irrespective of whether, in the case of cash or deferred contributions, the contribution is at the election of the Employee. For salary reduction contributions, the terms "deferral contributions" and "elective deferrals" have the same meaning. (d) "Distribution restrictions" means the Employee may not receive a distribution of the restricted balances described in Section 14.11 (nor earnings on those contributions) except in the event of: (1) the Participant's death, Disability, Separation from Service (which for purposes of this Section 14.03(d), means as the Plan Administrator determines under applicable Revenue Service guidance, including the "same desk" rule and Revenue Ruling 2000-27 with respect to certain asset sale transactions) or attainment of age 59 1/2, (2) financial hardship satisfying Section 14.11(A), (3) Plan termination, without establishment of a successor defined contribution plan (other than an ESOP), (4) a sale by a corporate Employer of substantially all of the assets (within the meaning of Code ss.409(d)(2)) used in a trade or business of the Employer, to another corporation, but only to an Employee who continues employment with the corporation acquiring those assets, or (5) a sale by a corporate Employer of its interest in a subsidiary (within the meaning of Code ss.409(d)(3)), but only to an Employee who continues employment with the subsidiary. A distribution described in clauses (3), (4) or (5) must be a lump sum distribution, and otherwise must satisfy Code ss.401(k)(10). (e) "Elective deferrals" are all salary reduction contributions and that portion of any cash or deferred contribution which the Employer contributes to the Plan at the election of an eligible Employee. 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. However, 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 (C) Copyright 2001 First Union National Bank 56 Defined Contribution Plan as an Employee contribution at the time of deferral or contribution. Elective deferrals are 100% vested at all times. (f) "Eligible Employee" means, for purposes of the ADP test described in Section 14.08, an Employee who is eligible to enter into a salary reduction agreement for all or any portion of the Plan Year, irrespective of whether he/she actually enters into such an agreement, and a Participant who is eligible for an allocation of the Employer's cash or deferred contribution for the Plan Year. For purposes of the ACP test described in Section 14.09, an eligible Employee is a Participant who is eligible to receive an allocation of matching contributions (or would be eligible if he/she 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/she 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 Employee contributions following a hardship distribution. (g) "Employee contributions" are nondeductible contributions made by a Participant and designated, at the time of contribution, as an Employee contribution. Elective deferrals and deferral contributions are not Employee contributions. Employee contributions are subject to Article IV. (h) "Highly Compensated Employee" means an eligible Employee who satisfies the definition in Section 1.14 of the Plan. (i) "Highly Compensated Group" means the group of eligible Employees who are Highly Compensated Employees for the Plan Year. (j) "Matching contributions" are contributions made by the Employer on account of elective deferrals under a 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. (k) "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. (l) "Nonhighly Compensated Employee" means an eligible Employee who is not a Highly Compensated Employee. (m) "Nonhighly Compensated Group" means the group of eligible Employees who are Nonhighly Compensated Employees for the Plan Year. (n) "Prior year testing" means for purposes of the ADP test described in Section 14.08 and the ACP test described in Section 14.09, the use of data from the Plan Year immediately prior to the testing year in determining the ADP or ACP for the Nonhighly Compensated Group. (o) "Qualified matching contributions" are matching contributions which are 100% Vested at all times and which are subject to the distribution restrictions described in Section 14.03(d). Matching contributions are not 100% Vested at all times if the Employee has a 100% Vested interest because of his/her Years of Service taken into account under a vesting schedule. Any matching contributions allocated to a Participant's qualified matching contributions Account under the Plan automatically satisfy and are subject to the definition of qualified matching contributions. (p) "Qualified nonelective contributions" are nonelective contributions which are 100% Vested at all times and which are subject to the distribution restrictions described in Section 14.03(d). Nonelective contributions are not 100% Vested at all times if the Employee has a 100% Vested interest because of his/her 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 and are subject to the definition of qualified nonelective contributions. (q) "Regular matching contributions" are matching contributions which are not qualified matching contributions. (r) "Safe harbor contributions" are Employer nonelective or matching contributions which the Plan Administrator applies to satisfy the ADP test safe harbor under Code ss.401(k)(12)(B) or (C) and which are 100% Vested at all times and subject to the distribution restrictions described in Section 14.03(d). Safe harbor contributions are not 100% Vested at all times if the Employee has a 100% Vested interest because of his/her Years of Service taken into account under a vesting schedule. Any nonelective contributions allocated to a Participant's safe harbor contributions Account, automatically satisfy and are subject to the definition of safe harbor contributions. (s) "Salary reduction agreement" is a written election by a Participant to make salary reduction contributions as described in Section 14.02(A). (t) "Salary reduction contributions" mean Employer contributions elected by a Participant to be made from the Participant's Compensation pursuant to a salary reduction agreement and which the Plan Administrator must allocate to the electing Participant's Account. (u) "Testing year" means for purposes of the ADP test described in Section 14.08 and the ACP test described in Section 14.09, the Plan Year for which the ADP or ACP test is being performed. 14.04 MATCHING CONTRIBUTIONS/ EMPLOYEE CONTRIBUTIONS. The Employer in Adoption Agreement Section 3.01 may elect to provide matching contributions. The Employer in Adoption Agreement Section 4.02 also may elect to permit a Participant to make Employee contributions. (C) Copyright 2001 First Union National Bank 57 Defined Contribution Plan 14.05 DEFERRAL DEPOSIT TIMING/EMPLOYER CONTRIBUTION STATUS. The Employer must make salary reduction contributions to the Trust after withholding the corresponding Compensation from the Participant at the earliest date on which the contributions can reasonably be segregated from the Employer's general assets. Furthermore, the Employer must make to the Trust salary reduction contributions, cash or deferred contributions, matching contributions (including qualified matching contributions), qualified nonelective contributions, safe harbor contributions and SIMPLE contributions no later than the time prescribed by the Code or ERISA. Salary reduction contributions and cash or deferred contributions are Employer contributions for all purposes under this Plan, except to the extent the Code prohibits the use of these contributions to satisfy the qualification requirements of the Code. 14.06 SPECIAL ACCOUNTING AND ALLOCATION PROVISIONS. To make allocations under the Plan, the Plan Administrator must establish for each Participant, consistent with the Employer's elections under its Adoption Agreement, a deferral contributions Account, a nonelective contributions Account, a qualified matching contributions Account, a regular matching contributions Account, a qualified nonelective contributions Account, a safe harbor contributions Account and a SIMPLE contributions account. (A) Deferral contributions. The Plan Administrator will allocate to each Participant's deferral contributions Account the amount of deferral contributions the Employer makes to the Trust on behalf of the Participant. The Plan Administrator will make this allocation as of the last day of each Plan Year or more frequently as it may determine to be appropriate and consistent with the Plan terms, including those providing for allocation of net income, gain or loss. (B) Matching contributions. The Plan Administrator will allocate the Employer's matching contributions as of the last day of each Plan Year or more frequently as the Plan Administrator may determine to be appropriate and consistent with the Plan terms, including those providing for allocation of net income, gain or loss. The Plan Administrator may not allocate any fixed or discretionary matching contributions with respect to deferral contributions that are excess deferrals under Section 14.07. For this purpose: (a) excess deferrals relate first to deferral contributions for the Plan Year not otherwise eligible for a matching contribution; and (b) if the Plan Year is not a calendar year, the excess deferrals for a Plan Year are the last elective deferrals made for a calendar year. The Plan Administrator may not allocate a matching contribution to a Participant's Account to the extent the matching contribution exceeds the Participant's Annual Additions limitation in Part 2 of Article III. The provisions of Section 3.05 govern the treatment of any matching contribution the Plan Administrator allocates contrary to this Section 14.06(B), and the Plan Administrator will compute a Participant's ACP under Section 14.09 by disregarding the forfeiture. (1) Fixed match. To the extent the Employer makes matching contributions under a fixed matching contribution formula set forth in the Employer's Adoption Agreement, the Plan Administrator will allocate the matching contribution to the Account of the Participant on whose behalf the Employer makes that contribution. A fixed matching contribution formula is a formula under which the Employer contributes a specified percentage or dollar amount on behalf of a Participant based on that Participant's deferral contributions or Employee contributions eligible for a match. The Employer may contribute on a Participant's behalf under a specific matching contribution formula only if the Participant satisfies the allocation conditions for matching contributions, if any, the Employer elects in Adoption Agreement Section 3.06. The Employer in its Adoption Agreement may elect whether the Plan Administrator will allocate a fixed matching contribution as a qualified matching contribution or as a regular matching contribution. (2) Discretionary match. To the extent the Employer makes matching contributions under a discretionary formula, the Plan Administrator will allocate the discretionary matching contributions to the Account of each Participant who satisfies the allocation conditions, if any, for matching contributions the Employer elects in Adoption Agreement Section 3.06. The allocation of discretionary matching contributions to a Participant's Account is in the same proportion that each Participant's deferral contributions bear to the total deferral contributions of all Participants. If the discretionary formula is a tiered formula, the Plan Administrator will make this allocation separately with respect to each tier of deferral contributions, allocating in such manner the amount of the matching contributions made with respect to that tier. The Employer operationally may direct the Plan Administrator to allocate any discretionary match as a regular matching contribution or as a qualified matching contribution. (3) Match on deferrals and Employee contributions. If the matching contribution formula applies both to deferral contributions and to Employee contributions, the matching contributions apply first to deferral contributions. (C) Qualified nonelective contributions. If the Employer operationally designates a nonelective contribution to be a qualified nonelective contribution for the Plan Year, the Plan Administrator will allocate that qualified nonelective contribution to the qualified nonelective contributions Account of each Participant eligible for an allocation of that designated contribution, as the Employer elects in Adoption Agreement Section 3.04. (D) Nonelective contributions. If the Employer makes a nonelective contribution for the Plan Year which the Employer does not designate as a qualified nonelective contribution, the Plan Administrator will allocate the nonelective contribution in accordance with Adoption Agreement Section 3.04. For purposes of the nondiscrimination tests described in Sections 14.08 (ADP test), 14.09 (ACP test) and 14.10 (multiple use limitation), the Plan Administrator may treat nonelective contributions allocated under this Section 14.06(D) as qualified nonelective contributions, if the contributions otherwise (C) Copyright 2001 First Union National Bank 58 Defined Contribution Plan satisfy the definition of qualified nonelective contributions. The Employer, to facilitate the Plan Administrator's correction of test failures under Sections 14.08, 14.09 and 14.10, also may make qualified nonelective contributions to the Plan irrespective of whether the Employer in its Adoption Agreement has elected to provide nonelective contributions. (E) Safe harbor contributions. If the Employer elects under Section 14.02(D) to apply the safe harbor provisions to the Plan, the Employer will allocate the safe harbor contributions to the safe harbor contributions Account of each Participant unless the Employer in an Addendum to its Adoption Agreement elects to limit safe harbor allocations to Nonhighly Compensated Employees. (F) SIMPLE 401(k) Plan contributions. If the Employer elects under Section 14.02(E) to apply the SIMPLE 401(k) provisions to the Plan, the Employer will allocate the SIMPLE contributions to the SIMPLE contributions Account of Participants eligible to receive an allocation of the Employer's SIMPLE contribution (including Participants who make deferral contributions), as specified in Section 14.02(E). 14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION. (A) Annual Elective Deferral Limitation. An Employee's elective deferrals for a calendar year may not exceed the Code ss.402(g) limitation ("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, pursuant to a salary reduction agreement or pursuant to a cash or deferral election, the Employer determines the Employee's elective deferrals to the Plan for a calendar year would exceed the 402(g) limitation, the Employer will suspend the Employee's salary reduction agreement, if any, until the following January 1 and pay in cash the portion of a deferral election which would result in the Employee's elective deferrals for the calendar year exceeding the 402(g) limitation. If the Plan Administrator determines an Employee's elective deferrals already contributed to the Plan for a calendar year exceed the 402(g) limitation, the Plan Administrator will distribute the amount in excess of the 402(g) limitation (the "excess deferral"), as adjusted for allocable income under Section 14.07(C), no later than April 15 of the following calendar year. If the Plan Administrator distributes the excess deferral by the appropriate April 15, the excess deferral is not an Annual Addition under Article III, and the Plan Administrator may make the distribution irrespective of any other provision under this Plan or under the Code. The Plan Administrator 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 14.08), if any, previously distributed to the Employee for the Plan Year beginning in that calendar year. Elective deferrals distributed to an Employee as excess Annual Additions in accordance with Article III are not taken into account under the Employee's 402(g) limitation. (B) More than One Plan. If an Employee participates in another plan subject to the 402(g) limitation under which he/she makes elective deferrals pursuant to a 401(k) arrangement, elective deferrals under a SARSEP, elective contributions under a SIMPLE IRA or salary reduction contributions to a tax-sheltered annuity (irrespective of whether the Employer maintains the other plan), the Employee may provide to the Plan Administrator a written claim for excess deferrals made to the Plan 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 Plan Administrator 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 Section 14.07(A). (C) Allocable Income. For purposes of making a distribution of excess deferrals pursuant to this Section 14.07, allocable income means net income or net loss allocable to the excess deferrals for the calendar year (but not beyond 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 Administrator to allocate income to Participants' Accounts. 14.08 ACTUAL DEFERRAL PERCENTAGE (ADP) TEST. For each Plan Year, the Plan Administrator must determine whether the Plan's 401(k) arrangement satisfies either of the following ADP tests: (i) The ADP for the Highly Compensated Group does not exceed 1.25 times the ADP of the Nonhighly Compensated Group; or (ii) The ADP for the Highly Compensated Group does not exceed the ADP for the Nonhighly Compensated Group by more than two percentage points (or the lesser percentage permitted by the multiple use limitation in Section 14.10) and the ADP for the Highly Compensated Group is not more than twice the ADP for the Nonhighly Compensated Group. (A) Calculation of ADP. The ADP for a group is the average of the separate deferral percentages calculated for each eligible Employee who is a member of that group. An eligible Employee's deferral percentage 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. In determining the ADP, the Plan Administrator must include any Highly Compensated Employee's excess deferrals, as described in Section 14.07(A), to this Plan or to any other Plan of the Employer and the Plan Administrator will disregard any Nonhighly Compensated Employee's excess deferrals. The Plan Administrator operationally may include in the ADP test, qualified nonelective contributions and qualified matching contributions the Plan Administrator does not use in the ACP test. The Plan Administrator, under prior year testing, may include qualified nonelective contributions or qualified matching contributions in determining the Nonhighly Compensated Employee ADP only if the Employer makes such contribution to the Plan by the end of the testing year and the Plan Administrator allocates the contribution to the prior Plan Year. In determining whether the Plan's 401(k) (C) Copyright 2001 First Union National Bank 59 Defined Contribution Plan arrangement satisfies either ADP test, the Plan Administrator will use prior year testing, unless the Employer in Adoption Agreement Appendices A or B elects to use current year testing. An Employer may not change from current year testing to prior year testing except as provided in the Code or in other applicable guidance. For the first Plan Year the Employer permits elective deferrals and the Plan is not a successor plan (as provided in the Code or in other applicable guidance), under prior year testing, the prior year ADP for the Nonhighly Compensated Group is 3% unless the Employer in an Addendum to its Adoption Agreement elects to use the actual first year ADP for the Nonhighly Compensated Group. (B) Special aggregation rule for Highly Compensated Employees. To determine the deferral percentage of any Highly Compensated Employee, the Plan Administrator must take into account any elective deferrals made by the Highly Compensated Employee under any other 401(k) arrangement maintained by the Employer, unless the elective deferrals are to an ESOP. If the plans containing the 401(k) arrangements have different plan years, the Plan Administrator will determine the combined deferral contributions on the basis of the plan years ending in the same calendar year. (C) Aggregation of certain 401(k) arrangements. If the Employer treats two or more plans as a single plan for coverage or nondiscrimination purposes, the Employer must combine the 401(k) arrangements under such plans to determine whether the plans satisfy 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. An Employer may aggregate 401(k) arrangements under this Section 14.08(C) only if the plans have the same plan years and use the same testing method. An Employer may not aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of a plan). If the Employer aggregating 401(k) arrangements under this Section 14.08(C) is using prior year testing, the Plan Administrator must adjust the Nonhighly Compensated Group ADP for the prior year as provided in the Code or in other applicable guidance. (D) Characterization of excess contributions. If, pursuant to this Section 14.08, the Plan Administrator has elected to include qualified matching contributions in the ADP test, the excess contributions are attributable proportionately to deferral contributions and to qualified matching contributions allocated on the basis of those deferral contributions. The Plan Administrator 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 14.07), 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 Plan Administrator determines the Plan fails to satisfy the ADP test for a Plan Year, the Trustee, as directed by the Plan Administrator, must distribute the excess contributions, as adjusted for allocable income under Section 14.08(F), during the next Plan Year. However, the Employer may incur an excise tax with respect to 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 the ADP test. The Plan Administrator will determine the total amount of the excess contributions to the Plan by starting with the Highly Compensated Employee(s) who has the greatest deferral percentage, reducing his/her deferral percentage (but not below the next highest deferral percentage), then, if necessary, reducing the deferral percentage of the Highly Compensated Employee(s) at the next highest deferral percentage level, including the deferral percentage of the Highly Compensated Employee(s) whose deferral percentage the Plan Administrator already has reduced (but not below the next highest deferral percentage), and continuing in this manner until the ADP for the Highly Compensated Group satisfies the ADP test. After the Plan Administrator has determined the total excess contribution amount, the Trustee, as directed by the Plan Administrator, then will distribute to each Highly Compensated Employee his/her respective share of the excess contributions. The Plan Administrator will determine each Highly Compensated Employee's share of excess contributions by starting with the Highly Compensated Employee(s) who has the highest dollar amount of elective deferrals, reducing his/her elective deferrals (but not below the next highest dollar amount of elective deferrals), then, if necessary, reducing the elective deferrals of the Highly Compensated Employee(s) at the next highest dollar amount of elective deferrals including the elective deferrals of the Highly Compensated Employee(s) whose elective deferrals the Plan Administrator already has reduced (but not below the next highest dollar amount of elective deferrals), and continuing in this manner until the Trustee has distributed all excess contributions. (F) Allocable income. To determine the amount of the corrective distribution required under this Section 14.08, the Plan Administrator must calculate the allocable income for the Plan Year (but not beyond 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 Plan Administrator will use a uniform and nondiscriminatory method which reasonably reflects the manner used by the Plan Administrator to allocate income to Participants' Accounts. 14.09 ACTUAL CONTRIBUTION PERCENTAGE (ACP) TEST. For each Plan Year, the Plan Administrator must determine whether the annual Employer matching contributions (other than qualified matching contributions used in the ADP test under Section 14.08), if any, and the Employee contributions, if any, satisfy either of the following 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 (C) Copyright 2001 First Union National Bank 60 Defined Contribution Plan points (or the lesser percentage permitted by the multiple use limitation in Section 14.10) 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 ACP 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 Employer matching contributions (other than qualified matching contributions used in the ADP test under Section 14.08) and Employee contributions (as defined in Section 14.03). The Plan Administrator operationally may include in the ACP test, qualified nonelective contributions and elective deferrals not used in the ADP test. The Plan Administrator, under prior year testing, may include qualified nonelective contributions or qualified matching contributions in determining the Nonhighly Compensated Employee ACP only if the Employer makes such contribution to the Plan by the end of the testing year and the Plan Administrator allocates the contribution to the prior Plan Year. In determining whether the Plan satisfies either ACP test, the Plan Administrator will use prior year testing, unless the Employer in Appendix A to its Adoption Agreement elects to use the current year testing. An Employer may not change from current year testing to prior year testing except as provided in the Code or in other applicable guidance. For the first Plan Year the Plan permits matching contributions or Employee contributions and the Plan is not a successor plan (as defined in the Code or in other applicable guidance), under prior year testing, the prior year ACP for the Nonhighly Compensated Group is 3% unless the Employer in an Addendum to its Adoption Agreement elects to use the actual first year ACP for the Nonhighly Compensated Group. (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/her behalf to any other plan maintained by the Employer, unless the other plan is an ESOP. If the plans have different plan years, the Plan Administrator will determine the combined aggregate contributions on the basis of the plan years ending in the same calendar year. (C) Aggregation of certain 401(m) arrangements. If the Employer treats two or more plans as a single for coverage or nondiscrimination purposes, the Employer must combine the 401(m) arrangements under such plans to determine whether the plans satisfy the ACP test. This aggregation rule applies to the ACP determination for all eligible Employees, irrespective of whether an eligible Employee is a Highly Compensated Employee or a Nonhighly Compensated Employee. An Employer may aggregate 401(m) arrangements under this Section 14.09(C) if where the plans have the same plan year and use the same testing method. An Employer may not aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of a plan). If the Employer aggregating 401(m) arrangements under this Section 14.09(C) is using prior year testing, the Plan Administrator must adjust the Nonhighly Compensated Group ACP for the prior year as provided in the Code or in other applicable guidance. (D) Distribution of excess aggregate contributions. The Plan Administrator will determine excess aggregate contributions after determining excess deferrals under Section 14.07 and excess contributions under Section 14.08. If the Plan Administrator determines the Plan fails to satisfy the ACP test for a Plan Year, the Trustee, as directed by the Plan Administrator, must distribute the Vested excess aggregate contributions, as adjusted for allocable income, during the next Plan Year. However, the Employer may incur an excise tax with respect to 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 the ACP test. The Plan Administrator will determine the total amount of the excess aggregate contributions by starting with the Highly Compensated Employee(s) who has the greatest contribution percentage, reducing his/her 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 Plan Administrator already has reduced (but not below the next highest contribution percentage), and continuing in this manner until the ACP for the Highly Compensated Group satisfies the ACP test. After the Plan Administrator has determined the total excess aggregate contribution amount, the Trustee, as directed by the Plan Administrator, then will distribute (to the extent Vested) to each Highly Compensated Employee his/her respective share of the excess aggregate contributions. The Plan Administrator will determine each Highly Compensated Employee's share of excess aggregate contributions by starting with the Highly Compensated Employee(s) who has the highest dollar amount of aggregate contributions, reducing the amount of his/her aggregate contributions (but not below the next highest dollar amount of the aggregate contributions), then, if necessary, reducing the amount of aggregate contributions of the Highly Compensated Employee(s) at the next highest dollar amount of aggregate contributions, including the aggregate contributions of the Highly Compensated Employee(s) whose aggregate contributions the Plan Administrator already has reduced (but not below the next highest dollar amount of aggregate contributions), and continuing in this manner until the Trustee has distributed all excess aggregate contributions. (E) Allocable income. To determine the amount of the corrective distribution required under this Section 14.09, the Plan Administrator must calculate the allocable income for the Plan Year (but not beyond the Plan Year) in which the excess aggregate contributions arose. "Allocable income" means net income or net loss. The Plan Administrator will determine allocable income in the same manner as described in Section 14.08(F) for excess contributions. (C) Copyright 2001 First Union National Bank 61 Defined Contribution Plan (F) Characterization of excess aggregate contributions. The Plan Administrator will treat a Highly Compensated Employee's allocable share of excess aggregate contributions in the following priority: (1) first as attributable to his/her Employee contributions, if any; (2) then as matching contributions allocable with respect to excess contributions determined under the ADP test described in Section 14.08; (3) then on a pro rata basis to matching contributions and to the deferral contributions relating to those matching contributions which the Plan Administrator has included in the ACP test; and (4) 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/she is not 100% Vested in his/her Account Balance attributable to matching contributions, the Plan Administrator 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/her Vested percentage (determined as of the last day of the Plan Year for which the Employer made the matching contribution). 14.10 MULTIPLE USE LIMITATION. If at least one Highly Compensated Employee is includible in the ADP test under Section 14.08 and in the ACP test under Section 14.09, 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 for the prior Plan Year; or (b) the ACP of the Nonhighly Compensated Group for the Plan Year beginning with or within the prior Plan Year of the 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 Plan Administrator, 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 for the prior Plan Year; or (b) the ACP of the Nonhighly Compensated Group for the Plan Year beginning with or within the prior Plan Year of the 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). If the Employer has elected in its Adoption Agreement to use current year testing, the multiple use limitation is calculated using the Nonhighly Compensated Group's current Plan Year data. The Plan Administrator will determine whether the Plan satisfies the multiple use limitation after applying the ADP test under Section 14.08 and the ACP test under Section 14.09 and using the deemed maximum corrected ADP and ACP percentages in the event the Plan failed either or both tests. If, after applying this Section 14.10, the Plan Administrator determines the Plan has failed to satisfy the multiple use limitation, the Plan Administrator will correct the failure by treating the excess amount as excess contributions under Section 14.08 or as excess aggregate contributions under Section 14.09, as the Plan Administrator determines in its sole discretion. This Section 14.10 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. 14.11 DISTRIBUTION RESTRICTIONS. The Employer in Adoption Agreement Section 6.01 must elect the distribution events permitted under the Plan. The distribution events applicable to the Participant's deferral contributions Account, qualified nonelective contributions Account, qualified matching contributions Account and safe harbor contributions Account (collectively, "restricted balances") must satisfy the distribution restrictions described in Section 14.03(d). (A) Hardship Distributions from Deferral Contributions Account. The Employer must elect in Adoption Agreement Section 6.01 whether a Participant may receive hardship distribution (as defined in Section 6.09) from his/her deferral contributions Account prior to the Participant's Separation from Service. A hardship distribution from the deferral contributions Account also must satisfy the requirements of this Section 14.11(A). A hardship distribution option may not apply to a Participant's qualified nonelective contributions Account, qualified matching contributions Account, nor to his/her safe harbor contributions Account except as provided in Paragraph (2). (1) Restrictions. The following restrictions apply to a Participant who receives a hardship distribution from his/her deferral contributions Account: (a) the Participant may not make elective deferrals or Employee contributions to the Plan for the 12-month period following the date of his/her hardship distribution; (b) the distribution may not exceed the amount of the Participant's immediate and heavy financial need (including any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the 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 must 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 14.07), 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 (C) Copyright 2001 First Union National Bank 62 Defined Contribution Plan 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). The Plan Administrator, absent actual contrary knowledge, may rely on a Participant's written representation that the distribution is on account of hardship (as defined in Section 6.09) and also satisfies clause (b). In addition, clause (c) regarding loans does not apply if the loan to the Participant would increase the Participant's hardship need. (2) Earnings. A hardship distribution may not include earnings on an Employee's elective deferrals credited after December 31, 1988. Qualified matching contributions and qualified nonelective contributions, and any earnings on such contributions, credited as of December 31, 1988, are subject to withdrawal for a hardship distribution only if the Employer in an Addendum to its Adoption Agreement elects to permit such withdrawals. The Addendum may modify the December 31, 1988, date for purposes of determining credited amounts, provided the date is not later than the end of the last Plan Year ending before July 1, 1989. (B) Distributions after Separation from Service. Following the Participant's Separation from Service, the distribution events applicable to the Participant apply equally to all of the Participant's Accounts. 14.12 SPECIAL ALLOCATION AND VALUATION RULES. If the 401(k) arrangement provides for salary reduction contributions, if the Plan accepts Employee contributions, or if the Plan allocates matching contributions as of any date other than the last day of the Plan Year, the Employer in Adoption Agreement Sections 9.08 and 10.15 must elect the method the Plan Administrator will apply to allocate net income, gain or loss to such contributions made during the Plan Year and any alternative valuation dates for the different Account types which the Plan Administrator maintains under the Plan. 63 ATTACHMENT TO WACHOVIA BANK, NATIONAL ASSOCIATION DEFINED CONTRIBUTION MASTER PLAN AND TRUST AGREEMENT NONSTANDARD 401(k) PROFIT SHARING PLAN 3. EMPLOYEE (1.11) The following Employees are not eligible to participate in the Plan: (Choose (a) or one or more of (b) through (g) as applicable) (f) Classifications: (1) Employees who are not members of a collective bargaining unit, (2) Employees who are members of a collective bargaining unit whose collective bargaining agreement with an Employer does not specify such bargaining unit as permitted to participate in this Plan. 8. PREDECESSOR EMPLOYER SERVICE (1.30) In addition to the predecessor service the Plan must credit by reason of Section 1.30 of the Plan, the Plan credits as Service under this Plan service with the following predecessor employer(s): ElderCare Resources Corp. f/k/a Health Resources of Tazewell, Inc. Genesis Health Ventures, Inc. EX-99 5 ex99-2.txt EXHIBIT 99-2 EGTRRA AMENDMENT TO THE GENESIS HEALTH VENTURES, INC. 401(K) PLAN FOR COLLECTIVE BARGAINING UNIT EMPLOYEES EGTRRA - Employer ARTICLE I PREAMBLE 1.1 Adoption and effective date of amendment. This amendment of the plan is adopted to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). This amendment is intended as good faith compliance with the requirements of EGTRRA and is to be construed in accordance with EGTRRA and guidance issued thereunder. Except as otherwise provided, this amendment shall be effective as of the first day of the first plan year beginning after December 31, 2001. 1.2 Supersession of inconsistent provisions. This amendment shall supersede the provisions of the plan to the extent those provisions are inconsistent with the provisions of this amendment. ARTICLE II ADOPTION AGREEMENT ELECTIONS ________________________________________________________________________ The questions in this Article II only need to be completed in order to override the default provisions set forth below. If all of the default provisions will apply, then these questions should be skipped. Unless the employer elects otherwise in this Article II, the following defaults apply: 1) The vesting schedule for matching contributions will be a 6 year graded schedule (if the plan currently has a graded schedule that does not satisfy EGTRRA) or a 3 year cliff schedule (if the plan currently has a cliff schedule that does not satisfy EGTRRA), and such schedule will apply to all matching contributions (even those made prior to 2002). 2) Rollovers are automatically excluded in determining whether the $5,000 threshold has been exceeded for automatic cash-outs (if the plan is not subject to the qualified joint and survivor annuity rules and provides for automatic cash-outs). This is applied to all participants regardless of when the distributable event occurred. 3) The suspension period after a hardship distribution is made will be 6 months and this will only apply to hardship distributions made after 2001. 4) Catch-up contributions will be allowed. 5) For target benefit plans, the increased compensation limit of $200,000 will be applied retroactively (i.e., to years prior to 2002). ________________________________________________________________________ 2.1 Vesting Schedule for Matching Contributions If there are matching contributions subject to a vesting schedule that does not satisfy EGTRRA, then unless otherwise elected below, for participants who complete an hour of service in a plan year beginning after December 31, 2001, the following vesting schedule will apply to all matching contributions subject to a vesting schedule: If the plan has a graded vesting schedule (i.e., the vesting schedule includes a vested percentage that is more than 0% and less than 100%) the following will apply: Years of vesting service Nonforfeitable percentage 2 20% 3 40% 4 60% 5 80% 6 100% If the plan does not have a graded vesting schedule, then matching contributions will be nonforfeitable upon the completion of 3 years of vesting service. In lieu of the above vesting schedule, the employer elects the following schedule: a. [ ] 3 year cliff (a participant's accrued benefit derived from employer matching contributions shall be nonforfeitable upon the participant's completion of three years of vesting service). b. [X] 6 year graded schedule (20% after 2 years of vesting service and an additional 20% for each year thereafter). c. [ ] Other (must be at least as liberal as a. or the b. above): (C)Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 1 EGTRRA - Employer Years of vesting service Nonforfeitable percentage ________ _________% ________ _________% ________ _________% ________ _________% ________ _________% The vesting schedule set forth herein shall only apply to participants who complete an hour of service in a plan year beginning after December 31, 2001, and, unless the option below is elected, shall apply to all matching contributions subject to a vesting schedule. d. [X] The vesting schedule will only apply to matching contributions made in plan years beginning after December 31, 2001 (the prior schedule will apply to matching contributions made in prior plan years). 2.2 Exclusion of Rollovers in Application of Involuntary Cash-out Provisions (for profit sharing and 401(k) plans only). If the plan is not subject to the qualified joint and survivor annuity rules and includes involuntary cash-out provisions, then unless one of the options below is elected, effective for distributions made after December 31, 2001, rollover contributions will be excluded in determining the value of the participant's nonforfeitable account balance for purposes of the plan's involuntary cash-out rules. a. [ ] Rollover contributions will not be excluded. b. [ ] Rollover contributions will be excluded only with respect to distributions made after _______. (Enter a date no earlier than December 31, 2001.) c. [ ] Rollover contributions will only be excluded with respect to participants who separated from service after _______. (Enter a date. The date may be earlier than December 31, 2001.) 2.3 Suspension period of hardship distributions. If the plan provides for hardship distributions upon satisfaction of the safe harbor (deemed) standards as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv), then, unless the option below is elected, the suspension period following a hardship distribution shall only apply to hardship distributions made after December 31, 2001. [ ] With regard to hardship distributions made during 2001, a participant shall be prohibited from making elective deferrals and employee contributions under this and all other plans until the later of January 1, 2002, or 6 months after receipt of the distribution. 2.4 Catch-up contributions (for 401(k) profit sharing plans only): The plan permits catch-up contributions (Article VI) unless the option below is elected. [ ] The plan does not permit catch-up contributions to be made. 2.5 For target benefit plans only: The increased compensation limit ($200,000 limit) shall apply to years prior to 2002 unless the option below is elected. [ ] The increased compensation limit will not apply to years prior to 2002. ARTICLE III VESTING OF MATCHING CONTRIBUTIONS 3.1 Applicability. This Article shall apply to participants who complete an Hour of Service after December 31, 2001, with respect to accrued benefits derived from employer matching contributions made in plan years beginning after December 31, 2001. Unless otherwise elected by the employer in Section 2.1 above, this Article shall also apply to all such participants with respect to accrued benefits derived from employer matching contributions made in plan years beginning prior to January 1, 2002. 3.2 Vesting schedule. A participant's accrued benefit derived from employer matching contributions shall vest as provided in Section 2.1 of this amendment. ARTICLE IV INVOLUNTARY CASH-OUTS 4.1 Applicability and effective date. If the plan provides for involuntary cash-outs of amounts less than $5,000, then unless otherwise elected in Section 2.2 of this amendment, this Article shall apply for distributions made after December 31, 2001, and shall apply to all participants. However, regardless of the preceding, this Article shall not apply if the plan is subject to the qualified joint and survivor annuity requirements of Sections 401(a)(11) and 417 of the Code. 4.2 Rollovers disregarded in determining value of account balance for involuntary distributions. For purposes of the Sections of the plan that provide for the involuntary distribution of vested accrued benefits of $5,000 or less, the value of a participant's nonforfeitable account balance shall be determined without regard to that portion of the account balance that is attributable to rollover contributions (and earnings allocable thereto) within the meaning of Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If the value of the participant's nonforfeitable account balance as so determined is $5,000 or less, then the plan shall immediately distribute the participant's entire nonforfeitable account balance. (C) Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 2 EGTRRA - Employer ARTICLE V HARDSHIP DISTRIBUTIONS 5.1 Applicability and effective date. If the plan provides for hardship distributions upon satisfaction of the safe harbor (deemed) standards as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv), then this Article shall apply for calendar years beginning after 2001. 5.2 Suspension period following hardship distribution. A participant who receives a distribution of elective deferrals after December 31, 2001, on account of hardship shall be prohibited from making elective deferrals and employee contributions under this and all other plans of the employer for 6 months after receipt of the distribution. Furthermore, if elected by the employer in Section 2.3 of this amendment, a participant who receives a distribution of elective deferrals in calendar year 2001 on account of hardship shall be prohibited from making elective deferrals and employee contributions under this and all other plans until the later of January 1, 2002, or 6 months after receipt of the distribution. ARTICLE VI CATCH-UP CONTRIBUTIONS Catch-up Contributions. Unless otherwise elected in Section 2.4 of this amendment, all employees who are eligible to make elective deferrals under this plan and who have attained age 50 before the close of the plan year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, Section 414(v) of the Code. Such catch-up contributions shall not be taken into account for purposes of the provisions of the plan implementing the required limitations of Sections 402(g) and 415 of the Code. The plan shall not be treated as failing to satisfy the provisions of the plan implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the making of such catch-up contributions. ARTICLE VII INCREASE IN COMPENSATION LIMIT Increase in Compensation Limit. The annual compensation of each participant taken into account in determining allocations for any plan year beginning after December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with Section 401(a)(17)(B) of the Code. Annual compensation means compensation during the plan year or such other consecutive 12-month period over which compensation is otherwise determined under the plan (the determination period). If this is a target benefit plan, then except as otherwise elected in Section 2.5 of this amendment, for purposes of determining benefit accruals in a plan year beginning after December 31, 2001, compensation for any prior determination period shall be limited to $200,000. The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. ARTICLE VIII PLAN LOANS Plan loans for owner-employees or shareholder-employees. If the plan permits loans to be made to participants, then effective for plan loans made after December 31, 2001, plan provisions prohibiting loans to any owner-employee or shareholder-employee shall cease to apply. ARTICLE IX LIMITATIONS ON CONTRIBUTIONS (IRC SECTION 415 LIMITS) 9.1 Effective date. This Section shall be effective for limitation years beginning after December 31, 2001. 9.2 Maximum annual addition. Except to the extent permitted under Article VI of this amendment and Section 414(v) of the Code, if applicable, the annual addition that may be contributed or allocated to a participant's account under the plan for any limitation year shall not exceed the lesser of: a. $40,000, as adjusted for increases in the cost-of-living under Section 415(d) of the Code, or b. 100 percent of the participant's compensation, within the meaning of Section 415(c)(3) of the Code, for the limitation year. The compensation limit referred to in b. shall not apply to any contribution for medical benefits after separation from service (within the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as an annual addition. (C)Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 3 EGTRRA - Employer ARTICLE X MODIFICATION OF TOP-HEAVY RULES 10.1 Effective date. This Article shall apply for purposes of determining whether the plan is a top-heavy plan under Section 416(g) of the Code for plan years beginning after December 31, 2001, and whether the plan satisfies the minimum benefits requirements of Section 416(c) of the Code for such years. This Article amends the top-heavy provisions of the plan. 10.2 Determination of top-heavy status. 10.2.1 Key employee. Key employee means any employee or former employee (including any deceased employee) who at any time during the plan year that includes the determination date was an officer of the employer having annual compensation greater than $130,000 (as adjusted under Section 416(i)(1) of the Code for plan years beginning after December 31, 2002), a 5-percent owner of the employer, or a 1-percent owner of the employer having annual compensation of more than $150,000. For this purpose, annual compensation means compensation within the meaning of Section 415(c)(3) of the Code. The determination of who is a key employee will be made in accordance with Section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder. 10.2.2 Determination of present values and amounts. This Section 10.2.2 shall apply for purposes of determining the present values of accrued benefits and the amounts of account balances of employees as of the determination date. a. Distributions during year ending on the determination date. The present values of accrued benefits and the amounts of account balances of an employee as of the determination date shall be increased by the distributions made with respect to the employee under the plan and any plan aggregated with the plan under Section 416(g)(2) of the Code during the 1-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the plan under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting "5-year period" for "1-year period." b. Employees not performing services during year ending on the determination date. The accrued benefits and accounts of any individual who has not performed services for the employer during the 1-year period ending on the determination date shall not be taken into account. 10.3 Minimum benefits. 10.3.1 Matching contributions. Employer matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Section 416(c)(2) of the Code and the plan. The preceding sentence shall apply with respect to matching contributions under the plan or, if the plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Section 401(m) of the Code. 10.3.2 Contributions under other plans. The employer may provide, in an addendum to this amendment, that the minimum benefit requirement shall be met in another plan (including another plan that consists solely of a cash or deferred arrangement which meets the requirements of Section 401(k)(12) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) of the Code are met). The addendum should include the name of the other plan, the minimum benefit that will be provided under such other plan, and the employees who will receive the minimum benefit under such other plan. ARTICLE XI DIRECT ROLLOVERS 11.1 Effective date. This Article shall apply to distributions made after December 31, 2001. 11.2 Modification of definition of eligible retirement plan. For purposes of the direct rollover provisions of the plan, an eligible retirement plan shall also mean an annuity contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this plan. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Section 414(p) of the Code. 11.3 Modification of definition of eligible rollover distribution to exclude hardship distributions. For purposes of the direct rollover provisions of the plan, any amount that is distributed on account of hardship shall not be an eligible rollover distribution and the distributee may not elect to have any portion of such a distribution paid directly to an eligible retirement plan. (C)Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 4 EGTRRA - Employer 11.4 Modification of definition of eligible rollover distribution to include after-tax employee contributions. For purposes of the direct rollover provisions in the plan, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code, or to a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible. ARTICLE XII ROLLOVERS FROM OTHER PLANS Rollovers from other plans. The employer, operationally and on a nondiscriminatory basis, may limit the source of rollover contributions that may be accepted by this plan. ARTICLE XIII REPEAL OF MULTIPLE USE TEST Repeal of Multiple Use Test. The multiple use test described in Treasury Regulation Section 1.401(m)-2 and the plan shall not apply for plan years beginning after December 31, 2001. ARTICLE XIV ELECTIVE DEFERRALS 14.1 Elective Deferrals - Contribution Limitation. No participant shall be permitted to have elective deferrals made under this plan, or any other qualified plan maintained by the employer during any taxable year, in excess of the dollar limitation contained in Section 402(g) of the Code in effect for such taxable year, except to the extent permitted under Article VI of this amendment and Section 414(v) of the Code, if applicable. 14.2 Maximum Salary Reduction Contributions for SIMPLE plans. If this is a SIMPLE 401(k) plan, then except to the extent permitted under Article VI of this amendment and Section 414(v) of the Code, if applicable, the maximum salary reduction contribution that can be made to this plan is the amount determined under Section 408(p)(2)(A)(ii) of the Code for the calendar year. ARTICLE XV SAFE HARBOR PLAN PROVISIONS Modification of Top-Heavy Rules. The top-heavy requirements of Section 416 of the Code and the plan shall not apply in any year beginning after December 31, 2001, in which the plan consists solely of a cash or deferred arrangement which meets the requirements of Section 401(k)(12) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) of the Code are met. ARTICLE XVI DISTRIBUTION UPON SEVERANCE OF EMPLOYMENT 16.1 Effective date. This Article shall apply for distributions and transactions made after December 31, 2001, regardless of when the severance of employment occurred. 16.2 New distributable event. A participant's elective deferrals, qualified nonelective contributions, qualified matching contributions, and earnings attributable to these contributions shall be distributed on account of the participant's severance from employment. However, such a distribution shall be subject to the other provisions of the plan regarding distributions, other than provisions that require a separation from service before such amounts may be distributed. This amendment has been executed this 17th day of JuNE, 2002. Name of Employer: Genesis Health Ventures, Inc. ----------------------------------- By: /s/ Richard Pell, Jr. Sr. VP Administration ------------------------------------------- EMPLOYER Name of Plan: Genesis Health Ventures, Inc. 401(k) Plan for Collective Bargaining Unit Employees (C)Copyright 2001 Retirement Plan Department, Genesis Health Ventures, Inc. 5 EX-99 6 ex99-3.txt EXHIBIT 99-3 Exhibit 99.3 GENESIS HEALTH VENTURES, INC. ----------------------------- UNION RETIREMENT SAVINGS PLAN ----------------------------- (Restated, Effective January 1, 1997) ARTICLE I DEFINITIONS ----------- Sec. 1.01 "Account" means the entire interest of a Participant, Beneficiary or Alternate Payee in this Plan. Unless otherwise specified, the value of an Account shall be determined as of a Valuation Date as closely following the event requiring such valuation as the Plan Administrator reasonably deems practicable, except that for annual reporting purposes, the Valuation Date to which reference shall be made shall be the Annual Valuation Date. A Participant's Account shall consist of the following Subaccounts as may exist for the Participant: his/her Deferral Contribution Subaccount; his/her Matching Contribution Subaccount; his/her Employer Contribution Subaccount; his/her Portability Subaccount(s); and his/her Restoration Contribution Subaccount. Sec. 1.02 "Accrual Computation Period" means the twelve (12) month period corresponding to the Plan Year. The Accrual Computation Period which begins on December 1, 1997 shall end on December 31, 1997. Sec. 1.03 "Active Participant" means an individual who has been admitted to participation in the Plan pursuant to the provisions of Article II and who is, at the date of reference, an Eligible Class Employee. Sec. 1.04 "Affiliated Company" means any entity which, with any entity constituting Employer, constitutes: (a) a "controlled group of corporations" within the meaning of Section 414(b) of the Code; (b) a "group of trades or businesses under common control" within the meaning of Section 414(c) of the Code; or (c) an "affiliated service group" within the meaning of Section 414(m) of the Code. The term Affiliated Company shall include any other entity required to be aggregated with the Employer pursuant to regulations under Section 414(o) of the Code. An entity shall be considered an Affiliated Company only with respect to such period as the relationship described in the preceding sentences exists. Solely for purposes of Article VI of this Plan, whether an entity constitutes an Affiliated Company under Clause (a) or (b) above shall be determined by the application of the provisions of Section 415(h) of the Code. Sec. 1.05 "Age" means the chronological age attained by the Participant at his/her most recent birthday. Sec. 1.06 "Alternate Payee" means any individual entitled to current or future payment of benefits under the Plan pursuant to a QDRO. Sec. 1.07 "Anniversary Date" means the last day of the Plan Year. Sec. 1.08 "Annual Valuation Date" means the last day of the Plan Year. Sec. 1.09 "Beneficiary" means any individual or entity entitled to a benefit under this Plan by reason of the death of a deceased Participant. Sec. 1.10 "Benefit Commencement Date" means, in the case of any benefit other than an annuity, the date on which the payee to whom reference is made receives (a) a single-sum distribution of his/her nonforfeitable interest under this Plan, or (b) the first in a series of scheduled payments. In the case of a benefit payable as a life annuity, "Benefit Commencement Date" is intended to be synonymous with the term "annuity starting date" under applicable regulations promulgated by the Secretary of the Treasury or his/her delegate. Neither the date on which a hardship withdrawal is paid nor the date on which a Participant loan becomes a distribution for federal tax purposes shall be considered a Benefit Commencement Date. A payee who receives more than one kind of benefit under this Plan may have a separate Benefit Commencement Date as to each such benefit. Sec. 1.11 "Board" means the board of directors of the Employer if the Employer is a business corporation; the sole proprietor if the Employer is a sole proprietorship; the appropriately authorized partner(s) if the Employer is a partnership; and if none of the foregoing apply, the supreme governing body of the Employer. Sec. 1.12 "Break in Service" means a failure by a Participant or Employee to complete more than 500 Hours of Service during any Eligibility or Vesting Computation Period. However, no Break in Service shall be deemed to have occurred until there occurs a termination of the employer-employee relationship between the Employer and the Employee or Participant involved. Any Break in Service shall be deemed to have commenced on the first day of the computation period in which it occurs, or, if later, the date on which the Employee last renders service for which he/she is entitled to credit for an Hour of Service during such computation period. No Break in Service shall be deemed to occur during an Employee's initial Eligibility Computation Period solely because of his/her failure to complete more than 500 Hours of Service during any one (1) Plan Year occurring in part during such twelve (12) month period if the Employee completes one (1) Year of Service during such initial Eligibility Computation Period. A Break in Service shall not be deemed to have occurred during any period of Excused Absence if the Employee returns to the service of the Employer within the time permitted pursuant to the provisions of this Plan setting forth circumstances of Excused Absence. Solely for the purposes of determining whether or not a Break in Service has occurred, there shall be credited to each Employee absent from service on a Parenthood Absence the lesser of (a) the number of Hours of Service that would normally have been credited to the Participant but for such absence (if determinable, or, if not determinable, then the number of Hours of Service determined by multiplying the number of days of such absence by eight (8)), or (b) 501 Hours of Service, with all of the Hours of Service so credited being deemed to have been credited to the Eligibility and Vesting Computation Periods in which such absence begins if necessary to avoid a Break in Service in such Computation Periods, or, if not necessary to avoid such Breaks in Service, then to the Eligibility and Vesting Computation Periods next following the Computation Periods in which such absence commenced. -2- Sec. 1.13 "Code" means the Internal Revenue Code of 1986, as amended, and any successor statute of similar purpose. Reference to any particular section of the Code shall be a reference to that section as it existed on the Effective Date or restatement of this Plan, as it may thereafter be amended, as it may thereafter be redesignated, and to any corresponding provision of a successor statute. Sec. 1.14 "Compensation" means: (a) In General. Compensation means the wages, salaries, fees for professional services, and other amounts paid during the Accrual Computation Period of reference (whether or not paid in cash) for personal services actually rendered in the course of employment with the Employer to the extent that the amounts are includable in gross income, including, but not limited to, commissions paid salesmen, remuneration for services on the basis of a percentage of profits, commissions on insurance premiums, tips, and bonuses. (b) Amounts Excluded. (1) In General. However, Compensation shall not include: (i) Employer contributions to a plan of deferred compensation which are not includable in the Participant's gross income for the taxable year in which contributed, or Employer contributions under a simplified employee pension plan, or any distributions from a plan of deferred compensation (whether or not tax-qualified); (ii) amounts realized from the exercise of a nonqualified stock option, or when restricted stock (or property) held by the Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture; (iii) amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and (iv) other amounts which receive special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity described in Section 403(b) of the Code (whether or not the amounts are excludable from the gross income of the Participant). -3- (2) Other Amounts Excluded. Notwithstanding any other provision of this Section to the contrary, Compensation shall not include reimbursement or other expense allowances, fringe benefits (cash and non-cash), moving expenses, deferred compensation, or welfare benefits. (c) Inclusion of Certain Deferred Amounts. Notwithstanding the foregoing, Compensation paid or made available during a Plan Year shall also include any amount contributed by the Employer pursuant to a salary reduction agreement and which is not includable in the gross income of the Participant in accordance with Sections 402(g)(3), 125, 132(f)(4) (for Plan Years beginning on or after January 1, 2001) or 457 of the Code. (d) Compensation of Self-Employed Individuals. If an Employer is a sole proprietorship or partnership, a Self-Employed Individual shall be treated as an Employee and, with respect to such individual, Compensation means his/her Earned Income for the Accrual Compensation Period within the meaning of Section 401(c)(2) of the Code. (e) Limitation on Compensation. In addition to other applicable limitations set forth in this Plan, and notwithstanding any other provision of this Plan to the contrary, the Compensation of each Employee taken into account under this Plan shall not exceed the Omnibus Budget and Reconciliation Act of 1993 ("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 Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding twelve (12) months, over which Compensation is determined ("Determination Period"), beginning in such calendar year. If such Determination Period consists of fewer than twelve (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, and the denominator of which is twelve (12). If Compensation for any prior Determination Period is taken into account in determining an Employee's benefits accruing in the current Plan Year, Compensation for that prior Determination Period is subject to the OBRA `93 annual compensation limit in effect for such prior Determination Period. For this purpose, for Determination Periods 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. -4- Sec. 1.15 "Currently Benefiting Participant" means: (a) a Participant who was in the employ of the Employer during the Plan Year of reference, and who, during that Plan Year did any of the following: (1) was in the employ of the Employer or an Affiliated Company at the end of the Plan Year, and if this Plan was not Top-Heavy for such Plan Year, completed at least 1,000 Hours of Service during the Plan Year; (2) retired (normal) during the Plan Year; (3) died during the Plan Year; (4) experienced a Termination of Employment due to Total Disability during the Plan Year; or (5) was on Excused Absence at the end of the Plan Year. (b) In addition, as to any Plan Year, if, and only if, the Plan Administrator determines that this Plan will not satisfy the requirements of Section 410(b) of the Code for a particular Plan Year, unless one or more additional Participants receive an allocation of the Employer contribution for that Plan Year, certain Participants not described in Subparagraphs (1) through (5) of Paragraph (a), but who, during that Plan Year, (1) were Eligible Class Employees, (2) completed more than 500 Hours of Service during that Plan Year and (3) were Non-Highly Compensated Employees, shall be deemed to be Participants described in Paragraph (a) with respect to that Plan Year to the extent necessary so that the percentage of Non-Highly Compensated Employees who benefit under the Plan over the percentage of Highly Compensated Employees who benefit under the Plan is at least seventy percent (70%) as determined under applicable Treasury regulations. The selection of those Participants who are deemed to satisfy the requirements of Paragraph (a) for the referenced Plan Year, who would otherwise not have satisfied those requirements, shall be based upon Compensation starting with the Participant having the lowest Compensation during the Plan Year of reference, provided, however, that each Participant who has the same Compensation as a Participant who is deemed to be a Currently Benefiting Participant shall also be deemed a Currently Benefiting Participant. Sec. 1.16 "Deferral Agreement" means any wage reduction, salary reduction or similar agreement through which the Employee directs the Employer to cause Deferral Amounts to be contributed to the Plan on his/her behalf. -5- Sec. 1.17 "Deferral Amount" means the amount by which the Participant has caused his/her current remuneration to be reduced by the Employer pursuant to a Deferral Agreement or pursuant under a cafeteria plan (within the meaning of Section 125 of the Code) for the purposes of funding deemed Employer contributions to his/her Deferral Contribution Subaccount. Sec. 1.18 "Deferral Contribution Subaccount" means so much of the Participant's Account as is comprised of Deferral Amounts credited under the Plan, as adjusted to reflect the investment gains (losses) and expenses attributable thereto and distributions made therefrom. Sec. 1.19 "Determination Year" means the Plan Year of reference. Sec. 1.20 "Disregarded Prior Service" means Years of Service completed prior to any Break in Service, if (a) (1) the Employee was not a Participant in this Plan, or (2) the Participant had no vested interest in that portion of his/her Account under this Plan attributable to Employer contributions prior to such Break in Service; and (b) the number of consecutive one-year Breaks in Service incurred (including in such series of consecutive one-year Breaks in Service the Break in Service with regard to which a determination is being made as to whether prior Years of Service are Disregarded Prior Service hereunder) equals or exceeds the greater of: (1) five (5), or (2) the number of Years of Service, other than Disregarded Prior Service, completed by the Employee (whether or not such Years of Service were completed as an Eligible Class Employee) prior to such Break in Service. Sec. 1.21 "Early Retirement Age" means Age 55, or if later, the Age attained by the Participant on the date he/she completes five (5) Years of Service (as computed for vesting computation purposes). Sec. 1.22 "Earned Income" means the net earnings from self-employment in the trade or business with respect to which this Plan is established, for which personal services of the individual are a material income-producing factor. Net earning will be determined without regard to items not included in gross income and the deductions allocable to such items. Net earnings are reduced by contributions by the Employer to a qualified plan to the extent deductible under Section 404 of the Code. -6- Sec. 1.23 "Effective Date" means December 1, 1989. The effective date of this restatement is January 1, 1997. However, those provisions of this Plan which are required for compliance with the Uruguay Round Agreements Act, Pub. L. 103-465, Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103-353, Small Business Job Protection Act of 1996, Pub. L. 104-188, Taxpayer Relief Act of 1997, Pub. L. 105-34, Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206, and Community Renewal Tax Relief Act of 2000, Pub. L. 106-554 shall be effective retroactively to the last permissible date on which such provision was required to become effective to assure full compliance with the act requiring its inclusion in this Plan. Sec. 1.24 "Eligibility Computation Period" means: (a) with respect to each Employee, the twelve (12) month period commencing on his/her most recent Employment Commencement Date (his/her "initial" Eligibility Computation Period), and (b) commencing with the Plan Year in which the Employee's initial Eligibility Computation Period ends, each and every full Plan Year during which an Employee is in the service of the Employer. Sec. 1.25 "Eligible Class Employee" means each Employee of the Employer whose terms and conditions of employment are determined through collective bargaining with a third party if the issue of retirement benefits has been a bona fide subject of collective bargaining, and the collective bargaining agreement provides that such Employee shall be eligible to participate in this Plan. The term Eligible Class Employee shall not include: (a) any Leased Employee; (b) any Employee who is a non-resident alien (within the meaning of Section 410(b)(3)(C) of the Code) and who receives no earned income (within the meaning of Section 911(d)(2) of the Code) from the Employer which constitutes income from sources within the United States (within the meaning of Section 861(a)(3) of the Code); and (c) any individual who is not classified as an Employee by the Employer regardless of whether such individual is considered an Employee for purposes of any federal or state law. If the Employer reclassifies an individual as an Employee, he/she shall be an Eligible Class Employee prospectively from the effective date of that reclassification only, and then only if he/she otherwise satisfies the requirements of this Section. If an individual not classified by the Employer as an Employee is retroactively reclassified as such by any governmental or regulatory authority, such individual shall nonetheless be deemed to have become an Eligible Class Employee only prospectively on the event of such reclassification (and not retroactively to the date on which he/she was found to have first become an employee for any other purpose), and then only if he/she otherwise satisfies the requirements of this Section. -7- Sec. 1.26 "Eligible Retirement Plan" means an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity described in Section 403(a) of the Code, or a qualified plan described in Section 401(a) of the Code, that accepts the distributee's Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to a surviving spouse, an Eligible Retirement Plan is an individual retirement arrangement described in Section 402(a) or (b) of the Code. Sec. 1.27 "Eligible Rollover Distribution" means any distribution of all or any portion of the balance of the Account of a Participant. The term "Eligible Rollover Distribution" shall not include: (a) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; (b) any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; (c) any hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the Code; (d) the portion of any other distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); and (e) any other distribution(s) that is reasonably expected to total less than $200 during a year. Sec. 1.28 "Employee" means an individual in the employ of the Employer. The term "Employee" includes any individual who renders service to the Employer and is so characterized for federal income and wage tax withholding purposes. If an individual is retroactively reclassified to "employee" status for federal income and wage tax withholding purposes, that individual shall be deemed to have been an "Employee" (but not an "Eligible Class Employee") for the period to which such reclassification applies. Sec. 1.29 "Employee Retirement Income Security Act of 1974" or "ERISA" means the Act (P.L. 93-406), known by that name, including all amendments thereto. Sec. 1.30 "Employer" means Genesis Health Ventures, Inc., a Pennsylvania corporation, the entities identified on Appendix "A" attached hereto and incorporated by this reference herein and any successor or related entity thereto which adopts this Plan and joins in the corresponding Trust Agreement. Appendix "A" will be revised from time to time by the Primary Employer to reflect additional Employers that have adopted this Plan. The term "Employer" also includes any other entity which, with the consent of the Board of the Primary Employer, adopts this Plan and joins in the corresponding Trust Agreement. Sec. 1.31 "Employer Contribution Subaccount" means that portion of a Participant's Account consisting of Employer profit-sharing contributions, as adjusted to reflect the investment gain (losses) and expenses attributable thereto and distributions made therefrom. -8- Sec. 1.32 "Employment Commencement Date" means, with respect to any individual, the first date on which that individual performs service as an Employee and for the Employer entitling him/her to credit for at least one (1) Hour of Service (whether or not such service was performed as an Eligible Class Employee). Sec. 1.33 "Entry Date" means every January 1st and July 1st thereafter during which this Plan is in effect. For Plan Years beginning before January 1, 1998, the term "Entry Date" means every December 1st and June 1st. Sec. 1.34 "Excused Absence" means any of the following: (a) absence on leave granted by the Employer for any cause for the period stated in such leave or, if no period is stated, then for six (6) months and any extensions that the Employer may grant in writing. For the purposes of this provision, the Employer shall give similar treatment to all Employees in similar circumstances; (b) absence in any circumstance so long as the Employee continues to receive his/her regular compensation (other than as severance pay or change of control benefits) from the Employer; (c) absence in the armed forces of the United States or government service in time of war or national emergency; (d) absence by reason of illness or disability until such time as the employment relationship between Employer and Employee is severed; and (e) absence under the provisions of the Family and Medical Leave Act of 1993 (P.L. 103-3), as amended, or under any applicable state law of similar purpose. An Excused Absence shall cease to be such retroactively to the last date on which the Employee performed service for the Employer or an Affiliated Company entitling him/her to credit for at least one (1) Hour of Service, and he/she shall be deemed to have experienced a Termination of Employment as of such date if (1) the Employee fails to return to the service of the Employer or of an Affiliated Company promptly upon expiration of any leave of absence referred to in Paragraph (a), (2) upon termination of the regular compensation payments referred to in Paragraph (b) above, (3) prior to the expiration of the period during which his/her reemployment rights are protected by law after discharge from active duty in the uniformed military service of the United States, or (4) upon recovery from illness or disability where such recovery is, in the judgment of the Plan Administrator, sufficient to permit the individual to perform the duties of any employment offered to the individual by the Employer or an Affiliated Company; provided, however, that no absence described in Paragraph (e) hereof shall be deemed to be a cessation of employment earlier than the earliest date permissible under applicable law. Notwithstanding the foregoing to the contrary, if a Participant dies or experiences Total Disability during the course of an Excused Absence, he/she shall be deemed to have experienced a Termination of Employment on the date of his/her death or on the date as of which he/she is determined to have experienced Total Disability, as applicable. -9- The Plan Administrator shall be the sole judge of whether recovery from illness or disability has occurred for this purpose. Sec. 1.35 "Family Member" means the spouse of the Participant and the lineal ascendants and descendants of either the Participant or that spouse. Sec. 1.36 "Five-Percent Owner" means any person who owns (or is considered as owning within the meaning of Section 318 of the Code, as modified by Section 416(i) of the Code) more than five percent (5%) of the outstanding voting stock of the Employer (or any entity constituting an Affiliated Company) or stock possessing more than five percent (5%) of the total combined voting power of all of the stock of such entity. If an entity is not a corporation, a person shall be considered a "Five-Percent Owner" if he/she owns more than five percent (5%) of either the capital or the profits interest in the entity. Sec. 1.37 "414(q) Compensation" means, with respect to any period of reference, the remuneration of the Employee taken into account under Section 415(c)(3) of the Code as then in effect, but for Plan Years beginning after December 31, 1996, including amounts contributed pursuant to a salary reduction agreement which are excludable from the Employee's gross income under Section 125 (relating to cafeteria plans), Section 402(h) (relating to elective deferrals under simplified employee pensions), elective deferral amounts under a qualified cash-or-deferred arrangement satisfying the requirements of Section 401(k), Section 403(b) (relating to tax-deferred annuities) or Section 457 (b) of the Code, and for Plan Years beginning after December 31, 2000, Section 132(f)(4) relating to qualified transportation fringe benefits). Sec. 1.38 "Fund" or "Trust Fund" means all of the assets of this Plan held by the Trustee (or any nominee thereof) at any time under the Trust Agreement. Sec. 1.39 "Highly Compensated Employee" means a person who is either a "highly compensated former employee" or a "highly compensated active employee." -10- (a) A "highly compensated former employee" is any Employee who separated from service with the Employer and all Affiliated Companies (or was deemed to have separated) prior to the Determination Year, performs no service for the Employer or an Affiliated Company during the Determination Year, and was a Highly Compensated Employee for either the year in which he/she experienced a cessation of the Employer/Employee or Affiliated Company/Employee relationship or for any Determination Year ending on or after the date on which he/she attains Age 55. (b) For Plan Years commencing on and after January 1, 1997, a "highly compensated active employee" is any Employee who performs service for the Employer or an Affiliated Company during the Determination Year and who: (1) was a Five-Percent Owner at any time during the Look-Back Year or the current Plan Year; and (2) received 414(q) Compensation from the Employer or Affiliated Companies in the aggregate in excess of $80,000 (as adjusted pursuant to Sections 414(q)(1) and 415(d) of the Code) during the Look-Back Year and was in the Top-Paid Group during the Look-Back Year. The foregoing Top-Paid Group election shall apply consistently to the Determination Years of all plans of the Employer, except that the consistency requirement shall not apply to Determination Years beginning before January 1, 1998, and for Determination Years beginning on or after January 1, 1998 and before January 1, 2000, satisfaction of the consistency requirement shall be determined without regard to any non-retirement plans of the Employer. Notwithstanding the foregoing, for the first Plan Year starting after December 31, 1996, any individual who was a Highly Compensated Employee (within the meaning of Paragraph (c) of this section) in the last Plan Year starting prior to January 1, 1997 shall be deemed to have been a Highly Compensated Employee for the Look-Back Year applicable to the first Plan Year commencing after December 31, 1996. (c) For Plan Years commencing prior to January 1, 1997, a "highly compensated active employee" is any Employee who performs service for the Employer or an Affiliated Company during the Determination Year and who: (1) was a Five-Percent Owner during the Look-Back Year; (2) received 414(q) Compensation from the Employer or Affiliated Companies in the aggregate in excess of $75,000 (as adjusted pursuant to Sections 414(q)(1) and 415(d) of the Code) during the Look-Back Year; -11- (3) received 414(q) Compensation from the Employer or Affiliated Companies in the aggregate in excess of $50,000 (as adjusted pursuant to Section 414(q)(1) and 415(d) of the Code) and was a member of the Top-Paid Group for the Look-Back Year; or (4) was an officer of the Employer and received 414(q) Compensation during the Look-Back Year that is greater than fifty percent (50%) of the dollar limitation in effect under Section 415(b)(1)(A) of the Code. The term "Highly Compensated Employee" also includes an Employee who is both described in the preceding portion of this Paragraph (c) if the term "Determination Year" is substituted for "Look-Back Year" and one of the 100 Employees who received the most 414(q) Compensation from the Employer and Affiliated Companies during the Determination Year. (d) For the purposes of applying Paragraph (c) hereof: (1) If no officer has satisfied the 414(q) Compensation requirement of Paragraph (c)(4) above, during either a Determination Year or Look-Back Year, the highest paid officer for such year shall be treated as a Highly Compensated Employee. (2) If an Employee is, during a Determination Year or Look-Back Year, a Family Member of either a Five-Percent Owner who is an active or former Employee or a Highly Compensated Employee who is one of the ten (10) most highly compensated employees ranked on the basis of 414(q) Compensation paid by the Employer and its Affiliated Companies during such year, then the Family Member and the Five-Percent Owner or top-ten Highly Compensated Employee shall be treated as a single Employee receiving 414(q) Compensation and plan contributions or benefits equal to the sum of such 414(q) Compensation and contributions or benefits of the Family Member and Five-Percent Owner or top-ten Highly Compensated Employee. (3) The determination of who is a Highly Compensated Employee, including the determinations of the number and identity of Employees in the top-paid group, the top one-hundred (100) Employees, the number of Employees treated as officers and the 414(q) Compensation that is considered, will be made in accordance with Section 414(q) of the Code and the regulations thereunder, as applicable to the subject Determination Year. -12- (e) For the purposes of this Section, each entity constituting Employer and each Affiliated Company shall be considered collectively as a single employer. Sec. 1.40 "Hour of Service" means: (a) each hour for which an Employee is paid or entitled to payment for the performance of duties for the Employer during the applicable computation period; (b) each hour for which an Employee is paid or entitled to payment by the Employer on account of a period of time during which no duties are performed (irrespective of whether or not the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury or military duty, or leave of absence; and (c) each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. Hours of Service shall be credited in a manner which is consistent with regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations, Section 2530.200b-2(b) and (c). Hours of Service shall be credited to the Computation Period in which earned, regardless of when determined or awarded. Notwithstanding the foregoing, (1) not more than 501 Hours of Service shall be credited to an Employee on account of any single continuous period during which the Employee performs no duties for the Employer; (2) no credit shall be granted for any period with respect to which an Employee receives payment or is entitled to payment under a plan maintained solely for the purpose of complying with applicable workmen's compensation, or unemployment compensation or disability insurance laws; and (3) no credit shall be granted for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee. Each week of absence for military service in the armed forces of the United States from which service the Employee returns to the Employer within the period during which he/she has legally protected reemployment rights shall count as a number of Hours of Service equal to the number of Hours of Service that would have been credited to the Employee with respect to the Employee's customary week of employment during the month immediately preceding the date on which absence for military service commenced. Service rendered at overtime or other premium rates shall be credited at the rate of one (1) Hour of Service for each hour for which pay is earned, regardless of the rate of compensation in effect with respect to such hour. If the Employer maintains the plan of a predecessor employer, Hours of Service with such employer shall be considered to be Hours of Service with the Employer. Service with an Affiliated Company in any Computation Period shall be considered service with the Employer in that Computation Period for the purposes of this Plan; provided, however, that except as may otherwise be specifically provided under this Plan, Hours of Service with any entity prior to the date on which it became an Affiliated Company and Hours of Service with any entity subsequent to the date on which it ceased to be an Affiliated Company shall not be considered to be Hours of Service with the Employer. -13- For purposes of this Section, the term "Employee" includes an Employee and a Leased Employee. If an Employee's payroll records are normally kept on other than an hourly basis, as described below, the following equivalencies may be utilized in determining the number of Hours of Service to which the Employee is entitled to be credited.
Basis Upon Which the Credit Granted If Participant Participant's Payroll Records Earns At Least One (1) Hour Are Maintained Of Service During Period - ------------------------------------- ----------------------------- Shift ................................................................................ Actual hours for full shift Day .......................................................................................10 Hours of Service Week ......................................................................................45 Hours of Service Semi-monthly Payroll Period................................................................95 Hours of Service Months of Employment.......................................................................190 Hours of Service
Past service credit shall be given as set forth in Appendix "B," attached hereto and incorporated by reference herein. Sec. 1.41 "Investment Manager" means any fiduciary (other than a Trustee or Named Fiduciary) who has the power to manage, acquire, or dispose of any asset of this Plan and who has qualified as an "Investment Manager" within the meaning of Section 3(38) of ERISA. Sec. 1.42 "Leased Employee" means an individual who is not an Employee of the Employer or of an Affiliated Company, but who provides services to the Employer or an Affiliated Company where (a) such services are performed pursuant to an agreement between the recipient of those services and any other person or entity, (b) the person performing the services has done so on a substantially full-time basis for at least one year, (c) as to Plan Years starting before January 1, 1997, the services so performed are of a type historically performed in the business field of the recipient by employees and (d) as to Plan Years starting after December 31, 1996, the services so performed are performed under the primary direction and control of the recipient of those services, except that even if an individual would otherwise be considered a Leased Employee hereunder, that individual shall not be considered a Leased Employee if (1) he/she is covered by a money purchase pension plan which (i) covers all employees of the leasing organization (other than those rendering service directly to the leasing organization), (ii) provides a nonintegrated employer contribution rate of at least ten percent (10%) of compensation (as defined in Section 415 (n)(5)(c)(iii) of the Code), and (iii) allows immediate participation and full and immediate vesting, and (2) Leased Employees (including, for this purpose, those who would be Leased Employees but for the operation of this sentence) do not constitute more than twenty percent (20%) of that part of the recipient's workforce consisting of Non-Highly Compensated Employees. -14- Sec. 1.43 "Look-Back Year" means the period of twelve (12) consecutive months immediately preceding the Determination Year. Sec. 1.44 "Matching Contribution Subaccount" means so much of a Participant's Account as is attributable to Employer contributions made pursuant to Section 3.01(b) of the Plan, as adjusted to reflect the investment gains (losses) and expenses attributable thereto and distributions made therefrom. Sec. 1.45 "Named Fiduciary" means the Employer, the Trustee, the Plan Administrator (if other than an Employer) and the Named Appeals Fiduciary. Each Named Fiduciary shall have only those particular powers, duties, responsibilities and obligations as are specifically delegated to him/her/it under this Plan and/or the Trust Agreement. Any fiduciary, if so appointed, may serve in more than one fiduciary capacity. Sec. 1.46 "Net Income" means the current and accumulated earnings of the Employer, as determined by the Employer's regularly engaged account on the basis of the Employer's books of account for shareholder reporting purposes, but without any deduction for any of the following: (a) depreciation; (b) extraordinary expenses or losses; (c) casualty losses in excess of recoveries (if any); (d) contributions to this or any other qualified retirement plan; or (e) federal, state, county or municipal income taxes or income taxes imposed by any other political subdivisions. If Net Income with respect to any fiscal period is restated after a contribution based thereon has been made to this Plan, there shall be no adjustment (upward or downward) in the amount of that contribution solely by reason of the change in Net Income resulting from such restatement. Sec. 1.47 "Non-Highly Compensated Employee" means any Employee who is not a Highly Compensated Employee. Sec. 1.48 "Normal Retirement Age" means the date on which the Participant attains Age 65. Sec. 1.49 "Officer" means a corporate officer (or person holding a position of comparable authority in an enterprise other than a corporation); provided, however, that not more than fifty (50) persons shall be deemed Officers (or, if lesser, the greater of three (3) employees or 10% of employees), disregarding persons who are excluded from consideration for inclusion in the Top-Paid Group. Sec. 1.50 "Owner-Employee" means a Self-Employed Individual who is a sole-proprietor if the Employer is a sole proprietorship, or a partner owning more than 10% of either the capital or profits interest of the Employer if the Employer is a partnership. -15- Sec. 1.51 "Parenthood Absence" means an absence from work (a) due to the pregnancy of the individual, (b) due to the birth of a child of the individual, (c) due to the placement of a child in connection with the adoption of that child by the individual, or (d) for the purposes of caring for a child during the period immediately following the birth or placement for adoption of such child. Sec. 1.52 "Participant" means any individual who has been admitted to participation in this Plan pursuant to the provisions of Article II and who (a) remains an Eligible Class Employee or (b) has ceased to be an Eligible Class Employee, but continues to have an undistributed Account under this Plan. Sec. 1.53 "Plan" means the Genesis Health Ventures, Inc. Union Retirement Savings Plan (formerly known as the Meridian Healthcare, Inc. Union Retirement Savings Plan) as set forth herein, and as the same may from time to time hereafter be amended. Notwithstanding any provision of this Plan to the contrary, in the event that a plan is merged into this Plan or a plan's assets and/or liabilities are transferred to this Plan, the amount in each Participant's Account which is attributable to such merger or transfer shall continue to be subject to the distribution method options available under the transferor plan (as in effect on the date of such transaction) as long as, and to the extent required to comply with the requirements of applicable regulatory anti-cutback rules. This Plan is intended to be a "profit-sharing plan" within the meaning of Section 401 of the Code and the cash-or-deferred arrangement incorporated within this Plan is intended to be a "qualified cash-or-deferred arrangement" within the meaning of Section 401(k) of the Code. The Plans listed in Appendix "C", attached hereto and incorporated by reference herein, have been merged into this Plan. Appendix "C" will be revised from time to time by the Primary Employer to reflect additional plans merged into this Plan. Sec. 1.54 "Plan Administrator" means the individual or committee named as such pursuant to the provisions hereof, or in the absence of any such appointment, the Primary Employer. Sec. 1.55 "Plan Year" means the twelve (12) month period commencing each January 1st and ending on the subsequent December 31st. The one (1) month period commencing December 1, 1997 and ending on December 31, 1997 shall also be a Plan Year. Prior to December 1, 1997, "Plan Year" means the twelve (12) month period commencing each December 1st and ending November 30th. -16- Sec. 1.56 "Portability Subaccount" means that portion of the Participant's Account consisting of amounts received as: (a) an Eligible Rollover Distribution from other tax-qualified retirement plans; (b) direct trustee-to-trustee transfers from other tax-qualified plans to the extent permissible (and not including amounts received in plan merger or consolidation transactions); (c) amounts delivered to this Plan by the Participant within 60 days of receipt thereof as an Eligible Rollover Distribution from a tax-qualified retirement plan; and (d) amounts received from an individual retirement arrangement (meeting the requirements of Section 408 of the Code) of the Participant consisting only of amounts described in Clause (c) hereof. A Participant shall have a separate Portability Subaccount for each source of transferred funds, and each such Portability Subaccount shall be separately accounted for and adjusted to reflect the investment gains (losses) and expenses attributable thereto and distributions made therefrom. Sec. 1.57 "Primary Employer" means Genesis Health Ventures, Inc. and any successor thereto which adopts this Plan. Sec. 1.58 "Prospective Beneficiary" means, as to any Participant, any individual who (or entity which), under the terms of this Plan or any valid beneficiary designation then in effect, would become a Beneficiary upon the death of the Participant if such death occurred on the date of reference. Sec. 1.59 "QDRO" means a "qualified domestic relations order" within the meaning of Section 206(d)(3)(B) of ERISA. Sec. 1.60 "Required Beginning Date" means the April 1 of the calendar year next following the calendar year in which the Participant attains Age 70-1/2, or for Plan Years beginning on or after January 1, 1997 if later, the April 1 of the calendar year next following the calendar year in which he/she retires, except that with respect to any Participant who is a Five Percent Owner with respect to the Plan Year ending in the calendar year in which he/she attains Age 70-1/2, the Required Beginning Date shall mean April 1 of the calendar year next following the calendar year in which the Participant attains Age 70-1/2, or if later, the date determined pursuant to a valid election made by the Participant under Section 242(b) of the Tax Equity and Fiscal Responsibility Act of 1982. Sec. 1.61 "Restoration Contribution Subaccount" means so much of a Participant's Account as is attributable to restoration contributions made under this Plan, adjusted to reflect investment gains (losses) and expenses attributable thereto and distributions made therefrom. Sec. 1.62 "Retirement" means a Termination of Employment of a Participant after that Participant has attained Early Retirement Age or Normal Retirement Age. Sec. 1.63 "Rollover Amount" means that portion of an Eligible Rollover Distribution from this Plan that, by election of the prospective distributee, is transferred directly from this Plan to: (a) a plan that is tax-qualified under Section 401(a) of the Code; (b) an annuity plan described in Section 403(a) of the Code; (c) one or more individual retirement arrangements within the meaning of Section 408 of the Code; or (d) a combination of any of the foregoing; except that if a prospective distributee's Eligible Rollover Distribution is less than $200, no portion thereof shall be a Rollover Amount. -17- Sec. 1.64 "Self-Employed Individual" means an individual who has Earned Income from the Employer. Sec. 1.65 "Spouse" means the individual to whom the Participant is married on the date of reference. In the context of designation of Prospective Beneficiaries and in the context of the exercise of elections under this Plan with respect to which spousal consent is normally required, the individual to whom the Participant is married on the date of a Prospective Beneficiary designation or election exercise, as the case may be, is the Participant's Spouse for Plan purposes unless there then exists a court-issued legal separation order, as described in the following sentence. For the purposes of this Plan, if a court of competent jurisdiction has issued a legal separation order, the parties to whom that order pertains shall not be deemed to be married to each other, even if their marriage has not been annulled or terminated by divorce. However, to the extent that a QDRO specifies that a former spouse (or legally separated spouse) of the Participant is to be treated as the Participant's Spouse, such specified former spouse (or legally separated person) shall be treated as the Participant's Spouse under this Plan to the extent required in such QDRO, to the exclusion of any subsequent Spouse. Sec. 1.66 "Termination of Employment" means a cessation of the employer-employee relationship between the Employer and all Affiliated Companies and the Employee. Such cessation of employment shall be deemed to have occurred on the last day on which the Employee performs an Hour of Service for the Employer or an Affiliated Company in the role of a common-law employee, without reference to any period after such relationship is terminated during which the former Employee performs services as a Leased Employee, as an independent contractor, or as an employee of any enterprise which is neither the Employer nor an Affiliated Company. In addition, Termination of Employment shall not be deemed not to have occurred merely because the former Employee's wages or other compensation may be continued beyond the last day on which the former Employee renders services as an employee (within the common-law definition of that term), or because the former Employee may be entitled to payments of previously deferred compensation. Sec. 1.67 "Top-Paid Group" means, for any Plan Year, the group consisting of the top 20% of the employees ranked on the basis of Compensation paid during the Plan Year, excluding from consideration: (i) those employees who have not completed six (6) months of service; (ii) those employees who normally (in 50% or more of the weeks in which he/she works) work fewer than 17.5 hours per week; (iii) those employees who normally work at least one day per month during not more than six (6) months during any year; (iv) those employees who have not attained Age 21; (v) except to the extent provided by regulations promulgated by the Secretary of the Treasury or his/her delegate, employees who are included in a unit of employees covered by an agreement which the Secretary of Labor has determined to be a collective bargaining agreement between employee representatives and the Employer; and (vi) employees who are nonresident aliens and receive no earned income from the Employer. -18- Sec. 1.68 "Total Disability" means a physical or mental condition of such severity and probable duration as to render it unlikely, in the judgment of the Plan Administrator, that the Participant will be able to resume in the foreseeable future the duties he/she was performing for the Employer prior to the onset of the condition resulting in Total Disability. The Plan Administrator shall rely, in making any determination of Total Disability hereunder, upon the judgment of one or more medical practitioners selected by the Plan Administrator and upon such evidence as is presented by the Participant. No determination of Total Disability shall be made if the Participant fails to provide such evidence as is required by the Plan Administrator and/or fails to submit to examination by the medical practitioner(s) selected by the Plan Administrator. Sec. 1.69 "Trust Agreement" means the Genesis Health Ventures, Inc. Union Retirement Plan Trust Agreement as the same is presently constituted, as it may hereafter be amended, and such additional and successor trust agreements as may be executed for the purpose of providing for the maintenance of the assets of this Plan. Sec. 1.70 "Trustee" means the party or parties so designated pursuant to the Trust Agreement and each of their respective successors. Sec. 1.71 "Valuation Date" means the last day of the Plan Year and each other interim date during the Plan Year on which a valuation of the Fund is made. The Plan Administrator may select different interim dates on which to value each subaccount. Sec. 1.72 "Vesting Computation Period" means the Plan Year. Sec. 1.73 "Year of Service" shall have the following meanings when used in this Plan: (a) When applied to eligibility provisions, a "Year of Service" (also referred to as a "Year of Eligibility Service") means completion of an Eligibility Computation Period in which the person is credited with 1,000 or more Hours of Service, whether or not that service is performed as an Eligible Class Employee. (b) When applied to vesting provisions, a "Year of Service" (also referred to as a "Year of Vesting Service") means a Vesting Computation Period in which the person completes 1,000 or more Hours of Service, whether or not that service is performed as an Eligible Class Employee, subject, however, to the limitations on service which is credited for vesting purposes as provided in this Plan. (c) All Years of Service which become Disregarded Prior Service shall cease to be Years of Service for all purposes under this Plan. -19- ARTICLE II PARTICIPATION ELIGIBILITY ------------------------- Sec. 2.01 Participation Commencement. Each Employee shall become a Participant on the Entry Date coincident with, or if there is no such Entry Date, then on the Entry Date next following, the date on which he/she first satisfies both of the following requirements: (a) he/she is an Eligible Class Employee; and (b) he/she has completed one (1) Year of Eligibility Service. Notwithstanding the foregoing to the contrary, (1) no individual shall be admitted as a Participant if he/she is no longer an Eligible Class Employee on the Entry Date as of which he/she would otherwise have become a Participant, and (2) an Eligible Class Employee shall become a Participant as set forth in Appendix "D," attached hereto and incorporated by reference herein. Sec. 2.02 Cessation of Participation. A Participant shall cease to be a Participant on the earliest date on which: (a) he/she receives (or there is paid on his/her behalf) his/her entire nonforfeitable interest in his/her Account or (b) he/she is deemed to have received a "zero dollar cash-out." Sec. 2.03 Restoration of Participant Status. If a former Participant again becomes an Eligible Class Employee, he/she shall return to Participant status in accordance with the following rules. (a) If the former Participant: (1) had no nonforfeitable interest in his/her Account attributable to his/her prior period of service, and (2) has experienced a number of consecutive one-year Breaks in Service that equals or exceeds both (i) five (5) and (ii) the number of Years of Eligibility Service with which the former Participant was credited prior to the first of such consecutive one-year Breaks in Service, all such previously credited Years of Eligibility Service shall be disregarded, and the former Participant shall resume Participant status as of the Entry Date described in Section 2.01 on which he/she would otherwise become a Participant without reference to such period of prior service. -20- (b) If the former Participant is not an individual described in Paragraph (a), he/she shall resume his/her status as a Participant as of the date on which he/she resumes his/her status as an Eligible Class Employee. Sec. 2.04 Changes of Status. (a) If an Employee who was not an Eligible Class Employee becomes an Eligible Class Employee, he/she shall become a Participant as of the later to occur of: (1) the date on which he/she becomes an Eligible Class Employee, or (2) the Entry Date specified in Section 2.01. (b) If a Participant remains an Employee but ceases to be an Eligible Class Employee, he/she shall remain a Participant until such time as he/she ceases to be a Participant pursuant to the provisions of Section 2.02, but neither his/her service nor his/her Compensation as other than an Eligible Class Employee shall be taken into account in determining the allocations of contributions and reallocable forfeitures to his/her Account under this Plan. Sec. 2.05 Waivers of Participation. Each Employee may make an election to waive participation under this Plan if he/she was never a participant under any tax-qualified retirement plan sponsored by the Employer or an Affiliated Company and if the waiver election conforms to all of the following rules: (a) it is made in writing in form and content satisfactory to the Plan Administrator and is delivered to the Plan Administrator upon commencement of the Employee's employment by the Employer or an Affiliated Company, or prior to the first date on which he/she would otherwise be admitted as a Participant under this Plan; (b) it is irrevocable and permanent; (c) by its terms, it precludes participation by the Employee in any tax-qualified plan then sponsored or maintained or thereafter to become sponsored or maintained by the Employer or any Affiliated Company. -21- ARTICLE III EMPLOYER CONTRIBUTIONS ---------------------- Sec. 3.01 Determination of Amount. (a) Deferral Contributions. The Employer shall contribute with respect to each Accrual Computation Period the aggregate of the Deferral Amounts applicable to such Accrual Computation Period, as determined pursuant to Deferral Agreements in force during that Accrual Computation Period between the Employer and Active Participants in this Plan. (b) Employer Matching Contributions. As of the last day of each period determined by the Employer (such period was the Accrual Computation Period prior to January 1, 1998), the Employer shall contribute to the Trust Fund an amount equal to fifty percent (50%) of the Deferral Amounts of each Participant for that period; provided, however, that Deferral Amounts in excess of six percent (6%) (three percent (3%) prior to January 1, 1998) of a Participant's Compensation for such period shall be disregarded. (c) Employer Profit-Sharing Contributions. As of the last day of each Accrual Computation Period, the Employer shall contribute to the Trust Fund such amounts as the Board of the Primary Employer, in its absolute discretion, shall timely determine to be the Employer's profit-sharing contribution for the Accrual Computation Period then ending. This provision shall not be construed as requiring the Employer to make a profit-sharing contribution in (or with respect to) any Accrual Computation Period, whether or not there exists Net Income from which such contributions could be made. If Employer consists of more than one entity, this Paragraph shall apply separately to each entity. If any entity constituting Employer is unable to contribute all, or a portion, of its required contribution for any Accrual Computation Period because it lacks sufficient Net Income from which to pay the contribution, the contribution shall be made by the other entities constituting Employer (which are part of an affiliated group, as defined in Section 1504 of the Code, with that entity) to the extent provided in the applicable provisions of this Section. If the entities constituting Employer do not file a consolidated federal income tax return, each of the other entities shall contribute on behalf of the noncontributing entity that portion of the unpaid contribution which bears the same ratio to the entire amount of the unpaid contribution as the contributing entity's Net Income (less the current contribution) bears to the aggregate Net Income of all entities constituting Employer. If the entities constituting Employer file a consolidated federal income tax return and any entity is unable to make the required contribution, then the remainder of the required contribution may be made by any other entity, included in the consolidated return, from its Net Income. -22- Sec. 3.02 Reinstatement Contributions. As to each Plan Year, the Employer shall contribute to this Plan such sums, if any, as may be required to reinstate amounts previously forfeited from the Account of each Participant who: (a) received a cash-out of the vested portion of his/her Account in connection with a prior Termination of Employment, if the cash-out was less than 100% of the Participant's Account at the time of distribution and during the Plan Year makes a timely restoration contribution in accordance with the provisions of this Plan (or, in the case of a Participant who received a "zero dollar cash-out," is deemed to have done so)or (b) experienced a forfeiture in connection with a Termination of Employment, if the Termination of Employment was subsequently classified as a Termination of Employment on account of Total Disability. Sec. 3.03 Military Service Make-Up Contributions. To the extent that the Employer is required to make contributions to this Plan for any Participant in order to comply with the provisions of Chapter 43 of Title 38 of the United States Code, such contributions shall be made (without adjustment for any investment gains or losses, earnings or expenses) when the Participant resumes service as an Employee of the Employer or an Affiliated Company within the time that his/her reemployment rights are protected under the Uniformed Services Employment and Reemployment Rights Act of 1994. Any such military service make-up contribution shall be in an amount equal to the sum of the contributions that the Employer would have made for allocation to the Participant's applicable subaccount (without adjustment to reflect investment gains or losses or income or expenses that would have been attributable thereto) had the Participant remained in the employ of the Employer as an Eligible Class Employee throughout the period of his/her military service absence, with imputed Compensation equal to the Compensation he/she would have earned at his/her rate of pay from the Employer in effect immediately prior to inception of his/her absence for military service. Sec. 3.04 Timing of Contributions. (a) Deferral Amounts. Contributions made pursuant to Section 3.01(a) shall be paid over to the Trustee as promptly as practicable following the close of the payroll period in which, but for the operation of the Deferral Agreement, such amount would have been included in the current remuneration paid to the Participant, and in no event later than the fifteenth (15th) business day of the calendar month next following the calendar month in which payment for that payroll period is distributed in the normal course. -23- (b) Matching and Profit-Sharing Contributions. Contributions made pursuant to Sections 3.01(b) and 3.01(c) hereof shall be paid over to the Trustee on or before the date established (including any extensions of such date) for the filing of the Employer's federal income tax return for the fiscal period to which the contribution relates. (c) Reinstatement Amounts and Military Service Makeup Contributions. Contributions made pursuant to Sections 3.02 and 3.03 shall be paid over to the Trustee as promptly as practicable following the date upon which the amount thereof is definitely determined, and in no event later than the date prescribed in Subsection (b) hereof for contributions made with respect to Sections 3.01(b)and 3.01(c). Sec. 3.05 Contingent Nature of Contributions. To the extent that the deductibility thereof is subsequently denied, each contribution made by the Employer pursuant to the provisions of Section 3.01, 3.02 and 3.03 hereof is hereby made expressly contingent on the current deductibility thereof for Federal income tax purposes for the year with respect to which such contribution is made. Sec. 3.06 Exclusive Benefit; Refund of Contributions. All contributions made by the Employer are made for the exclusive benefit of the Participants and their Beneficiaries, and such contributions shall not be used for nor diverted to purposes other than for the exclusive benefit of the Participants and their Beneficiaries (including the costs of maintaining and administering this Plan and Trust Fund). Notwithstanding the foregoing, to the extent that such refunds do not, in themselves, deprive this Plan of its qualified status, refunds of contributions shall be made to the Employer under the following circumstances and subject to the foregoing limitations: (a) Initial Qualification. If this Plan is submitted to the Internal Revenue Service within the time required to preserve the right to amend it retroactively to the Effective Date, if the Internal Revenue Service makes an adverse determination with regard to this Plan in connection with the qualification requirements of Section 401(a) of the Code, and if the Board of the Primary Employer declines to amend this Plan to satisfy such qualification requirements, contributions made with respect to any period of nonqualification and prior to receipt of notification by the Employer of the determination by the Internal Revenue Service that this Plan has failed to qualify shall be returned to the Employer. -24- (b) Disallowance of Deduction. To the extent that a federal income tax deduction is disallowed for any contribution made by the Employer, the Trustee shall refund to the Employer the amount so disallowed within one (1) year of the date of such disallowance. (c) Mistake of Fact. In the case of a contribution which is made in whole or in part by reason of a mistake of fact (for example, incorrect information as to the eligibility or compensation of an Employee, or a mathematical error), so much of the Employer contribution as is attributable to the mistake of fact shall be returnable to the Employer upon demand, upon presentation of evidence of the mistake of fact to the Trustee and of calculations as to the impact of such mistake. Demand and repayment must be effectuated within one (1) year after the payment of the contribution to which the mistake applies. (d) Specifically Authorized Refunds. The provisions of this Section shall not be construed to prohibit the refund to the Employer of any amount contributed by the Employer if such refund is: (1) made to enable this Plan to satisfy nondiscrimination or other requirements imposed by the Code; (2) consistent with both (i) regulations promulgated by the Secretary of the Treasury and (ii) provisions of this Plan; or (3) made pursuant to any procedure approved by the Secretary of the Treasury or his/her delegate for the correction of operational errors relating to administration of this Plan. (e) General Conditions Pertaining to Refunds. (1) Except where regulations require that a refund be accompanied by earnings attributable thereto, all refunds paid to the Employer shall be made without interest but shall be reduced by the amount of investment losses and shall be deducted from among the Employer Contribution Subaccounts of the Participants. (2) Amounts to be refunded shall, to the extent identifiable to Accounts maintained for one or more specific Participants (as in the case of certain mistakes of fact, determination by the Internal Revenue Service that a portion of a Participant's Compensation was not reasonable, and amounts refunded to achieve compliance with the limitations of Section 415 of the Code) shall be deducted directly from each such Account in the amount identifiable thereto. (3) Notwithstanding any other provision of this Section to the contrary, no refund shall be made to the Employer which is specifically chargeable against the Account of any Participant which is in excess of one hundred percent (100%) of the amount in such Account, nor shall a refund be made by the Trustee of any funds, otherwise subject to refund hereunder, which have been distributed to Participants, Beneficiaries or Alternate Payees. In the case that previously distributed sums become refundable, the Employer shall have a claim directly against the distributee(s) to the extent of the refundable amounts distributed to each of them. -25- (4) All refunds pursuant to Paragraphs (a), (b) and (c) of this section shall be limited in amount, circumstance and timing to those refunds permissible under Section 403(c) of ERISA. No refund shall be made if, solely by reason of such refund having been made, this Plan would cease to be a tax-qualified Plan under Section 401(a) of the Code. Sec. 3.07 Limitations on Employer Matching Contributions. (a) Definitions. (1) "Aggregate Limit" means the greater of (i) the sum of (A) one hundred twenty-five percent (125%) of the greater of (I) the Actual Deferral Percentage of the group of Participants who are not Highly Compensated Employees for the prior Plan Year ("Relevant Actual Deferral Percentage") or (II) the Actual Contribution Percentage of the group of Participants who are not Highly Compensated Employees for the prior Plan Year ("Relevant Actual Contribution Percentage"); and (B) two (2) percentage points plus the lesser of the Relevant Actual Deferral Percentage or the Relevant Actual Contribution Percentage; provided, however, that in no event shall the amount in this Paragraph (a)(1)(i)(B) exceed two hundred percent (200%) of the lesser of the Relevant Actual Deferral Percentage or the Relevant Actual Contribution Percentage; or (ii) the sum of (A) one hundred twenty-five percent (125%) of the lesser of the Relevant Actual Deferral Percentage or the Relevant Actual Contribution Percentage; and (B) two (2) percentage points plus the greater of the Relevant Actual Deferral Percentage or the Relevant Actual Contribution Percentage; provided, however, that in no event shall the amount in this Paragraph (a)(1)(ii)(B) exceed two hundred percent (200%) of the greater of the Relevant Actual Deferral Percentage or the Relevant Actual Contribution Percentage. (2) "Actual Contribution Percentage" or "ACP" means the average, expressed as a percentage, of the Contribution Percentages of the Participants to whom reference is made. -26- (3) "Contribution Percentage" means the ratio, expressed as a percentage, of a Participant's Contribution Amounts to his/her Compensation for the Accrual Computation Period. (4) "Contribution Amount" means the Employer matching contributions allocable to a Participant for the Plan Year. To the extent that Employer matching contributions are treated as Deferral Amounts pursuant to Section 5.03(c), such contributions shall not be treated as Contribution Amounts for purposes of this Section. To the extent provided in regulations, Deferral Amounts may be treated as Contribution Amounts for purposes of this Section; provided, however, that the requirements of Section 5.03(b) are satisfied prior to including such Deferral Amounts as Contribution Amounts and Section 5.03(b) continues to be satisfied after such Deferral Amounts are treated as Contribution Amounts. In addition, Employer profit-sharing contributions shall be treated as Contribution Amounts if such contributions satisfy the vesting and distribution requirements of Section 5.03(c). (5) "Current Year Testing Method" means testing ACP compliance under Section 401(m)(2) of the Code by comparing the current Plan Year ACP for Participants who are Highly Compensated Employees for the Plan Year of reference with the current Plan Year ACP for Participants who are Non-Highly Compensated Employees. (6) "Dollar Leveling Method" means the method of reducing Excess Aggregate Contributions of Highly Compensated Employees (by refund of nonforfeitable Excess Aggregate Contributions and by forfeiture of forfeitable Contribution Amounts) by determining the aggregate dollar amount by which the Contribution Amounts of all Highly Compensated Employees must be reduced to achieve compliance with the applicable limitations, and then by reducing the Excess Aggregate Contributions of the Highly Compensated Employee(s) having the highest Contribution Amount for such year to the higher of (i) the level at which the ACP test is passed by the Plan without the reduction of the Contribution Amount of any other Highly Compensated Employees, or (ii) the Contribution Amount of the Highly Compensated Employee(s) having the next highest Contribution Amount. If the process described in the preceding sentence does not result in aggregate reductions equal to the requisite aggregate reduction amount, the process described in the preceding sentence shall be repeated at progressively descending Contribution Amount levels among Highly Compensated Employees until the required aggregate reduction has been achieved. -27- (7) "Excess Aggregate Contributions" means, with respect to any Plan Year, the excess of: (i) the Contribution Amount of a Highly Compensated Employee for such Plan Year, over (ii) the maximum allowable Contribution Amount determined in accordance with the Actual Contribution Percentage test described in Paragraph (b) of this Section. Such determination shall be made after first determining "Excess Deferrals" pursuant to Section 5.03(d) and then determining "Excess Contributions" pursuant to Section 5.03(e). (8) "Prior Year Testing Method" means testing for compliance with the requirements of Section 401(m)(2) of the Code for a given Plan Year by using the current Plan Year ACP for Participants who are Highly Compensated Employees and by using the prior Plan Year ACP for Participants who were Non-Highly Compensated Employees who were Participants in such prior Plan Year, except that, unless the Plan is a successor plan, for the first Plan Year in which the Plan permits Elective Deferral Amounts, the prior Plan Year ACP of the Non-Highly Compensated Employees who were Participants shall be arbitrarily deemed to have been three percent (3%). (9) "Ratio Leveling Method" means the method of reducing the Excess Aggregate Contributions (by refund of nonforfeitable Contribution Percentage Amounts and by forfeiture of forfeitable Contribution Amounts) of the Highly Compensated Employees for a Plan Year in which the ACP test is not otherwise met, pursuant to which method the ACP of the Highly Compensated Employee having the highest ACP is reduced to the ACP of the Highly Compensated Employee having the next highest ACP, then, if necessary, reducing the ACPs of those Highly Compensated Employees to the ACP of the Highly Compensated Employee having the next highest ACP, repeating this process at progressively lower levels of ACP until the ACP of the Highly Compensated Employees as a group does not exceed the maximum permissible for the Plan Year under the ACP test. (10) "Testing Method" means the Current Year Testing Method or the Prior Year Testing Method, as determined by context. -28- (b) Actual Contribution Percentage Test. (1) The Contribution Amount of any Highly Compensated Employee shall not exceed the maximum amount determined by the Employer to be acceptable so that the Actual Contribution Percentage for all Participants who are Highly Compensated Employees is not more than one hundred twenty-five percent (125%) of the Actual Contribution Percentage for all other Participants. Notwithstanding the preceding sentence, the Actual Contribution Percentage for the Participants who are Highly Compensated Employees may be greater than one hundred twenty-five percent (125%) of the Actual Contribution Percentage of the other Participants, to a maximum of two hundred percent (200%) of such Actual Contribution Percentage for the other Participants if the Actual Contribution Percentage for such Highly Compensated Employees does not exceed the Actual Contribution Percentage of the other Participants by more than two (2) percentage points, or such lesser amount as the Secretary of the Treasury shall prescribe to prevent the multiple use of this alternative limitation with respect to any Highly Compensated Employee. (2) If, with respect to an Accrual Computation Period commencing prior to January 1, 1997, the Plan initially fails to satisfy the ACP test, Contribution Amounts allocable to the Accounts of individuals who are deemed to be Highly Compensated Employees with reference to that Accrual Computation Period will be adjusted through the use of the Ratio Leveling Method until compliance is achieved. If, with respect to an Accrual Computation Period commencing after December 31, 1996, the Plan initially fails to satisfy the ACP test, Contribution Amounts allocable to the Accounts of individuals who are deemed to be Highly Compensated Employees with reference to that Accrual Computation Period will be adjusted through the use of the Dollar Leveling Method until compliance is achieved. The amount by which each such Highly Compensated Employee's Contribution Amount is reduced shall be treated as an Excess Aggregate Contribution. For this purpose, the Actual Deferral Percentage and the Contribution Percentage of such Highly Compensated Employee are determined after any corrections described in Paragraph (d) and Section 5.03(e). (3) For purposes of this Section, the Contribution Percentage of any Participant who is a Highly Compensated Employee and who is eligible to have Contribution Amounts allocated to his/her Account under two or more plans described in Section 401(a) of the Code, including arrangements described in Section 401(k) of the Code that are maintained by the Employer or any Affiliated Company, shall be determined as if all such Contribution Amounts are made under each plan. In addition, if a Highly Compensated Employee participates in two or more such plans that have different plan years, all such plans having plan years ending with or within the same calendar year shall be treated as a single plan. -29- (4) In the event that this Plan satisfies the requirements of Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such Section of the Code only if aggregated with this Plan, then this Section shall be applied by determining the Contribution Percentages of participants in such plans, as if such plans were a single plan, provided, however, that plans may be aggregated in order to satisfy Section 401(m) of the Code only if they have the same Plan Year. (5) For purposes of the Contribution Percentage test, Employer matching contributions and Employer profit-sharing contributions shall be considered made for an Accrual Computation Period if they are made within the time prescribed by Article III and allocated to a Participant's Account with respect to the Accrual Computation Period. (6) In determining whether or not the ACP test has been satisfied, the Plan will employ the Prior Year Testing Method; provided, however, that not withstanding the foregoing, if the Plan is required to satisfy the Actual Deferral Percentage test under Section 401(k) of the Code for the Plan Year, the Testing Method employed for determining whether or not the requirements of Section 401(m) of the Code have been satisfied will be the same Testing Method as is used by the Plan to determine compliance with the requirements of Section 401(k) for that Plan Year. (7) The ACP test shall be deemed satisfied automatically with respect to a Plan Year if this Plan is a "safe harbor" design plan meeting the requirements of Section 401(m)(11) of the Code, Section 401(k)(12)(B) or 401(k)(12)(C) of the Code, Section 401(k)(12)(D) of the Code, Section 401(k)(12) of the Code, and Section 401(m)(11)(B) of the Code, and if the applicable requirements of all regulations and notices promulgated in connection therewith have been satisfied. (c) Distributions of Excess Aggregate Contributions. (1) Notwithstanding any other provision of this Plan to the contrary, Excess Aggregate Contributions, together with the earnings thereon, shall be forfeited, if forfeitable, or if not forfeitable, distributed to those Participants whose Accounts include such Excess Aggregate Contributions as promptly as practicable but not later than the last day of the Plan Year following the Plan Year in which the Excess Aggregate Contributions were allocated. For purposes of Article VI, Excess Aggregate Contributions shall be considered Annual Additions. -30- (2) Earnings allocable to Excess Aggregate Contributions shall be determined as of the last day of the Accrual Computation Period with respect to which such Excess Aggregate Contributions are attributable and shall be equal to the net earnings for such Accrual Computation Period allocable to the Participant's aggregate Contribution Amounts, multiplied by a fraction, the numerator of which is the Participant's Excess Aggregate Contributions for the Accrual Computation Period and the denominator of which is that portion of the Participant's Account attributable to his/her aggregate Contribution Amounts (determined prior to adjustment for net investment experience for such Accrual Computation Period). (3) Excess Aggregate Contributions shall be reduced by forfeiting, if forfeitable, or distributing if nonforfeitable, the Participant's Employer matching contributions (and, if applicable, the Participant's Employer profit-sharing contributions and Deferral Amounts) proportionately. (4) With respect to any Participant who is a Highly Compensated Employee to whom the rules of Section 3.07 (b)(2) apply, Excess Aggregate Contributions are determined and corrected by reducing the Contribution Amount of such Participant as determined under Section 3.07(b)(2) and, in connection with Accrual Computation Periods commencing prior to January 1, 1997, allocating the Excess Aggregate Contributions among all Family Members in proportion to the Contribution Amounts of each Family Member that are combined for purposes of determining such Participant's Contribution Percentage. (5) Excess Aggregate Contributions forfeited pursuant to this Section shall be applied in accordance with Section 6.02. (d) Multiple Use Test. If, with respect to an Accrual Computation Period, Deferral Amounts and Contributions Amounts are credit to the Account of a Participant who is a Highly Compensated Employee and the sum of the Actual Deferral Percentage and the Actual Contribution Percentage of such Participant exceeds the Aggregate Limit, then the Contribution Percentage of such Participant shall be reduced using the Dollar Leveling Method (the Ratio Leveling Method shall be used for the Plan Years beginning prior to January 1, 1997) so that such limit is not exceeded. The amount by which each such Highly Compensated Employee's Contribution Percentage is reduced shall be -31- treated as an Excess Aggregate Contribution. For this purpose, the Actual Deferral Percentage and the Contribution Percentage of such Highly Compensated Employee are determined after any corrections described in Paragraph (c) and Section 5.03(e). The limitation described in this Paragraph (d) shall not be exceeded if the Actual Deferral Percentage and the Actual Contribution Percentage for the group of Highly Compensated Employees does not exceed one hundred twenty-five percent (125%) of the Relevant Actual Deferral Percentage and the Relevant Actual Contribution Percentage. -32- ARTICLE IV TOP-HEAVY PLAN PROVISIONS ------------------------- Sec. 4.01 Application. For each Plan Year in which this Plan is or becomes a Top-Heavy Plan, as hereinafter defined, the provisions of this Article shall supersede any conflicting provisions of this Plan. Under the provisions of this Article, a Participant may receive increased Employer contributions and/or an increase in his/her vested interest. Sec. 4.02 Minimum Contribution. (a) Except as otherwise provided in this Section, with respect to each Top-Heavy Plan Year, a minimum contribution shall be made by the Employer and allocated to the Employer Contribution Subaccount of each Participant described in Paragraph (f) of this Section who is not a Key Employee. Except as otherwise provided in this Section, such minimum contribution and allocation shall be an amount determined by multiplying (1) three percent (3%) by (2) the Participant's compensation, as defined in Section 415 of the Code and the regulations thereunder. (b) The minimum contribution and allocation described in Paragraph (a) of this Section, may be reduced if no Key Employee's Employer Contribution Subaccount is credited (or required to be credited) with an amount of Employer contribution, including elective contributions, (with respect to that Top-Heavy Plan Year) equal to or exceeding three percent (3%) of his/her compensation (as defined in Section 415 of the Code and the regulations thereunder) for that Top-Heavy Plan Year. For such Top-Heavy Plan Year, the largest percentage calculated in accordance with the preceding sentence shall be determined and such lesser percentage shall be substituted for the three percent (3%) stated in Subparagraph (a)(1) of this Section. For the purpose of this Paragraph, all defined contribution plans included in a Required Aggregation Group will be treated as one plan. This Paragraph shall not apply in any Plan Year in which this Plan is a part of an Aggregation Group containing a defined benefit pension plan if this Plan enables a defined benefit plan required to be included in such group to meet the requirements of Sections 401(a)(4) or 410 of the Code. (c) The minimum contribution and allocation described in Paragraphs (a) and (b) of this Section, shall be reduced to the extent that a Participant's Employer Contribution Subaccount is credited with an Employer contribution under the terms of this Plan without the application of Paragraph (a) of this Section. In the event a Participant is covered by any other qualified defined contribution plan(s) sponsored by the Employer, the minimum contribution and allocation described in Paragraphs (a) and (b) of this Section shall be reduced by the amount of Employer contributions allocated to the account of such Participant under such other qualified defined contribution plan(s). -33- (d) In the event that a Participant described in Paragraph (f) is also a Participant in a qualified defined benefit plan(s) sponsored by the Employer, then for each Top-Heavy Plan Year five percent (5%) shall be substituted for three percent (3%) in Paragraph (a) of this Section for purposes of determining the amount of minimum contribution and allocation that may be required to be made by the Employer. (e) The following special rules shall apply for purposes of determining what Employer contributions are made or are required to be made: (1) Benefits under or contributions made to Social Security or related to self-employment income shall be disregarded; (2) Solely for purposes of determining the amount described in Paragraph (b), Employee contributions by a Key Employee attributable to any salary reduction or similar arrangement to a plan described in Section 401(k) of the Code shall be taken into account with respect to any Plan Year; (3) Employer contributions shall include reallocable and reallocated forfeitures (if any); and (4) A waiver of the minimum funding standards of Section 412(d) of the Code shall be disregarded. (f) Any minimum Employer contribution which the Employer may be required to make under the provisions of this Article shall be allocated to the Employer Contribution Subaccount of each Participant employed by the Employer on the last day of the Plan Year even though such Employee would not otherwise receive an allocation of Employer contributions to this Plan because he/she (1) fails to make a mandatory contribution to this Plan, (2) fails to complete 1,000 Hours of Service, or (3) fails to have a stated minimum amount of remuneration. Sec. 4.03 Adjustment to Section 415 Limits. Subject to the transition rule stated in Section 416(h)(3) of the Code, if, during any Limitation Year beginning prior to January 1, 2000, this Plan is a Top-Heavy Plan, the limitations on Annual Additions described in Article VI of this Plan shall be applied with respect to a Participant by substituting 1.00 for 1.25 each place it appears in the Defined Benefit Fraction and Defined Contribution Fraction described in Article VI. However, this Section shall not apply if this Plan is not a Super Top-Heavy Plan and the minimum contribution and allocation requirements of Section 4.02 are satisfied: -34- (a) after substituting four percent (4%) for three percent (3%) where it appears in Subparagraph (a)(1) of such Section; or (b) after substituting seven and one-half percent (7-1/2%) for five percent (5%) where it appears in Paragraph (d) of such Section. Sec. 4.04 Determination of Top-Heavy Status. This Plan shall be deemed to be a Top-Heavy Plan as to any Plan Year if, as of the Determination Date, any of the following conditions are met: (a) This Plan is not part of any Required Aggregation Group or Permissive Aggregation Group and the Key-Employee Ratio under this Plan exceeds sixty percent (60%); (b) This Plan is part of a Required Aggregation Group, there is no Permissive Aggregation Group of which this Plan is a part, and the Key-Employee Ratio of the Required Aggregation Group of which this Plan is a part exceeds sixty percent (60%); or (c) This Plan is part of a Required Aggregation Group and part of a Permissive Aggregation Group and the Key-Employee Ratio for the Permissive Aggregation Group exceeds sixty percent (60%). Sec. 4.05 Definitions. With respect to any Plan Year in which this Plan is a Top-Heavy Plan, the following additional definitions shall apply: (a) "Aggregation Group" shall mean a Required Aggregation Group or Permissive Aggregation Group. "Required Aggregation Group" shall consist of each qualified retirement plan of the Employer in which a Key Employee is a Participant and each other qualified retirement plan of the Employer which enables any plan in which a Key Employee participates to meet the requirements of Sections 401(a)(4) or 410 of the Code whether or not this Plan is terminated (including plans for self-employed individuals). "Permissive Aggregation Group" shall consist of the Required Aggregation Group plus one or more additional qualified retirement plans sponsored by the Employer and which the Employer elects to include in the Aggregation Group if such total group of plans considered together continues to meet the requirements of Sections 401(a)(4) and 410 of the Code. (b) "Determination Date" shall mean the last day of the preceding Plan Year or in the case of this Plan's first Plan Year, the last day of such Plan Year. -35- (c) "Employer" shall include all Affiliated Companies for purposes of this Article. (d) "Key Employee" shall mean an Employee or former Employee who during the Plan Year or any of the four (4) preceding Plan Years was any of the following: (1) An officer of the Employer. The term officer means a duly elected or appointed administrative executive rendering regular and continuous service to an Employer whose annual compensation as determined under Section 6.03 exceeds fifty percent (50%) of the amount in effect under Section 415(b)(1)(A) of the Code for the calendar year in which such Plan Year ends. (2) One (1) of the ten (10) Employees of the Employer owning (or considered as owning within the meaning of Section 318 of the Code, as modified by Section 416(i) of the Code) the largest interests in the Employer or any Affiliated Company; except that an Employee who owns not more than a 1/2 percent interest in the Employer or any Affiliated Company, or whose annual compensation as determined under Section 6.03 does not exceed the maximum dollar limitation under Section 415(c)(1)(A) of the Code as in effect for the calendar year in which the Determination Date falls shall not be included as a Key Employee. (3) An Employee who is a Five-Percent Owner of the Employer. (4) An Employee whose annual compensation as determined under Section 6.03 exceeds $150,000 and who would be described in Subparagraph (3) above if "one percent (1%)" were substituted for "five percent (5%)" each place it appears in the definition of "Five-Percent Owner." The Beneficiary of any deceased Employee shall be considered as either a Key Employee or not a Key Employee for the same period the deceased Employee would have been so considered. (e) "Key Employee Ratio" shall mean the ratio for any Plan Year, as of the Determination Date with respect to such Plan Year, determined by comparing the amount described in Subparagraph (1) of this Paragraph with the amount described in Subparagraph (2) of this Paragraph after deducting from both such amounts the amount described in Subparagraph (3). -36- (1) The amount described in this Subparagraph is the sum of (i) the aggregate of the present values of all accrued benefits of Key Employees under all qualified defined benefit plans included in the Aggregation Group, (ii) the aggregate of the balances in all of the accounts standing to the credit of Key Employees under all qualified defined contribution plans included in the Aggregation Group, and (iii) the aggregate amount distributed from all plans in such Aggregation Group to or on behalf of any Key Employee during the period of five (5) Plan Years ending on the Determination Date. (2) The amount described in this Subparagraph is the sum of (i) the aggregate of the present values of all accrued benefits of all Participants under all qualified defined benefit plans included in the Aggregation Group, (ii) the aggregate of the balances in all of the accounts standing to the credit of all Participants under all qualified defined contribution plans included in the Aggregation Group, and (iii) the aggregate amount distributed from all plans in such Aggregation Group to or on behalf of any Participant during the period of five (5) Plan Years ending on the Determination Date. (3) The amount described in this Subparagraph is the sum of (i) all rollover contributions (or similar transfers) to this Plan initiated by an Employee and (ii) any amount that is included in Subparagraph (2) hereof for, on behalf of, or on account of, an individual who is not a Key Employee as to the Plan Year of reference but who was a Key Employee as to any earlier Plan Year and (iii) any amount that is included in Subparagraph (2) hereof for, on behalf of, or on account of an individual who has not performed any services for the Employer at any time during the five (5) year period ending on the Determination Date. For purposes of computing the present value of accrued benefits in any defined benefit plan, the valuation date shall be the most recent valuation date specified in such plan which falls within the twelve (12) month period ending on the Determination Date. The actuarial assumptions that shall be used for such purposes shall be the assumptions used for determining actuarial equivalence of optional benefits under the plan(s). If plans are aggregated, the value of account balances and accrued benefits shall be calculated with reference to the Determination Dates that fall within the same calendar year. (f) "Super Top-Heavy Plan" shall mean this Plan for any Plan Year in which this Plan would be deemed "top-heavy" pursuant to Section 4.05 if "ninety (90%) percent" were substituted for "sixty (60%) percent" at each place where "sixty (60%) percent" appears in such Section. -37- (g) "Top-Heavy Plan" shall mean this Plan for any Plan Year in which this Plan is determined to be "top-heavy" pursuant to the provisions of Section 4.05 hereof. (h) "Top-Heavy Plan Year" shall mean a Plan Year in which this Plan is a Top-Heavy Plan. -38- ARTICLE V PARTICIPANT CONTRIBUTIONS ------------------------- AND DEFERRAL ARRANGEMENTS ------------------------- Sec. 5.01 Eligibility for Deferral Arrangement. Any Employee who is an Active Participant or who anticipates becoming such may enter into a written Deferral Agreement with the Employer in accordance with uniform nondiscriminatory rules prescribed by the Plan Administrator pursuant to which such Participant's Compensation shall be reduced by his/her Deferral Amount. Sec. 5.02 Effective Date of Deferral Agreements. (a) Initial Effective Date. Any Deferral Agreement (and any change in any existing Deferral Agreement) shall become effective at such times and in such manner as shall be described in uniform nondiscriminatory rules and regulations prescribed by the Plan Administrator. (b) Cancellation and Reinstatement. A Deferral Agreement may be canceled or suspended by a Participant or by the Employer at such times and in such manner as shall be described in uniform nondiscriminatory rules and regulations prescribed by the Plan Administrator. In the event of such a cancellation or suspension by or at the request of the Participant, no Deferral Agreement may be reinstated or become effective with respect to such Participant until the date designated by the Plan Administrator in accordance with uniform and nondiscriminatory rules and regulations. Sec. 5.03 Deferral Amounts. (a) The tentative Deferral Amount set forth in any Deferral Agreement shall be an amount, not less than one percent (1%) of the Participant's Compensation nor more than fifteen percent (15%) of the Participant's Compensation (in increments of full percentage points) which does not exceed the dollar amount described in Paragraph (d). Tentative Deferral Amounts shall become Deferral Amounts only after the Employer or the Plan Administrator has made such adjustments thereto as they (or either of them) deem necessary to maintain the qualified status of this Plan and/or to maintain the treatment of Deferral Amounts as a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code. (b) This Plan must satisfy the actual deferral percentage test requirements of Section 401(k) of the Code for each Accrual Computation Period. -39- (1) If a Participant for any Accrual Computation Period is a Highly Compensated Employee, his/her Deferral Amount shall not exceed the maximum amount determined by the Employer to be acceptable so that the Actual Deferral Percentage for all Highly Compensated Employees is not more than one hundred twenty-five percent (125%) of the Actual Deferral Percentage for all other Participants, except that the Actual Deferral Percentage for the Highly Compensated Employees may be greater than one hundred twenty-five percent (125%) of the Actual Deferral Percentage of the other Participants, to a maximum of two hundred percent (200%) of such Actual Deferral Percentage for all Participants if the Actual Deferral Percentage for the Highly Compensated Employees does not exceed the Actual Deferral Percentage of the other Participants by more than two (2) percentage points. (2) This Plan will be deemed to have satisfied the test described in Subparagraph (1) with respect to an Accrual Computation Period if this Plan is a "safe harbor" design plan meeting the requirements of Section 401(k)(12) of the Code, Section 401(k)(12)(B) or 401(k)(12)(C) of the Code, and Section 401(k)(12)(D) of the Code, and if the applicable requirements of all regulations and notices promulgated in connection therewith have been satisfied. (3) Testing for compliance with the nondiscrimination requirements of Section 401(k) of the Code will be achieved using the Prior Year Testing Method for Plan Years beginning on or after January 1, 1997. The Board of the Primary Employer delegates to the Plan Administrator authority to amend the Plan to change from the Current Year Testing Method to the Prior Year Testing Method for ADP and ACP testing purposes in those situations in which such a change is approved in IRS Notice 98-1 (Part VII(A)) or in subsequent guidance promulgated by the Secretary of the Treasury or his/her delegate, or to change from the Prior Year Testing Method to the Current Year Testing Method. (c) In order to satisfy the requirements of the ADP test described in Paragraph (b), the Employer may: (1) make an optional Employer profit-sharing contribution which is fully vested and nonforfeitable when made and which shall be allocated proportionately among all Active Participants who are not Highly Compensated Employees on the basis of their respective Deferral Amounts for the Accrual Computation Period of reference; -40- (2) take into account Employer matching contributions which are fully vested and nonforfeitable when made; (3) take into account Employer profit-sharing contributions which are fully vested and nonforfeitable when made; or (4) reduce the tentative Deferral Amounts of Highly Compensated Employees. Contributions described in Subparagraph (1), (2) or (3) of this Paragraph shall be credited to the Deferral Contribution Subaccounts of the Active Participants and shall be deemed to be additional Deferral Amounts for purposes of Paragraph (b) of this Section and Section 5.06(a). However, if the reduction under Subparagraph (4) of this Paragraph is to be made, the Employer shall calculate the maximum Actual Deferral Percentage for such group pursuant to Paragraph (b). The Deferral Amounts of the Highly Compensated Employees shall be reduced progressively, using the Ratio Leveling Method with respect to Accrual Computation Periods commencing prior to January 1, 1997 to the highest percentage of each such Participant's Compensation as the Employer, in its discretion, deems to be permissible to ensure that the Actual Deferral Percentage of such group does not exceed the maximum allowable amount. The Deferral Amounts of the Highly Compensated Employees shall be reduced progressively using the Dollar Leveling Method with respect to Accrual Computation Periods commencing after December 31, 1996, to the highest dollar amount of each such Participant's Compensation which the Employer, in its discretion, shall deem to be permissible to ensure that the Actual Deferral Percentage of such group does not exceed the maximum allowable percentage. Any Employer matching contributions to which such Deferral Amounts relate shall be forfeited and applied in accordance with Section 6.02. (d) Notwithstanding any provision in this Plan to the contrary, in no event shall the Deferral Amounts under this Plan and the elective deferrals (as defined in Section 402(g)(3) of the Code) to any other plans, contracts or arrangements of the Employer, made with respect to any Participant during any calendar year exceed $9,500 (or such other amount as may be established by the Secretary of the Treasury to reflect cost of living adjustments). In the event that a Participant's Deferral Amount exceeds the limitation of the preceding sentence, such excess amount ("Excess Deferrals") shall be distributed in accordance with the provisions of Section 5.03(c). -41- (e) All amounts withheld pursuant to a Deferral Agreement and thereafter delivered to the Trustee shall be so delivered only if the Employer in good faith believes that such amounts do not exceed the amounts permissible pursuant to the limitations hereinabove set forth. If any amount shall be withheld from the Compensation of a Participant pursuant to a Deferral Agreement which exceeds the maximum amount permissible pursuant to Paragraph (b) hereof, and if such amount is delivered to the Trustee prior to the discovery of the fact that such amount exceeds the limitations hereinabove set forth, and if such excess is not eliminated by means of the optional contribution described in Paragraph (c) above, such amount ("Excess Contributions"), together with the earnings and losses thereon, shall be deemed to have been contributed to the Plan by way of a mistake of fact, shall be refunded to the Employer, and shall thereafter be paid as promptly as practicable, but no later than the last day of the Plan Year following the Plan Year with respect to which such Excess Contributions arose (subject, however, to the withholding of taxes and other amounts as though such amount were current compensation) by the Employer to the Employee from whose Compensation such amount was obtained pursuant to a Deferral Agreement). For purposes of Section 6.03, Excess Contributions shall be considered Annual Additions. For purposes of this Paragraph, earnings allocable to Excess Contributions shall be determined as of the last day of the Accrual Computation Period with respect to which such Excess Contributions are attributable and shall be equal to the net earnings allocable to the Participant's Deferral Contribution Subaccount, multiplied by a fraction, the numerator of which is the Participant's Excess Contributions for the Accrual Computation Period and the denominator of which is the Participant's Deferral Contribution Subaccount (determined prior to adjustment for net investment experience for such Accrual Computation Period). (f) The aggregate of all Deferral Amounts with respect to any Plan Year shall not exceed amounts determined by the Employer to be deductible to the Employer under Section 404(a) of the Code when contributed to the Plan for such Plan Year. If the Employer deems it necessary to reduce the Deferral Amount called for in any Deferral Agreement to satisfy the aforesaid limitation, the Deferral Amounts of all Participants shall be reduced proportionately until the aggregate of all Deferral Amounts are within the limitations of Section 404(a) of the Code, taking into account all other contributions made by the Employer. (g) For purposes of this Section, the Actual Deferral Percentage of any Participant who is a Highly Compensated Employee and who is eligible to have Deferral Amounts (and contributions treated as Deferral Amounts) allocated to his/her Account under two or more arrangements described in Section 401(k) of the Code that are maintained by the Employer or any Affiliated Company, shall be determined as if the total of such amounts are made under a single arrangement. In addition, if a Highly Compensated Employee participates in two or more such plans that have different plan years, all such plans ending with or within the same calendar year shall be treated as a single plan. -42- (h) The Actual Deferral Percentage of a Highly Compensated Employee who is either a Five-Percent Owner or one (1) of the ten (10) most highly compensated Employees when ranked on the basis of Compensation (including Family Members in the case of Accrual Computation Periods commencing prior to January 1, 1997) shall be equal to the Actual Deferral Percentage determined by combining the Deferral Amounts (and contributions treated as Deferral Amounts) and Compensation of all Family Members. The preceding sentence shall not apply with respect to Accrual Computation Periods commencing after December 31, 1996. With respect to any Participant described in this Paragraph, Excess Contributions for Accrual Computation Periods commencing prior to January 1, 1997 are determined and corrected by reducing the Actual Deferral Percentage of such Highly Compensated Employee (as determined under this paragraph) and allocating the Excess Contributions among all Family Members in proportion to the Deferral Amounts (and contributions treated as Deferral Amounts) of each Family Member that are combined for purposes of determining such Participant's Actual Deferral Percentage. (i) For purposes of determining the Actual Deferral Percentage, Deferral Amounts and contributions treated as Deferral Amounts will be considered made for an Accrual Computation Period if they are made within the time prescribed by Article III and allocated to a Participant's Account with respect to the Accrual Computation Period. (j) In the event that this Plan satisfies the requirements of Section 401(k), 401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such Section of the Code only if aggregated with this Plan, then this Section 5.03 shall be applied by determining the Actual Deferral Percentages of participants in such plans, as if such plans were a single plan. Provided, however, that plans may be aggregated in order to satisfy Section 401(k) of the Code only if they have the same Plan Year. (k) For the purposes of applying the provisions of this Section, the following terms shall be defined as follows: (1) "Actual Deferral Percentage" or "ADP" means, for a specified group of Participants for any Accrual Computation Period, the average of the ratios (calculated separately for each Participant in such group) of (1) the Deferral Amounts actually paid over to the Trustee on behalf of such Participant for the Accrual Computation Period to (2) the Participant's Compensation for such Accrual Computation Period. Employer contributions on behalf of any Participant shall include (i) any Deferral Amounts made pursuant to the Participant's deferral election (including Excess Deferrals of Highly Compensated Employees), but excluding (A) Excess Deferrals of Non-Highly Compensated Employees that arise solely from Deferral Amounts made under the plan or plans of the Employer and the Affiliated Companies and (B) Deferral Amounts that are taken into account in the Contribution Percentage Test under Section 401(m) of the Code (provided the ADP test is satisfied both with and without exclusion of these Deferral Amounts), and (ii) at the election of the Employer, Qualified Nonelective Contributions and Qualified Matching Contributions (each as defined for this purpose under the Code). For purposes of computing ADP, an Employee who would be a Participant but for the failure to make or authorize any Deferral Amount shall be treated as a Participant on whose behalf no Deferral Amounts are made. -43- (2) "Compensation" means the Participant's compensation as determined pursuant to Section 414(s) of the Code and complying with the requirements of Treas. Reg. Section 1.414(s)-1, including, without limitation, the requirement that such definition be applied consistently as to any Accrual Computation Period for all Employees similarly situated. Absent specification by the Plan Administrator of use of a permissible alternate definition, the definition of "Compensation" to be applied with respect to any Accrual Computation Period shall be the definition applicable for the purposes of determining whether annual additions to the Plan are within the limitations of Section 415(c)(1) of the Code. (3) "Current Year Testing Method" means testing ADP compliance under Section 401(k)(3) of the Code by comparing the current Plan Year ADP for Participants who are Highly Compensated Employees for the Plan Year of reference with the current Plan Year ADP for Participants who are Non-Highly Compensated Employees. (4) "Deferral Amount" means: (i) elective contributions under a qualified cash or deferred arrangements meeting the requirements of Section 401(k) of the Code (including Deferral Amounts under the Plan); (ii) Employer contributions under a simplified employee pension plan pursuant to a salary reduction arrangement as described at Section 408(k)(6) of the Code to the extent excluded from the Employee's taxable income under Section 402(h)(1)(B) of the Code (before applying the limits of Section 402(g) of the Code); (iii) Employer contributions toward the purchase of a tax-sheltered annuity contract (or comparable custodial account) pursuant to a salary reduction arrangement described in Section 3121(a)(5)(D) of the Code, to the extent excluded from current taxable income under Section 403(b) of the Code (before applying the limits of Section 402(g) of the Code); (iv) amounts excluded from current income taxation by reason of Section 457(b) of the Code, and (v) Employee contributions designated as deductible under a trust described in Section 501(c)(18) of the Code. -44- (5) "Dollar Leveling Method" means the method of reducing (by payment of presumptive Deferral Amounts to the respective Highly Compensated Employees whose current remuneration was reduced to generate such amounts) the total Deferral Amounts of the Highly Compensated Employees for a given Accrual Computation Period, as described in this Paragraph. The aggregate dollar amount by which the Deferral Amounts of all Highly Compensated Employees must be reduced to achieve compliance with the applicable limitations is determined; then the Deferral Amount of the Highly Compensated Employee(s) having the highest Deferral Amount for such Accrual Computation Period to the higher of (i) the level at which the ADP test is passed by the Plan without the reduction of the Deferral Amount of any other Highly Compensated Employee, or (ii) the Deferral Amounts of the Highly Compensated Employee(s) having the next highest Deferral Amount. If the process described in the preceding sentence does not result in Deferral Amount reductions equal to the requisite aggregate reduction amount, the process described in the preceding sentence shall be repeated at progressively descending Deferral Amount levels among Highly Compensated Employees until the required aggregate reduction has been achieved. (6) "Prior Year Testing Method" means testing for compliance with the requirements of Section 401(k)(3) of the Code for a given Plan Year by using the current Plan Year ADP for Participants who are Highly Compensated Employees and by using the prior Plan Year ADP for Participants who were Non-Highly Compensated Employees who were Participants in such prior Plan Year, except that, unless the Plan is a successor plan, for the first Plan Year in which the Plan permits Deferral Amounts, the prior Plan Year ADP of the Non-Highly Compensated Employees who were Participants shall be arbitrarily deemed to have been three percent (3%). (7) "Ratio Leveling Method" means the method of reducing the ADP (by payment of presumptive Deferral Amounts to the respective Highly Compensated Employees whose current remuneration was reduced to generate such amounts) of the Highly Compensated Employees for an Accrual Computation Period in which the ADP test is not otherwise met, pursuant to which method the ADP of the Highly Compensated Employee having the highest ADP is reduced to the ADP of the Highly Compensated Employee having the next highest ADP, then, if necessary, reducing the ADPs of those Highly Compensated Employees to the ADP of the Highly Compensated Employee having the next highest ADP, repeating this process at progressively lower levels of ADP until the ADP of the Highly Compensated Employees as a group does not exceed the maximum permissible for the Plan Year under the ADP test. -45- Sec. 5.04 Establishment of Separate Account. The Plan Administrator shall establish on behalf of each Participant who enters into a Deferral Agreement a Deferral Contribution Subaccount. All Deferral Amounts resulting from the reduction of the remuneration of any Participant shall be credited directly to that Participant's Deferral Contribution Subaccount, such crediting to be effective as of a date (or dates) no later than the last day of such Accrual Computation Period. Crediting of any Deferral Amount shall not be contingent upon continued participation in the Plan as of any date subsequent to the date on which such Deferral Amount was earned by the Participant to whom it is to be credited. Sec. 5.05 Distributions from Participant's Deferral Contribution Subaccount. (a) No portion of a Participant's Deferral Contribution Subaccount shall be distributed or withdrawn earlier than upon one of the following events: (1) the Participant's retirement, death, Total Disability or separation from service of the Employer; (2) the termination of the Plan without the establishment or maintenance of a "successor plan" (as defined in Treasury Regulation Section 1.401(k)- i(d)(3)); provided, however, that the Participant receives a lump sum distribution (as defined in Section 402(e)(4) of the Code, without regard to Clauses (i), (ii), (iii) and (iv) of Subparagraph (A), Subparagraph (B) or Subparagraph (H) thereof) by reason of such termination; (3) the disposition by the Employer of substantially all of the assets (within the meaning of Section 409(d)(2) of the Code) used by the Employer in a trade or business with respect to a Participant who continues employment with the corporation acquiring such assets; provided, however, that the Participant receives a lump-sum distribution (as defined in Section 402(d)(4)(A) of the Code, without regard to Clauses (i), (ii), (iii) and (iv) of Subparagraph (A), Subparagraph (B) or Subparagraph (H) thereof) by reason of such disposition; (4) the disposition by the Employer of its interest in a subsidiary (within the meaning of Section 409(d)(3) of the Code) with respect to a Participant who continues employment with such subsidiary; provided, however, that the Participant receives a lump-sum distribution (as defined in Section 402(d)(4)(A) of the Code, without regard to Clauses (i), (ii), (iii) and (iv) of Subparagraph (A), Subparagraph (B) or Subparagraph (H) thereof) by reason of such disposition; -46- (5) the Participant's attainment of Age 59-1/2; or (6) the Participant's hardship, as provided in Section 5.06; provided, however, that with respect to the portion of a married Participant's account attributable to assets from a transferor plan, no distribution or withdrawal permitted by this Section shall be made, unless, if such consent is required by law, such Participant's spouse consents thereto in writing in form satisfactory to the Plan Administrator. (b) Notwithstanding any other provision in this Plan to the contrary, if, on or before any March 1, a Participant notifies the Plan Administrator that during the prior calendar year, he/she has made an Excess Deferral and that all or a portion of such Excess Deferral has been allocated to the Plan, the Plan Administrator may, in its sole discretion, direct the Trustee to refund such Excess Deferral, together with the earnings and losses thereon, to the Employer and thereafter such amount may be paid by the Employer on or before the next following April 15 (subject, however, to the withholding of taxes and other amounts as though such amount were current compensation) to the Participant from whose Compensation such Excess Deferral was obtained pursuant to a Deferral Agreement. For purposes of Section 6.03, Excess Deferrals shall be considered Annual Additions. Any Employer matching contributions to which such Excess Deferrals relate shall be forfeited and applied in accordance with Section 6.02. The refund of an Excess Deferral pursuant to this Section shall not affect the calculation of the Actual Deferral Percentage for any Accrual Computation Period falling within the calendar year with respect to which such Excess Deferral had been made. (c) For purposes of this Section, earnings allocable to Excess Deferrals shall be determined as of the last day of the calendar year with respect to which such Excess Deferrals are attributable and shall be equal to the net earnings for such calendar year allocable to the Participant's Deferral Contribution Subaccount, multiplied by a fraction, the numerator of which is such Participant's Excess Deferrals for such calendar year and the denominator of which is the Participant's Deferral Contribution Subaccount (determined prior to adjustment for net investment experience for such calendar year). Sec. 5.06 Hardship Withdrawals: Participant's Prior Plan Employee Subaccount. Notwithstanding any provision of this Article V to the contrary, the Plan Administrator, in its sole discretion, may approve distribution of any amount made on account of an immediate and heavy financial need of the Participant if (1) the Participant has a subaccount under the Plan attributable to participation in the Geri-Med 401(k) Plan for Union Professional Nurses of New Jersey ("Prior Plan Employee Subaccount") and (2) the distribution is necessary to satisfy such financial need. For this purpose, a distribution will be deemed to be made on account of an immediate and heavy financial need of the Participant if the distribution is on account of: -47- (a) medical expenses incurred or anticipated by the Participant, the Participant's Spouse or dependents; (b) the purchase (excluding mortgage payments) of a principal residence for the Participant; (c) the payment of tuition and related educational fees (as such term is defined in Treasury Regulations under Section 401(k) of the Code or otherwise by the Commissioner of Internal Revenue, from time to time, in regulations, revenue rulings, notices, and other documents of general applicability) for the next twelve (12) months of post-secondary education for the Participant, his/her Spouse or dependents; (d) the need to prevent the eviction of the Participant from his/her principal residence or foreclosure on the mortgage of the Participant's principal residence; or (e) such other deemed immediate and heavy financial needs as shall be published by the Commissioner of Internal Revenue, from time to time, in regulations, revenue rulings, notices and other documents of general applicability. A distribution shall be deemed to be necessary to meet an immediate and heavy financial need of the Participant if (1) the distribution does not exceed the lesser of (i) the aggregate Deferral Amounts in the Prior Plan Employee Subaccount made on behalf of the Participant as of the date the Participant applies to the Plan Administrator for a distribution hereunder, reduced by any prior withdrawal therefrom or (ii) the amount of the immediate and heavy financial need of the Participant; and (2) the Participant presents a certification acceptable to the Plan Administrator that the need cannot be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by reasonable liquidation of the Participant's assets (including those assets owned by his/her Spouse and minor children that are reasonably available to the Participant) to the extent such liquidation would not itself cause an immediate and heavy financial need, (iii) by cessation of Deferral Amounts; or (iv) by other distributions or nontaxable loans from plans maintained by the Employer or any other employer, or by borrowing from commercial sources on reasonable commercial terms. A distribution made pursuant to this paragraph may include any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated as a result of such distribution." -48- Sec. 5.07 Portability Contributions. (a) Transfers and Rollovers. (1) Qualified Plan Rollovers. To the extent permitted by the Plan Administrator, this Plan shall accept direct transfers from the Trustee of any tax-qualified retirement plan sponsored by a prior employer of a Participant, provided that all of the following conditions are met: (i) the Plan Administrator reasonably believes the transferor plan to be a tax-qualified retirement plan within the meaning of Section 401(a) of the Code and reasonably believes the amount being transferred to be an Eligible Rollover Distribution; (ii) the amount so transferred is not subject to a QDRO, and it is reasonable to believe that all spousal consents necessary to permit a distribution to the Participant of a single-sum distribution from the transferor plan have been obtained and verified; and (iii) if the Plan Administrator requests, each amount so transferred is identified as to source and nature (such as non-deductible employee contributions, elective deferral amounts and deemed elective deferral amounts subject to the provisions of Section 401(k) of the Code, conventional employer contributions, etc.). Any amount presented by a Participant to the Trustee within sixty (60) days of the receipt thereof as a distribution from any other tax-qualified retirement plan shall be treated as having been received directly from the appropriate dispersing officer or fiduciary of the dispersing plan. (2) IRA Rollovers. To the extent permitted by the Plan Administrator, any Participant who has established an individual retirement arrangement pursuant to the provisions of Section 408 of the Code solely for the purpose of serving as a repository for Eligible Rollover Distributions received from qualified retirement plans of former employers, not including any amount contributed by the Employee (other than tax-deductible qualified voluntary employee contributions) as a participant or member of such plan, and who has not made any contributions to such individual retirement arrangement on his/her own behalf may, transfer all of the assets of such individual retirement arrangement to the Trustee. -49- (b) Accounting for Transferred Amounts. All amounts received by this Plan pursuant to this Section shall be accounted for in a separate Portability Subaccount established for the Participant. To the extent required by regulation, components of the Portability Subaccount shall be separately tracked administratively and separately accounted for to the extent that such separate components may be subject to special rules or limitations (such as limitations on distributions of Deferral Amounts and deemed Deferral Amounts transferred from qualified cash or deferred arrangements under plans meeting the requirements of Section 401(k) of the Code). (c) Restrictions and Limitations on Portability Subaccount Transfers. (1) No amount shall be acceptable for credit to a Participant's Portability Subaccount if such amount is subject to a QDRO. (2) No contributions shall be accepted directly or indirectly from (i) any individual retirement account to which the Participant has contributed on his/her own behalf, or (ii) any plan for self-employed persons or any plan containing assets previously part of a plan for self-employed persons, if, at any time under such plan, the Participant was a self-employed person. (3) No transfer of assets will be accepted which consists, in whole or in part, of insurance contracts unless the Plan Administrator determines that it is likely that the other assets being transferred and future contributions allocable to the Account of the Participant will be sufficient to sustain the cost of carrying such insurance without violating the "incidental death benefit" rules under the Code. (4) Amounts received under this Section shall be held in interest-bearing segregated accounts until the Valuation Date next following the date of receipt by the Trustee, or until such other date as the Trustee finds it feasible to include such amounts among the general investments of the Fund. (5) No asset shall be acceptable for credit to a Participant's Portability Subaccount if such asset includes a participant loan. (d) Withdrawal of Portability Subaccounts. There shall be no withdrawals of any portion of any Portability Subaccount by any Participant until such time as he/she is otherwise eligible to receive his/her nonforfeitable interest attributable to Employer contributions under this Plan (or would have been eligible, had he/she been vested in any part of his/her Matching Contribution Subaccount). All transfer amounts, and the earnings and accretions attributable thereto, shall be subject to the provisions of any QDRO applicable to the Participant under either this Plan or the plan from which the transfer amount was received. -50- (e) Distribution of Portability Subaccounts. The assets held on behalf of any Participant in a Portability Subaccount shall be aggregated with any other vested interest he/she may have in this Plan for the purpose of distribution and shall be distributed at the same time as the remainder of his/her vested interest, if any, in this Plan would have been distributed, and, to the extent feasible, by the same method of distribution of benefits, subject, however, to the provisions of any applicable QDRO. Sec. 5.08 Restoration Contributions. (a) Deemed Restoration Contributions. Any former Participant who: (1) experienced a Termination of Employment; (2) is deemed to have received a "zero-dollar cash-out" under this Plan; and (3) returns to employment covered by this Plan prior to experiencing five (5) consecutive one-year Breaks in Service commencing after his/her Termination of Employment, will be deemed to have made a restoration contribution of his/her "zero-dollar cash-out" on the date on which he/she again becomes a Participant. Upon such deemed restoration contribution, his/her Employer Contribution Subaccount and Matching Contribution Subaccount, as applicable, shall be restored to the amount that was standing to the Participant's credit therein as of the date of his/her Termination of Employment (or, if such amount is not determinable as of that date, as of the date on which his/her Employer Contribution Subaccount and Matching Contribution Subaccount, as applicable, was forfeited under the Plan), without any adjustment for investment experience or administrative costs from the date of such forfeiture to the date of the deemed restoration contribution. (b) Actual Restoration Contributions. (1) Repayment of Prior Distribution. If a Participant receives a distribution of his/her entire nonforfeitable interest under this Plan on account of Termination of Employment, where such nonforfeitable interest was less than the Participant's entire Account balance but was not a "zero-dollar cash-out," the Participant shall have the right to repay to this Plan the amount received in such distribution (without interest), and by so doing to cause his/her Account balance to be restored to the amounts credited thereto as of the date of the earlier distribution. Any such restoration contribution must be made: -51- (i) after the Participant's return to employment covered by this Plan; (ii) prior to the date on which the Participant experiences five (5) consecutive one-year Breaks in Service commencing after the distribution referred to in the first sentence of this Paragraph; and (iii) prior to the date that is the fifth (5th) anniversary of the date on which the Participant was first employed by the Employer or an Affiliated Company after receiving such distribution. Any Participant who fails to make a restoration contribution within the time limitations herein established shall have irrevocably waived the privilege of making such contribution. (2) Where Disability Separation has been Determined to have Occurred. Where a Participant's Account has been diminished by a forfeiture subsequent to a Termination of Employment, and that Termination of Employment is later determined to have been by reason of Total Disability, the Employer shall contribute an amount equal to the amount of the previous forfeiture, without adjustment for any investment gains or losses or for expenses that would have been credited to or borne by the Account had such forfeiture not occurred. -52- ARTICLE VI ALLOCATION OF CONTRIBUTIONS --------------------------- Sec. 6.01 Employer Contributions. (a) Deferral Amount Contributions. There shall be directly and promptly allocated to the Deferral Contribution Subaccount of each Participant the Deferral Amounts contributed by the Employer to the Plan by reason of any Deferral Agreement in force between the Employer and that Participant. (b) Employer Matching Contributions. As of the last day of each period described in Section 3.01(b), the Employer matching contribution for such period shall be allocated to the Matching Contribution Subaccount of each Participant who is entitled to an Employer Matching Contribution for such period pursuant to Section 3.01(b) of this Plan. (c) Employer Profit-Sharing Contributions. As of each Anniversary Date, there shall be allocated to the Employer Contribution Subaccount of each Currently Benefiting Participant an amount determined by multiplying the Employer's profit-sharing contribution for the Accrual Computation Period ending with or immediately prior to such Anniversary Date by a fraction, the numerator of which is the Participant's Compensation for such Accrual Computation Period and the denominator of which is the aggregate Compensation of all Currently Benefiting Participants for such Accrual Computation Period. (d) Reinstatement and Military Service Make-Up Contributions. Reinstatement contributions and military service make-up contributions made by the Employer for the Account of a specific Participant shall be allocated as promptly as practicable following receipt thereof by the Trustee to the Account of the Participant on whose behalf contributed, divided within that Account among Subaccounts such that, in the case of reinstatement contributions, amounts shall be credited to each Subaccount equal to the amount forfeited from that Subaccount, and in the case of military service make-up contributions, an amount shall be credited to each Subaccount equal to the amount that would have been allocated to that Subaccount, had the make-up contribution been made at the time that it would otherwise have been made, had the Participant not been absent for the purpose of serving in the armed forces of the United States. -53- Sec. 6.02 Forfeitures. Forfeitures of Employer profit-sharing contributions arising from Breaks in Service experienced by Participants with less than fully vested interests in the Plan shall be applied as promptly as practicable to defray reasonable administrative expenses borne by the Plan and/or to reduce Employer profit-sharing contributions pursuant to Section 3.01(c). Forfeitures of Employer matching contributions shall be applied as promptly as practicable to defray reasonable administrative expenses borne by the Plan and/or to reduce Employer matching contributions pursuant to Section 3.01(b). Forfeitures of Employer matching contributions may arise from (a) Breaks in Service experienced by Participants with less than fully vested interests in their Matching Contribution Subaccounts; (b) the treatment of a portion of the Deferral Amounts to which such Employer matching contributions relate as Excess Contributions and/or Excess Deferrals; and (c) the treatment of a portion of the Employer matching contributions made with respect to a Participant for the Accrual Computation Period of reference as Excess Aggregate Contributions to the extent that such Participant is not vested in his/her Employer Matching Contribution Account. Except in the case of a vested Participant who is not in the employ of the Employer at the time of his/her death, and with respect to whom the death benefit is less than 100% of the balance standing to his/her credit in his/her Account, no portion of a Participant's Account shall be forfeited until such time as that Participant has experienced five (5) consecutive one-year Breaks in Service. Notwithstanding the foregoing to the contrary, the non-vested portion of a Participant's Account shall be immediately forfeited, and applied as provided above, upon distribution to the Participant of the entire vested interest in his/her Account as described in Treas. Reg. Sec. 1.411(a)-(7)(d) or a "zero-dollar cash-out"; subject, however, to restoration as provided in Article V. In addition, if a Participant has no vested interest in his/her Account as of the date he/she experiences a Termination of Employment with the Employer, such Participant shall be deemed to have: (i) received a complete distribution of his/her Account in the amount of zero dollars ($0.00); and (ii) forfeited the non-vested portion of his/her Account. Sec. 6.03 Annual Additions Limitations. (a) General Limitation. Notwithstanding any other provision of this Article VI, in no event shall the Annual Addition to a Participant's Account for any Limitation Year exceed the lesser of (1) $30,000 (or such other amount as is the then-applicable limitation under Section 415(c)(1)(A) or (2) twenty-five percent (25%) of such Participant's compensation for the Limitation Year. Reinstatement contributions allocated pursuant to Section 6.02 shall not be taken into account when computing the limitations under this Section. Military service make-up contributions, for the purpose of this Section, shall be treated as if made in the Accrual Contribution Period to which applicable, and not in the Accrual Computation Period in which actually made (unless the two Accrual Computation Periods are the same). (b) Combination and Aggregation of Plans. For purposes of this Section, the amounts contributed to any defined contribution plan maintained by the Employer (or any Affiliated Company) shall be aggregated with contributions made by the Employer under this Plan for any Employee in computing his/her Annual Addition Limitations. To the extent required, all plans, whether or not terminated, of the Employer and Affiliated Companies shall be taken into account for purposes of these limitations. -54- (c) Disposition of Excess Annual Additions. To the extent permitted by Section 415 of the Code and the regulations thereunder, excess Annual Additions shall be corrected in accordance with the provisions of this Paragraph. In the event that the amount tentatively available for allocation to the Account of any Participant in any Limitation Year exceeds the maximum permissible hereunder, there shall first be returned to the Participant such portion of the voluntary contributions he/she made during such Limitation Year (if any such voluntary contributions were made) as is necessary to reduce the Annual Addition to his/her Account to the maximum allowable hereunder. If further reduction in the amount allocable to the Participant's Account is required, the Participant's share of Employer contributions shall be reduced to the extent necessary to result in conformity to the limitations expressed herein. Other than Deferral Amounts that have been contributed to Deferral Contribution Subaccounts, amounts released pursuant to the preceding sentence shall then be reallocated among the Accounts of the remaining Currently Benefiting Participants as though an additional Employer contribution for the Accrual Computation Period ending with or within said Limitation Year, provided, however, that such amounts shall be credited to the Accounts of Participants only to the extent that is permissible without causing any such Accounts to experience Annual Additions in excess of the maximum allowable hereunder. If, after all such reallocations have been completed, there remains a reallocable amount which cannot be reallocated to the Accounts of any of the Currently Benefiting Participants (because all such Accounts have been credited with the maximum allowable Annual Addition for the Limitation Year in issue), such remaining reallocable amount shall be placed in a suspense account, to be held and applied as an additional Employer contribution in the next succeeding Limitation Year(s) until exhausted. Such a suspense account shall not participate in the allocation of the Trust Fund's investment earnings and losses. All amounts in the suspense account shall be allocated to Participants' Accounts prior to the allocation of any Employer or Employee contributions for that Limitation Year. Any Deferral Amount that would be violative of Section 415 of the Code if allocated to the Deferral Contribution Subaccount of the Participant on whose behalf it was made shall be returned (together with earnings attributable thereto) to the Employer and thereafter paid to the Participant (net of any tax withholding and other deductions normally attached to current compensation) on whose behalf it was originally received by the Trust. (d) Overall Limitation on Contributions and Benefits. This Paragraph (d) shall not apply to Plan Years commencing after December 31, 1999. Notwithstanding any other provision in this Article, but subject to the limitation in the first sentence of this Paragraph, in no event shall the amount allocated to the Account of any Participant cause the sum of the Defined Contribution Fraction and the Defined Benefit Fraction to exceed 1.00, or such other limitation as may be applicable under Section 415 of the Code with respect to any combination of qualified plans without disqualification of any such plan. -55- (1) The term Defined Benefit Fraction shall mean a fraction, (i) the numerator of which is the projected annual benefit of the Participant under this Plan (as of the close of the Limitation Year of reference), and (ii) the denominator of which is the lesser of (A) 1.25 multiplied by the dollar limitation in effect under Section 415(b)(1)(A) of the Code as to such Limitation Year, or (B) the product of (I) 1.4, multiplied by (II) the amount which may be taken into account under Section 415(b)(1)(B) of the Code with respect to such individual for such Limitation Year. (2) The term Defined Contribution Fraction shall mean a fraction, (i) the numerator of which is the sum of the Annual Additions to the Participant's Account as of the close of the Limitation Year of reference, and (ii) the denominator of which is the sum of the lesser of the following amounts determined for such Limitation Year and each prior year: (A) the product of 1.25 multiplied by the dollar limitation in effect under Section 415(c)(1)(A) of the Code for such Limitation Year (determined without regard to Section 415(c)(6) of the Code or (B) the product of (I) 1.4, multiplied by (II) the amount which may be taken into account under Section 415(c)(1)(B) of the Code (or Section 415(c)(7) of the Code, if applicable) with respect to such individual for such Limitation Year. (e) Annual Addition. The term Annual Addition, as it applies to the Account of any Participant, shall mean, for any Limitation Year (as defined below), the sum of: (1) employer contributions allocated to his/her Employer Contribution Subaccount; (2) the amount of the Participant's voluntary after-tax contributions; -56- (3) forfeitures reallocable to the Participant's Account; (4) amounts allocated with respect to a Participant, after March 31, 1984, to an individual medical benefit account, as defined in Section 415(1)(2) of the Code, which is part of a pension or annuity plan maintained by the Employer; and (5) amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after such date, which are attributable to post-retirement medical benefits allocated to the separate account of a Participant who is a key employee, as defined in Section 419A(d)(3) of the Code, under a welfare benefit fund, as defined in Section 419(e) of the Code, maintained by the Employer. The limitation in Subparagraph (a)(2) of this Section shall not apply to any amount treated as an Annual Addition under the two immediately preceding Subparagraphs. Unless otherwise defined by resolution of the Board of the Primary Employer, the "Limitation Year" shall correspond to the Accrual Computation Period. (f) Compensation. The term "compensation" as used in this Section means wages, salaries, and fees for professional services, and other amounts paid or made available (without regard to whether or not an amount is paid in cash) during the Limitation Year for personal services rendered in the course of employment with the Employer to the extent that the amounts are includable in gross income (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, reimbursements and other expense allowances under a non-accountable plan as described in Section 1.62.2(c) of the Income Tax Regulations. In addition, Compensation shall include: (1) amounts described in Sections 104(a)(3), 105(a), and 105(h) of the Code, but only to the extent that these amounts are includible in the gross income of the Employee; (2) amounts paid or reimbursed by the Employer for moving expenses incurred by an Employee, but only to the extent that at the time of the payments it is reasonable to believe that these amounts are not deductible by the Employee under Section 217 of the Code; (3) the value of a non-qualified stock option granted to an Employee by the Employer, but only to the extent that the value of the option is includible in the gross income of the Employee for the taxable year in which granted; and (4) the amount includible in the gross income of an Employee upon making the election described in Section 83(b) of the Code). However, Compensation shall not include Employer contributions to a plan of -57- deferred compensation which are not includable in the Participant's gross income for the taxable year in which contributed, or Employer contributions under a simplified employee pension plan, or any distributions from a plan of deferred compensation; amounts realized from the exercise of a nonqualified stock option or when restricted stock (or property) held by the Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture; amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity described in Section 403(b) of the Code (whether or not the amounts are excludable from the gross income of the Participant). With regard to Limitation Years commencing after December 31, 1997, compensation paid or made available during such Limitation Years shall include any elective deferral within the meaning of Section 402(g)(3) of the Code, and any amount which is contributed or deferred by the Employer at the election of the Employee and which is not includable in the gross income of the Employee by reason of Sections 125 or 457. For Limitation Years beginning after December 31, 2000, compensation shall also include any elective amounts that are not includible in the gross income of the Employee by reason of Section 132(f)(4) of the Code. If an Employer is a sole proprietorship or partnership, compensation with respect to a Self-Employed Individual shall mean his/her Earned Income for the Limitation Year. Sec. 6.04 Rollover Contributions and Inter-plan Transfers. Rollover contributions and inter-plan transfers provided for in Article V shall be allocated directly to the Accounts of the respective Participants on whose behalf received. Sec. 6.05 Restoration Contributions. All restoration contributions made by Participants pursuant to the provisions of Article V shall be allocated directly to the Subaccounts of that Participant from which originally distributed. -58- ARTICLE VII ADMINISTRATIVE PROVISIONS ------------------------- Sec. 7.01 Investment of Assets. All contributions shall be paid over to the Trustee and shall be invested by the Trustee in accordance with this Plan and its corresponding Trust Agreement. Sec. 7.02 Valuations. The Fund (and, if applicable, each of its sub-funds) shall be valued by the Trustee at fair market value annually as of the close of business on the Annual Valuation Date. A similar valuation (or the partial valuation of one or more sub-funds, if appropriate) may occur as of any other interim date during a Plan Year upon the direction of the Plan Administrator. Sec. 7.03 Crediting of Contributions. (a) Employer Contributions. Any contribution made in respect of any Plan Year (or fiscal year ending during a Plan Year) by the Employer (other than deemed Employer contributions of Deferral Amounts) shall be deemed to have been made when delivered to the Trustee; except that for federal income tax purposes, all Employer contributions shall be deemed to have been made at the earlier of (1) the date on which delivered to the Trustee, or (2) the last day of the fiscal year on which it can be properly claimed by the Employer as a deductible amount for federal income tax purposes. Any Employer contribution made to a Participant's Employer Contribution Subaccount or Matching Contribution Subaccount solely for the purpose of reinstating the balance of that account to the balance thereof as of the date of a prior cash-out of benefits, and any military service make-up contribution made by the Employer shall be deemed to have been made on the date on which such amount is received by the Trustee from the Employer. (b) Deferral Amounts. Contributions made pursuant to Article V hereof during any Plan Year shall be credited when received by the Trustee. Notwithstanding the foregoing to the contrary, if a Participant becomes entitled to receive the entire vested amount standing to his/her credit during any Plan Year and such amount is distributed to him/her (or to his/her Beneficiary), the distribution shall include all amounts contributed by him/her during the Plan Year in which the distribution occurs, as though such amounts were credited to his/her Account as of the date of distribution. (c) Restoration and Rollover Contributions; Inter-Plan Transfers. Restoration and rollover contributions and inter-plan transfers of funds shall be credited to the Account of the Participant on whose behalf contributed as promptly as practicable following receipt thereof by the Trustee. Restoration contributions shall be credited to the Subaccounts from which the amount being restored was originally distributed or deemed to have been distributed. If a Participant becomes entitled to receive the entire vested amount standing to his/her credit during any Plan Year and such amount is distributed to him/her (or his/her Beneficiary), the distribution shall include all amounts contributed as restoration or rollover contributions or received as inter-plan transfers on the Participant's behalf during the Plan Year of the distribution, whether or not such amount had been formally credited to his/her Account prior to the date of distribution. -59- Sec. 7.04 Establishment of Segregated Investment Accounts. (a) In General. The Plan Administrator is authorized, but not required, to direct the sequestration of Plan assets attributable to the Account of any Participant from the remainder of the Fund, and for the maintenance of those assets as a segregated investment account. Any such sequestration shall be temporary in nature and intended to facilitate the administration of this Plan in connection with funds received prior to the Valuation Date on which such funds will be commingled with the balance of the Fund for investment purposes, to preserve values, to facilitate an imminent benefit payout, or to assure availability of resources to fund a specific stream of payments. No interest shall be credited in connection with such a sequestered account. (b) Participant Loans. If this Plan permits Participant loans and a Participant or other person having an interest in this Plan borrows funds from this Plan, such loan must be treated as a segregated investment account established for the benefit of, and at the risk of, the borrower. Sec. 7.05 Crediting of Investment Results. (a) General. As of each Valuation Date, the earnings and accretions of the Fund attributable to investment of Fund assets (other than Fund assets held in segregated investment accounts), reduced by losses experienced (whether or not realized) and expenses incurred since the preceding Valuation Date, shall be allocated among the Accounts of the Participants, Beneficiaries and Alternate Payees in proportion to the balances in such Accounts as of the prior Valuation Date, after reducing such prior Valuation Date balance by any amounts withdrawn by or distributed from that Account since such prior Valuation Date. For the purposes of this Paragraph, the balance in any Participant's Account shall not include values contained in any segregated investment accounts. If the Account of any Participant, Beneficiary or Alternate Payee consists of more than one Subaccount, each such Subaccount shall be treated as a separate Account for the purposes of crediting investment gains and losses pursuant to this Section. -60- (b) Investment Direction by Participants. If this Plan provides for investment direction by Participants, each category of investment offered by any Trustee shall be considered a separate fund for the purposes of computing and crediting investment results and expenses specifically attributable to such investment category. (c) Segregated Investment Accounts. To the extent that the Trustee maintains a segregated investment account on behalf of any Participant, Beneficiary or Alternate Payee, other than a short-term segregated account as described in Section 7.04(a), there shall be allocated to such segregated investment account as of any Valuation Date the earnings, accretions, diminutions in value and expenses identifiable to that segregated investment account since the immediately preceding Valuation Date. Any segregated investment account established in connection with a Participant loan shall uniquely bear the risk of loss associated with such loan and shall uniquely benefit from interest paid in connection with such loan. (d) Amounts to be Distributed. If a distribution is to be made as of a particular Valuation Date, there shall be no adjustment in the amount to be distributed by reason of the passage of time or investment experience of the Fund between the Valuation Date as of which the amount of such distribution is determined and the Benefit Commencement Date. In particular, the balance in the Account of any Participant shall not be adjusted to reflect interest, dividends, investment gains or losses or general expenses of the Fund relating to the period prior to the Benefit Commencement Date and subsequent to the Valuation Date of reference. Sec. 7.06 Allocation and Charging of Plan Administrative Expenses. (a) General Rule. To the extent that the administrative expenses of this Plan are borne by this Plan, they shall be allocated to and charged against the Accounts of the Participants in any consistently applied manner determined by the Plan Administrator, having absolute discretion with respect to such matters, as being both equitable and reasonable in principle. (b) Default Provision. To the extent that the Plan Administrator does not determine otherwise pursuant to the plenary authority granted in Paragraph (a) hereof, the following guidelines shall apply: -61- (1) Specific Expenses. Expenses specifically identifiable to the Account of a Participant or to a group of such Accounts shall normally be charged against that Account or those Accounts in such manner as the Plan Administrator, in its sole discretion, deems fair and equitable. By way of example, and not by way of limitation, such expenses would include expenses associated with: (i) the initiation, maintenance and recovery of a Participant Loan, (ii) transaction costs associated with Participant-directed investments, and (iii) expenses incurred for legal services with respect to a governmental attachment of an Account. Certain routine expenses, such as (by way of example only, and not by way of limitation) per-check charges for benefit disbursements, normal course review of domestic relations orders, and the processing of claims for benefits or denied benefit appeals, while specific in application when incurred, are so minimal, so commonly incurred, or so inconvenient to isolate and identify that they shall be general expenses of this Plan and allocated pursuant to Subparagraph (2) or (3) hereof. (2) Asset-based General and Specific Expenses. Vendor charges and other expenses incurred that are based on Plan assets generally, or on a specific investment of the Plan, shall be charged against the Accounts of the Participants on the basis of the relative asset values of those Accounts with respect to which the vendor's services were rendered or expenses incurred. The allocation of the charges shall be done in such manner as the Plan Administrator, in its sole discretion, deems both equitable and practicable. By way of example, and not by way of limitation, such vendor charges and expenses would customarily include general fiduciary, custodial and asset management fees. (3) Per Capita General and Specific Expenses. Vendor charges and other expenses incurred that are based on a per capita calculation shall be charged against the appropriate Accounts of the Participants on a per capita basis. The allocation of the charges shall be done in such manner as the Plan Administrator, in its sole discretion, deems both equitable and practicable. By way of example, and not by way of limitation, such vendor charges and expenses would customarily include recordkeeping fees. Sec. 7.07 Loans to Participants ("Participant Loans"). (a) Permissibility. Loans to parties in interest, as defined in Section 3(14) of ERISA, who are Participants shall be allowed if, the Plan Administrator determines that such loans are to be made generally. The determination as to whether or not Participant Loans are to be allowed shall be completely within the discretion of the Plan Administrator. Notwithstanding the foregoing to the contrary, in no event shall loans be permitted to be made to any Participant who is an Owner-Employee or a shareholder-employee (as that term was defined in Section 1379 of the Code prior to its amendment by the Subchapter S Revision Act of 1982). The Plan Administrator shall have the right to require any applicant for a Participant Loan to secure the written consent of (1) any party for whose benefit there exists a QDRO in respect to the Participant's interest under this Plan and (2) the Participant's Spouse before making any loan to such Participant. -62- (b) Application. Subject to such uniform and nondiscriminatory rules as may from time to time be adopted by the Plan Administrator after it has been determined that Participant Loans shall be allowed, the Trustee, upon application by a Participant or Beneficiary on forms approved by the Plan Administrator, may make a loan or loans to such Participant. (c) Limitation on Amount. No Participant or Beneficiary shall, under any circumstance, be entitled to loans aggregating in excess of the lesser of (1) $50,000, reduced by the excess (if any) of (i) the highest outstanding balance of loans to such individual from this Plan during the 1-year period ending on the day before the date on which such loan was made, over (ii) the outstanding balance of loans from this Plan on the date on which such loan was made or (2) one-half (1/2) of the value of his/her adjusted vested interest in his/her Account as of the Valuation Date coincident with or immediately preceding the date on which the loan is made. For this purpose, the value of a borrower's adjusted vested interest in his/her Account shall be the value of such vested interest as of the Valuation Date coincident with or immediately preceding the date on which the loan is made reduced by any amounts withdrawn from such Account since the Valuation Date of reference. Except for an in-service distribution under Section 5.05(a)(5), any amount withdrawn by a borrower from his/her Account while a loan is outstanding, and any amount distributed to, or on account of, a borrower while a loan is outstanding against the Account from which such distribution is to be made, shall be immediately applied to reduce the amount of the loan and accrued interest. Loans under any other qualified plan sponsored by the Employer shall be aggregated with Participant Loans under this Plan in determining whether or not the limitation stated herein has been exceeded. (d) Equality of Borrowing Opportunity. Participant Loans shall be available to all prospective borrowers on a reasonably equivalent basis, provided, however, that the Trustee may make reasonable distinctions among prospective borrowers on the basis of credit worthiness. Participant Loans shall not be made available to Participants who are Highly Compensated Employees in an amount greater than the amount available to other borrowers. Thus, the same percentage of a borrower's vested Account balance may be loaned to Participants or Beneficiaries with large and small amounts of vested benefits, if such vested benefit is security (or partial security) for repayment of the loan. -63- Sec. 7.08 Participant Loans General Terms. Each loan to a Participant or Beneficiary shall be considered a fixed income investment of the Participant's Account from which it was made. The following conditions shall prevail with respect to each such loan: (a) Pledge. Each loan to a Participant or Beneficiary made by the Trustee shall be secured by the pledge of no more than fifty percent (50%) of the borrower's vested interest in the Trust Fund and by the pledge of such further collateral as the Trustee, in its discretion, deems necessary to assure repayment of the borrowed amount and all interest to be accrued thereon in accordance with the terms of the loan. (b) Interest Rate. Interest shall be charged at a commercially reasonable rate, designed to provide this Plan with a return commensurate with interest rates charged by persons in the business of lending money under similar circumstances. (c) Loan Term. A loan shall be for a term not to exceed five (5) years. To the extent that a Participant or Beneficiary becomes entitled to payments of benefits or withdraws all or a portion of the borrower's Account, the payment or withdrawals, as the case may be, shall be immediately applied against the balance outstanding, including interest on the loan, and such amount shall then be deemed immediately due and payable. A Loan shall be non-renewable and non-extendable. (d) Amortization. A loan shall provide for substantially level amortization of principal and interest and payments no less frequently than quarterly. (e) Defaults and Remedies. If not paid as and when due, any such outstanding loan or loans may be deducted from any benefit which is or becomes payable to the borrower or his/her Beneficiary, and any other security pledged shall be sold by the Trustee at public or private sale as soon as is practicable after such default. The proceeds of any sale shall first be applied to pay the expenses of conducting the sale, including reasonable attorneys' fees, and then to pay any sums due from the borrower to the Trust Fund, with such payment to be applied first to accrued interest and then to principal. The Participant shall remain liable for any deficiency, and any surplus remaining shall be paid to the Participant. (f) Creditworthiness. No loan shall be made to any individual who is not creditworthy at the time of the borrowing. -64- (g) Post Default Interest. If an outstanding loan in default becomes taxable as current income, the full amount recognizable for federal income tax purposes shall remain due and payable to this Plan, but shall cease to accrue interest from the date of recognition. (h) Temporary Suspension of Repayment Obligation. In the event that a Participant is on leave of absence without pay granted under the Family and Medical Leave Act, P.L. 103-3, as amended, the outstanding loan obligation will continue to accrue interest, but the obligation to make periodic payments will be suspended until the earliest to occur of: (1) the date on which the loan would have matured under its original terms; (2) the date on which the leave of absence expires; or (3) the date on which the Participant is restored to the Employer's payroll. If the suspension period expires at the date specified in either clause (2) or clause (3) hereof, the periodic payments of principal and interest shall be recalculated for the balance of the period to the original maturity date so as to be as nearly equal as practicable. In the event that a Participant is on leave for service in the armed forces of the United States, the accrual of interest under the loan and the obligation to make periodic payments of principal and interests shall be suspended in accordance with applicable federal law to the extent permissible under Section 414(u) of the Code. Sec. 7.09 Investment Direction by Participants and Others. (a) General Provisions. To the extent permitted by the Plan Administrator, each Participant, Beneficiary and Alternate Payee for whom an Account is maintained under this Plan shall have the right to direct the manner in which assets held for and identified to that Account are invested, subject to the provisions of, and limitations set forth in, this Section. An individual may not distinguish between Employer-source and Participant-source assets nor among funds attributable to different types of contributions for the purpose of designating investment categories, provided, however, that the investment direction privilege shall not apply: (1) after his/her Benefit Commencement Date to a Participant, Beneficiary or Alternate Payee who has elected receipt of benefits in the form of a fixed amount (nonvariable) annuity or fixed amount installment payout; (2) to Plan assets held in a segregated account under this Plan pending determination as to whether an instrument received by this Plan constitutes a QDRO; or (3) assets invested at the direction of the Participant, Beneficiary or Alternate Payee in any form of time deposit which has not matured or in any contract (such as an annuity, life insurance, retirement income, or investment participation contract), except to the extent that such time deposit or contract permits withdrawal therefrom or surrender and cancellation thereof. -65- (b) Investment Options. (1) Diversity Requirement. The Plan Administrator shall offer such investment options (including such Diversified Asset Pools as defined below) as it, in its sole discretion, determines appropriate. (2) "Diversified Asset Pool" Defined. For the purposes hereof, the term "Diversified Asset Pool" may be one or more mutual funds, a collective investment fund operated by a financial institution, a segregated account operated by an insurance company, a portfolio of securities held exclusively for this Plan, or any other portfolio or combination of investments having a shared generic nature. (3) Changes in Available Investment Options. The Plan Administrator shall have the right at any time and from time to time, to increase or decrease the number and nature of investment options available, and to substitute investments in any generic category for investments previously offered in that category; provided, however, that at all times the requirements of Subparagraph (b)(1) shall be satisfied. If the Trustee discontinues or restricts the offering of any specific investment opportunity or investment category, the Trustee shall have the right to; (i) continue such investment opportunity or investment category as to amounts already invested therein (along with dividends, interest and other income generated thereby); (ii) continue such investment opportunity or investment category on a limited basis, open only to those who have previously invested in that particular investment or investment category; or (iii) require amounts previously invested in a particular investment or category to be liquidated and reinvested in another available investment or investment category, as may be appropriate under the circumstances then prevailing (such as, by way of example, the closing of a mutual fund to new investors). The requirements of Subparagraph (b)(1) shall be deemed to be satisfied without the offering of any Diversified Asset Pool if Participants can generally direct, for their respective accounts, (i) the purchase and sale of individual stocks and bonds (without restriction as to issuer), mutual fund shares (without restriction as to vendor), and other investment assets generally, and (ii) the deposit of funds in money market instruments, savings accounts, certificates of deposit, and similar types of investments. (c) Transmission of Investment Instructions. If the custodian or other financial institution (1) provides confirmation of all transactions and appropriate periodic statements to the Trustee, and (2) provides a mechanism through which it accepts direct transmission of investment directions from Participants, Beneficiaries and Alternate Payees that mechanism shall be used by the individual giving such investment direction for the transmission of investment directions relating to his/her interest under this Plan to which such directions apply. If the preceding sentence does not apply, investment directions given by Participants, Beneficiaries and Alternate Payees, whether relating to the liquidation and reinvestment of funds in the custody of the Trustee, the investment of funds thereafter to be received by the Trustee, or a combination thereof, must be; (i) communicated in writing or through another medium approved by the Trustee; (ii) shall be effective prospectively only, and only as to funds available for investment when or after the direction is received by the Trustee; and (iii) effective as promptly as practicable after receipt by the Trustee. Until an investment direction becomes effective, the Trustee shall be fully protected in following the previous investment direction which is to be superseded by the new investment direction. -66- (d) Investment Direction Mechanism. To give effect to the investment direction privilege described in Paragraph (c), the Plan Administrator shall establish such rules, regulations and procedures as it, in its sole discretion, deems necessary or desirable; provided, however, that all of the following shall apply: (1) Scope of Privilege and Frequency of Exercise. Each Participant, Beneficiary and Alternate Payee shall have the right to exercise his/her investment direction privileges as to Plan assets held in his/her Account and subject to that privilege with such frequency as the Plan Administrator shall determine, which frequency shall be not less often than quarterly. All of the investment options currently available for newly contributed funds shall generally be available for portfolio reinvestment; provided, however, that the investment minimums described in Subparagraph (2) below are satisfied. (2) Investment and Reinvestment Minimum. If an underwriter or issuer establishes a minimum dollar amount for initial or incremental investments in any investment vehicle (such as, by way of example, a mutual fund initial investment minimum), such minimum shall be given effect under this Plan. Otherwise, this Plan establishes no minimum for investment in any investment option (other than any minimum which may apply to Participant loans); provided, however, that the Plan Administrator or the Trustee, either acting in his, her or its discretion, at any time and from time to time, may establish reasonable minimum for the investment of funds in any single investment option, the division of funds between two or more investment options, and the liquidation and reinvestment of funds; further provided that such minimum as may be established shall be of uniform application and shall not be unduly restrictive with regard to small Accounts. -67- (e) Investment Associated Matters. (1) Interest, Dividends, Gains and Losses. Interest, dividends, gains and losses generated by investments held for the Account of a Participant, Beneficiary or Alternate Payee in any investment option shall be applied to that option, with dividends, interest and gains reinvested in the option generating the same, and with losses diminishing the amount held in that option for the Account of reference. If, however, a Participant, Beneficiary or Alternate Payee has liquidated the entire interest held for his/her Account in a particular investment option and caused the proceeds of such liquidation to be reinvested in other investment options, the Plan Administrator shall have the right, but not the obligation, to cause interest and dividends received by this Plan with respect to such liquidated investments after the liquidation thereof to be reinvested in the investment option or options selected by the Participant, Beneficiary or Alternate Payee for reinvestment of the liquidated investment in the same proportion as the proceeds of such liquidation were so reinvested. (2) Expense Charges. Each Account shall be charged with the expenses (such as brokerage fees, financial institution sales and administrative charges, taxes, etc.) associated with and identifiable to the administration or management of that Account or the assets held therefore, and with all expenses associated with each transaction involving assets thereof. To the extent feasible, expenses associated with any investment option selected by the Participant, Beneficiary or Alternate Payee shall be charged back against the assets held by this Plan for such person or entity in that investment option. (3) Default Investment Direction. In the event that a Participant, Beneficiary or Alternate Payee declines or fails to provide investment directions with respect to Plan assets held for his/her Account and subject to the investment direction privilege, the Trustee shall determine the appropriate manner in which such assets are to be invested, and shall be fully protected in so doing. In connection with the discharge of this default investment function, the Trustee shall focus principally (but not necessarily exclusively) on safety of principal, secondarily on generation of a reasonable rate of income, and thereafter on the prospect of growth of principal. (4) Temporary Holding of Funds. Notwithstanding any investment direction received from a Participant, Beneficiary or Alternate Payee, the Trustee shall have the right to hold temporarily uninvested or temporarily invested in short-term investments any funds intended for investment or reinvestment and any funds the distribution of which is contemplated in the immediate future. To the extent that the Trustee's exercise of this investment discretion is inconsistent with the investment instructions of the Participant, Beneficiary or Alternate Payee, the Trustee's authority shall supersede the investment direction privilege of the Participant, Beneficiary or Alternate Payee. -68- (f) ERISA Section 404(c) Compliance. It is the intention of the Employer that the requirements of Section 404(c) of ERISA and the regulations thereunder be satisfied by the provisions of this Section, that this Section be construed in a manner consistent with that intention, and that all fiduciaries under this Plan be afforded the maximum protection from investment liability afforded by Section 404(c) of ERISA. -69- ARTICLE VIII RETIREMENT AND DISABILITY BENEFITS ---------------------------------- Sec. 8.01 Retirement Benefit. Upon Retirement, a Participant is entitled to a benefit equal to 100% of his/her Account. Sec. 8.02 Disability Benefit. (a) Termination of Employment Known to be on Account of Total Disability. If, at the time of a Participant's Termination of Employment, the Plan Administrator has determined that the Participant's Termination of Employment is attributable to Total Disability, the Participant is entitled to a benefit equal to 100% of his/her Account. (b) Termination of Employment Later Determined to be on Account of Total Disability. If the Participant's Termination of Employment occurs prior to a determination that the cause of that Termination of Employment was Total Disability, if any portion of the Participant's Account was deemed to have become forfeited by reason of that Termination of Employment, and if there is later made a binding determination that the Participant's Termination of Employment was attributable to Total Disability, any amount forfeited from the Participant's Account by reason of that Termination of Employment shall be restored to the Account of the Participant (in the form of a reinstatement contribution made by the Employer and without adjustment for investment gains or losses or expenses that would have been experienced by the Account had no such forfeiture been deemed to have occurred). Any balance standing to the credit of the Participant in his/her Account, after the reinstatement adjustment described in the preceding sentence, shall become distributable as promptly as practicable following the making of the binding determination that the Participant's Termination of Employment was attributable to Total Disability. -70- ARTICLE IX DEATH BENEFITS -------------- Sec. 9.01 Benefit Upon the Death of a Participant. (a) Decedent's Benefits Not in Pay Status. Upon the death of a Participant whose benefits are not in pay status at the time of his/her death, the Participant's Beneficiary shall be paid a death benefit equal to the value of the Participant's vested interest in his/her Account. (b) Decedent's Benefits in Pay Status. Upon the death of a Participant whose benefits are in pay status at the time of his/her death, there shall be paid such benefit, if any, as is provided under the annuity contract or other payout arrangement in effect at the time of the Participant's death. If there is no such annuity contract or other arrangement then in effect, the undistributed balance of the Participant's vested interest in his/her Account shall be paid to the Participant's Beneficiary. Sec. 9.02 Beneficiary Designation. (a) By Married Participants. (1) Spouse as Default Primary Prospective Beneficiary. The sole primary Prospective Beneficiary of each married Participant shall be his/her Spouse except to the extent that (i) the Participant has designated one or more non-spousal Prospective Beneficiaries, and (ii) the designation of such non-spousal Prospective Beneficiaries was consented to in writing by the Participant's Spouse as provided in Section 9.03. (2) Designation of Non-spousal Primary Prospective Beneficiaries. To the extent provided in a spousal consent conforming to the requirements of Section 9.03, each married Participant has the right to designate one or more primary Prospective Beneficiaries other than, or in addition to, his/her Spouse. (3) Designation of Contingent Beneficiaries. Each married Participant shall have the right to designate one or more contingent Prospective Beneficiaries who shall become the Participant's Beneficiaries upon his/her death if, at the time of his/her death, he/she is not survived by any of his/her primary Prospective Beneficiaries. Spousal consent shall not be required as to the designation of contingent Prospective Beneficiaries, but if the Participant is not survived by any primary Prospective Beneficiaries and is survived by his/her Spouse, his/her Spouse shall supersede all designated contingent Prospective Beneficiaries and shall become the Participant's sole Beneficiary unless he/she either (i) has consented in writing to the Participant's designation of contingent Prospective Beneficiaries other than himself/herself, or (ii) elects to waive his/her right to be the Participant's sole Beneficiary after the Participant's death. -71- (b) By Unmarried Participants. Each unmarried Participant has the right to designate one or more primary Prospective Beneficiaries and one or more contingent Prospective Beneficiaries. (c) Change of Beneficiary Designations. Each Participant may at any time, and from time to time, change his/her primary Prospective Beneficiary and/or contingent Prospective Beneficiary designations; provided, however, that if the Participant is married, any such change which does not result in the designation of the Participant's Spouse as his/her primary Prospective Beneficiary shall be invalid unless and until consented to by the Participant's Spouse in the manner described in Section 9.03. (d) Form of Beneficiary Designation. Each designation of Prospective Beneficiaries and each change of such designations shall be set forth in writing, shall be on forms provided by or in form acceptable to the Plan Administrator, and shall be effective only if delivered to the Plan Administrator prior to the death of the Participant; provided, however, that a designation of Prospective Beneficiaries delivered to the Plan Administrator after the death of a Participant shall be given effect (1) only if it is authenticated to the satisfaction of the Plan Administrator, and (2) shall apply only to benefits payable by reason of the death of the Participant that have not been distributed prior to the delivery and authentication of the instrument making the subject designation. (e) Multiple Beneficiaries. In general, if a Participant is survived by one or more primary Beneficiaries, benefits payable by reason of the Participant's death shall be paid only to such surviving primary Beneficiaries, and no benefit shall be payable to any contingent Prospective Beneficiary. However, if the Participant's beneficiary designation clearly indicates that the interest of a designated primary Prospective Beneficiary who predeceases the Participant is to be paid to one or more specified contingent Beneficiaries (to the exclusion, as to that interest, of all other primary Beneficiaries) and indicates the amount to be paid to each such contingent Beneficiary or the manner in which such amount is to be calculated, the interest of such deceased primary Beneficiary shall be paid to such designated contingent Beneficiaries in the amounts so determined. -72- (f) Default Beneficiaries. In the event that a Participant fails to effectively designate at least one Prospective Beneficiary (or if the Participant is predeceased by all of his/her designated Prospective Beneficiaries), any benefits payable by reason of the death of the Participant shall be paid to those members of the following Classes of takers as may reasonably be located by the Plan Administrator, each Class to take to the exclusion of all subsequent Classes, and with all located members in each Class to share equally: (1) Class First: the Participant's Spouse; (2) Class Second: the Participant's lineal descendants (including adopted persons, per stirpes); (3) Class Third: the Participant's surviving legal parents (equally); and (4) Class Fourth: the Participant's estate. Step-children not legally adopted by the Participant at the time of his/her death (and their respective lineal descendants) shall not be included in Class Second and shall qualify as Beneficiaries only if named by the Participant as Prospective Beneficiaries. The Plan Administrator shall make a good faith effort to (i) identify, (ii) confirm the existence of, and (iii) locate all members of the Class eligible to share in a death benefit distribution. However, the Plan Administrator shall not be liable to any member of any such Class for either direct or consequential damages suffered by such person by reason of the Plan Administrator's failure to identify, confirm the existence of, or locate such person, nor shall the Plan Administrator be required to either unduly delay death benefit distributions or incur any substantial expense in the attempt to identify, confirm the existence of or locate any person who might be entitled to inclusion in any such Class. (g) Order of Death. If it is impossible to ascertain with certainty the order of death of the Participant and any Prospective Beneficiary, the Participant shall be deemed to have survived the Prospective Beneficiary unless the Participant has specifically indicated to the contrary in writing on his/her beneficiary designation form. If it is impossible to ascertain with certainty the order of death of two or more Prospective Beneficiaries, deceased primary Prospective Beneficiaries shall be deemed to have survived deceased contingent Prospective Beneficiaries. -73- (h) Effect of Divorce or Legal Separation. Upon the later to occur of (1) the effective date of the legal separation or divorce of the Participant and his/her Spouse or former Spouse or (2) the date on which the Plan Administrator receives written notification of such legal separation or divorce, except as may otherwise be provided in a QDRO, (1) the rights of such Spouse or former Spouse under Paragraphs (a)(1), (f) and Article XII hereof shall be extinguished, and (2) any designation of that separated or former Spouse as a Prospective Beneficiary under this Plan shall be null and void unless reaffirmed in writing by the Participant after the effective date of such divorce or legal separation. However, the foregoing shall not operate to render null and void a Participant's designation of a Spouse as a Prospective Beneficiary on a form of beneficiary designation if executed by the Participant prior to July 1, 2002. Sec. 9.03 Spousal Consent Requirement and Rules. The designation by a married Participant of his/her Spouse to be his/her sole primary Prospective Beneficiary shall not require the consent of his/her Spouse hereunder. All designations by a married Participant of a person other than, or in addition to, his/her Spouse to be a primary Prospective Beneficiary, to be valid and operative upon the death of the Participant, must have been (or be) consented to in writing by his/her Spouse. To be effective for the purposes of this Section, a spousal consent must satisfy the requirements of Paragraphs (a) through (h), inclusive, of this Section. (a) Written Instrument Requirement. Each spousal consent shall be set forth in a written instrument on forms provided by the Plan Administrator or in a form acceptable to the Plan Administrator. (b) Witness Requirement. All spousal consents must be witnessed by a notary public or by a representative of this Plan. (c) Acknowledgment of Effect. Each spousal consent shall contain an acknowledgment of its financial effect upon the party giving such consent. (d) Effect of QDRO. Each spousal consent shall be subject to the effect of any QDRO applicable to the Participant's interest in this Plan at the time of the Participant's death. (e) Specific and General Spousal Consent. Each spousal consent must identify the specific nonspousal Prospective Beneficiary(ies) the designation of whom is authorized by such consent, or must identify the class from whom such Prospective Beneficiaries may be designated; provided, however, that a spousal consent may be general in nature (permitting the Participant to designate any persons or entities as Prospective Beneficiaries and to change such designations at any time and from time to time without securing a further spousal consent) if it specifies that it is general in nature, acknowledges the Spouse's right to limit such consent to specific Prospective Beneficiaries, and acknowledges the Spouse's intention to voluntarily relinquish such right of limitation. -74- (f) Effect of Divorce. Each spousal consent given under this Section shall become null and void upon termination of the marriage (other than by the death of the Participant) between the Participant and the party who gave such consent. No such consent shall be binding upon a subsequent Spouse of the Participant, nor upon the originally consenting Spouse in the event of a divorce (subsequent to the giving of such consent) followed by a remarriage of the originally consenting spouse and the Participant. (g) Effect of Prenuptial and Similar Agreements. This Plan does not recognize the terms of any prenuptial, post-nuptial or similar agreement as having the effect of either a designation of Prospective Beneficiary or a spousal consent under this Section. (h) Spousal Consents May Be Revocable. Spousal consents given under this Section shall be revocable or irrevocable, as specified therein. If a spousal consent is not irrevocable by its terms, it shall be revocable. If revocable, whether by specification or by default, such consent shall become irrevocable upon the earlier to occur of the Participant's death or his/her Benefit Commencement Date. Revocation of a spousal consent hereunder shall become effective only upon delivery to the Plan Administrator of an instrument executed by the Spouse originally giving such consent and satisfying the requirements of Paragraphs (a) and (b) hereof. (i) Missing Spouse. If a married Participant is unable to determine the whereabouts of his/her Spouse, such Participant may file with the Plan Administrator an "Affidavit of Missing Spouse," which affidavit may be accepted by the Plan Administrator in lieu of the spousal consent otherwise required by this Section in connection with the designation by the Participant of a non-spousal Prospective Beneficiary. The Plan Administrator shall have the right to rely on such affidavit without further inquiry until such time as the Plan Administrator develops actual knowledge of the whereabouts of the purportedly missing spouse. Upon receipt of actual knowledge of the whereabouts of a purportedly missing spouse who is the subject of an Affidavit of Missing Spouse, any designation of Prospective Beneficiary that was dependent for its validity on the Affidavit of Missing Spouse relating to the person whose whereabouts have been learned shall immediately become null and void (but shall not affect payments made before the Plan Administrator learned of the whereabouts of the previously missing spouse or payments at a processing stage too advanced to be reasonably stopped the time of such learning). Upon development of actual knowledge of the whereabouts of a missing spouse with respect to whom an "Affidavit of Missing Spouse" is known by the Plan Administrator to have been relied upon to validate a current designation by the Participant of Prospective Beneficiaries, the Plan Administrator shall notify the Participant in writing that his/her designation of non-spousal Prospective Beneficiaries has become null and void. The Plan Administrator shall not, however, be required to disclose to the Participant the whereabouts of the previously missing spouse. Any change by a married Participant in the identity of his/her designated Prospective Beneficiaries must be accompanied by a new Affidavit of Missing Spouse unless otherwise supported by an appropriate spousal consent as otherwise described in this Section. -75- Sec. 9.04 Designation of Prospective Beneficiaries by Persons other than the Participant. Only the Participant shall have the right to designate Prospective Beneficiaries. Beneficiaries and Alternate Payees shall not have the right to designate Prospective Beneficiaries. In the event of the death of a Beneficiary or Alternate Payee prior to the distribution to him/her of his/her entire interest under this Plan, the interest of the Beneficiary or Alternate Payee shall be payable to his/her estate. Sec. 9.05 Transferee Plan Provision. Notwithstanding any other provision of this Section to the contrary, if, by reason of the merger of another tax-qualified plan into this Plan or by reason of a direct trustee-to-trustee transfer of assets and liabilities from another tax-qualified plan to this Plan in a transaction that did not constitute an Eligible Rollover Distribution, the Participant's Account includes a Portability Subaccount attributable to such assets, the Portability Subaccount so created and maintained shall have preserved with respect to it, but only for such period as may be required under regulations then pertaining under Section 411(d)(6) of the Code: (a) any provision automatically designating the Participant's surviving spouse or any other person as the death benefit payee with respect to all or a portion of the Participant's interest under the transferor plan; (b) any provision permitting the Participant to elect to waive the death benefit otherwise payable to his/her surviving spouse; and (c) all provisions relating to spousal consent in connection with any such waiver. In general, the preserved transferor plan rights shall be in addition to all other rights provided by this Plan, but shall apply only to the Portability Subaccount and only to the extent that those rights would have applied to the assets of the Portability Subaccount under the transferor plan. The preservation of transferor plan rights with respect to the subject Portability Subaccount shall not have any effect on the rights otherwise granted under this Article in connection with either (1) the balance of the Participant's Account not part of that Portability Subaccount or (2) the portion (if any) of the subject Portability Subaccount not subject to the preserved transferor plan rights. However, to the extent that any preserved transferor plan right conflicts with the rights granted in this Article, the conflict will be resolved in favor of the most valuable specific or composite spousal right. -76- For example, if the transferor plan was a money purchase pension plan that provided, absent Participant waiver with spousal consent, for one-half of the Participant's Account to be payable upon the Participant's death to his/her surviving spouse in the form of a life annuity, and if, after the transfer, the Participant dies survived by his/her spouse without having validly waived the default provision of the transferor plan, there will be paid to the Participant's surviving spouse, in the form of a life annuity a benefit having a value equal to one-half of the value of the Portability Subaccount, regardless of the payees designated to receive the balance of the Participant's interest in either the Portability Subaccount or any other element of his/her Account under this Plan. For the purposes of this Section, for an individual to be considered the surviving spouse of a deceased Participant, such individual need not have been the Participant's spouse at the time of the asset transfer from the transferor plan to this Plan. -77- ARTICLE X VESTING PROVISIONS ------------------ Sec. 10.01 General Vesting. Except as to his/her interest in his/her Employer Contribution Subaccount and his/her Matching Contribution Subaccount, the interest of each Participant in his/her Account is nonforfeitable (fully vested). Sec. 10.02 Employer Contribution Subaccount and Matching Contribution Sub-account Vesting. (a) Vesting Table. A Participant's nonforfeitable (vested) interest in his/her Employer Contribution Subaccount and his/her Matching Contribution Subaccount shall be determined by multiplying the amount standing to his/her credit in that Account by the appropriate percentage from the following table: Participant's Participant's Years of Vesting Service Vested Percentage - ------------------------ ----------------- Less than 2 Years of Vesting Service.................................None 2 Years of Vesting Service, but fewer than 3.........................20% 3 Years of Vesting Service, but fewer than 4 ........................40% 4 Years of Vesting Service, but fewer than 5 ........................60% 5 Years of Vesting Service, but fewer than 6.........................80% 6 Years of Vesting Service or more...................................100% (b) Acceleration of Vesting. A Participant shall become 100% vested in his/her Employer Contribution Subaccount and his/her Matching Contribution Subaccount upon: (1) his/her attainment of Early or Normal Retirement Age while in the employ of the Employer or any Affiliated Company or (2) the occurrence of any of the following events while in the employ of the Employer or an Affiliated Company: (i) Termination of Employment due to Total Disability; (ii) Termination of Employment due to death; or (iii) termination of this Plan or upon a partial termination of this Plan with respect to which he/she is an affected Participant if such person has not received a cash-out of his/her vested interest in this Plan prior to the date of such termination or partial termination. -78- For the purposes of this Subparagraph, a Participant shall be deemed to have received a cash-out of his/her nonforfeitable interest only if: (i) he/she received a distribution of his/her entire nonforfeitable interest under this Plan and has not repaid such amount to this Plan in the form of a restoration contribution; or (ii) he/she terminated employment with no nonforfeitable interest in his/her Account under this Plan and has not returned to employment covered by this Plan on or before the date on which this Plan is terminated or partially terminated. (c) Effect of Certain QDROs. If (1) the vested interest of a Participant in any Subaccount is less than 100%, (2) if any portion of that Subaccount was distributed to an Alternate Payee or transferred to a separate account established for the benefit of an Alternate Payee pursuant to a QDRO, and (3) the Alternate Payee's interest is not subject to forfeiture at the same percentage rate as is the Participant's interest in the referenced Subaccount, the value of the Participant's vested interest in the referenced Subaccount shall be determined pursuant to the formula V = P x (B + T) - T, where V is the vested value to be determined, P is the Participant's vesting percentage, B is the balance standing to the credit of the Participant in the referenced Subaccount, and T is the dollar amount transferred out of that Subaccount for the benefit of the Alternate Payee. (d) Special Vesting Schedules. Notwithstanding Paragraph (a) to the contrary, the provisions set forth on Appendix "E," attached hereto and incorporated by reference herein, shall apply to determine a Participant's nonforfeitable (vested) interest in the subaccount identified therein. Sec. 10.03 Disregarded Service for Vesting Purposes. The following service shall be disregarded in computing a Participant's nonforfeitable interest in his/her Employer Contribution Subaccount and/or Matching Contribution Subaccount pursuant to the provisions of Section 10.02: service disregarded pursuant to the provisions of Section 10.04. Sec. 10.04 Effect of Breaks in Service/Terminations of Employment. (a) Service after a period of Disregarded Prior Service shall not increase the Participant's vested interest in so much of his/her Account derived from Employer contributions as was accrued with respect to the period of Disregarded Prior Service, nor shall a period of Disregarded Prior Service be taken into account in computing the Participant's vested interest in so much of his/her Account derived from Employer contributions as is attributable to service subsequent to such period of Disregarded Prior Service. -79- (b) Service after a Break in Service or Termination of Employment shall not increase the Participant's vested interest in so much of his/her Account as was accrued with respect to the period prior to such Break in Service or Termination of Employment if the Participant received a distribution of his/her entire vested interest which was accrued prior to such Break in Service or Termination of Employment and thereafter declined to make a restoration contribution authorized by Article V of this Plan within the time prescribed therein. Otherwise, service subsequent to one or more Breaks in Service shall be aggregated with service prior to such Breaks in Service in determining the Participant's vested interest in accruals to his/her Account attributable to service both before and after such Breaks in Service. Sec. 10.05 Amendments to the Vesting Schedule. In the event that the vesting schedule under this Plan is amended, each individual who is a Participant at the effective date of the amendment and who then has three (3) Years of Vesting Service shall have his/her vested interest under this Plan determined under the prior vesting schedule or the amended vesting schedule, whichever yields the higher vested percentage. -80- ARTICLE XI IN-SERVICE BENEFITS ------------------- Sec. 11.01 Required Benefit Commencement. If a Participant remains in the employ of the Employer or an Affiliated Company to his/her Required Beginning Date and his/her Benefit Commencement Date has not theretofore occurred, his/her Required Beginning Date shall be his/her Benefit Commencement Date, and his/her nonforfeitable interest under this Plan shall be distributable to him/her at that time, with the minimum amount of such distribution each year to be the minimum required under the provisions of Section 401(a)(9) of the Code. Sec. 11.02 Superannuation Benefit. For Plan Years prior to January 1, 1999, any Participant who has attained Age 70-1/2 and who remains in the employ of the Employer or an Affiliated Company shall have the right to withdraw all or any part of the vested portion of his/her Account. To effect such a withdrawal, the Participant must request such withdrawal in writing at least thirty (30) days prior to the Valuation Date as of which such withdrawal is to be effective. The Participant shall also specify which of his/her Accounts are to be debited for the withdrawal, and the amount to be debited from each such Account. Funds withdrawn pursuant to this Section shall be delivered by the Trustee to the Participant as promptly as practicable following the Valuation Date as of which withdrawn, and there shall be no adjustment in the amounts so distributed to reflect changes in market value, interest earned, expenses incurred (other than expenses associated specifically with such withdrawal) from the Valuation Date to the date of actual distribution, nor shall such distribution include current contribution amounts not yet received by the Trustee, even if such current contribution amounts, when so received, are deemed to have been received as of the Valuation Date of reference. -81- ARTICLE XII FORM AND TIMING OF ------------------ BENEFIT DISTRIBUTIONS --------------------- Sec. 12.01 Forms of Benefit Payments other than Death Benefits. (a) Vested Interests Not Exceeding $5,000. If a Participant's nonforfeitable interest in his/her Account does not exceed $5,000 at his/her Benefit Commencement Date, any benefit payable to or on account of the Participant during his/her lifetime shall be paid as a single-sum distribution, a Rollover Amount, or a combination thereof. (b) Vested Interests Exceeding $5,000. Unless the Participant has elected an alternative form of benefit payment permitted under this Plan, if the Participant's benefit is other than a death benefit and if the Participant's nonforfeitable interest in his/her Account exceeds $5,000 at his/her Benefit Commencement Date, the Participant's benefit shall be paid in the form of a single-sum distribution, a Rollover Amount, or a combination thereof. (c) Optional Forms of Benefits. Any Participant having a benefit described in Paragraph (b) hereof may elect to receive his/her benefits in any one of the optional forms described in Section 12.03. (d) Substitution of "$3,500" for "$5,000" in this Section. In connection with any benefit the Benefit Commencement Date of which occurred prior to the first day of the first Plan Year starting after August 7, 1997, "or at the time of any prior distribution did not exceed $3,500" shall be substituted for "$5,000" at each place where "$5,000" appears in Paragraphs (a) and (b). Sec. 12.02 Forms of Death Benefits. (a) "In Pay Status" Defined. For the purposes of this Section, benefits shall be deemed "in pay status" if the Participant's Benefit Commencement Date occurs on or before the date of his/her death. (b) Decedent's Benefits in Pay Status. (1) Life Annuity in Place. If at the time of his/her death the Participant was receiving benefits as a life annuity (with or without refund feature or period certain, and with or without contingent annuitant benefits), the death benefit payable, if any, shall be as provided under the annuity arrangement in effect with respect to the Participant at the time of his/her death. -82- (2) Fixed Period Installment Stream in Place. If at the time of his/her death the Participant was receiving benefits in installments over a fixed period, the undistributed balance of the Participant's Account shall be distributed to his/her Beneficiary at least as rapidly as under the method of distribution being used as of the date of his/her death. (3) Decedent's Benefits not in Pay Status. (4) Non-Spousal Beneficiaries. If at the time of his/her death the Participant's benefits were not in pay status, any benefit payable to any person other than the Participant's Spouse by reason of the Participant's death shall be paid as a single-sum distribution or in installment payments if the vested benefit at the time of the Participant's death exceeds $5,000. (5) Spousal Beneficiaries. (i) If the Participant's vested interest under this Plan at the time of his/her death was $5,000 or less, the benefit payable to the Participant's Spouse shall be paid as a single-sum distribution, a Rollover Amount, or a combination thereof. (ii) If the Participant's vested interest under this Plan at the time of his/her death exceeded $5,000, the benefit payable to the Participant's Spouse shall be paid as a single-sum distribution, installment payments, a Rollover Amount, or a combination thereof. (c) Certain Distributions Commencing Prior to the First Plan Year Starting After August 7, 1997. With respect to Benefit Commencement Dates occurring prior to the first day of the first Plan Year starting after August 7, 1997, Subparagraph (2) of Paragraph (c) hereof shall be applied with "or at the time of any prior distribution did not exceed $3,500" substituted for "$5,000" therein. Sec. 12.03 Optional Forms of Benefits. Any Participant who is entitled to benefits in the form of a single-sum distribution, a Rollover Amount, or a combination thereof, other than a distribution to which Section 12.01(a) applies, may elect to decline that form of benefit and to receive his/her nonforfeitable interest in his/her Account in the form identified in this Section. The optional form of benefits provided for in this Section is a series of periodic payments, not less frequent than annual and as nearly equal as practicable, over a fixed period which, at its commencement, does not exceed the life expectancy of the Participant, or the joint life and survivorship expectancy of the Participant and his/her Prospective Beneficiary, except that if the Participant's Prospective Beneficiary is a person other than his/her Spouse, the value of the survivorship interest at the Benefit Commencement Date shall not exceed fifty Percent (50%) of the Participant's Account. -83- Sec. 12.04 Benefit Commencement Dates. (a) Retirement and Disability Benefits. The Benefit Commencement Date with respect to any benefit payable pursuant to Retirement or Termination of Employment by reason of Total Disability shall occur as promptly as practicable following the later to occur of: (1) the Participant's Retirement or the date on which the Participant's Termination of Employment is determined to be by reason of Total Disability, or (2) the date on which the Participant consents in writing to receive such benefits in the event that the distribution occurs prior to the later of the time the Participant has attained Normal Retirement Age or Age 62. However, if a Participant, at the time of his/her most recent Break in Service, had completed the number of Years of Service required to be eligible for an early retirement benefit described pursuant to Article VIII, his/her vested interest shall be treated as an early retirement benefit upon attainment by the Participant of the Age specified in the definition of Early Retirement Age. (b) Death Benefits. (1) A benefit described in Paragraph (a) of Section 9.01 and payable to a Beneficiary other than the Participant's Spouse shall be payable as promptly as practicable following the date on which the Participant's death is reported to the Plan Administrator; provided, however, that in any event the payment thereof shall be completed by the end of the fifth (5th) Plan Year following the Plan Year in which the Participant's death occurs. (2) A benefit described in Paragraph (a) of Section 9.01 which is payable to the Participant's Spouse shall first become payable when the Participant's death is reported to the Plan Administrator, and shall be paid as promptly as practicable following such notice, but in no event later than the end of the fifth (5th) Plan Year following the Plan Year in which the Participant's death occurs. -84- (3) A benefit described in Paragraph (b) of Section 9.01 shall be paid at least as rapidly as under the method of distribution in force at the time of the Participant's death. (c) Termination of Employment Benefits. (1) If a Participant has no nonforfeitable interest in his/her Account attributable to Employer-source contributions at the time of his/her Termination of Employment, he/she will be deemed to have received a "zero-dollar cash-out" of his/her interest in this Plan as of the date of such Termination of Employment; provided, however, that this Subparagraph shall not apply if the Participant, at the time of his/her Termination of Employment, has completed a sufficient number of Hours of Service in the Vesting Computation Period in which such Termination of Employment occurs to entitle him/her to a nonforfeitable interest in any part of his/her Account attributable to Employer-source contributions as of the end of such Vesting Computation Period. (2) If a vested Participant experiences a Termination of Employment (other than due to Retirement, death or Total Disability), his/her Benefit Commencement Date shall occur as promptly as practicable following the date on which occurs the Participant's Termination of Employment provided that if the Participant returns to the employ of the Employer or an Affiliated Company before such payment is made, distribution of the Participant's benefit shall be deferred to such date as would apply if the previous Termination of Employment had not occurred; and further provided that if the Participant's nonforfeitable interest under this Plan exceeds $5,000, no such distribution shall be made without the written consent of the Participant (and, if required by law or regulation, the written consent of the Participant's Spouse) until the Valuation Date of this Plan coinciding with, or if there is none, the Valuation Date next following the date on which the Participant attains the earlier of Normal Retirement Age or Age 62. However, if a Participant, at the time of his/her most recent Break in Service, had completed the number of Years of Service required to be eligible for an early retirement benefit described pursuant to Article VII, his/her vested interest shall be treated as an early retirement benefit upon attainment by the Participant of the Age specified in the definition of Early Retirement Age. With respect to Benefit Commencement Dates occurring prior to the first day of the first Plan Year starting after August 7, 1997, "or at the time of any prior distribution did not exceed $3,500" shall be substituted for "$5,000" herein. -85- (d) In-Service Benefits. In-Service Benefits payable by reason of Article XI shall be paid as promptly as practicable following the date on which application therefor is received and approved by the Plan Administrator, but in no event later than the Participant's Required Beginning Date. Sec. 12.05 Provisions Relating to Eligible Rollover Distributions. (a) Election Procedure. If a prospective distribution shall include an amount which is an Eligible Rollover Distribution, the prospective distributee shall have the right to elect to have all or any portion of the Eligible Rollover Distribution treated as a Rollover Amount. (1) Election to be Made in Writing. Any such election shall be made in writing on forms acceptable to the Plan Administrator and shall include such information and certifications as may reasonably be required by the Plan Administrator. (2) Election Period. The election described in this Section shall be made not more than ninety (90), and not less than thirty (30) days prior to the Benefit Commencement Date of the distribution. The prospective distributee may waive the thirty (30) day minimum period if such waiver is in writing and in a form acceptable to the Plan Administrator. (3) Default Election. If the prospective distributee fails to file an election during the Election Period described in Subparagraph (2) hereof, until such time as a subsequent election is filed as a change of election in accordance with Subparagraph (4) hereof, the distributee shall be deemed conclusively to have elected to have no portion of his/her Eligible Rollover Distribution treated as a Rollover Amount. (4) Durability, Change and Revocation of Elections. (i) Any election filed pursuant to the provisions of this Section shall be given full force and effect as promptly as practicable after receipt of the election and of any supporting certifications or information required by the Plan Administrator, and shall remain in force until a written revocation thereof is delivered to the Plan Administrator. Any revocation of such an election shall be given full force and effect as promptly as practicable following receipt thereof by the Plan Administrator. (ii) In general, if an Eligible Rollover Distribution is to be made in a series of payments, the distributee's election as to that portion (if any) of the Eligible Rollover Distribution to be treated as a Rollover Amount shall apply to each payment in the series. A distributee of an Eligible Rollover Distribution may, at any time and from time to time, change the amount thereof to be treated as a Rollover Amount, may change the payee thereof, and may change the delivery mechanism of such payments, provided that no such changes shall be effective as to any amount distributed before the Plan Administrator receives such information, documentation and certifications as it may reasonably require to make the change effective as a new election. Any such change shall supersede all such directions of the distributee previously in force. -86- (b) Minimum Rollover Amount. If it is reasonable to expect that the aggregate of Eligible Rollover Distributions payable to a distributee under this Plan will not exceed two hundred dollars ($200) in any Plan Year, no portion of the amount payable to that distributee shall be treated as a Rollover Amount. (c) Splitting of Eligible Rollover Distributions and Rollover Amounts. (1) Minimum Divisible Amounts. A distributee of an Eligible Rollover Distribution may require that the Eligible Rollover Distribution be divided into a Rollover Amount and a current distribution; provided, however, that this privilege shall attach only if the Rollover Amount is not less than the lesser of (i) the entire portion of the payment constituting an Eligible Rollover Distribution, or (ii) five hundred dollars ($500) and the currently distributable amount is more than a de minimis amount. Subject to the condition of the foregoing sentence, the prospective distributee of any Eligible Rollover Distribution may determine the portion thereof (if any) to be treated as a Rollover Amount and the amount not to be so treated (expressed in dollar terms or in Percentage of payment terms, as the Plan Administrator determines), and may from time to time change such determination following the procedures set forth in Paragraph (a) hereof. The portion not treated as a Rollover Amount will be distributed (subject to applicable withholding of income taxes) to the distributee thereto. (2) Rollover Amounts. Subject to the consent of the Plan Administrator, an eligible distributee may direct that his/her Rollover Amount be divided into up to three (3) separate Rollover Amounts. -87- (d) Mechanism for Delivery of Rollover Amounts. A Rollover Amount shall be delivered by (1) check or draft, made payable to and delivered directly to the fiduciary or institutional underwriter of the Eligible Retirement Plan, (2) check or draft, made payable to the fiduciary or institutional underwriter of the Eligible Retirement Plan, and delivered to the Participant, Beneficiary or Alternate Payee to whom the transferred amount is to be credited for subsequent delivery to the payee, or (3) wire transfer directly to the fiduciary or institutional underwriter of the Eligible Retirement Plan (if appropriate ABA routing information and account numbers have been provided). (e) Form of Rollover Amounts. All Rollover Amounts shall be delivered to the designated payee thereof in the same form (i.e., in cash, in kind, or in combination) as such amounts would have been delivered to the Participant, Beneficiary or Alternate Payee, had the same elected not to have such amounts treated as a Rollover Amount; except that this Plan shall not be obliged to include in any Rollover Amount any form of asset that will not be accepted by the prospective Eligible Retirement Plan. By way of non-exclusive examples, this Plan will not deliver as part of a Rollover Amount Employer securities which cannot lawfully be transferred to or cannot lawfully be held by the prospective Eligible Retirement Plan, nor shall this Plan deliver to an individual retirement arrangement of a distributee the distributee's own note for indebtedness to this Plan. (f) Effect of Delivery of Rollover Amounts. Each prospective distributee, by electing to have any portion of his/her Eligible Rollover Distribution treated as a Rollover Amount, agrees that, upon transmittal as instructed of the funds to which such election applies, the Plan Administrator, the Trustee, the Employer and all other persons and entities associated with the operation and maintenance of this Plan shall be released from all duties, obligations, responsibilities and liabilities in connection with the amount so transmitted, including, but not limited to, the duty to see to the application thereof. None of the persons or entities so released shall be responsible to see to the crediting or application of the funds so transferred. Sec. 12.06 Statutory Compliance. (a) Section 401(a)(9) Compliance. Notwithstanding any other provision of this Article, all distributions shall commence not later than the latest permissible Benefit Commencement Date under Section 401(a)(9) of the Code and regulations thereunder, and each benefit shall be distributed at a rate not lesser than the minimum distribution rate prescribed for such benefit under Section 401(a)(9) and the regulations thereunder. Notwithstanding any other provision of this Plan, if the Participant's Benefit Commencement Date has not previously occurred, and the Participant is living at his/her Required Beginning Date, the Participant's Required Beginning Date shall be his/her Benefit Commencement Date. -88- With respect to distributions under this Plan made for calendar years beginning on or after January 1, 2002, this Plan will apply the minimum distribution requirements of Section 401(a)(9) of the Code in accordance with the regulations under Section 401(a)(9) that were proposed on January 17, 2001, notwithstanding any provision of this Plan to the contrary. This provision shall continue in effect until the end of the last calendar year beginning before the effective date of final regulations under Section 401(a)(9) or such other date as may be specified in guidance published by the Internal Revenue Service. (b) Section 401(a)(14) Compliance. Unless the Participant has elected otherwise in writing, his/her Benefit Commencement Date shall not be later than the sixtieth (60th) day after the close of this Plan Year in which occurs the last of: (1) the date on which the Participant attains the earlier of Age 65 or the Normal Retirement Age specified in this Plan; (2) the tenth (10th) anniversary of the year in which the Participant commenced participation; or (3) the date on which the Participant experiences a Termination of Employment. Sec. 12.07 Post-Distribution Credits. If, after the payment of a single-sum distribution under this Plan, there shall remain in the Participant's Account any funds or any funds are subsequently credited to such Account, such additional funds, to the extent nonforfeitable, shall be paid to the Participant or applied for the Participant's Account as promptly as practicable. If, after the commencement of periodic payments under this Plan, there shall be additional funds credited to the Account of a Participant in which the payee has a nonforfeitable interest, this Plan Administrator shall direct adjustment of the remaining periodic payments so as to include all such additional credited amounts, as nearly evenly as possible, in the remaining periodic payments (without extending the period during which such payments are payable). Sec. 12.08 Withholding of Income Taxes. All distributions made under this Plan shall be subject to the withholding of: (a) income taxes, to the extent that the Plan Administrator or Trustee reasonably believes withholding to be required by applicable law; and -89- (b) such other income taxes as the distributee directs pursuant any election that the distributee is entitled to make under the terms of this Plan or under law. Sec. 12.09 Transferee Plan Provision. Subject to the limitations set forth in Section 12.10 hereof, if by reason of the merger of another tax-qualified plan into this Plan or by reason of a direct trustee-to-trustee transfer of assets and liabilities from another tax-qualified plan to this Plan in a transaction that did not constitute an Eligible Rollover Distribution, the Participant's Account includes a Portability Subaccount attributable to such assets, the Portability Subaccount so created and maintained shall have preserved with respect to it for such time as is then required under the anti-cutback provisions of Section 411(d)(6) of the Code and regulations promulgated with respect thereto: (a) each default form of benefit payment applicable under the transferor plan with respect to the transferred funds and each optional form of benefit which could have been elected by the payee under the transferor plan upon waiver of the default form of benefit available with respect to the transferred funds under the transferor plan; (b) all provisions permitting the Participant to elect to waive the default form of benefit and to elect in lieu thereof an optional form of benefit under the transferor plan with respect to the transferred funds and all spousal consent provisions relating to each such election and waiver under the transferor plan; (c) all provisions permitting the Participant's surviving Spouse to elect to waive the default form of benefit and to elect in lieu thereof an optional form of benefit under the transferor plan with respect to the transferred funds and all spousal consent provisions relating to each such election and waiver under the transferor plan; and (d) all election periods, election period waivers and election procedures applicable under the transferor plan with respect to the transferred funds. The rights preserved under this Section, if in conflict with rights otherwise applicable to benefit forms, elections, waivers and procedures under this Plan that would otherwise attach to the Account of the Participant, shall supersede those other rights with respect to the subject Portability Subaccount only. The Participant may elect at any time within the ninety (90) day period preceding his/her Benefit Commencement Date, with spousal consent conforming to the requirements of Section 12.05 if he/she is then married, to waive the applicability of this Section to the subject Portability Subaccount and to have that Portability Subaccount governed by the otherwise applicable benefit distribution provisions of this Plan. -90- Sec. 12.10 Limitation on Preservation of Benefits, Rights and Features. Notwithstanding the provisions of Section 12.09, this Plan shall not be a "Transferee Plan" with respect to amounts received by this Plan (and earnings thereon) resulting from a plan merger into or a transfer of assets to this Plan (collectively "Transferred Amounts"), provided that (a) the Transferred Amounts were not accrued under or held by a plan which was subject to the funding standards of Code Section 412, (b) the single-sum distribution form provided in this Plan is otherwise identical (within the meaning of regulations and other guidance promulgated by the Secretary of the Treasury or his/her delegate) to the optional forms of benefit through which the Transferred Amounts may have been distributed prior to merger into or transfer to this Plan, and (c) the Participant receives a distribution of his/her Transferred Amounts on or after the earlier of (1) the ninetieth (90th) day after he/she is furnished a summary of material modifications that satisfies the requirements of 29 CFR 2520.104b-3 and informs him/her of the elimination of all optional forms of benefit with regard to the Transferred Amounts other than the otherwise available optional forms as provided in this Article XII, or (2) with respect to Transferred Amounts held by this Plan as of the effective date of this Section, the first day of the second Plan year following the Plan Year in which the effective date of this Section occurs, or with respect to all other Transferred Amounts, the first day of the second Plan Year following the Plan Year in which the Transferred Amounts are merged into or transferred to this Plan. -91- ARTICLE XIII PLAN ADMINISTRATION Sec. 13.01 Appointment and Tenure. The Plan Administrator shall be the Primary Employer. Sec. 13.02 Authority and Duties of the Plan Administrator. The Plan Administrator shall have the following authority and duties: (a) to appoint (and to dismiss) such Named Appeals Fiduciaries as are necessary to determine the merits of appeals of each denied claim for benefits under this Plan; (b) to appoint (and to dismiss) such Participant Loan Administrators as may be required to operate any Participant loan program offered under this Plan; (c) to maintain and preserve the records of this Plan relating to Participants, Beneficiaries, Prospective Beneficiaries and Alternate Payees; (d) to prepare and furnish to Participants, Beneficiaries, Prospective Beneficiaries and Alternate Payees such information and notices as may be required by law, by the provisions of this Plan, or by reason of administrative policies and procedures adopted in conjunction with the operation of this Plan; (e) to collect such data as is required for Plan operation, to process that data, and to apply, share, communicate, archive and transmit that data in such manner and at such times as the Plan Administrator deems appropriate; (f) to prepare, file and publish such returns and reports as are required of the Plan Administrator under law; (g) to solicit from Participants, Beneficiaries, Prospective Beneficiaries and Alternate Payees, and their respective spouses, such elections, designations, consents and other instruments as may be appropriate to the operation of this Plan; (h) to communicate the terms and provisions of this Plan, and relevant changes therein, to all parties entitled to receive such communications; (i) to maintain a location at which documents relevant to this Plan may be examined by persons entitled to examine them; (j) to receive service of process against this Plan; -92- (k) to initiate legal action on behalf of this Plan; (l) to direct the Trustee as to the purchase of contracts of life insurance, annuity contracts, methods of benefit payment, the conduct of valuations, the timing of benefit distributions, and on all other matters where such direction is called for under this Plan or requested by the Trustee; (m) to arrange for bonding, if required by law; (n) to provide and execute (or delegate to others for execution) all procedures necessary for the proper conduct of the affairs of this Plan (such as, by way of example and not by way of limitation: enrollment procedures, participation waiver procedures, benefit application procedures, Participant investment direction procedures, domestic relations order validation procedures, etc.), except such procedures as this Plan may specifically determine to be exclusively within the province of a party other than the Plan Administrator; (o) to establish a QDRO determination procedure, and, pursuant to that procedure, to determine whether any instrument served upon this Plan constitutes a QDRO; (p) to construe and interpret the provisions of this Plan as otherwise set forth herein; (q) to determine the most appropriate method by which to correct any errors that may occur in the administration or operation of this Plan and the application of its provisions, and to exercise full discretion in the implementation or direction of corrective actions, as otherwise set forth herein; and (r) to perform such other duties as may be imposed by law or regulation. Sec. 13.03 Reporting and Disclosure. The Plan Administrator shall keep all individual and group records relating to Plan Participants, and Beneficiaries, and all other records necessary for the proper operation of this Plan. Such records shall be made available to the Employer and to each Participant and Beneficiary for examination during business hours except that a Participant or Beneficiary shall examine only such records as pertain exclusively to the examining Participant or Beneficiary and those records and documents relating to all Participants generally. The Plan Administrator shall prepare and shall file as required by law or regulation all reports, forms, documents and other items required by ERISA, the Code, and every other relevant statute, each as amended, and all regulations thereunder. This provision shall not be construed as imposing upon the Plan Administrator the responsibility or authority for the preparation, preservation, publication or filing of any document required to be prepared, preserved or filed by the Trustee or by any other Named Fiduciary to whom such responsibilities are delegated by law or by this Plan. -93- Sec. 13.04 Construction of this Plan. The Plan Administrator shall take such steps as are considered necessary and appropriate to remedy any inequity that results from incorrect information received or communicated in good faith or as the consequence of an administrative error. The Plan Administrator shall have the sole and absolute discretion to interpret this Plan and shall resolve all questions arising in the administration, interpretation and application of this Plan. It shall endeavor to act, whether by general rules or by particular decisions, so as not to discriminate in favor of, or against, any person and so as to treat all persons in similar circumstances uniformly. The Plan Administrator shall correct any defect, reconcile any inconsistency, or supply any omission with respect to this Plan. All such corrections, reconciliations, interpretations and completions of Plan provisions shall be final and binding upon the parties. Sec. 13.05 Engagement of Assistants and Advisers; Plan Expenses. The Plan Administrator shall have the right to hire such professional assistants and consultants as it, in its sole discretion, deems necessary or advisable, including, but not limited to: (a) Investment Managers and/or advisers; (b) accountants; (c) actuaries; (d) attorneys; (e) consultants and the Appraiser; (f) clerical and office personnel; and (g) medical practitioners. The expenses incurred by the Plan Administrator in connection with the operation of this Plan, including, but not limited to, the expenses incurred by reason of the engagement of professional assistants and consultants, shall be expenses of this Plan and shall be payable from the Fund at the direction of the Plan Administrator. The Employer shall have the option, but not the obligation, to pay any such expenses, in whole or in part, and by so doing, to relieve the Fund from the obligation of bearing such expenses. Payment of any such expenses by the Employer on any occasion shall not bind the Employer to thereafter pay any similar expenses. -94- Sec. 13.06 Bonding. The Plan Administrator shall arrange for such bonding as is required by law, but no bonding in excess of the amount required by law shall be considered required by this Plan. Sec. 13.07 Compensation of the Plan Administrator. The Plan Administrator shall serve without compensation for its services as such, but all expenses of the Plan Administrator shall be paid or reimbursed by the Employer, and if not so paid or reimbursed, shall be proper charges to the Trust Fund and shall be paid therefrom. -95- ARTICLE XIV DOMESTIC RELATIONS ORDERS ------------------------- Sec. 14.01 QDRO Determination Procedure. The Plan Administrator shall establish, and may at any time and from time to time modify, a written procedure setting forth the process to be followed when a determination is to be made as to whether an instrument that has been served on the Plan Administrator is a QDRO. The current iteration of that procedure is deemed to be incorporated as though fully set forth herein to the extent such incorporation is required by regulations promulgated by the Secretary of Labor, the Secretary of the Treasury, or the delegate of either. A copy of the current qualified domestic relations order determination procedure shall be available without charge to Participants, to prospective Alternate Payees, and to the respective personal representatives of each. Sec. 14.02 Status, Rights and Privileges of Alternate Payees. (a) General Rule. Except as otherwise specifically provided by statute, regulation or the provisions of Paragraph (b) of this Section, an Alternate Payee shall have the status and rights of a Beneficiary under this Plan, to the exclusion of all other rights associated with Participants under this Plan. (b) Exceptions to General Rule. Notwithstanding the provisions of Paragraph (a), each Alternate Payee shall have the following rights and privileges to the extent that the same are available to Participants under this Plan: (1) The right to direct the manner in which Plan assets held for the Account of such Alternate Payee are invested; and (2) The right to select the form in which benefits are to be paid and the time at which such benefit payments are to commence. (c) Special Conditions Pertaining to Certain Alternate Payees. (1) If the interest of an Alternate Payee is less than fully vested at the time of the Alternate Payee's death, the amount, if any, payable by reason of that death shall be limited to the Alternate Payee's vested interest in this Plan, the balance becoming a forfeiture on the date of that death. (2) If an event occurs that accelerates a Participant's vested Percentage to 100%, the interest of the Alternate Payee (if not theretofore at the 100% level) shall be simultaneously increased to 100%. -96- (3) Unless otherwise specifically provided in the governing QDRO, if the interest of an Alternate Payee is fully vested and not subject by its terms to any contingency (such as, by way of example, survival of the Participant by the Alternate Payee), the Alternate Payee may, at any time, apply for and receive a distribution of his/her entire interest under this Plan which shall be valued and distributed as promptly as practicable following the date on which a written application for that distribution is received by the Plan Administrator. -97- ARTICLE XV ALLOCATION AND LIMITATION OF AUTHORITY -------------------------------------- OF FIDUCIARIES AND PERSONS -------------------------- WITH MINISTERIAL DUTIES ----------------------- Sec. 15.01 Authority of the Primary Employer. The Primary Employer shall have the following (and only the following) authority under this Plan: (a) to determine all matters of Plan design, and, in connection therewith, to amend this Plan pursuant to the procedure more fully described at Section 17.01; (b) to terminate this Plan, pursuant to the procedure more fully described at Section 17.04; (c) to cause this Plan to be merged into or with any other plan(s), to cause this Plan to be consolidated with any other plan(s), and to cause the transfer from or to this Plan of assets or liabilities (where such transfers are in connection with the interests of groups of Participants, and not rollover transactions or fiduciary to fiduciary transfers of individual interests of the type commonly associated with transfers of employment from or to unrelated enterprises); (d) to determine which entities other than the Primary Employer, if any, may be included in the definition of "Employer," and the terms and conditions of such inclusion; (e) to determine when and under what circumstance another entity shall be substituted for itself as Primary Employer; (f) with such other entities as may constitute Employer, to make such contributions as this Plan may contemplate as Employer-source contributions; (g) to appoint: (1) the Plan Administrator, and to act as Plan Administrator in the absence of an appointed Plan Administrator, (2) the Trustee (or Trustees), (3) the Named Appeals Fiduciary (or Fiduciaries), (4) one or more Investment Managers, and -98- (5) such other persons as may have fiducial or ministerial roles in connection with the operation of this Plan and the management of the assets constituting the Fund; provided, however, that all such appointments shall be subject to the provisions of Section 15.05 hereof; (h) in respect of each appointment made pursuant to the authority set forth in Paragraph (g) hereof, to monitor the performance of such appointee according to any criteria determined by the Primary Employer to be relevant and appropriate, and the power to terminate any such appointment; (i) to provide such personnel and records to the Plan Administrator and each Trustee as such parties may need for the proper discharge of their respective duties under this Plan; (j) to apply for rulings from administrative and regulatory agencies with respect to this Plan, to comply with all reporting, disclosure and registration requirements imposed by law upon the Primary Employer, and to participate in any audit of Plan operations by any administrative or regulatory agency; and (k) to delegate to any person, persons or entities, temporarily or permanently, any or all of its authority and obligation under this Section. Sec. 15.02 Authority of the Plan Administrator. The Plan Administrator shall have such authority as is allocated to it pursuant to the provisions of Article XIII. The Plan Administrator shall have the right to delegate to any person, persons or entity any or all of its authority under Article XIII. Sec. 15.03 Authority of the Trustee. The Trustee shall have the authority granted to it in the Trust Agreement, with such rights of delegation, and such limitations on those rights of delegation, as are specified in the Trust Agreement (to the extent the rights of delegation, if any, provided therein are not in conflict with applicable provisions of law). Sec. 15.04 Limitations on Authority of All Fiduciaries. No Named Fiduciary shall have authority to deal with matters other than as allocated under this Plan or by operation of law, unless such authority is delegated to it by another fiduciary having under this instrument both the authority, the delegation of which is intended, and the right to delegate that authority. A Named Fiduciary shall not in any event be liable for breach of fiduciary responsibility by another fiduciary (including Named Fiduciaries) if the act or omission deemed to be a breach of fiduciary responsibility by such other fiduciary was not within the scope of the authority of the subject Named Fiduciary. -99- Sec. 15.05 Prohibition Against Certain Appointments and Delegations. (a) No person, persons or entity shall knowingly appoint any other person, persons or entity (the "prospective appointee") to serve in any role with respect to this Plan if such prospective appointee is barred from service in that role by operation of Section 411(a) of ERISA. (b) No person, persons or entity shall knowingly delegate any delegable authority under this Plan to any person, persons or entity (the "prospective delegate") if such prospective delegate is barred by operation of Section 411(a) of ERISA from the exercise of such authority, or would be barred by Section 411(a) of ERISA from appointment to the role of the party seeking to make the delegation of authority to the prospective delegate. (c) No person, persons or entity shall accept appointment to any position having authority under this Plan, nor shall any such person, persons or entity accept a delegation of such authority from another, if such appointment or delegation is barred by the provisions of this Section, or if such person, persons or entity is disabled from the exercise of such authority by operation of Section 411(a) of ERISA. (d) If, while having any direct or delegated authority under this Plan, the person, persons or entity having such authority cease to be eligible to have such authority by reason of the operation of Section 411(a) of ERISA, such person, persons or entity shall immediately notify the source of such authority of such ineligibility, shall resign the position in which service is barred, and shall cooperate in all respects to accomplish the transition of authority and responsibility to a successor. -100- ARTICLE XVI APPLICATION FOR BENEFITS AND CLAIMS PROCEDURES ---------------------------------------------- Sec. 16.01 Application for Benefits. Each Participant and/or Beneficiary and/or Alternate Payee who believes that he/she is eligible for benefits under this Plan may apply for such benefits by completing and filing with the Plan Administrator an application for benefits on a form supplied by the Plan Administrator. Before the date on which benefit payments commence, if payable, each such application must be supported by such information and data as the Plan Administrator deems relevant and appropriate. Evidence of age, marital status (and, in the appropriate instances, health, death or Total Disability), and location of residence shall be required of all applicants for benefits. Written notice of the disposition of a claim shall be furnished to the applicant within 90 days after the application for benefits is filed with the Plan Administrator, unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the final decision. Sec. 16.02 Appeals of Denied Claims for Benefits. In the event that any claim for benefits is denied in whole or in part, the Participant, Beneficiary or Alternate Payee whose claim has been so denied shall be notified of such denial in writing by the Plan Administrator. The notice advising of the denial shall specify the reason or reasons for denial, make specific reference to pertinent Plan provisions, describe any additional material or information necessary for the claimant to perfect the claim (explaining why such material or information is needed), and shall advise the claimant of the procedure for the appeal of such denial, including a statement of the claimant's right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review. All appeals shall be made by the following procedure. (a) The Participant, Beneficiary or Alternate Payee whose claim has been denied shall file with the Plan Administrator a notice of appeal. Such notice shall be filed within sixty (60) days of notification by the Plan Administrator of claim denial, shall be made in writing, and shall set forth all of the facts upon which the appeal is based. Appeals not timely filed shall be barred. (b) The Plan Administrator shall, within thirty (30) days of receipt of the claimant's notice of appeal, establish a hearing date on which the claimant (or his/her attorney or other authorized representative) may make an oral presentation to the Named Appeals Fiduciary in support of his/her appeal. The claimant (or claimant's representative) shall have the right to submit written or oral evidence and argument in support of his/her claim at such hearing. The claimant shall be given not less than ten (10) days' notice of the date set for the hearing. At the hearing (or prior thereto upon five (5) business days' written notice to the Plan Administrator), the claimant (or claimant's representative) shall have an opportunity to review all documents, records, and other information which are relevant to the claim at issue and to receive copies thereof without charge. -101- (c) The Named Appeals Fiduciary shall consider the merits of the claimant's written and oral presentations, the merits of any facts or evidence in support of the denial of benefits, and such other facts and circumstances as the Named Appeals Fiduciary shall deem relevant. If the claimant elects not to make an oral presentation, such election shall not be deemed adverse to his/her interest, and the Named Appeals Fiduciary shall proceed as set forth below as though an oral presentation of the contents of the claimant's written presentation had been made. (d) The Named Appeals Fiduciary shall render a determination within sixty (60) days of the receipt of the appeal (unless there has been an extension of no more than sixty (60) days due to special circumstances, provided that the delay and the special circumstances occasioning it are communicated to the claimant in writing within the first sixty (60) day period). That determination shall be accompanied by a written statement presented in a manner calculated to be understood by the claimant and shall include specific reasons for the determination and specific references to the pertinent Plan provisions on which the determination is based and a statement of the claimant's right to bring a civil action under Section 502(a) of ERISA. The determination so rendered shall be binding upon all parties. The Plan Administrator shall provide such access to, and copies of, documents, records and other information relevant to the claimant's claim for benefits. Sec. 16.03 Appointment of the Named Appeals Fiduciary. The Named Appeals Fiduciary shall be the person or persons named as such by the Board of the Primary Employer, or, if no such person or persons be named, then the person or persons named by the Plan Administrator as the Named Appeals Fiduciary. Named Appeals Fiduciaries may at any time be removed by the Board of the Primary Employer, and any Named Appeals Fiduciary named by the Plan Administrator may be removed by the Plan Administrator. All such removals may be with or without cause and shall be effective on the date stated in the notice of removal. The Named Appeals Fiduciary shall be a "Named Fiduciary" within the meaning of ERISA, and, unless appointed to other fiduciary responsibilities, shall have no authority, responsibility, or liability with respect to any matter other than the proper discharge of the functions of the Named Appeals Fiduciary as set forth herein. -102- ARTICLE XVII AMENDMENT AND TERMINATION ------------------------- Sec. 17.01 Amendment. This Plan may be amended at any time, and from time to time, by action of the Board (or of any delegate thereof) of the Primary Employer. Each entity constituting the Employer hereby delegates to the Board of the Primary Employer and its delegates the full authority to act in its stead and on its behalf with respect to amendment of this Plan and the instrument or instruments establishing the Trust associated with this Plan; provided, however, that: (a) no amendment shall increase the duties or liabilities of the Plan Administrator or of the Trustee without the consent of that party; (b) no amendment shall deprive any Participant or Beneficiary of any benefit which is (1) accrued as of the effective date of such amendment, or (2) which, with respect to such accrued benefit, is a condition, characteristic or feature then constituting a "protected benefit" within the meaning of Section 411(d)(6) of the Code, by applicable regulatory agency authority; and (c) no amendment shall provide for the use of funds or assets held to provide benefits under this Plan other than for the benefit of Participants and their respective Beneficiaries and Alternate Payees or to meet the administrative expenses of this Plan, except as may be specifically authorized by statute or regulation. The power to amend this Plan shall reside exclusively in the Board of the Primary Employer; except that the Board of the Primary Employer shall have the right to delegate to any fiduciary responsible under this Plan for promulgating procedures that are deemed by law or regulation to constitute a part of this Plan the authority to amend, modify, suspend, replace and revoke, at any time and in whole or in part, such procedures as the subject fiduciary has the authority to promulgate. Any action taken by a fiduciary pursuant to, and within the scope of, such delegation shall be deemed an effective amendment of the subject procedure (and thus of this Plan) to the same extent as though such action had been taken by the Board of the Primary Employer or its delegate. No amendment by a fiduciary of a procedure that constitutes a part of this Plan shall be given an effect that violates the limitations on Plan amendment imposed herein with respect to amendments adopted by the Board of the Primary Employer or its delegate. -103- Notwithstanding the foregoing, (1) any amendment necessary to initially qualify this Plan under Section 401(a) of the Code, or to qualify any specific feature of this Plan under Sections or Subsections of ERISA or the Code specifically applicable to such feature, may be made without the further approval of the Board of the Primary Employer if signed by the proper officers of the Primary Employer, and (2) amendment by an authorized fiduciary of any procedure that constitutes a part of this Plan may be made without further approval of the Board of the Primary Employer or its delegate if published by the fiduciary having the authority to make such amendment in the form of a notice, announcement or procedure, or similar communication. Sec. 17.02 Adoption by Additional Entities. This Plan may be adopted by one or more entities not previously constituting the Employer by action of the board (or corresponding governing body) of such entity; except that no such adoption shall be effective until consented to in writing by the Board of the Primary Employer. Any such adoption, the joinder of the adopting entity in the Trust, and the consent of the Board of the Primary Employer shall be evidenced by such documentation as the Plan Administrator deems appropriate. Sec. 17.03 Withdrawal from Sponsorship. Any entity constituting the Employer may withdraw from sponsorship of this Plan, but only upon the establishment of such measures as the Plan Administrator deems necessary to protect the interests of the Participants adversely affected by such withdrawal and their respective Beneficiaries, Prospective Beneficiaries and Alternate Payees. Withdrawal by an entity from Employer status shall not be construed as resulting in either a whole or partial termination of this Plan. Sec. 17.04 Plan Termination. (a) Right Reserved. While it is the Employer's intention to continue this Plan indefinitely in operation, the right is, nevertheless, reserved to completely or partially terminate this Plan. Complete or partial termination of this Plan shall result in full and immediate vesting in each affected Participant of the entire amount credited to his/her Account, and there shall not thereafter be any forfeitures with respect to any such affected Participant for any reason. Plan termination shall be effective as of the date specified by resolution of the Board of the Primary Employer, subject, however, to the provisions of Section 17.06 hereof. (b) Effect on Retired Persons, Etc. Termination of this Plan shall have no effect upon payment of installments and benefits to former Participants, their Beneficiaries, their Alternate Payees and their estates, whose benefit payments commenced prior to Plan termination. The Trustee shall retain sufficient assets to complete any such payments, and shall have the right, upon direction by the Employer, to purchase annuity contracts to assure the completion of such payments or to pay the value of the remaining payments in a single-sum distribution. -104- (c) Effect on Remaining Participants. The Primary Employer shall instruct the Trustee either (1) to continue to manage and administer the assets of the Trust Fund for the benefit of the Participants and their respective Beneficiaries and Alternate Payees pursuant to the terms and provisions of the Trust Agreement, or (2) to pay over to each Participant (and former Participant), or his/her Beneficiary or Alternate Payee (to the extent of such Alternate Payee's interest), the value of his/her vested interest, and to thereupon dissolve the Trust Fund. (d) Effect on Other Entities Constituting Employer. Termination, in whole or in part, of this Plan by an entity which is included in the term Employer shall have no effect on the continued operation of this Plan with respect to other entities constituting Employer. Sec. 17.05 Complete Discontinuance of Employer Contributions. While it is the Employer's intention to make substantial and recurring contributions to the Trust Fund pursuant to the provisions of this Plan, the right is, nevertheless, reserved to at any time completely discontinue Employer contributions. Such complete discontinuance shall be established by resolution of the Board of the Primary Employer and shall have the effect of a termination of this Plan, as set forth in Section 17.04, except that the Trustee shall not have the authority to dissolve the Trust Fund except upon adoption of a further resolution by the Board of the Primary Employer to the effect that this Plan is terminated and upon receipt from the Primary Employer of instructions to dissolve the Trust Fund pursuant to Section 17.04(c) hereof. Sec. 17.06 Suspension of Employer Contributions. The Primary Employer shall have the right at any time, and from time to time, to suspend Employer contributions to the Trust Fund pursuant to this Plan. Such suspension shall have no effect on the operation of this Plan except as set forth below: (a) If the Board of the Primary Employer determines by resolution that such suspension shall be permanent, a complete discontinuance of contributions shall be deemed to have occurred as of the date of such resolution or such earlier date as is therein specified. (b) If such suspension becomes a plan termination, a complete discontinuance of contributions shall be imputed. In such case, the complete discontinuance, with resultant full vesting for all affected Participants, shall be deemed to have occurred on the earlier of: -105- (1) the date specified by resolution of the Board of the Primary Employer or established as a matter of equity by the Plan Administrator, or (2) the last day of the first Plan Year which meets both of the following criteria: (i) no Employer contributions were made for that, or for any subsequent, Plan Year, and (ii) there existed for such Plan Year Net Income out of which Employer contributions could have been made, and the existence of such Net Income was known to the Board of the Primary Employer in time to make deductible contributions for such Plan Year. Sec. 17.07 Mergers and Consolidations of Plans. In the event of any merger or consolidation with, or transfer of assets or liabilities to, any other plan, each Participant shall have a benefit in the surviving or transferee plan (determined as if such plan were then terminated immediately after such merger, consolidation or transfer) that is equal to or greater than the benefit he/she would have been entitled to receive immediately before such merger, consolidation or transfer in this Plan in which he/she was then a Participant (had such Plan been terminated at that time). For the purposes hereof, former Participants and Beneficiaries shall be considered Participants. This provision is not intended to apply to a direct transfer constituting an Eligible Rollover Distribution. -106- ARTICLE XVIII MISCELLANEOUS PROVISIONS ------------------------ Sec. 18.01 Nonalienation of Benefits. (a) General Rule. Except as provided in Section 18.01(b), none of the payments, benefits or rights of any Participant, Beneficiary or Alternate Payee shall be subject to any claim of any creditor, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be free from attachment, garnishment, trustee's process, or any other legal or equitable process available to any creditor of such Participant, Beneficiary or Alternate Payee. Other than as provided in Section 18.01(b), no Participant, Beneficiary or Alternate Payee shall have the right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments which he/she may expect to receive, contingently or otherwise, under this Plan, except the right to designate a Prospective Beneficiary or Prospective Beneficiaries as hereinabove provided. (b) Exceptions. The following shall not be precluded by the operation of Paragraph (a) hereof: (1) compliance with the provisions and conditions of any QDRO; (2) the withholding of income taxes from distributions (whether by legal mandate or by election of the prospective distributee) and transmittal of the amounts so withheld to appropriate tax collection authorities; (3) the pledge by a borrower from this Plan (and foreclosure on the pledged amount by the lender or other holder of the borrower's debt obligation) of any portion of his/her interest in this Plan as security for the repayment of the amount borrowed, interest payable in respect thereto, and costs and expenses associated therewith; (4) any arrangement for recovery by this Plan of overpayments of benefits previously made to or for the benefit of the Participant or other person with respect to whom such arrangement applies; (5) transfer of any Eligible Rollover Distribution from this Plan to any other benefit plan qualified under Section 401(a) of the Code or to an individual retirement arrangement established under Section 408 of the Code; -107- (6) direct deposit arrangements with respect to benefits if the direct deposits authorized by such arrangement is to an account of the payee (or a joint account of the payee and his/her spouse) at a bank or other financial institution; (7) any assignment or alienation of benefits in pay status to the extent that such assignment or alienation (i) is voluntary and revocable, (ii) is not for the purpose of, nor has the effect of, defraying Plan administration costs; and (iii) does not, when combined with all other such assignments in the aggregate, exceed ten percent (10%) of any benefit payment; (8) any assignment to the Employer if (i) such assignment is revocable at any time, and (ii) the Employer files with the Plan Administrator a written acknowledgment meeting the requirements of Section ss.1.401(a)-13(e)(2) of the Income Tax Regulations (or a successor regulation of similar purpose); and (9) the enforcement of a federal tax levy made pursuant to Section 6331 of the Code or the collection by the United States on a judgment resulting from an unpaid tax assessment. Sec. 18.02 No Contract of Employment. Neither the establishment of this Plan, nor any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits shall be construed as giving any Participant or Employee, or any person, the right to be retained in the service of the Employer, and all Participants and other Employees shall remain subject to discharge to the same extent as if this Plan had never been adopted. Sec. 18.03 Severability of Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provisions had not been included. Sec. 18.04 Heirs, Assigns and Personal Representatives. This Plan shall be binding upon the heirs, executors, administrators, successors and assigns of the parties, including each Participant and Beneficiary, present and future, and all Alternate Payees for whose benefit there exists any QDRO with respect to any Participant (except that no successor to the Employer shall be considered a sponsor of this Plan unless that successor adopts this Plan). Sec. 18.05 Retention of Tax Qualified Status. While it is the intention of the Employer that this Plan be qualified within the meaning of Section 401(a) of the Code and that the cash-or-deferred arrangement contained herein be a qualified cash-or-deferred arrangement within the meaning of Section 401(k) of the Code, conduct by any fiduciary, by the Employer, by the Plan Administrator, or by any other party associated with the operation of this Plan that results in a denial of tax qualified status (or a corresponding denial to the Trust Fund or any Participant, Beneficiary or Alternate Payee of any or all of the favorable tax consequences associated with tax qualified status) or denial of qualified status to the cash-or-deferred arrangement contained herein shall not be deemed to be a breach of fiduciary duty. Neither the tax qualified status of this Plan nor the qualified status of the cash-or-deferred arrangement shall be deemed of the essence of this Plan, nor shall securing the special tax consequences associated with that status be deemed a purpose of this Plan. The tax consequences of any denial of qualified status shall not be a basis upon which either this Plan or any person having an interest therein shall be entitled to a recovery against the person or entity whose conduct is determined to have resulted in such loss of tax qualified status. -108- Sec. 18.06 Headings and Captions. The headings and captions herein are provided for reference and convenience only, shall not be considered part of this Plan, and shall not be employed in the construction of this Plan. Sec. 18.07 Gender and Number. Except where otherwise clearly indicated by context, the masculine and the neuter shall include the feminine and the neuter, the singular shall include the plural, and vice-versa. Sec. 18.08 Controlling Law. This Plan shall be construed and enforced according to the laws of the Commonwealth of Pennsylvania to the extent not preempted by Federal law, which shall otherwise control. Sec. 18.09 Funding Policy. The Plan Administrator, in consultation with the Primary Employer, shall establish and communicate to the Trustee a funding policy consistent with the objectives of this Plan and of the corresponding Trust Fund. Such policy will be in writing and shall have due regard for the emerging liquidity needs of the Fund. Such funding policy shall also state the general investment objectives of the Trust Fund and the philosophy upon which maintenance of this Plan is based. Sec. 18.10 Title to Assets. No Participant, Beneficiary or Alternate Payee shall have any right to, or interest in, any assets of the Trust Fund upon termination of his/her employment or otherwise, except as provided from time to time under this Plan, and then only to the extent of the benefits payable under this Plan to such Participant or out of the assets of the Trust Fund. All payments of benefits as provided for in this Plan shall be made from the assets of the Trust Fund, and neither the Employer nor any other person shall be liable therefore in any manner. Sec. 18.11 Payments to Minors, Etc. Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipting therefore shall be deemed paid when paid to such person's guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Trustee, the Plan Administrator, the Employer and all other parties with respect thereto. -109- Sec. 18.12 Lost Payees. A benefit shall be deemed forfeited if the Plan Administrator is unable to locate a Participant or Beneficiary to whom payment is due, provided, however, that such benefit shall be reinstated if a claim is made by the Participant, Beneficiary or Alternate Payee for the forfeited benefit. Sec. 18.13 Reliance on Data and Consents. The Employer, the Trustee, the Plan Administrator, all fiduciaries with respect to this Plan, and all other persons or entities associated with the operation of this Plan, the management of its assets, and the provision of benefits thereunder, may reasonably rely on the truth, accuracy and completeness of all data provided by the Participant and his/her Beneficiaries and Alternate Payees, including, without limitation, data with respect to age, health and marital status. Furthermore, the Employer, the Trustee, the Plan Administrator and all fiduciaries with respect to this Plan may reasonably rely on all consents, elections and designations filed with this Plan or those associated with the operation of this Plan and its corresponding Trust Fund by any Participant, the spouse of any Participant, any Beneficiary or Alternate Payee of any Participant, or the representatives of such persons without duty to inquire into the genuineness of any such consent, election or designation. None of the aforementioned persons or entities associated with the operation of this Plan, its assets and the benefits provided under this Plan shall have any duty to inquire into any such data, and all may rely on such data being current to the date of reference, it being the duty of the Participants, spouses of Participants and Beneficiaries to advise the appropriate parties of any change in such data. Sec. 18.14 USERRA. Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code. Loan repayments will be suspended under this Plan as permitted under Section 414(u)(4) of the Code. Sec. 18.15 Missing Spouses. If a Participant certifies in writing to the Plan Administrator that he/she is unable to locate his/her spouse after diligent effort to do so, and if the Plan Administrator, having written to such spouse at the address at which such spouse was last known to the Participant or to the Plan Administrator to have resided (or to the said spouse's legal representative if the Plan Administrator has been advised of the existence of such legal representative), receives no timely response that can reasonably be expected to result in the location of such spouse, the Participant shall be treated as an unmarried person for the purposes of this Plan until such time as such spouse is located and the whereabouts of such spouse are made known to the Plan Administrator. Upon the location of a formerly missing spouse, such spouse shall have rights only to the extent that this Plan so provides, and shall have no rights whatsoever with respect to amounts distributed to the Participant or any other party during the period that the location of the spouse was unknown to the Plan Administrator. -110- Sec. 18.16 Counterpart Instruments. The Plan instrument and amendments thereto may be executed in several counterparts, each of which shall be deemed an original. As to the Plan instrument and as to the instruments of amendment thereto, the counterparts of the respective instruments shall be considered a single instrument, which may be sufficiently evidenced by one counterpart. Further, each amendment to this Plan shall be deemed to have amended all counterpart Plan instruments, and if applicable, all counterparts of prior amendments. IN WITNESS WHEREOF, and as evidence of the adoption of the foregoing as an amendment and restatement of this Plan set forth herein, the Employer has caused the same to be executed by its duly authorized officers this 28th day of October, 2002. ATTEST: GENESIS HEALTH VENTURES, INC. /s/ James J. Wankmiller By: /s/ George V. Hager, Jr. - ---------------------------------- ----------------------------- Secretary Title: CFO, Executive VP Finance -------------------------- (SIGNATURE LINES CONTINUED ON NEXT PAGE) ATTEST: ELDERCARE RESOURCES CORP. f/k/a HEALTH RESOURCES OF TAZEWELL, INC. /s/ James J. Wankmiller By: /s/ George V. Hager, Jr. - ----------------------------------- ----------------------------- Secretary Title: CFO & Executive VP Finance --------------------------- ATTEST: GENESIS ELDERCARE MANAGEMENT SERVICES, INC. f/k/a BLUEFIELD MANOR, INC. /s/ James J. Wankmiller By: /s/ George V. Hager, Jr. - ----------------------------------- ----------------------------- Secretary Title: CFO & Executive VP Finance --------------------------- GENESIS PROPERTIES OF DELAWARE, LTD. PARTNERSHIP, L.P. By: /s/ George V. Hager, Jr. --------------------------------- Title: CFO & Executive VP Finance ------------------------------ ATTEST: GERIATRIC AND MEDICAL SERVICES, INC. /s/ James J. Wankmiller By: /s/ George V. Hager, Jr. - ----------------------------------- ----------------------------- Secretary Title: CFO & Executive VP Finance --------------------------- MERIDIAN/CONSTELLATION LIMITED PARTNERSHIP By: /s/ George V. Hager, Jr. --------------------------------- Title: CFO & Executive VP Finance ------------------------------ (SIGNATURE LINES CONTINUED ON NEXT PAGE) -111- ATTEST: MERIDIAN HEALTH, INC. f/k/a MI ACQUISITION CORP. /s/ James J. Wankmiller By: /s/ George V. Hager, Jr. - ----------------------------------- ----------------------------- Secretary Title: CFO & Executive VP Finance --------------------------- ATTEST: MERIDIAN HEALTHCARE, INC. f/k/a MHC ACQUISITION CORP. /s/ James J. Wankmiller By: /s/ George V. Hager, Jr. - ----------------------------------- ----------------------------- Secretary Title: CFO & Executive VP Finance --------------------------- ATTEST: NEIGHBORCARE-TCI, INC. /s/ James J. Wankmiller By: /s/ George V. Hager, Jr. - ----------------------------------- ----------------------------- Secretary Title: CFO & Executive VP Finance --------------------------- -112-
GENESIS HEALTH VENTURES, INC. ----------------------------- UNION RETIREMENT SAVINGS PLAN ----------------------------- (Restated, Effective January 1, 1997) TABLE OF CONTENTS ----------------- ARTICLE I DEFINITIONS...............................................................................1 ARTICLE II PARTICIPATION ELIGIBILITY................................................................20 ARTICLE III EMPLOYER CONTRIBUTIONS...................................................................22 ARTICLE IV TOP-HEAVY PLAN PROVISIONS................................................................33 ARTICLE V PARTICIPANT CONTRIBUTIONS AND DEFERRAL ARRANGEMENTS.............................................................................39 ARTICLE VI ALLOCATION OF CONTRIBUTIONS..............................................................53 ARTICLE VII ADMINISTRATIVE PROVISIONS................................................................59 ARTICLE VIII RETIREMENT AND DISABILITY BENEFITS.......................................................70 ARTICLE IX DEATH BENEFITS...........................................................................71 ARTICLE X VESTING PROVISIONS.......................................................................78 ARTICLE XI IN-SERVICE BENEFITS......................................................................81 ARTICLE XII FORM AND TIMING OF BENEFIT DISTRIBUTIONS................................................82 ARTICLE XIII PLAN ADMINISTRATION......................................................................92 ARTICLE XIV DOMESTIC RELATIONS ORDERS................................................................96 ARTICLE XV ALLOCATION AND LIMITATION OF AUTHORITY OF FIDUCIARIES AND PERSONS WITH MINISTERIAL DUTIES.......................................................................98 ARTICLE XVI APPLICATION FOR BENEFITS AND CLAIMS PROCEDURES..............................................................................101 ARTICLE XVII AMENDMENT AND TERMINATION...............................................................103 ARTICLE XVIII MISCELLANEOUS PROVISIONS................................................................107
A-i GENESIS HEALTH VENTURES, INC. UNION RETIREMENT SAVINGS PLAN (Restated, Effective January 1, 1997) APPENDIX "A" to Genesis Health Ventures, Inc. Union Retirement Savings Plan Additional Employers -------------------- 1. ElderCare Resources Corp. f/k/a Health Resources of Tazewell, Inc. 2. Genesis ElderCare Management Services, Inc. f/k/a Bluefield Manor, Inc. 3. Genesis Properties of Delaware, LTD. Partnership, L.P. 4. Geriatric and Medical Services, Inc. 5. Meridian/Constellation Limited Partnership 6. Meridian Health, Inc. f/k/a MI Acquisition Corp. 7. Meridian Healthcare, Inc. f/k/a MHC Acquisition Corp. 8. NeighborCare-TCI, Inc. A-1 APPENDIX "B" to Genesis Health Ventures, Inc. Union Retirement Savings Plan Past Service Credit ------------------- 1. Effective as of January 1, 2001, any individual who is an Employee and who was an employee of Ohima, Inc. or Ohi (Connecticut), Inc. immediately prior to becoming an Employee shall receive credit for hours of service performed for Ohima, Inc. or Ohi (Connecticut), Inc. for eligibility purposes only under this Plan as though such hours of service were performed for the Employer. 2. Effective as of July 1, 2000, any individual who is an Employee of ElderCare Resources Corp. or Century Care Management, Inc. shall receive credit for Periods of Service performed for ElderCare Resources Corp. or Century Care Management, Inc., as applicable, for purposes of determining Years of Eligibility Service and Years of Vesting Service under this Plan. 3. All Hours of Service for eligibility, vesting and benefit accrual credited under the Vitalink Pharmacy Services, Inc. Retirement Savings and Investment Plan shall be deemed to be Hours of Service for such purposes under this Plan. Such service shall be credited effective October 1, 1999. 4. If an Eligible Class Employee would be credited with a Year of Service for eligibility purposes under the terms of the Geri-Med 401(k) Plan for Union Employees, he/she shall be credited with such service under this Plan. B-1 APPENDIX "C" to Genesis Health Ventures, Inc. Union Retirement Savings Plan List Of Merged Plans -------------------- 1. Century Care Management, Inc. 401(k) Savings Plan (Union portion) 2. Effective as of October 1, 1999, this Plan assumed the assets and liabilities of the Vitalink Pharmacy Services, Inc. Retirement Savings and Investment Plan with regard to the account balances of those Neighborcare Pharmacy Services, Inc. employees identified as union employees. 3. Geri-Med 401(k) Plan for Union Employees. C-1 APPENDIX "D" to Genesis Health Ventures, Inc. Union Retirement Savings Plan Special Entry Dates ------------------- 1. An Eligible Class Employee of ElderCare Resources Corp. or Century Care Management, Inc. who became an employee of ElderCare Resources Corp. or Century Care Management, Inc., as applicable, on or before May 7, 2000, and who had satisfied the eligibility requirements of the Century Care Management, Inc. 401(k) Savings Plan as of that date, shall be eligible to participate and shall be admitted as a Participant on July 1, 2000, if he/she is an Eligible Class Employee on such date. An Eligible Class Employee of ElderCare Resources Corp. or Century Care Management, Inc. who became an employee of ElderCare Resources Corp. or Century Care Management, Inc., as applicable, after May 7, 2000, and on or before September 30, 2000, who had satisfied the eligibility requirements of the Century Care Management, Inc. 401(k) Savings Plan as of September 30, 2000, and whose immediately preceding employer was an entity, in which the ownership interest of The Multicare Companies, Inc. is directly or indirectly 100%, shall be eligible to participate and shall be admitted as a Participant on October 1, 2000, if he/she is an Eligible Class Employee on such date. Each other Eligible Class Employee of ElderCare Resources Corp. or Century Care Management, Inc. shall be eligible to participate in this Plan in accordance with the eligibility provisions of this Plan. The foregoing is effective July 1, 2000. 2. Effective as of October 1, 1999, any Employee who on October 1, 1999 is (1) employed by Neighborcare Pharmacy Services, Inc., (2) a participant in the Vitalink Pharmacy Services, Inc. Retirement Savings and Investement Plan, and (3) an Eligible Class Employee, shall become a Participant in this Plan on October 1, 1999. All other Neighborcare Pharmacy Services, Inc. Eligible Employees shall participate in this Plan in accordance with the eligibility provisions of this Plan. D-1 APPENDIX "E" to Genesis Health Ventures, Inc. Union Retirement Savings Plan List Of Preserved Vesting Schedules ----------------------------------- 1. A Participant's vested interest in that portion of his/her Account transferred from the Century Care Management, Inc. 401(k) Savings Plan ("Century Care Plan") into this Plan which is attributable to employer contributions shall be determined in accordance with the applicable vesting schedule(s) as set forth in the Century Care Plan as of any date of reference during which he/she is a Participant, and as of the date on which he/she experiences a Break in Service, subject however, to the provisions of Sections 10.03 and 10.04 with regard to disregarded periods of service. 2. Effective as of October 1, 1999, a Participant's interest in the portion of his/her Account attributable to amounts transferred to this Plan from the Vitalink Pharmacy Services, Inc. Retirement Savings and Investment Plan shall at all times be fully vested as of October 1, 1999. 3. Any Participant who becomes a Participant in the Plan on January 1, 1998, as a result of the merger into this Plan of the Geri-Med 401(k) Plan for Union Employees shall be fully vested in all amounts allocated to his/her accounts under the Geri-Med 401(k) Plan for Union Employees. 4. Any "Years of Service" credited to a Participant for vesting purposes, under the terms of the Geri-Med 401(k) Plan for Union Employees, shall be Years of Service for purposes of Article X. Additionally, if a Participant would be credited with a Year of Service under the terms of the Geri-Med 401(k) Plan for Union Employees, for the period beginning on July 1, 1997 and ending on June 30, 1998, he/she shall be credited with a Year of Service for purposes of Article X. E-1 EX-99 7 ex99-4.txt EXHIBIT 99-4 Exhibit 99.4 GENESIS HEALTH VENTURES, INC. UNION RETIREMENT SAVINGS PLAN (Restated, Effective January 1, 1997) AMENDMENT NO. 1 (EGTRRA) Genesis Health Ventures, Inc., a Pennsylvania corporation (the "Employer"), hereby adopts this amendment to the Genesis Health Ventures, Inc. Union Retirement Savings Plan ("Plan"). This amendment is adopted pursuant to Section 17.01 of the Plan. 1. Section 1.14 of the Plan is hereby amended by adding the following Paragraph (f) to the end thereof: "(f) Increase in Compensation Limit. Notwithstanding any provision of this Plan to the contrary, the annual compensation of each Participant taken into account in determining allocations for any Plan Year beginning after December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with Section 401(a)(17)(B) of the Code. Annual compensation means Compensation during the Plan Year or such other consecutive 12-month period over which Compensation is otherwise determined under this Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year." 2. Section 3.07(d) of the Plan is hereby amended by adding the following to the end thereof: "The multiple use test described in Treasury Regulation Section 1.401(m)-2 and in this Section shall not apply for Plan Years beginning after December 31, 2001." 3. Article IV of the Plan is hereby amended by adding the following Sections to the end thereof: "Section 4.06 Modification of Top-Heavy Rules. (a) Effective Date. This Section shall apply for purposes of determining whether this Plan is a top-heavy plan under Section 416(g) of the Code for Plan Years beginning after December 31, 2001, and whether this Plan satisfies the minimum benefits requirements of Section 416(c) of the Code for such years. (b) Determination of Top-Heavy Status. (1) Key Employee. Key Employee means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the Determination Date was an officer of the Employer having annual compensation greater than $130,000 (as adjusted under Section 416(i)(1) of the Code for Plan Years beginning after December 31, 2002), a 5-percent owner of the Employer, or a one percent owner of the Employer having annual compensation of more than $150,000. For this purpose, annual compensation means compensation within the meaning of Section 415(c)(3) of the Code. The determination of who is a Key Employee will be made in accordance with Section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder. (2) Determination of Present Values and Amounts. This Paragraph (b)(2) shall apply for purposes of determining the present values of accrued benefits and the amounts of Account balances of Employees as of the Determination Date. (i) Distributions During Year Ending on the Determination Date. The present values of accrued benefits and the amounts of Account balances of an Employee as of the Determination Date shall be increased by the distributions made with respect to the Employee under this Plan and any plan aggregated with this Plan under Section 416(g)(2) of the Code during the 1-year period ending on the Determination Date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with this Plan under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting "five-year period" for "one-year period." 2 (ii) Employees Not Performing Services During Year Ending on the Determination Date. The accrued benefits and Accounts of any individual who has not performed services for the Employer during the 1-year period ending on the Determination Date shall not be taken into account. (3) Minimum Benefits/Matching Contributions. Employer matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Section 416(c)(2) of the Code and this Plan. The preceding sentence shall apply with respect to matching contributions under this Plan or, if this Plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Section 401(m) of the Code. Section 4.07 Additional Modification of Top-Heavy Rules. The top-heavy requirements of Section 416 of the Code and Article IV of this Plan shall not apply in any year beginning after December 31, 2001, in which this Plan consists solely of a cash or deferred arrangement which meets the requirements of section 401(k)(12) of the Code and matching contributions with respect to which the requirements of section 401(m)(11) of the Code are met." 4. Section 5.03(a) of the Plan is hereby amended by adding the following unnumbered paragraph to the end thereof: "Effective for Plan Years beginning on and after January 1, 2002, each Participant who is eligible to make a Deferral Amount under this Plan and who has attained Age 50 before the close of the Plan Year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, Section 414(v) of the Code. Such catch-up contributions shall not be taken into account for purposes of the provisions of this Plan implementing the required limitations of Sections 402(g) and 415 of the Code. This Plan shall not be treated as failing to satisfy the provisions of this Plan implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the making of such catch-up contributions." 3 5. Section 5.03(d) of the Plan is hereby amended by adding the following unnumbered paragraph to the end thereof: "No Participant shall be permitted to have Deferral Amounts made under this Plan, or any other qualified plan maintained by the Employer during any taxable year, in excess of the dollar limitation contained in Section 402(g) of the Code in effect for such taxable year, except to the extent permitted under Section 5.03(a) and Section 414(v) of the Code, if applicable." 6. Section 5.05(a) of this Plan is hereby amended by adding the following paragraph to the end thereof: "Effective with regard to distributions and severances from employment occurring on and after January 1, 2002, notwithstanding the `separation from service' requirements set forth in Section 5.05(a)(1) to the contrary, a Participant's Deferral Amounts, qualified non-elective contributions, and qualified matching contributions shall be distributed on account of the Participant's severance from employment. However, such a distribution shall be subject to the other provisions of this Plan regarding distributions, other than provisions that require a separation from service before such amounts may be distributed." 7. Article V of the Plan is hereby amended by adding the following Section to the end thereof: "Section 5.08 Rollovers from Other Plans. To the extent permitted by the Plan Administrator, this Plan will accept rollover contributions and/or direct rollovers of distributions made after December 31, 2001 by a Participant, from the types of plans specified below, beginning on the effective date specified below. Direct Rollovers: This Plan will accept a direct rollover of an Eligible Rollover Distribution from: (1) a qualified plan described in Section 401(a) or 403(a) of the Code, excluding after-tax employee contributions; (2) an annuity contract described in Section 403(b) of the Code, excluding after-tax employee contributions; and (3) an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state. 4 Participant Rollover Contributions from Other Plans: This Plan will accept a Participant contribution of an Eligible Rollover Distribution from: (1) a qualified plan described in Section 401(a) or 403(a) of the Code; (2) an annuity contract described in Section 403(b) of the Code; and (3) an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state. Participant Rollover Contributions from IRAs: This Plan will accept a Participant rollover contribution of the portion of a distribution from an individual retirement account or annuity described in Section 408(a) or 408(b) of the Code that is eligible to be rolled over and would otherwise be includible in gross income." 8. Section 6.03(a) of the Plan is hereby amended by adding the following unnumbered paragraph to the end thereof: "Except to the extent permitted under Section 4 of this amendment and Section 414(v) of the Code, if applicable, the Annual Addition that may be contributed or allocated to a Participant's Account under this Plan for any Limitation Year beginning after December 31, 2001 shall not exceed the lesser of: (i) $40,000, as adjusted for increases in the cost-of-living under Section 415(d) of the Code, or (ii) 100 percent of the Participant's compensation, within the meaning of Section 415(c)(3) of the Code, for the Limitation Year. The compensation limit referred to in (ii) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as an Annual Addition." 9. Section 7.07(a) of the Plan is hereby amended by adding the following to the end thereof: "Effective for Plan loans made after December 31, 2001, the Plan provisions prohibiting loans to any owner-employee or shareholder-employee shall cease to apply." 5 10. Section 12.04 (c) (2) of the Plan is hereby amended by adding the following to the end thereof: "Effective on and after January 1, 2002, for purposes of this subparagraph, the value of a Participant's nonforfeitable Account balance shall be determined without regard to that portion of the Account balance that is attributable to rollover contributions (and earnings allocable thereto) within the meaning of Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code." 11. Article XII of the Plan is hereby amended by adding the following Section to the end thereof: "Section 12.11 Direct Rollovers of Plan Distributions. (a) Effective Date. This Section shall apply to distributions made after December 31, 2001. (b) Modification of Definition of Eligible Retirement Plan. For purposes of the direct rollover provisions in Section 12.05 of this Plan, an Eligible Retirement Plan shall also mean an annuity contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. The definition of Eligible Retirement Plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the Alternate Payee under a qualified domestic relation order, as defined in Section 414(p) of the Code. (c) Modification of Definition of Eligible Rollover Distribution to Exclude Hardship Distributions. For purposes of the direct rollover provisions in Section 12.05 of this Plan, any amount that is distributed on account of hardship shall not be an Eligible Rollover Distribution and the distributee may not elect to have any portion of such a distribution paid directly to an Eligible Retirement Plan. (d) Modification of Definition of Eligible Rollover Distribution to Include After-tax Employee Contributions. For purposes of the direct rollover provisions in Section 12.05 of this Plan, a portion of a distribution shall not fail to be an Eligible Rollover Distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code, or to a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible." 6 12. Article XII of the Plan is hereby amended by adding the following Section to the end thereof: "Section 12.12 Minimum Distribution Requirements (Section 401(a)(9) Final and Temporary Regulations (2002)). (a) General Rules. (1) Effective Date. The provisions of this Section shall apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year as well as required minimum distributions for the 2002 distribution calendar year that are made on or after the date of this Amendment. The provisions of this Section shall not be construed as establishing an optional form of benefit or require the purchase of an annuity if such form is not otherwise provided under the terms of this Plan. (2) Coordination with Minimum Distribution Requirements Previously in Effect. If Paragraph (a)(1) specifies an effective date of this Section that is earlier than calendar years beginning with the 2003 calendar year, required minimum distributions for 2002 under this Section will be determined as follows. If the total amount of 2002 required minimum distributions under this Plan made to the distributee prior to the effective date of Paragraph (a)(1) equals or exceeds the required minimum distributions determined under this Section, then no additional distributions will be required to be made for 2002 on or after such date to the distributee. If the total amount of 2002 required minimum distributions under this Plan made to the distributee prior to the effective date of this Section is less than the amount determined under this Section, then required minimum distributions for 2002 on and after such date will be determined so that the total amount of required minimum distribution for 2002 made to the distributee will be the amount determined under this Section. (3) Precedence. The requirements of this Section shall take precedence over any inconsistent provisions of this Plan. 7 (4) Requirements of Treasury Regulations Incorporated. All distributions required under this Section shall be determined and made in accordance with the Treasury regulations under Section 401(a)(9) of the Code. (5) TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Section, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of this Plan that relate to Section 242(b)(2) of TEFRA. (b) Time and Manner of Distribution. (1) Required Beginning Date. A Participant's entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant's Required Beginning Date. (2) Death of Participant Before Distributions Begin. If a Participant dies before distributions begin, the Participant's entire interest will be distributed, or begin to be distributed, no later than as follows: (i) If the Participant's surviving Spouse is the Participant's sole designated beneficiary, then, distributions to the surviving Spouse shall begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 1/2, if later. (ii) If the Participant's surviving Spouse is not the Participant's sole designated beneficiary, distributions to the designated beneficiary shall begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. (iii) If there is no designated beneficiary as of September 30 of the year following the year of the Participant's death, the Participant's entire interest shall be distributed by December 31 of the calendar year containing the fifth (5th) anniversary of the Participant's death. (iv) If the Participant's surviving Spouse is the Participant's sole designated beneficiary and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse begin, this Subparagraph (b)(2), other than Subparagraph (b)(2)(i), shall apply as if the surviving Spouse were the Participant. 8 (v) The provisions of Subparagraphs (b)(2) (i), (ii) and (iv) shall apply if the provisions of this Plan (or the optional form of benefit provisions of a transferor plan that are required to be preserved in this Plan) provide that if a Participant dies before distributions begin, the Participant's entire interest may be distributed over any such periods; however, in such event, (1) a beneficiary may elect on an individual basis whether the 5-year rule or the life expectancy rule applies to distributions after the death of a Participant who has a designated beneficiary. The election must be made no later than the earlier of September 30 of the calendar year in which distribution would be required to begin under the life expectancy rule, or by September 30 of the calendar year which contains the fifth (5th) anniversary of the Participant's (or if applicable, surviving Spouse's) death. If the beneficiary does not make an election under this provision, distributions will be made in accordance with the life expectancy rule; and (2) a designated beneficiary who is receiving payments under the 5-year rule may make a new election to receive payments under the life expectancy rule until December 31, 2003, provided that all amounts that would have been required to be distributed under the life expectancy rule for all distribution calendar years before 2004 are distributed by the earlier of December 31, 2003 or the end of the 5-year period. If the provisions of Subparagraphs (b)(2)(i), (ii) and (iv) do not apply, a Participant who dies before distributions begin shall have his/her entire interest be distributed to the designated beneficiary by December 31 of the calendar year containing the fifth (5th) anniversary of the Participant's death. If the Participant's surviving Spouse is the Participant's sole designated beneficiary and the surviving Spouse dies after the Participant but before distributions to either the Participant or the surviving Spouse begin, this Section shall apply as if the surviving Spouse were the Participant. For purposes of this Subparagraph (b)(2) and Paragraph (d), unless Subparagraph (b)(2)(iv) applies, distributions are considered to begin on the Participant's Required Beginning Date. If Subparagraph (b)(2)(iv) applies, distributions are considered to begin on the date distributions are required to begin to the surviving Spouse under Subparagraph (b)(2)(i). If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant's Required Beginning Date (or to the Participant's surviving Spouse before the date distributions are required to begin to the surviving Spouse under Subparagraph (b)(2)(i)), the date distributions are considered to begin is the date distributions actually commence." 9 (3) Forms of Distribution. Unless a Participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first distribution calendar year distributions shall be made in accordance with Paragraphs (c) and (d) of this Section. If the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Section 401(a)(9) of the Code and the Treasury regulations. (c) Required Minimum Distributions During Participant's Lifetime. (1) Amount of Required Minimum Distribution for Each Distribution Calendar Year. If this Plan provides for a form of benefit other than a single-sum distribution (or is required to provide such other form of benefit as a result of a transfer of assets to this Plan), during a Participant's lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of: (i) The quotient obtained by dividing the Participant's account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Participant's age as of the Participant's birthday in the distributions calendar year; or (ii) If the Participant's sole designated beneficiary for the distribution calendar year is the Participant's Spouse, the quotient obtained by dividing the Participant's account balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in the distributions calendar year. (2) Lifetime Required Minimum Distributions Continue Through Year of Participant's Death. Required minimum distributions shall be determined under this Paragraph (c) beginning with the first distributions calendar year and up to and including the distributions calendar year that includes the Participant's date of death. (d) Required Minimum Distributions After Participant's Death. (1) Death On or After Date Distributions Begin. (i) Participant Survived by Designated Beneficiary. If a Participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant's designated beneficiary, determined as follows: 10 (A) The Participant's remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. (B) If the Participant's surviving Spouse is the Participant's sole designated beneficiary, the remaining life expectancy of the surviving Spouse is calculated for each distribution calendar year after the year of the Participant's death using the surviving Spouse's age as of the Spouse's birthday in that year. For distribution calendar years after the year of the surviving Spouse's death, the remaining life expectancy of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse's birthday in the calendar year of the Spouse's death, reduced by one for each subsequent calendar year. (C) If the Participant's surviving Spouse is not the Participant's sole designated beneficiary, the designated beneficiary's remaining life expectancy is calculated using the age of the beneficiary in the year following the year of the Participant's death, reduced by one for each subsequent year. (ii) No Designated Beneficiary. If a Participant dies on or after the date distributions begin and there is no designated beneficiary as of September 30 of the year after the year of the Participant's death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the Participant's remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. (2) Death Before Date Distributions Begin. (i) Participant Survived by Designated Beneficiary. If a Participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the remaining life expectancy of the Participant's designated beneficiary, determined as provided in Paragraph (d)(1). 11 (ii) No Designated Beneficiary. If a Participant dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth (5th) anniversary of the Participant's death. (iii) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If a Participant dies before the date distributions begin, the Participant's surviving Spouse is the Participant's sole designated beneficiary, and the surviving Spouse dies before distributions are required to begin to the surviving Spouse under Subparagraph (b)(2)(i), this Paragraph (d)(2) will apply as if the surviving Spouse were the Participant. (iv) Applicability of Life-Expectancy Rule. The provisions of Subparagraphs (d)(2)(i) and (iii) shall apply if the provisions of this Plan (or the optional form of benefit provisions of a transferor plan that are required to be preserved in this Plan) provide that if a Participant dies before distributions begin, the Participant's interest may be distributed using the life expectancy rule. If the provisions of Subparagraphs (d)(2) (i) and (iii) do not apply, the Participant's interest must be distributed using the five-year rule. (e) Definitions. (1) Designated Beneficiary. The individual who is designated as the Beneficiary under Article I of this Plan and is the designated beneficiary under Section 401(a)(9) of the Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations. (2) Distribution Calendar Year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant's Required Beginning Date. For distributions beginning after the Participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin under Paragraph (b)(2). The required minimum distribution for the Participant's first distribution calendar year will be made on or before the Participant's Required Beginning Date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participant's Required Beginning Date occurs, will be made on or before December 31 of that distribution calendar year. 12 (3) Life Expectancy. Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations. (4) Participant's Account Balance. The account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year. (5) Required Beginning Date. The date specified in Article I of this Plan." 13. This Amendment of the Plan is adopted to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). This amendment is intended as good faith compliance with the requirements of EGTRRA and is to be construed in accordance with EGTRRA and guidance issued thereunder. Except as otherwise provided, this Amendment shall be effective as of the first day of the Plan Year beginning after December 31, 2001. 14. This Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this amendment. IN WITNESS WHEREOF, and as evidence of the adoption of this Amendment, the Employer has caused the same to be executed and attested by its duly authorized officers this 28th day of October, 2002. ATTEST: GENESIS HEALTH VENTURES, INC. /s/ James J. Wankmiller By: /s/ George V. Hager, Jr. - ----------------------------------- ----------------------------- Secretary Title: CFO & Executive VP Finance --------------------------- -----END PRIVACY-ENHANCED MESSAGE-----