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RENT-A-CENTER, INC. 401(k) RETIREMENT SAVINGS PLAN As Amended and Restated Generally Effective as of January 1, 2007

Employee Benefits Plan Agreement

RENT-A-CENTER, INC. 401(k) RETIREMENT SAVINGS PLAN As Amended and Restated Generally Effective as of January 1, 2007 | Document Parties: RENT A CENTER INC DE You are currently viewing:
This Employee Benefits Plan Agreement involves

RENT A CENTER INC DE

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Title: RENT-A-CENTER, INC. 401(k) RETIREMENT SAVINGS PLAN As Amended and Restated Generally Effective as of January 1, 2007
Governing Law: Texas     Date: 2/27/2009
Industry: Rental and Leasing     Sector: Services

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Exhibit 10.30

RENT-A-CENTER, INC.
401(k) RETIREMENT SAVINGS PLAN

As Amended and Restated
Generally Effective as of January 1, 2007

 


 

RENT-A-CENTER, INC.
401(k) RETIREMENT SAVINGS PLAN

TABLE OF CONTENTS

 

 

 

 

 

 

 

Page

 

ARTICLE I DEFINITIONS

 

 

2

 

 

 

 

 

 

ARTICLE II ELIGIBILITY

 

 

15

 

2.1 Initial Eligibility Requirements

 

 

15

 

2.2 Treatment of Interruptions of Service

 

 

16

 

2.3 Change in Status

 

 

17

 

 

 

 

 

 

ARTICLE III CONTRIBUTIONS

 

 

17

 

3.1 Pre-Tax Contributions

 

 

17

 

3.2 Matching Contributions

 

 

19

 

3.3 Profit Sharing Contributions

 

 

19

 

3.4 Discretionary Contributions

 

 

19

 

3.5 Form of Contributions

 

 

20

 

3.6 Timing of Contributions

 

 

20

 

3.7 Contingent Nature of Company Contributions

 

 

20

 

3.8 Restoration Contributions

 

 

21

 

3.9 USERRA Compliance

 

 

21

 

3.10 Catch-up Contributions

 

 

21

 

 

 

 

 

 

ARTICLE IV ROLLOVERS AND TRANSFERS BETWEEN PLANS

 

 

22

 

4.1 Rollover Contributions

 

 

22

 

4.2 Transfer Contributions

 

 

23

 

4.3 Spin-offs to Other Plans

 

 

23

 

 

 

 

 

 

ARTICLE V PARTICIPANTS’ ACCOUNTS: CREDITING AND ALLOCATIONS

 

 

24

 

5.1 Establishment of Participants’ Account

 

 

24

 

5.2 Allocation and Crediting of Pre-Tax, Matching, Profit Sharing, Rollover and Transfer Contributions

 

 

24

 

5.3 Allocation and Crediting of Discretionary Contributions

 

 

24

 

5.4 Crediting of Restoration Contributions

 

 

25

 

5.5 Allocation of Forfeitures

 

 

25

 

5.6 Allocation and Crediting of Investment Experience

 

 

25

 

5.7 Notice to Participants of Account Balances

 

 

26

 

5.8 Good Faith Valuation Binding

 

 

26

 

5.9 Errors and Omissions in Accounts

 

 

26

 

 

 

 

 

 

ARTICLE VI CONTRIBUTION AND SECTION 415 LIMITATIONS AND NONDISCRIMINATION REQUIREMENTS

 

 

27

 

6.1 Deductibility Limitations

 

 

27

 

6.2 Maximum Limitation on Elective Deferrals

 

 

27

 

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Page

 

6.3 Nondiscrimination Requirements for Pre-Tax Contributions

 

 

28

 

6.4 Nondiscrimination Requirements for Matching Contributions

 

 

30

 

6.5 Order of Application

 

 

33

 

6.6 Code Section 415 Limitations on Maximum Contributions

 

 

33

 

6.7 Construction of Limitations and Requirements

 

 

35

 

 

 

 

 

 

ARTICLE VII INVESTMENTS

 

 

36

 

7.1 Establishment of Trust Account

 

 

36

 

7.2 Investment Fund

 

 

36

 

7.3 Participant Direction of Investments

 

 

36

 

7.4 Valuation

 

 

38

 

7.5 Voting and Tender Offer Rights

 

 

39

 

7.6 Fiduciary Responsibilities for Investment Directions

 

 

41

 

7.7 Appointment of Investment Manager; Authorization to Invest in Collective Trust

 

 

41

 

7.8 Purchase of Life Insurance

 

 

42

 

7.9 Transition Rule

 

 

42

 

7.10 Effective Date of Employer Stock Fund Amendments

 

 

42

 

 

 

 

 

 

ARTICLE VIII VESTING IN ACCOUNTS

 

 

42

 

8.1 General Vesting Rule

 

 

42

 

8.2 Vesting Upon Attainment of Normal Retirement Age, Death or Disability

 

 

43

 

8.3 Timing of Forfeitures and Vesting after Restoration Contribution

 

 

43

 

8.4 Vesting after Delayed or In-Service Distribution

 

 

44

 

8.5 Amendment to Vesting Schedule

 

 

44

 

 

 

 

 

 

ARTICLE IX PAYMENT OF BENEFITS FROM ACCOUNTS

 

 

45

 

9.1 Benefits Payable Upon Separation From Service for Reasons Other Than Death

 

 

45

 

9.2 Death Benefits

 

 

47

 

9.3 Forms of Distribution

 

 

48

 

9.4 Cash-Out Payment of Benefit

 

 

48

 

9.5 Qualified Domestic Relations Orders

 

 

49

 

9.6 Beneficiary Designation

 

 

49

 

9.7 Claims and Appeal Procedures

 

 

50

 

9.8 Explanation of Rollover Distributions

 

 

50

 

9.9 Unclaimed Benefits

 

 

51

 

9.10 Transition Rule

 

 

51

 

9.11 Distribution Upon Severance from Employment

 

 

51

 

9.12 Minimum Distribution Requirements

 

 

51

 

 

 

 

 

 

ARTICLE X WITHDRAWALS AND LOANS

 

 

56

 

10.1 Hardship Withdrawals

 

 

56

 

10.2 Age 59 1 / 2 Withdrawals

 

 

57

 

10.3 Rollover Account and After-Tax Account Withdrawals

 

 

57

 

10.4 Source of Withdrawal Amounts

 

 

57

 

10.5 Election to Withdraw

 

 

57

 

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Page

 

10.6 Payment of Withdrawal

 

 

57

 

10.7 Loans to Participants

 

 

58

 

10.8 Transition Rule

 

 

58

 

 

 

 

 

 

ARTICLE XI ADMINISTRATION

 

 

58

 

11.1 Plan Administrator

 

 

58

 

11.2 Powers and Responsibility

 

 

58

 

11.3 Reporting and Disclosure

 

 

59

 

11.4 Construction of the Plan

 

 

59

 

11.5 Assistants and Advisors

 

 

59

 

11.6 Investment Authority

 

 

60

 

11.7 Direction of Trustee

 

 

60

 

11.8 Bonding

 

 

60

 

11.9 Indemnification

 

 

60

 

 

 

 

 

 

ARTICLE XII ALLOCATION OF AUTHORITY AND RESPONSIBILITIES

 

 

61

 

12.1 Controlling Company and Board

 

 

61

 

12.2 Trustee

 

 

61

 

12.3 Limitations on Obligations of Fiduciaries

 

 

61

 

12.4 Delegation

 

 

61

 

12.5 Multiple Fiduciary Role

 

 

62

 

 

 

 

 

 

ARTICLE XIII AMENDMENT, TERMINATION AND ADOPTION

 

 

62

 

13.1 Amendment

 

 

62

 

13.2 Termination

 

 

62

 

13.3 Adoption of the Plan by a Participating Company

 

 

63

 

13.4 Merger, Consolidation and Transfer of Assets or Liabilities

 

 

64

 

 

 

 

 

 

ARTICLE XIV TOP-HEAVY PROVISIONS

 

 

65

 

14.1 Top-Heavy Plan Years

 

 

65

 

14.2 Determination of Top-Heavy Status

 

 

65

 

14.3 Top-Heavy Minimum Contribution

 

 

68

 

14.4 Top-Heavy Minimum Vesting

 

 

69

 

14.5 Construction of Limitations and Requirements

 

 

69

 

 

 

 

 

 

ARTICLE XV MISCELLANEOUS

 

 

70

 

15.1 Nonalienation of Benefits and Spendthrift Clause

 

 

70

 

15.2 Headings

 

 

71

 

15.3 Construction, Controlling Law

 

 

71

 

15.4 No Contract of Employment

 

 

71

 

15.5 Legally Incompetent

 

 

71

 

15.6 Heirs, Assigns and Personal Representatives

 

 

71

 

15.7 Title to Assets, Benefits Supported Only By Trust Fund

 

 

71

 

15.8 Legal Action

 

 

72

 

15.9 Severability

 

 

72

 

15.10 Exclusive Benefit: Refund of Contributions

 

 

72

 

15.11 Predecessor Service

 

 

73

 

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Page

 

15.12 Plan Expenses

 

 

73

 

15.13 Residents of Puerto Rico

 

 

73

 

iv


 

RENT-A-CENTER, INC.
401(k) RETIREMENT SAVINGS PLAN

     Rent-A-Center, Inc., a holding company duly organized and existing under the laws of the State of Delaware (the “Controlling Company”), hereby amends and restates the Rent-A-Center, Inc. 401(k) Retirement Savings Plan (the “Plan”) generally effective as of January 1, 2007.

STATEMENT OF PURPOSE

     A. The Plan initially was adopted effective as of October 1, 1997 under the name Renters Choice, Inc. 401(k) Retirement Savings Plan. Effective January 1, 1999, the Thorn Americas 401(k) Savings Plan was merged into the Plan, and, in connection with such merger, the Plan was amended and restated and its name was changed to the Rent-A-Center, Inc. 401(k) Retirement Savings Plan.

     B. The Plan has been amended from time-to-time since the 1999 restatement, including amendment and restatements effective January 1, 2001 and January 1, 2003 and subsequent amendments.

     C. The Plan is hereby amended and restated effective January 1, 2007 (the “Effective Date”) (except where otherwise specifically provided) to incorporate the provisions of Amendments No. One and Two to the Plan; except to the extent that the failure to retroactively make any provisions effective prior to the Effective Date would result in the Plan (as it existed prior to the Effective Date) containing a disqualifying provision, as defined in Treasury Regulations Section 1.401(b)-1 (as modified by any Treasury guidance), or an operational defect, as defined in Revenue Procedure 2006-27, in which case such provision (and any definitions pertinent to the application of such provision) will be retroactively effective to the date which will result in no such disqualifying provision or operational defect in the Plan prior to the Effective Date. The Plan, as set forth in this document, is intended and should be construed as a restatement and continuation of the Plan as previously in effect, as so amended.

     D. The purpose of the Plan is to provide certain benefits for the Employers’ Eligible Employees and their Beneficiaries. It is the intention of the Controlling Company that the Plan meet all of the requirements necessary or appropriate to qualify it as a 401(k) profit sharing plan under Code Sections 401(a) and 401(k) and that the Trust made a part hereof be exempt from tax under Code Section 501(a), and all provisions hereof shall be interpreted accordingly.

STATEMENT OF AGREEMENT

     To amend and restate the Plan with the purposes and goals as herein above described, the Controlling Company hereby sets forth the terms and provisions of the Plan as follows:

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ARTICLE I

DEFINITIONS

     For purposes of the Plan, the following terms, when initially capitalized, shall have the meanings set forth below, unless a different meaning plainly is required by the context.

     1.1 Account shall mean, with respect to a Participant or Beneficiary, the amount of money or other property in the Trust Fund, as is evidenced by the last balance posted in accordance with the terms of the Plan to the account record established for such Participant or Beneficiary. The Plan Administrator, as required by the terms of the Plan and otherwise as it deems necessary or desirable in its sole discretion, may establish and maintain separate subaccounts for each Participant and Beneficiary, provided allocations are made to such subaccounts in the manner described in Article V of the Plan. “Account” shall refer to the aggregate of all separate subaccounts or to individual, separate subaccounts, as the appropriate context requires.

     1.2 ACP or Average Contribution Percentage shall mean, with respect to a specified group of Participants for a Plan Year, the average of the ratios (calculated separately for each Participant in such group and rounded to the nearest 1/100th of a percent) of (i) the total of the amount of Matching Contributions and, to the extent designated by the Plan Administrator, the other elective and/or qualified nonelective contributions (excluding Pre-Tax, other elective and/or qualified nonelective contributions counted for purposes of Section 6.3 and any Contributions returned to a Participant or otherwise removed from his Account to correct excess Annual Additions) actually paid to the Trustee on behalf of each such Participant for a specified Plan Year, to (ii) such Participant’s Compensation for such specified Plan Year. If a Highly Compensated Employee participates in the Plan and in one or more other plans of any Affiliates to which matching or after-tax contributions are made (other than a plan for which aggregation with the Plan is not permitted), the matching and after-tax contributions made with respect to such Highly Compensated Employee shall be aggregated for purposes of determining his ACP. The ACP shall be rounded to the nearest 1/100th of a percent and shall be calculated in a manner consistent with the terms of Code section 401(m) and the regulations promulgated thereunder. If a Participant is eligible to participate in the Plan for all or a portion of a Plan Year by reason of satisfying the eligibility requirements of Article II but makes no Pre-Tax Contributions which are taken into account (as described above) for purposes of calculating his ACP, and if he receives no allocations of Matching Contributions or qualified nonelective contributions which are taken into account (as described above) for purposes of calculating his ACP, such Participant’s ACP for such Plan Year shall be zero.

     1.3 ACP Tests shall mean the nondiscrimination tests described in Section 6.4.

     1.4 Active Participants shall mean, for any Plan Year (or any portion thereof), any Covered Employee who, pursuant to the terms of Article II, has been admitted to, and not removed from, active participation in the Plan since the last date his employment commenced or recommenced.

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     1.5 ADP or Actual Deferral Percentage shall mean, with respect to a specified group of Participants for a Plan Year, the average of the ratios (calculated separately for each Participant in such group and rounded to the nearest 1/100th of a percent) of (i) the total of the amount of Pre-Tax Contributions and Discretionary Contributions (excluding Pre-Tax Contributions and Discretionary Contributions, if any, designated by the Plan Administrator to be taken into account under Section 6.4 to help satisfy the ACP Tests, or removed from a Participant’s Account to correct excess Annual Additions) and, to the extent designated under Section 6.3(b) by the Plan Administrator, other elective and/or qualified nonelective contributions (excluding qualified nonelective contributions counted for purposes of Section 6.4(c)) made on behalf of each such Participant for a specified Plan Year, to (ii) such Participant’s Compensation for such specified Plan Year. If a Highly Compensated Employee participates in the Plan and one or more plans of any Affiliates to which pre-tax contributions are made (other than a plan for which aggregation with the Plan is not permitted), the pre-tax contributions made with respect to such Highly Compensated Employee shall be aggregated for purposes of determining his ADP. The ADP shall be rounded to the nearest 1/100th of a percent and shall be calculated in a manner consistent with the terms of Code section 401(k) and the regulations promulgated thereunder. If a Participant is eligible to participate in the Plan for all or a portion of a Plan Year by reason of satisfying the eligibility requirements of Article II but makes no Pre-Tax Contributions and receives no allocation of qualified nonelective contributions that are taken into account for purposes of the ADP Tests, such Participant’s ADP for such Plan Year shall be zero percent.

     1.6 ADP Tests shall mean the nondiscrimination tests described in Section 6.3.

     1.7 Affiliate shall mean (i) a Participating Company, and (ii) any company, person or organization which, on such date (A) is a member of the same controlled group of corporations (within the meaning of Code section 414(b)) as is a Participating Company; (B) is a trade or business (whether or not incorporated) which controls, is controlled by or is under common control (within the meaning of Code section 414(c)) with a Participating Company; (C) is a member of an affiliated service group (as defined in Code section 414(m)) which includes a Participating Company; or (D) is required to be aggregated with a Participating Company pursuant to regulations promulgated under Code section 414(o); provided, solely for purposes of Section 6.6, the term “Affiliate” as defined in this Section shall be deemed to include any corporation that would be an Affiliate if the phrase “more than 50 percent” were substituted for the phrase “at least 80 percent” in each place the latter phrase appears in Code section 1563(a)(1).

     1.8 After-Tax Account shall mean the separate subaccount established and maintained on behalf of a Participant or Beneficiary to reflect his interest in the Trust Fund attributable to after-tax contributions made to the Thorn Americas Plan prior to January 1, 1998.

     1.9 Annual Addition shall mean the sum of the amounts described in Section 6.6(c)(1).

     1.10 Beneficiary shall mean the person(s) designated in accordance with Section 9.6, to receive any death benefits that may be payable under the Plan upon the death of a Participant.

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     1.11 Benefit Commencement Date shall mean, with respect to a Participant or Beneficiary, the first day of the first period for which payment of his benefit under the Plan is scheduled to commence, either as a result of his written election or by operation of the Plan.

     1.12 Board shall mean the board of directors of the Controlling Company. A reference to the board of directors of any other Participating Company shall specify it as such.

     1.13 Break in Service shall mean, with respect to periods of severance of an Employee beginning on and after January 1, 1999, a period of 12 consecutive months beginning on a post-1998 Severance Date or a post-1998 anniversary of such date, during which such Employee does not complete an Hour of Service. For purposes of determining whether or not the Employee has incurred a Break in Service, and solely for the purpose of avoiding a Break in Service, an Employee absent from work due to a Maternity or Paternity Leave shall not have a Break in Service until the second anniversary of the first day of such absence from employment, provided that the period between the first and second anniversary of such first day of absence is not a period of service for any other purpose.

     For the purpose of determining whether or not an Employee has incurred a Break in Service, and solely for the purpose of avoiding a Break in Service, to the extent required under the Family and Medical Leave Act of 1993 and the regulations thereunder, an Employee shall be deemed to be performing services for an Affiliate during any period the Employee is granted leave under such Act for (i) the birth of a child, (ii) the placement with the Employee of a child for adoption or foster care, (iii) to care for a spouse, child or parent of the Employee with a serious health condition, or (iv) for a serious health condition that makes the Employee unable to perform the functions of the Employee’s job.

     1.14 Business Day shall mean each day on which the Trustee operates and is open to the public for its business. If more than one trust is used as a funding vehicle for the Plan, Business Day shall be determined by reference to the institutional Trustee; provided, if there is more than one institutional Trustee, the Plan Administrator shall designate and specify the institutional Trustee with respect to which Business Day shall be determined.

     1.15 Catch-up Contributions shall mean contributions made pursuant to Section 3.10 of the Plan and Code Section 414(v).

     1.16 Catch-up Contribution Election shall mean an election by an Active Participant directing the Participating Company of which he is an Employee to withhold an amount from his current Compensation and to contribute such withheld amount to the Plan as a Catch-up Contribution. In order to make a Catch-up Contribution Election, a Participant shall meet the eligibility requirements of Section 3.10 and shall have made an election to make Pre-Tax Contributions up to the Maximum Deferral Amount.

     1.17 Code shall mean the Internal Revenue Code of 1986, as amended.

     1.18 Company Contributions shall mean Pre-Tax, Catch-up, Matching, Profit Sharing and Discretionary Contributions made by the Participating Companies pursuant to the terms of the Plan.

4


 

     1.19 Company Stock shall mean Company Stock issued by the Controlling Company which constitutes “qualifying employer securities” under Code section 4975(e)(8). In the event Company Stock or other qualifying employer securities are or become not readily tradeable on an established securities market, the fair market value thereof shall be as determined by an independent appraiser meeting requirements similar to those contained in Treasury Regulations promulgated under Code section 170(a)(1).

     1.20 Compensation shall have the meaning set forth in subsection (a), (b), (c) or (d) hereof, whichever is applicable:

     (a) Benefit Compensation . For purposes of determining the amount of Pre-Tax Contributions under Section 3.1, determining the amount of Matching Contributions and Profit Sharing Contributions under Section 3.2 and 3.3, and allocating Discretionary Contributions under Section 5.3, and for all other purposes except those set forth in Subsections (b), (c), (d) and (e) hereof, “Compensation” shall mean, for any Plan Year, the total of the amounts described in subsections (1) and (2) minus the amounts described in subsections (3), (4), and (5), as follows:

     (1) All amounts that are wages within the meaning of Code section 3401(a) and all other payments of compensation to an employee by his employer (in the course of the employees trade or business) for which the employer is required to furnish the employee a written statement under Code section 6041(d), section 6051(a)(3) and section 6052; provided, such amounts shall be determined without regard to any rules under Code section 3401 that limit remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2)); plus

     (2) all pre-tax, salary deferral or reduction contributions made to the Plan and other Section 401(k), Section 125 and Section 132 plans of the Affiliates on behalf of a Participant for such Plan Year (including any contributions made under Code section 402(e)(3), section 402(h)(1)(B) or section 403(b)); minus

     (3) all amounts included in subsection (1) or (2) that consist of reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation and welfare benefits (even if includable in gross income); minus

     (4) any amounts paid or made available to a Participant during the Plan Year while he is not actively participating in the Plan; minus

     (5) all Compensation in excess of $200,000 (as determined under Code section 401(a)(17) and adjusted by the Secretary of the Treasury under such Code section for cost of living expenses).

     (b) Section 415 Compensation . Solely for purposes of Section 6.1 (relating to maximum deductible contribution limitations under Code section 404), Section 6.6 (relating to maximum contribution and benefit limitations under Code section 415) and

5


 

Section 14.3 (relating to minimum Contributions under a Top-Heavy Plan), “Compensation” shall mean, with respect to a Participant for a specified period, the amounts from all Affiliates referred to in subsection (a)(1) hereof. “Compensation” as determined hereunder shall also include any elective deferrals as defined in Section 402(g)(3) and any deferrals made pursuant to Code sections 125, 132 or 457.

     (c) Key Employee Compensation . Solely for purposes of determining which Employees are Key Employees under Section 14.2 and which Employees are Highly Compensated Employees under Section 1.43, for any applicable Plan Year, “Compensation” shall mean the total of the amounts from all Affiliates determined under subsections (a)(1), (a)(2) and (a)(5) hereof.

     (d) Testing Compensation . For purposes of performing discrimination testing to ensure compliance with Code section 401(a)(4), section 401(k) and section 401(m), “Compensation” generally shall be defined separately for the Controlling Company and its Affiliates as the amounts determined under subsections (a)(1), (a)(2), (a)(4), and (a)(5); provided, on a Plan Year-by-Plan Year basis, the Plan Administrator may elect to use the definition of “Compensation” as set forth in subsection (b) or (c) hereof or any other definition that satisfies the nondiscrimination requirements of Code section 414(s).

     1.21 Contributions shall mean, individually or collectively, the Pre-Tax, Catch-up, Matching, Profit Sharing, Discretionary, Rollover and Transfer Contributions permitted under the Plan.

     1.22 Controlling Company shall mean Rent-A-Center, Inc., a Delaware holding company, and its successors which adopt the Plan.

     1.23 Covered Employee shall mean an Employee other than:

     (a) An Employee who is a nonresident alien who receives no earned income from an Affiliate which constitutes income from sources within the United States;

     (b) An Employee who is a member of a collective bargaining unit, unless the terms of the collective bargaining agreement between the Participating Company of the Employee and the bargaining unit require that the Employee be eligible to participate in the Plan.

     (c) An individual classified as an independent contractor or leased employee under a Participating Company’s customary worker classification procedures (whether or not such individual is actually an Employee). The term “leased employee” means any person (other than an employee of the recipient) who pursuant to an agreement between the recipient and any other person (“leasing organization”) has performed services for the recipient (or the recipient and related persons determined in accordance with Section 414(n)(6) of the Code) on a substantially full time basis for a period of at least one (1) year and such services are performed under the primary direction or control by the recipient. Contributions or benefits provided a leased employee by the leasing organization which are attributable to services performed for the recipient employer shall be treated as provided by the recipient employer.

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     A leased employee shall not be considered an employee of the recipient if (i) such employee is covered by a money purchase pension plan providing: (1) a nonintegrated employer contribution rate of at least ten percent (10%) of compensation, as defined in Section 415(c)(3) of the Code, but not including amounts contributed by the employer pursuant to a salary reduction agreement which is excludable from the employee’s gross income under Section 125, Section 402(a)(8), Section 402(h) or Section 403(b) of the Code, (2) immediate participation, and (3) full and immediate vesting; and (ii) leased employees do not constitute more than twenty percent (20%) of the recipient’s workforce that are not Highly-Compensated Employees.

     (d) an individual employed pursuant to an agreement providing that the individual is not eligible to participate in the Plan.

     (e) an Employee whose basic compensation for services on behalf of a Participating Company is not paid directly by the Participating Company or an Affiliate.

     (f) an individual who is not contemporaneously classified as an Employee of a Participating Company’s payroll system. In the event such individual is reclassified as an Employee for any purpose, including, without limitation, as a common law or statutory employee, by any action of any third party, including, without limitation, any government agency, or as a result of any private lawsuit, action, or administrative proceeding, such individual will, notwithstanding such reclassification, remain ineligible for participation hereunder and will not be considered a Covered Employee. In addition to and not in derogation of the foregoing, the exclusive means for an individual who is not contemporaneously classified as an Employee of a Participating Company’s payroll system to become eligible to participate in this Plan is through an amendment to the Plan which specifically renders such individual eligible for participation hereunder.

     1.24 Deferral Election shall mean an election by an Active Participant directing the Participating Company of which he is an Employee to withhold a percentage of his current Compensation from his paychecks and to contribute such withheld amounts to the Plan as Pre-Tax Contributions, all as provided in Section 3.1.

     1.25 Defined Benefit Minimum shall mean the minimum benefit level as described in Section 14.3(d).

     1.26 Defined Benefit Plan shall mean any qualified retirement plan maintained by an Affiliate which is not a Defined Contribution Plan.

     1.27 Defined Contribution Minimum shall mean the minimum contribution level as described in Section 14.3(c).

     1.28 Defined Contribution Plan shall mean a plan described in Section 6.6(c)(2).

     1.29 Determination Date shall mean the date described in Section 14.2(b)(1).

     1.30 Disability or Disabled shall mean a disability as determined under the Company’s long-term disability plan. Any claims with respect to any determination of Disability under the

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Company’s long-term disability plan shall be resolved under the claims procedures that apply to such long-term disability plan. No determination of Disability shall be made under this Plan.

     1.31 Discretionary Contributions shall mean the amounts paid by each Participating Company to the Trust Fund as provided in Section 3.4.

     1.32 Discretionary Account shall mean the separate subaccount established and maintained on behalf of a Participant or Beneficiary to reflect his interest in the Trust Fund attributable to Discretionary Contributions.

     1.33 Effective Date shall mean January 1, 2007, the date that this restatement of the Plan generally shall be effective; provided, any effective date specified herein for any provision, if different from the Effective Date, shall control.

     1.34 Elective Deferrals shall mean, with respect to a Participant for any calendar year, the total amount of his Pre-Tax Contributions plus such other amounts as shall be determined pursuant to the terms of Code section 402(g)(3).

     1.35 Eligible Participant shall mean, for purposes of allocating Discretionary Contributions for any Plan Year, any Active Participant who was not a Highly Compensated Employee.

     1.36 Eligible Retirement Plan shall mean a plan which is a defined contribution plan, the terms of which permit the acceptance of rollover distributions and which is either (i) an individual retirement account described in Code section 408(a), (ii) an individual retirement annuity described in Code section 408(b) (other than an endowment contract), (iii) a qualified trust described in Code section 401(a) and exempt from tax under Code section 501(a), (iv) an annuity plan described in Code section 403(a), (v) an annuity contract described in Section 403(b) of the Code, or (vi) 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 distribution to a Surviving Spouse or to a Spouse or former Spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code.

     1.37 Eligible Rollover Distribution shall mean any distribution to (i) a Participant, (ii) his Surviving Spouse (after his death), or (iii) his Spouse or former Spouse who is his alternate payee under a qualified domestic relations order (see Sections 9.5 and 15.1), of all or any portion of the balance to his credit in a qualified trust (including any distribution to a Participant of all or any portion of his Account); provided, an “Eligible Rollover Distribution” shall not include (i) any distribution which is one of a series of substantially equal periodic payments made, not less frequently than annually, (A) for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of the employee and his beneficiary, or (B) for a specified period of 10 years or more, (ii) any distribution to the extent such distribution is required under Code section 401(a)(9), (iii) the portion of any distribution that is not includible in gross income of the employee, and (iv) any amount that is distributed on account of hardship.

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     1.38 Employee shall mean any individual who is employed by a Participating Company including officers, but excluding independent contractors, and directors who are not officers or otherwise employees.

     1.39 Employment Date shall mean the date on which an Employee first completes an Hour of Service.

     1.40 Entry Date shall mean the first day of each calendar month during the period in which the Plan remains in effect.

     1.41 ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.

     1.42 Forfeiture shall mean, for any Plan Year, the dollar amount of an Account of a former Employee that is removed from the Account during such Plan Year.

     1.43 Highly Compensated Employee shall mean an employee of an Affiliate who:

     (a) was a five percent (5%) owner (“5 Percent owner”) during a Plan Year or during the preceding Plan Year; or

     (b) received compensation from a Participating Company in excess of $80,000 (subject to indexing as permitted by the Code and Treasury Regulations thereunder) during the preceding Plan Year and, if the Company elects in accordance with Code Section 414(q), is in the group consisting of the top twenty percent (20%) of the employees of the Participating Company when ranked on the basis of compensation paid during such year.

     Notwithstanding the foregoing, the Controlling Company can elect to use compensation received in the current Plan Year in lieu of compensation received in the preceding Plan Year under Section 1.43(b) to the extent permitted by Code Section 414(q) and applicable guidance of the Internal Revenue Service.

     For purposes of this Section 1.43, the term “compensation” means compensation as defined in Section 415(c)(3) of the Code.

     A former employee shall be treated as a Highly Compensated Employee if:

     (1) Such employee was a Highly Compensated Employee when such employee separated from service; or

     (2) Such employee was a Highly Compensated Employee at any time after attaining age fifty-five (55).

     (c) Nonresident Aliens . For purposes of this Section, nonresident aliens who receive no earned income from an Affiliate which constitutes income from sources within the United States (as described in Code section 414(q)(8)) shall not be treated as employees.

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     (d) Compliance with Code Section 414(q) . The determination of who is a Highly Compensated Employee shall be made in accordance with Code section 414(q) and the regulations promulgated thereunder.

     1.44 Hour of Service shall mean each hour for which an Employee is paid, or entitled to payment, for the performance of duties for an Affiliate.

     1.45 Investment Fund or Funds shall mean one or all of the investment funds established from time to time pursuant to the terms of Section 7.2.

     1.46 Investment Manager shall mean an “investment manager” within the meaning of ERISA Section 3(38).

     1.47 Key Employee shall mean any person described in Section 14.2(b)(2).

     1.48 Leave of Absence shall mean an excused leave of absence granted to an Employee by an Affiliate in accordance with applicable federal or state law or the Affiliate’s personnel policy. Among other things, Leave of Absence shall be granted to an Employee under such circumstances as the Plan Administrator shall determine are fair, reasonable and equitable, as applied uniformly among Employees under similar circumstances.

     1.49 Limitation Year shall mean the 12-month period ending on each December 31, which shall be the “limitation year” for purposes of Code section 415 and the regulations promulgated thereunder.

     1.50 Matching Account shall mean the separate subaccount established and maintained on behalf of a Participant or Beneficiary to reflect his interest in the Trust Fund attributable to Matching Contributions.

     1.51 Matching Contributions shall mean the amounts paid by each Participating Company to the Trust Fund as a match to Participants’ Pre-Tax Contributions, as provided in Section 3.2.

     1.52 Maternity or Paternity Leave shall mean any period during which an Employee is absent from work as an employee of an Affiliate (i) because of the pregnancy of such Employee; (ii) because of the birth of a child of such Employee; (iii) because of the placement of a child with such Employee in connection with the adoption of such child by such Employee; or (iv) for purposes of such Employee caring for a child immediately after the birth or placement of such child.

     1.53 Maximum Deferral Amount shall mean the maximum Pre-Tax Contribution that can be made to this Plan, as determined under Section 402(g)(5), but shall not include Catch-up Contributions.

     1.54 Named Fiduciary shall mean the Controlling Company, the Board, the Plan Administrator and the Trustee.

     1.55 Non-Key Employee shall mean any person described in Section 14.2(b)(3).

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     1.56 Normal Retirement Age shall mean age 62.

     1.57 Participant shall mean any person who has been admitted to, and has not been removed from, participation in the Plan pursuant to the provisions of Article II. “Participant” shall include Active Participants and former Employees who have an Account under the Plan.

     1.58 Participating Company shall mean any company that has adopted or hereafter may adopt the Plan for the benefit of its employees and which continues to participate in the Plan, all as provided in Section 13.3. Participating Companies as of the Effective Date are set out on Schedule B.

     1.59 Permissive Aggregation Group shall mean the group of plans described in Section 14.2(b)(4).

     1.60 Plan shall mean the Rent-A-Center, Inc. 401(k) Retirement Savings Plan as contained herein and all amendments thereto. The Plan is intended to be a profit sharing plan qualified under Code sections 401(a) and 401(k).

     1.61 Plan Year shall mean the 12-month period ending on each December 31.

     1.62 Pre-Tax Account shall mean the separate subaccount established and maintained on behalf of a Participant or Beneficiary to reflect his interest in the Trust Fund attributable to Pre-Tax Contributions.

     1.63 Pre-Tax Contributions shall mean the amounts paid by each Participating Company to the Trust Fund at the election of Participants pursuant to Section 3.1(a).

     1.64 Prior Plan shall mean this Plan as in effect prior to January 1, 2007.

     1.65 Profit Sharing Account shall mean the separate subaccount established and maintained on behalf of a Participant or Beneficiary to reflect his interest in the Trust Fund attributable to Profit Sharing Contributions.

     1.66 Profit Sharing Contributions shall mean the amounts paid by each Participating Company to the Trust Fund, as provided in Section 3.3.

     1.67 Qualified Nonelective Contributions shall mean the amounts paid by each Participating Company to the Trust Fund as provided in Section 3.4.

     1.68 Qualified Spousal Waiver shall mean a written election executed by a Spouse, delivered to the Plan Administrator and witnessed by a notary public or a Plan representative, which consents to the payment of all or a specified portion of a Participant’s death benefit to a Beneficiary other than such Spouse and which acknowledges that such Spouse has waived his right to be the Participant’s Beneficiary under the Plan. A Qualified Spousal Waiver shall be valid only with respect to the Spouse who signs it and shall apply only to the alternative Beneficiary designated therein, unless the written election expressly permits other designations without further consent of the Spouse. A Qualified Spousal Waiver shall be irrevocable unless revoked by the Participant by way of (i) a written statement executed by the Participant and

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delivered to the Plan Administrator, or (ii) a written revocation of the nonspouse Beneficiary designation to which such Spouse has consented; provided, any such revocation must be received by the Plan Administrator prior to the Participant’s date of death.

     1.69 Required Aggregation Group shall mean the group of plans described in Section 14.2(b)(5).

     1.70 Restoration Contributions shall mean the amounts paid to the Trust Fund by or on behalf of a rehired individual pursuant to Section 3.8.

     1.71 Rollover Account shall mean the separate subaccount established and maintained on behalf of a Participant or Beneficiary to reflect his interest in the Trust Fund attributable to Rollover Contributions.

     1.72 Rollover Contributions shall mean the amounts contributed to the Trust Fund (and received and accepted by the Trustee) as “rollover” contributions received from an Eligible Retirement Plan as defined in Code section 402(c) and Section 1.36 of the Plan. An amount shall be treated as a Rollover Contribution only to the extent that its acceptance by the Trustee is permitted under the Code (including the regulations and rulings promulgated thereunder). Notwithstanding the foregoing, the Plan shall not accept a rollover contribution from any plan or account which has an after-tax account or from any plan which requires that distributions be made in any form other than a single sum distribution.

     1.73 Severance Date shall mean, with respect to an Employee of an Affiliate, the earlier of:

     (a) the date on which such Employee quits, retires, is discharged or dies; or

     (b) the first anniversary of the first date such Employee is absent from employment with all Affiliates (with or without pay) for any other reason (for example, vacation, Disability, Leave of Absence or layoff).

     1.74 Severance from Employment means a separation from service that occurs when:

     (a) an Employee ceases to be employed by the Controlling Company or an Affiliate, or

     (b) a person fails to report for work with the Controlling Company or an Affiliate, at the termination of an authorized leave of absence.

     A transfer of employment from the Controlling Company to an Affiliate or from an Affiliate to the Controlling Company shall not constitute a Severance from Employment for purposes of the Plan. A person shall not be considered to have incurred a Severance from Employment due to his having entered the Uniformed Services of the United States unless it is determined by the Plan Administrator that he has no reemployment rights under the law. Upon the sale of all of the stock (or other membership or equity interests) or substantially all of the assets used in a trade or business of any Participating Company which has adopted the Plan prior to such sale, a Severance from Employment shall occur on the date of such sale with respect to

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any Employee who continues in employment with the purchaser of such assets or with such Participating Company, as the case may be, provided that the following conditions are met:

     (a) the Controlling Company continues to maintain the Plan after such sale;

     (b) the Participating Company ceased to be a Participating Company under the Plan prior to such sale;

     (c) the purchaser of such Participating Company’s stock (or other membership or equity interests) does not adopt the Plan;

     (d) the purchaser is not an Affiliate; and

     (e) no assets or liabilities of the Plan are transferred to a defined contribution plan maintained by the purchaser, or any subsidiary or affiliate of the purchaser, as the case may be.

     After incurring a Severance from Employment, a terminated person shall not be eligible for or credited with Hours of Service or Years of Vesting Service for any purpose under the Plan with respect to any period after such Severance from Employment.

     1.75 Spouse or Surviving Spouse shall mean, with respect to a Participant the person who is treated as married to such Participant under the laws of the state in which the Participant resides. The determination of a Participant’s Spouse or Surviving Spouse shall be made as of the earlier of the date as of which benefit payments from the Plan to such Participant are made or commence (as applicable) or the date of such Participant’s death. In addition, a Participant’s former spouse shall be treated as his Spouse or Surviving Spouse to the extent provided under a qualified domestic relations order as defined in Code section 414(p).

     1.76 Thorn Americas Plan shall mean the Thorn Americas 401(k) Savings Plan which was merged into this Plan on January 1, 1999.

     1.77 Top-Heavy Group shall mean the group of plans described in Section 14.2(b)(6).

     1.78 Top-Heavy Plan shall mean a plan to which the conditions set forth in Article XIV apply.

     1.79 Transfer Account shall mean one or more separate subaccounts established and maintained on behalf of a Participant or Beneficiary to reflect his interest in the Trust Fund attributable to Transfer Contributions; provided, to the extent that the Plan Administrator (in conjunction with the Plan’s recordkeeper) deems appropriate, other subaccounts may be used to reflect Participant’s interests attributable to Transfer Contributions. “Transfer Account” shall refer to the aggregate of all separate subaccounts established for Transfer Contributions or to individual, separate subaccounts appropriately described, as may be appropriate in context. Transfer Accounts shall be reflected and described on a schedule hereto.

     1.80 Transfer Contributions shall mean amounts which are received either (i) by a direct trustee to trustee transfer or (ii) as part of a spin-off, merger or other similar event by the

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Trustee from the trustee or custodian of another qualified retirement plan and held in the Trust Fund on behalf of a Participant or Beneficiary. Transfer Contributions shall retain the character that those contributions had under the other qualified retirement plan; for example, after-tax contributions under a prior plan shall continue to be treated as after-tax contributions when held in the Transfer Account.

     1.81 Trust or Trust Agreement shall mean the separate agreement between the Controlling Company and the Trustee governing the creation of the Trust Fund and all amendments thereto.

     1.82 Trustee shall mean INTRUST Bank, N.A.

     1.83 Trust Fund shall mean the total amount of cash and other property held by the Trustee (or any nominee thereof) at any time under the Trust Agreement.

     1.84 Valuation Date shall mean each Business Day; provided, the value of an Account or the Trust Fund on a day other than a Business Day shall be the value determined for the immediately preceding Business Day.

     1.85 Years of Vesting Service shall mean, with respect to an Employee, the number of whole 12-month periods of service commencing on the Employee’s Employment Date and ending on Severance Date, subject to the following provisions:

     (a) Aggregation Rule . In determining an Employee’s number of whole 12-month periods of service for purposes of this Section, nonsuccessive periods of service shall be aggregated (to the extent that any portion of such service is not excluded pursuant to the terms of subsection (c) or (d) hereof) on the basis of days of service, with 365 days (366 days in a leap year) of service equal to one Year of Vesting Service. Periods of service of less than 365 days (366 days in a leap year) shall be disregarded.

     (b) Counting Periods of Severance . In determining an Employee’s periods of service for purposes of this Section, the following periods of severance shall be taken into account and treated as periods of service:

     (1) If an Employee’s employment with all Affiliates terminates and the Employee then performs an Hour of Service within 12 months of his Severance Date, the period between his Severance Date and his next, succeeding Employment Date shall be treated as a period of service; and

     (2) If an Employee’s employment with all Affiliates terminates before the end of the initial 12-month period that begins on the first date such Employee is absent from employment with all Affiliates for any reason other than termination of his employment (for example, vacation, Disability, Leave of Absence or layoff), and if such Employee then performs an Hour of Service before the end of said initial 12-month period, the period from his initial date of absence to his next succeeding Employment Date shall be treated as a period of service.

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     (c) Pre-Break Service . Years of Vesting Service shall exclude any period of time prior to a Break in Service if the Employee was not vested in his Matching Account prior to the Break in Service and has incurred 5 or more consecutive 1-year Breaks in Service.

     (d) Post-Break Service . Years of Vesting Service completed after a period in which the Participant had at least 5 consecutive Breaks in Service shall be disregarded for the purpose of determining his vested interest in that portion of his Account which accrued before such Breaks in Service.

     (e) Predecessor Plan . To the extent required by Code section 414(a)(1) and not otherwise counted hereunder, if an Affiliate maintains a plan that is or was the qualified retirement plan of a predecessor employer, an Employee’s periods of employment with such predecessor employer shall be taken into account in determining his Years of Vesting Service.

     (f) Predecessor Employer . To the extent determined by the Plan Administrator, set forth on Schedule C attached hereto, and not otherwise counted hereunder, an Employee’s periods of employment with one or more companies or enterprises acquired by or merged into, or all or a portion of the assets or business of which are acquired by, an Affiliate shall be taken into account in determining his Years of Vesting Service.

ARTICLE II

ELIGIBILITY

     2.1 Initial Eligibility Requirements .

     (a) General Rule . Except as provided in this subsection or in subsection (b) or (c) hereof, all as modified by subsection (d) hereof, every Covered Employee shall become an Active Participant on the Entry Date coincident with or next following the date that is the 3-month anniversary date of the Covered Employee’s Employment Date by the Company or an Affiliate, provided he is a Covered Employee on such Entry Date.

     (b) Participation Upon Effective Date . Each Covered Employee who is an Active Participant in the Prior Plan on the day immediately preceding the Effective Date shall be an Active Participant in the Plan in accordance with the terms of the Plan.

     (c) New Participating Companies . For employees of companies that become Participating Companies after the Effective Date, each Covered Employee employed by a Participating Company on the date such Participating Company first becomes a Participating Company shall become an Active Participant as of such Participating Company’s effective date under the Plan, if, as of the Participating Company’s effective date, the Covered Employee has met the applicable eligibility requirements under Section 2.1(a).

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     (d) Predecessor Employer . To the extent determined by the Plan Administrator, set forth on Schedule B hereto and not otherwise counted hereunder, an Employee’s periods of employment with one or more companies or enterprises acquired by or merged into, or all or a portion of the assets or business of which are acquired by, an Affiliate shall be taken into account in determining whether he has completed the eligibility requirements set forth herein; and, in its sole discretion, the Plan Administrator may establish a special entry date for all Covered Employees of such an acquired business.

     2.2 Treatment of Interruptions of Service .

     (a) Leave of Absence or Layoff . If a Covered Employee satisfies the eligibility requirements set forth in Section 2.1 but is on a Leave of Absence at the time he would have become an Active Participant, he shall become an Active Participant on the date he subsequently resumes the performance of duties as a Covered Employee in accordance with the terms of his Leave of Absence.

     (b) Reemployment Before Break in Service . If a Covered Employee satisfies the eligibility requirements set forth in Section 2.1, terminates employment with a Participating Company before the Entry Date on which he otherwise would become an Active Participant, and then is reemployed by a Participating Company prior to completing a Break in Service, he shall become an Active Participant on the later of (i) the Entry Date on which he otherwise would have become an Active Participant if he had not terminated employment, or (ii) the date he is reemployed as a Covered Employee.

     (c) Reemployment After Break in Service .

     (1) If a Covered Employee (other than a Covered Employee described in subsection (2)) satisfies the eligibility requirements set forth in Section 2.1, terminates employment with a Participating Company (and all other Participating Companies) before the Entry Date on which he otherwise would become an Active Participant, and then is reemployed as a Covered Employee by a Participating Company after completing a Break in Service, he shall become an Active Participant as of the Entry Date coinciding with or next following his completion of the eligibility requirements set forth in Section 2.1 for the period commencing on his reemployment date that follows his last Break in Service.

     (2) A Covered Employee who was an “Employee” as defined under this Plan prior to the Effective Date and who satisfies the Plan’s eligibility conditions but who terminates employment prior to becoming a Participant in this Plan will become a Participant on the later of the (i) the Entry Date on which he otherwise would have become an Active Participant if he had not terminated employment, or (ii) the date he is reemployed as a Covered Employee. The rule in this subsection (2) shall apply whether or not the Covered Employee incurs a Break in Service.

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     (d) Reparticipation Upon Reemployment . If an Active Participant terminates employment with a Participating Company (and all other Participating Companies), his active participation in the Plan shall cease immediately, and he again shall become an Active Participant as of the day he again becomes a Covered Employee. However, regardless of whether he again becomes an Active Participant, he shall continue to be a Participant until he no longer has an Account under the Plan.

     2.3 Change in Status .

     (a) Loss of Covered Employee Status . If a Covered Employee (i) satisfies the eligibility requirements set forth in Section 2.1, (ii) changes his employment status (but remains employed) so that he ceases to be a Covered Employee before the Entry Date on which he otherwise would become an Active Participant, and (iii) then again changes his employment status and becomes a Covered Employee prior to completing a Break in Service, he shall become an Active Participant as of the later of (A) the date that would have been his Entry Date, or (B) the date he again becomes a Covered Employee. If an Employee covered by this subsection does complete a Break in Service prior to again becoming a Covered Employee, his entry to participation in the Plan will be governed by Section 2.2(c).

     (b) Change to Covered Employee Status . If an Employee who first satisfies the eligibility requirements of Section 2.1 while he is not a Covered Employee subsequently changes his employment status so that he becomes a Covered Employee, he shall become an Active Participant as of the later of (i) the date that would have been his Entry Date, or (ii) the date of his change in status.

     (c) Change by Participant . If an Active Participant changes his status of employment (but remains employed) so that he is no longer a Covered Employee, his active participation in the Plan shall cease immediately, and he shall again become an Active Participant in the Plan as of the day he again becomes a Covered Employee. However, regardless of whether he again becomes an Active Participant, he shall continue to be a Participant until he no longer has an Account under the Plan.

ARTICLE III

CONTRIBUTIONS

     3.1 Pre-Tax Contributions .

     (a) Generally . Each Participating Company shall contribute to the Plan, on behalf of each Active Participant employed by such Participating Company and for each regular payroll period and any payment of bonuses for which an Active Participant has a Deferral Election in effect with such Participating Company, a Pre-Tax Contribution in an amount equal to the amount by which such Active Participant’s Compensation has been reduced for such period pursuant to his Deferral Election. The amount of the Pre-Tax Contribution shall be determined in increments of 1 percent of such Active Participant’s Compensation for each payroll period. An Active Participant may elect to

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reduce his Compensation for any period by a minimum of 1 percent and a maximum of 50 percent (or such other minimum or maximum percentage and/or amount established by the Plan Administrator from time to time), subject to the maximum limitations in Article VI; provided, however, that the maximum percentage by which an Active Participant who is a resident of Puerto Rico can elect to reduce his Compensation for any period is 10 percent.

     (b) Deferral Elections . Each Active Participant who desires that his Participating Company make a Pre-Tax Contribution on his behalf shall complete and deliver to the Participating Company (or its designee) a Deferral Election. Such Deferral Election shall provide for the reduction of his Compensation from each regular paycheck, bonus paycheck and any other payment of compensation while he is an Active Participant employed by such Participating Company. The Plan Administrator, in its sole discretion, shall prescribe the form of all Deferral Elections and may prescribe such nondiscriminatory terms and conditions governing the use of the Deferral Elections as it deems appropriate. Subject to any modifications, additions or exceptions which the Plan Administrator, in its sole discretion, deems necessary, appropriate or helpful, the following terms shall apply to Deferral Elections:

     (1) Effective Date . An Active Participant’s initial Deferral Election with a Participating Company shall be effective for the first payroll period which ends after the Deferral Election is made and after the effective date of such Deferral Election. If an Active Participant fails to submit a Deferral Election in a timely manner, he shall be deemed to have elected a deferral of zero percent. For purposes of this subsection, the “effective date” of a Deferral Election shall mean: (A) for a Participant who commences participation in the Plan on an Entry Date, that Entry Date; and (B) for a Participant who commences or recommences participation in the Plan on a date other than an Entry Date, the date that is as soon as practicable after the date on which the Deferral Election is processed by the Participating Company.

     (2) Term . Each Active Participant’s Deferral Election with a Participating Company shall remain in effect in accordance with its original terms until the earlier of (A) the date the Active Participant ceases to be a Covered Employee of all Participating Companies, (B) the date the Active Participant revokes such Deferral Election pursuant to the terms of subsection (b)(3) hereof, or (C) the date the Active Participant or the Plan Administrator modifies such Deferral Election pursuant to the terms of subsection (b)(4) or (b)(5) hereof. If a Participant is transferred from the employment of a Participating Company to the employment of another Participating Company, his Deferral Election with the first Participating Company will remain in effect and will apply to his Compensation from the second Participating Company until the earlier of (A), (B) or (C) of the preceding sentence.

     (3) Revocation . An Active Participant’s Deferral Election shall terminate upon his ceasing to be a Covered Employee. In addition, an Active Participant may revoke his Deferral Election with a Participating Company in the

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manner prescribed by the Plan Administrator, and such revocation shall be effective as soon as practicable in the calendar month following the calendar month in which it is made (under procedures established for the Plan). An Active Participant who revokes a Deferral Election may enter into a new Deferral Election in the manner prescribed by the Plan Administrator, effective as soon as practicable after the date on which it is processed; provided, the Plan Administrator, in its sole discretion, may specify a suspension period for all Participants who voluntarily revoke their Deferral Elections, such that any new Deferral Election shall not be effective until a later date.

     (4) Modification by Participant . An Active Participant may modify his existing Deferral Election to increase or decrease the percentage of his Contribution by making a new Deferral Election in the manner prescribed by the Plan Administrator not more than once each calendar month. Such modification shall be effective as soon as practicable in the calendar month following the calendar month in which it is made (under procedures established for the Plan).

     (5) Modification by Plan Administrator . Notwithstanding anything herein to the contrary, the Plan Administrator may modify any Deferral Election of any Active Participant at any time by decreasing the percentage of any Pre-Tax Contributions to any extent the Plan Administrator believes necessary to comply with the limitations described in Article VI.

     3.2 Matching Contributions . For each Active Participant on whose behalf a Participating Company has made any Pre-Tax Contributions, the Participating Company may, in its discretion, make a Matching Contribution based on but no greater than the first 4 percent of the Active Participant’s Compensation. Effective for the Plan Year beginning on the Effective Date, the Matching Contribution on behalf of an Active Participant shall be $.50 for each $1.00 of Pre-Tax Contributions, calculated as of each payroll period, but including no more than 4 percent of Compensation for each such payroll period. The total amount of the Matching Contributions which a Participating Company shall make for any Active Participant in a Plan Year shall not exceed 4 percent of such Active Participant’s Compensation paid by such Participating Company. The Board, in its sole discretion, may change the matching percentage at any time.

     3.3 Profit Sharing Contributions . For each Active Participant who is employed on the last day of a Plan Year, the Participating Company, in its sole discretion, may make Profit Sharing Contributions at the end of each Plan Year. The Participating Company has complete discretion to determine the amount of the Profit Sharing Contribution, if any, each year. The Participating Company shall allocate Profit Sharing Contributions to such Active Participants in the same ratio as each Participant’s Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year.

     3.4 Discretionary Contributions . To the extent and in such amounts as the Plan Administrator, in its sole discretion, deems desirable or helpful as a method to help satisfy the ADP and/or ACP Tests for any Plan Year and subject to the requirements and limitations set forth in Sections 6.1, 6.3, 6.4 and 6.6, each Participating Company shall make a Discretionary

19


 

Contribution for such Plan Year. In the case of a Discretionary Contribution which is a Qualified Nonelective Contribution, such Qualified Nonelective Contribution for a Plan Year shall meet the requirements of Treasury Regulation Section 1.401(k)-2(a)(6) (or any successor thereto), shall be treated as Pre-Tax Contributions and shall be allocated to each affected Participant’s Pre-Tax Account in a manner proportionate to the Compensation of all affected Participants. The maximum Qualified Nonelective Contribution for each Eligible Participant for each Plan Year shall be an amount equal to the difference between the maximum amount permitted under Section 6.6 after taking into account the Pre-Tax Contributions and Matching Contributions for such Participant. Such Qualified Nonelective Contributions shall be nonforfeitable and shall be subject to the same restrictions on distribution that apply to Pre-Tax Contributions, except that Qualified Nonelective Contributions (and the earnings thereon) shall not be distributable under Section 10.1 in the event of hardship.

     3.5 Form of Contributions . All Contributions shall be paid to the Trustee in the form of cash.

     3.6 Timing of Contributions .

     (a) Pre-Tax Contributions . Each Participating Company that withholds Pre-Tax Contributions from an Active Participant’s paycheck pursuant to Section 3.1 (a) shall pay such Pre-Tax Contributions to the Trustee as of the earliest date on which such Contributions can reasonably be segregated from the Participating Company’s general assets (generally not to exceed 15 business days after the end of the month within which such amounts otherwise would have been payable to such Active Participant in cash or such earlier time as may be required by law).

     (b) Matching, Profit Sharing, and Discretionary Contributions . To the extent administratively practicable, all Matching, Profit Sharing, and Discretionary Contributions shall be paid to the Trustee no later than (1) the date for filing the Participating Company’s federal income tax return (including extensions thereof) for the tax year to which such Matching, Profit Sharing, and Discretionary Contributions relate, or (ii) such other date as shall be within the time allowed to permit the Participating Company to properly deduct, for federal income tax purposes and for the tax year of the Participating Company in which the obligation to make such Contributions was incurred, the full amount of such Matching, Profit Sharing, and Discretionary Contributions.

     (c) Catch-up Contributions . Each Participating Company that withholds Catch-up Contributions from an Active Participant’s paycheck pursuant to a Catch-up Contribution Election under Section 3.10 shall pay such Catch-up Contribution to the Trustee as of the earliest date on which such Contribution can reasonably be segregated from the Participating Company’s general assets (generally not to exceed fifteen (15) business days after the end of the month within which such amounts otherwise would have been payable to such Active Participant in cash or such earlier time as may be required by law).

     3.7 Contingent Nature of Company Contributions . Notwithstanding Section 3.1 and subject to the terms of Section 15.11, each Company Contribution made to the Plan by a

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Participating Company is made expressly contingent upon the deductibility thereof for federal income tax purposes for the taxable year of the Participating Company with respect to which such Company Contribution is made.

     3.8 Restoration Contributions .

     (a) Restoration Upon Buy-Back . If a Participant who is not 100 percent vested in his Matching Account and Profit Sharing Account has received a distribution of the entire vested portion of his Matching Account and Profit Sharing Account in a manner described in Section 8.3(a) (such that he forfeited the nonvested portion of his Matching Account and Profit Sharing Account in accordance with the terms of Section 8.3(a)), and such Participant is subsequently rehired as a Covered Employee prior to the occurrence of 5 consecutive Breaks in Service, that individual may, prior to the earlier of (i) 5 years after the first day on which he is rehired or (ii) the close of the first period of 5 consecutive Breaks in Service commencing after the distribution, repay the full amount of the distribution to the Trustee (unadjusted for gains or losses). Upon such repayment, his Accounts will be credited with (i) all of the benefits (unadjusted for gains or losses) which were forfeited, and (ii) the amount of the repayment.

     (b) Restoration of Other Forfeitures . If a Participant has forfeited his nonvested Accounts in accordance with Section 8.3(b) or Section 8.4, and such Participant subsequently is rehired as a Covered Employee prior to the occurrence of 5 consecutive Breaks in Service, his Account shall be credited with all of the benefits (unadjusted for gains or losses) which were forfeited, as determined pursuant to the terms of Section 8.3(b) or Section 8.4, respectively.

     (c) Restoration Contribution . The assets necessary to fund the Account of the rehired individual (in excess of the amount of the repayment, if any) shall be provided no later than as of the end of the Plan Year following the Plan Year in which repayment occurs (if subsection (a) hereof applies) or in which the individual is rehired (if subsection (b) hereof applies), and shall be provided in the discretion of the Plan Administrator from (i) income or gain to the Trust Fund with respect to Forfeitures, (ii) Forfeitures arising from the Accounts of Participants employed or formerly employed by the Participating Companies, or (iii) Contributions by the Participating Companies.

     3.9 USERRA Compliance . Notwithstanding any provision of the Plan to the contrary, contributions, benefits, Plan loan repayment suspensions and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u), which provides special rules relating to the reemployment of veterans under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”).

     3.10 Catch-up Contributions . Effective January 1, 2002, all Active Participants (other than Participants who work in and are residents of Puerto Rico, so long as Puerto Rico law does not permit Catch-up Contributions) who are eligible to make Pre-Tax Contributions under this Plan and who have attained or will attain age fifty (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

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purposes of the provisions of the Plan implementing the required limitations of Section 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. Each Active Participant who desires that his Participating Company make a Catch-up Contribution on his behalf shall complete and deliver to the Participating Company (or its designee) a Catch-up Deferral Election, in the form prescribed for such purpose and under such terms and conditions as shall be determined by the Plan Administrator, in its sole discretion. Notwithstanding anything herein to the contrary, the Plan Administrator may modify any Catch-up Contribution Election of any Active Participant at any time to the extent the Plan Administrator believes necessary to comply with the limitations of this Section 3.10 and Code Section 414(v). For purposes of clarification, although a Catch-up Contribution is made on a pre-tax basis and is an elective deferral under the Code, the defined terms Pre-Tax Contributions and Elective Deferral as used in this Plan do not refer to Catch-up Contributions. Accordingly, there are no Matching Contributions with respect to Catch-up Contributions. Catch-up Contributions shall be maintained in the Pre-Tax Account of a Participant and shall not require a separate subaccount.

ARTICLE IV

ROLLOVERS AND TRANSFERS BETWEEN PLANS

     4.1 Rollover Contributions .

     (a) Request by Covered Employee . A Covered Employee may make a written request to the Plan Administrator that he be permitted to contribute, or cause to be contributed, to the Trust Fund a Rollover Contribution which is received by such Covered Employee or to which such Covered Employee is entitled. Such written request shall contain information concerning the type of property constituting the Rollover Contribution and a statement, satisfactory to the Plan Administrator, that the property constitutes a Rollover Contribution. If a Covered Employee who is not a Participant makes a Rollover Contribution, the time and method of distribution of such Covered Employee’s Rollover Account shall be determined under the terms of the Plan as if such Covered Employee were a Participant, but he shall not be considered a Participant under the Plan for any other purpose.

     (b) Acceptance of Rollover . Subject to the terms of the Plan and the Code (including regulations and rulings promulgated thereunder), the Plan Administrator, in its sole discretion, shall determine whether (and if so, under what conditions and in what form) a Rollover Contribution shall be accepted at any time by the Trustee. For example, the Plan Administrator, in its sole discretion, may decide to allow Rollover Contributions from Participants and/or direct Rollover Contributions from another qualified retirement plan (as described in Code section 401(a)(31)) and may decide to pass through to the Covered Employee making the Rollover Contribution any recordkeeping fees directly attributable to his Rollover Contribution. In the event the Plan Administrator permits an Active Participant to make a Rollover Contribution, the amount of the Rollover Contribution shall be transferred to the Trustee and allocated as soon as practicable

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thereafter to a Rollover Account for the Active Participant. Unless the Plan Administrator permits otherwise, all Rollover Contributions shall be made in cash.

     4.2 Transfer Contributions .

     (a) Direct Transfers Permitted . The Plan Administrator, in its sole discretion, shall permit direct trustee-to-trustee transfers of assets and liabilities to the Plan (which shall be distinguished from direct Rollover Contributions as described in Code section 401(a)(31)) as a Transfer Contribution on behalf of an Active Participant. However, in no event shall a Transfer Contribution be accepted on behalf of an Active Participant if such Transfer Contribution is from a retirement plan which, with respect to such Participant, is subject to the requirements of providing any alternative form of benefit not permitted under the Plan.

     (b) Mergers and Spin-offs Permitted . The Plan Administrator, in its sole discretion, shall permit other qualified retirement plans to transfer assets and liabilities to the Plan as part of a merger, spin-off or similar transaction. Any such transfer shall be made in accordance with the terms of the Code and subject to such rules and requirements as the Plan Administrator may deem appropriate. Without limitation, the Plan Administrator shall determine the schedule under which such Transfer Contributions shall vest. Notwithstanding anything herein to the contrary, in no event shall a Transfer Contribution be accepted if the transferring plan is subject to the requirements of providing any alternative form of benefit not permitted under the Plan.

     (c) Establishment of Transfer Accounts . As soon as practicable after the date the Trustee receives a Transfer Contribution, there shall be credited to one or more Transfer Accounts of each Participant the total amount received from the respective accounts of such Participant in the transferring qualified retirement plan. Any amounts so credited as a result of any such merger or spin-off or other transfer shall be subject to all of the terms and conditions of the Plan from and after the date of such transfer.

     (d) Certain Transfer Accounts . The Plan will only accept Transfer Contributions in the event that the Plan would not be required to provide any form of distribution with respect to the resulting Transfer Account other than a single sum distribution. For this reason, the Plan will not accept Transfer Contributions which are required to provide annuity or installment forms of distribution. The Plan Administrator may develop additional rules and terms applicable to Transfer Contributions and resulting Transfer Accounts.

     4.3 Spin-offs to Other Plans . The Plan Administrator, in its sole discretion, may cause the Plan to transfer to another qualified retirement plan (as part of a spin-off or similar transaction) assets and liabilities maintained under the Plan. Any such transfer shall be made in accordance with the terms of the Code and subject to such rules and requirements as the Plan Administrator may deem appropriate. Upon the effectiveness of any such transfer, the Plan and Trust shall have no further responsibility or liability with respect to the transferred assets and liabilities.

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ARTICLE V

PARTICIPANTS’ ACCOUNTS: CREDITING AND ALLOCATIONS

     5.1 Establishment of Participants’ Account . The Plan Administrator shall establish and maintain, on behalf of each Participant and Beneficiary, an Account which shall be divided into segregated subaccounts. The subaccounts shall include (to the extent applicable) Pre-Tax, After-Tax, Matching, Profit Sharing, Rollover, and Transfer Accounts and such other subaccounts as the Plan Administrator shall deem appropriate or helpful. Each Account shall be credited with Contributions allocated to such Account and generally shall be credited with income on investments derived from the assets of such Accounts. Notwithstanding anything herein to the contrary, while Contributions may be allocated to a Participant’s Account as of a particular date (as specified in the Plan), such Contributions shall actually be added to a Participant’s Account and shall be credited with investment experience only from the date such Contributions are received and credited to the Participant’s Account by the Trustee. Each Account of a Participant or Beneficiary shall be maintained until the value thereof has been distributed to or on behalf of such Participant or Beneficiary.

     5.2 Allocation and Crediting of Pre-Tax, Matching, Profit Sharing, Rollover and Transfer Contributions . As of each Valuation Date coinciding with or immediately following the date on which Pre-Tax, Matching, Profit Sharing, Rollover and Transfer Contributions are received on behalf of an Active Participant, such Contributions shall be allocated and credited directly to the appropriate Pre-Tax, Matching, Profit Sharing, Rollover and Transfer Accounts, respectively, of such Active Participant.

     5.3 Allocation and Crediting of Discretionary Contributions .

     (a) General Provision . As of the last day of each Plan Year for which the Participating Companies make (or are deemed to have made) Discretionary Contributions, the Plan Administrator shall cause such Discretionary Contributions to be allocated in accordance with the terms of subsection (b), (c), (d) or (e), whichever is applicable.

     (b) Per Capita Discretionary Contributions . To the extent that the Administrative Committee designates all or any portion of the Discretionary Contributions for a Plan Year as “Per Capita Discretionary Contributions,” such Contributions shall be allocated to the Accounts of all Eligible Participants who were Employees on the last day of such Plan Year on a per capita basis (that is the same dollar amount shall be allocated to the Account of each such Eligible Participant).

     (c) Proportional Discretionary Contributions . To the extent that the Plan Administrator designates all or any portion of the Discretionary Contributions for a Plan Year as “Proportional Discretionary Contributions,” such Contributions shall be allocated to the Account of each Eligible Participant who was an Employee on the last day of such Plan Year in the same proportion that (i) the Compensation of such Eligible Participant for such Plan Year bears to (ii) the total Compensation of all such Eligible Participants for such Plan Year.

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     (d) Section 415 Discretionary Contributions . To the extent that the Plan Administrator designates all or any portion of the Discretionary Contributions for a Plan Year as “Section 415 Discretionary Contributions,” such Contributions shall be allocated to the Discretionary Account of some or all Eligible Participants (i) beginning with such Eligible Participant(s) who have the lowest Compensation (within the meaning of “Testing Compensation” as described in Section 1.20(d)), until such Eligible Participants) reach their annual addition limits (as described in Section 6.6), or the amount of the Discretionary Contributions is fully allocated, and then (ii) continuing with successive individuals or groups of Eligible Participants in the same manner until the amount of the Section 415 Discretionary Contributions is fully allocated.

     (e) Qualified Nonelective Contributions . To the extent that the Plan Administrator designates all or any portion of the Discretionary Contributions as “Qualified Nonelective Contributions,” such contributions shall be allocated to the appropriate subaccount of each Eligible Participant with respect to whom such contributions are made.

     5.4 Crediting of Restoration Contributions . As of each Valuation Date coinciding with or immediately following the date (i) on which a Restoration Contribution pursuant to Section 3.8 is received from an Active Participant, or (ii) on which the Plan restores the forfeitable portion of his Account pursuant to Section 3.8(c), such amount shall be credited to the appropriate Pre-Tax, Matching, Profit Sharing, Rollover and Transfer Accounts of the Active Participant, in the amounts distributed or forfeitable from such Accounts immediately prior to the earlier distribution to such Participant.

     5.5 Allocation of Forfeitures . To the extent Forfeitures for a Plan Year are not used to pay Restoration Contributions pursuant to Section 3.8(b), to replace abandoned Accounts as provided in Section 9.9, or to pay Plan expenses as provided in Section 15.12, the Plan Administrator, in its sole discretion shall deem such Forfeitures to be Matching, Profit Sharing and/or Discretionary Contributions (which shall first be used to reduce the Participating Companies’ obligation, if any, to make such Contributions pursuant to the terms of the Plan and then shall be added to, and combined with, any such other Contributions made for such Plan Year by the Participating Companies), and such Forfeitures shall be allocated pursuant to the terms of Section 5.2 or Section 5.3, as applicable.

     5.6 Allocation and Crediting of Investment Experience . As of each Valuation Date, the Trustee shall determine the fair market value of the Trust Fund which shall be the sum of the fair market values of the Investment Funds. The Plan Administrator shall determine the amount of the Accounts as follows:

     (a) Determination of Investment Experience . As of each Valuation Date, the investment earnings (or losses) of each Investment Fund shall be the amount by which the sum determined in (1) exceeds (or is less than) the sum determined in (2), where (1) and (2) are as follows:

     (1) The sum of (A) the fair market value of such Investment Fund as of such Valuation Date, plus (B) the amount of distributions and withdrawals and

25


 

any transfers to other Investment Funds made since the immediately preceding Valuation Date from amounts invested in the Investment Fund; and

     (2) The sum of (A) the fair market value of the Investment Fund as of the immediately preceding Valuation Date, plus (B) Contributions deposited in and amounts transferred to such Investment Fund since the immediately preceding Valuation Date.

     (b) Utilization of Investment Experience . To the extent directed by the Plan Administrator, investment earnings initially shall be used to pay Restoration Contributions pursuant to Section 3.8(b), to replace abandoned Accounts as provided in Section 9.9 or to pay Plan expenses as provided in Section 15.12. As of each Valuation Date and prior to the allocations described in Section 5.2, Section 5.3, Section 5.4 and Section 5.5, each Participant’s Account shall be allocated and credited with a portion of such remaining earnings or debited with a portion of such losses of each Investment Fund, as determined in accordance with subsection (a) hereof, in the proportion that (i)(A) the amount credited to such Account that was invested in such Investment Fund as of the immediately preceding Valuation Date, minus (B) any distributions or withdrawals or transfers to other Investment Funds which were made from such Account since such preceding Valuation Date and on or before such current Valuation Date, plus (C) any amounts transferred to such Investment Fund since the immediately preceding Valuation Date bears to (ii)(A) the total amount invested in such Investment Fund by all Participants as of the immediately preceding Valuation Date, minus (B) any distributions or withdrawals or transfers to other Investment Funds which were made since such preceding Valuation Date and on or before such current Valuation Date, plus (C) any amounts transferred to such Investment Fund since the immediately preceding Valuation Date.

     (c) Unitized Investments . To the extent that the Plan’s recordkeeper keeps its records on the basis of units, the fair market value of each Investment Fund shall be determined on the basis of units. Furthermore, adjustments for Contributions, distributions, withdrawals and transfers to or from each such Investment Fund for purposes of determining fair market value shall be made on the basis of units.

     5.7 Notice to Participants of Account Balances . At least once for each Plan Year, the Plan Administrator shall cause a written statement of a Participant’s Account balance to be distributed to the Participant.

     5.8 Good Faith Valuation Binding . In determining the value of the Trust Fund and the Accounts, the Trustee and the Plan Administrator shall exercise their best judgment, and all such determinations of value (in the absence of bad faith) shall be binding upon all Participants and Beneficiaries.

     5.9 Errors and Omissions in Accounts . If an error or omission is discovered in the Account of a Participant or Beneficiary, the Plan Administrator shall cause appropriate, equitable adjustments to be made as of the Valuation Date as soon as practicable following the discovery of such error or omission.

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ARTICLE VI

CONTRIBUTION AND SECTION 415 LIMITATIONS
AND NONDISCRIMINATION REQUIREMENTS

     6.1 Deductibility Limitations . In no event shall the total Company Contribution amount for any taxable year of a Participating Company exceed that amount which is properly deductible for federal income tax purposes under the then appropriate provisions of the Code. Generally, the maximum, tax-deductible Company Contribution amount for any taxable year of a Participating Company shall be equal to 15 percent of the total Compensation paid or accrued during such taxable year to all Participants employed by such Participating Company; provided, no Company Contribution amount shall be deductible if it shall cause the Plan to exceed the applicable maximum allocation limitations under Code section 415, as described in Section 6.6. For purposes of this Section, a Company Contribution may be deemed made by a Participating Company for a taxable year if it is paid to the Trustee on or before the date of filing the Participating Company’s federal income tax return (including extensions thereof) for that year or on or before such other date as shall be within the time allowed to permit proper deduction by the Participating Company of the amount so contributed for federal income tax purposes for the year in which the obligation to make such Company Contribution was incurred.

     6.2 Maximum Limitation on Elective Deferrals .

     (a) Maximum Elective Deferrals Under Participating Company Plans . The aggregate amount of a Participant’s Elective Deferrals made for any calendar year under the Plan and any other plans, contracts or arrangements with the Participating Companies shall not exceed the Maximum Deferral Amount.

     (b) Return of Excess Pre-Tax Contributions . If the aggregate amount of a Participant’s Pre-Tax Contributions made for any calendar year by itself exceeds the Maximum Deferral Amount, the Participant shall be deemed to have notified the Plan Administrator of such excess, and the Plan Administrator shall cause the Trustee to recharacterize, if possible, all or a portion of such excess amount as a Catch-up Contribution to the extent permitted under Section 3.10 and Code Section 414(v), and then if there is still an excess remaining, to distribute to such Participant, on or before April 15 of the next succeeding calendar year, the total of (i) the amount by which such Pre-Tax Contributions exceed the Maximum Deferral Amount, plus (ii) any earnings allocable thereto. In determining the amount of earnings allocable to Excess Pre-Tax Contributions, any reasonable alternative method of calculating earnings allocable to Excess Pre-Tax Contributions may be utilized, including the safe harbor method. Earnings from the end of the Plan Year through a date that is no more than seven (7) days before the actual date of distribution (“gap period” income) will also be calculated and distributed with such Excess Pre-Tax Contributions. In addition, Matching Contributions made on behalf of the Participant which are attributable to the distributed Pre-Tax Contributions shall be forfeited.

     (c) Return of Excess Elective Deferrals Provided by Other Participating Company Arrangements . If after the reduction described in subsection (b) hereof, a

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Participant’s aggregate Elective Deferrals under plans, contracts and arrangements with Participating Companies still exceed the Maximum Deferral Amount, then, the Participant shall be deemed to have notified the Plan Administrator of such excess, and, unless the Plan Administrator directs otherwise, such excess shall be reduced by distributing to the Participant Elective Deferrals that were made for the calendar year under such plans, contracts and/or arrangements with Participating Companies other than the Plan. However, if the Plan Administrator decides to make any such distributions from Pre-Tax Contributions made to the Plan, such distributions (including forfeiture of Matching Contributions) shall be made in a manner similar to that described in subsection (b) hereof.

     (d) Discretionary Return of Elective Deferrals . If, after the reductions described in subsections (b) and (c) hereof, (i) a Participant’s aggregate Elective Deferrals made for any calendar year under the Plan and any other plans, contracts or arrangements with Participating Companies and any other employers still exceed the Maximum Deferral Amount, and (ii) such Participant submits to the Plan Administrator, on or before the March 1 following the end of such calendar year, a written request that the Plan Administrator distribute to such Participant all or a portion of his remaining Pre Tax Contributions made for such calendar year, and any earnings attributable thereto (including “gap period” income as described in subsection (b) hereof), then the Plan Administrator may, but shall not be required to, cause the Trustee to distribute such amount to such Participant on or before the following April 15. However, if the Plan Administrator decides to make any such distributions from Pre-Tax Contributions made to the Plan, such distributions (including forfeiture of Matching Contributions) shall be made in a manner similar to that described in subsection (b) hereof.

     (e) Return of Excess Annual Additions . Any Pre-Tax Contributions returned to a Participant to correct excess Annual Additions shall be disregarded for purposes of determining whether the Maximum Deferral Amount has been exceeded.

     (f) Recharacterization of Catch-up Contributions . In the event a Participant’s Pre-Tax Contributions for a Plan Year do not equal the Maximum Deferral Amount, a Participant’s Catch-up Contributions, if any, for such Plan Year shall be recharacterized as Pre-Tax Contributions for all purposes to the extent necessary to increase Pre-Tax Contributions to equal such Maximum Deferral Amount. In the event that such Catch-up Contributions are recharacterized as Pre-Tax Contributions, such recharacterized amounts shall be treated as Pre-Tax Contributions for all purposes hereunder, including limitations.

     6.3 Nondiscrimination Requirements for Pre-Tax Contributions .

     (a) ADP Test . The annual allocation of the aggregate of all Pre-Tax Contributions, any Qualified Nonelective Contributions designated by the Plan Administrator for use in connection with the ADP Tests, and, to the extent taken into account under subsection (b) hereof, elective and/or qualified nonelective contributions made under another plan, shall satisfy at least one of the following ADP Tests for each Plan Year:

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     (1) The ADP for a Plan Year for the Highly Compensated Employees who are Active Participants shall not exceed the product of (A) the ADP for the current Plan Year for the Active Participants who are not Highly Compensated Employees, multiplied by (B) 1.25; or

     (2) The ADP for a Plan Year for the Highly Compensated Employees who are Active Participants shall not exceed the ADP for the current Plan Year for the Active Participants who are not Highly Compensated Employees by more than 2 percentage points, nor shall it exceed the product of (A) the ADP for the current Plan Year of the Active Participants who are not Highly Compensated Employees, multiplied by (B) 2.

     (b) Multiple Plans . If pre-tax and/or qualified nonelective contributions are made to one or more other plans (other than employee stock ownership plans as described in Code section 4975(e)(7)) which, along with the Plan, are considered as a single plan for purposes of Code section 401(a)(4) or section 410(b), such plans shall be treated as one plan for purposes of this Section, and the pre-tax and applicable qualified nonelective contributions made to those other plans shall be combined with the Pre-Tax and applicable Discretionary Contributions for purposes of performing the tests described in subsection (a) hereof. In addition, the Plan Administrator may elect to treat the Plan as a single plan along with the one or more other plans (other than employee stock ownership plans as described in Code section 4975(e)(7)) to which pre-tax and/or qualified nonelective contributions are made for purposes of this Section; provided, the Plan and all of such other plans also must be treated as a single plan for purposes of satisfying the requirements of Code section 401(a)(4) and section 410(b) (other than the requirements of Code section 410(b)(2)(A)(ii)). However, plans may be aggregated for purposes of this subsection only if they have the same plan year.

     (c) Adjustments to Actual Deferral Percentages . In the event that the allocation of the Pre-Tax Contributions and qualified nonelective contributions for a Plan Year does not satisfy one of the ADP Tests of subsection (a) hereof, the Plan Administrator shall cause the Pre-Tax and Discretionary Contributions for such Plan Year to be adjusted in accordance with one or a combination of the following options:

     (1) The Plan Administrator may cause the Participating Companies to make, with respect to such Plan Year, Discretionary Contributions on behalf of, and allocable to, the Eligible Participants described in Section 5.3 with respect to such Plan Year, in the minimum amount necessary to satisfy one of the ADP Tests. Such Discretionary Contributions shall be allocated among such Eligible Participants pursuant to one of the methods described in Section 5.3.

     (2) (A) Notwithstanding any other provision of the Plan, Excess Contributions, plus any income and minus any loss allocable thereto, shall be distributed no later than the last day of each Plan Year to Participants to whose Accounts such Excess Contributions were allocated for the preceding Plan Year. The Committee will determine the aggregate amount of Excess Contributions to be distributed by reducing the ADP Percentage of the Highly Compensated

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Employee with the highest ADP to the extent necessary to (i) satisfy the ADP limits of Section 6.3(a), or (ii) cause such Highly Compensated Employee’s


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