SOUTHWEST GAS CORPORATION EMPLOYEES' INVESTMENT PLAN

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(5) years, who is not Vested pursuant to Section 6.04 at the time he incurs such five (5) consecutive one (1) year Periods of Severance, but is then reemployed by the Company; his Service prior to such five (5) consecutive one (1) year Periods of Severance shall be forfeited and shall not be included in determining his Service under paragraph (a) above.  Such person's Service at the time of a one (1) year Period of Severance shall not include any Service disregarded by virtue of the application of this subparagraph to any prior one (1) year Period of Severance.

Spouse means the person to whom the Participant has been legally married throughout the one year period ending on the earlier of the date the Participant receives or begins to receive his benefit payment from the Plan, or the date of the Participant's death. ›

Total Vested Account Balance means the value of the Participant's Deferral Account, Frozen After Tax Account, and Rollover Account, as well as the Vested portion of his Company Matching Contributions Account.

Trust means one or more Trusts established pursuant to the Trust Agreement for purposes of funding the benefits of this Plan.

Trust Agreement means one or more Trust Agreements executed by the Company and provided for the administration of the Trust.

Trust Fund or Funds means the total amount of contributions made by the Participants and the Company together with the net earnings on them, that will be used to provide the benefits to Participants and their Beneficiaries under the Plan.

Trustee means the Trustee of the Trust and any successor Trustee as appointed in the Trust Agreement.

USERRA means the Uniform Services Employment and Reemployment Rights Act of 1994.

Valuation Date means the close of business of each Business Day.

Valuation Period means daily.

Vested means nonforfeitable.  The Vested portion of a Participant's Account is determined in accordance with the provisions of Article 6.

Voice Response System means a system of telephonic or other verbal or electronic communication with the Plan Trustee or record-keeper that has been approved by the Committee for the purpose of making certain elections under the Plan.

Effective April 1, 1992, any Eligible Employee shall be eligible to participate in the Plan.

If a company other than Southwest Gas Corporation becomes an Affiliated Company after December 31, 1988, any employee of such company may elect to become an Eligible Employee as of the later of the employee's date of hire by such company or the date such company adopts the Plan in a manner acceptable to the Committee or the Board.

An Eligible Employee shall become a Participant on the Entry Date coincident with or first following successful completion of enrollment through the Voice Response System, or in such other manner as is allowed by the Committee from time to time, authorizing the Company to withhold such contributions from his Compensation and to pay the same amount to the Trustee, designating the allocation of these contributions between the Investment Funds, and designating a Beneficiary.

If an Eligible Employee who met the eligibility requirements of Section 2.01 and whose employment has terminated is subsequently rehired as an Eligible Employee, he may elect to participate pursuant to Section 2.02 and shall, if administratively practicable, enter the Plan on the following Entry Date.  A rehired Employee who had not met the eligibility requirements of Section 2.01 before his employment terminated will be eligible to enter the Plan on the first Entry Date after he satisfies the requirements of Section 2.01.  If an Eligible Employee terminates employment and is rehired in the same Plan Year, he may elect to participate

pursuant to Section 2.02 on the date he is rehired and shall, if administratively practicable, enter the Plan on the following Entry Date.

A Participant who continues in the employ of the Company after Normal Retirement Age will continue to be eligible to be a Participant.

Upon enrollment or reenrollment in the Plan, each Participant must elect to reduce his Compensation in a fixed whole percentage of not less than 2 percent and not more than 6 percent.  The Company will make payments to the Plan within the time frame required by applicable laws and regulations of the amount of the reduction, to be credited to the Participant's Deferral Account.  Amounts deferred under this subsection will be contributed as Matched Deferrals.

Participant making Matched Deferrals at the maximum percentage rate may elect to further reduce his Compensation in a fixed whole percentage of not less than one percent (1%) and not more than fifty-four percent  (54%) or the cash compensation payable to the Participant after all other applicable withholdings.   The Company will make payments to the Plan within the time frame required by applicable laws and regulations of the amount of the reduction to be credited to the Participant's Deferral Account.  Amounts deferred under this subsection will be contributed as Unmatched Deferrals.

A Participant's Deferral percentage will remain in effect until the Participant elects to change the percentage.  A Participant may elect to change or suspend his Deferral percentage or resume all suspended Deferrals through the Voice Response System or in such other manner as is approved by the Committee from time to time.  Changes to a Participant’s Deferral election may be made on a daily basis and will be effective as soon as practicable thereafter, but in no event will such change become effective prior to the beginning of the Participant’s next full pay period.

Participant Deferrals under this section will be made by payroll deductions authorized by the Participant and will be paid to the Plan by the Company.  Participant Deferrals constitute Company contributions under the Plan and are intended to qualify as elective contributions under Code Section 401(k).  Elective contributions invested by Participants in the Southwest Gas Stock Fund are also intended to qualify as contributions under the ESOP provisions of the Plan.

No Eligible Employee who is a Participant will be permitted to make Deferrals under this Plan or any other qualified plan maintained by the Company during any taxable year in excess of the dollar limitation contained in Code Section 402(g) in effect for such taxable years, except to the extent permitted under Section 3.03(b) of the Plan and Code Section 414(v), if applicable.  The foregoing limit shall not apply to Deferrals of amounts attributable to service performed in 1986 and described in Section 1105(c)(5) of the Tax Reform Act of 1986.

For Plan Years beginning after December 31, 2001, Participants who have attained age 50 before the close of the Plan Year shall (at such times and in such manner as is determined by the Committee with respect to all Participants eligible to make catch-up contributions) be eligible to make catch-up contributions in accordance with, and subject to the limitations of Code Section 414(v).  Such catch-up contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Code Sections 402(g) and 415.

If a Participant has made Excess Deferrals, the following provisions shall apply:

that:  (A) he has Excess Deferrals included with his Deferrals under this Plan for the immediately preceding calendar year; and (B) the amount of such Excess Deferrals which are to be allocated to this Plan for such immediately preceding calendar year, the Committee shall direct the Trustee to make a single payment from the Trust Fund, adjusted for any applicable Trust Fund investment income or loss thereon, to the Participant by April 15 immediately following the calendar year in which the Excess Deferrals occurred.

For purposes of this Section 3.04, the following terms shall have the following meanings:

If during the Determination Year or Look-Back Year, an individual employed by the Employer is an Employee and is a Family Member of either a Five Percent Owner, or a Higher Compensated Employee who is one of the ten (10) most highly compensated Employees of the Company (ranked on the basis of Compensation paid by the Company during such year), the Actual Deferral Ratio for the Five Percent Owner or Higher Compensated Employee and such Family Member (who together shall be treated as one Higher Compensated Employee) shall be the ratio determined by combining the Deferrals and Compensation of all eligible Family Members.

Effective for Plan Years beginning after December 31, 1996, the aforesaid family aggregation rules shall no longer apply.

Deferrals will be taken into account in determining a Participant's Actual Deferral Ratio for a Plan Year only if such contributions are: (a) allocated to the contributing Participant's applicable Plan account, as of a date within such year, i.e.:  (b) are not contingent on the Participant's Plan participation or performance of future services subsequent to such date; (c) are actually paid to the Trust by the end of the twelfth (12th) month following the close of the Plan Year; and (d) relate to Compensation that either would have been received by the Participant in the Plan Year (but for being contributed as a

Deferral to the Plan) or is attributable to services performed by the Participant in the Plan Year and would have been received by the Participant within two and one-half months after the close of the Plan Year (but for being contributed to the Plan as a Deferral).

As an alternative to the above, if:  (A) at all times during any Plan Year, the Company maintained significant business activities and employed employees in at least two (2) significantly separate geographic areas; and (B) the Company satisfies such other conditions as the Secretary of Treasury or his or her delegate may prescribe, then the Company may make the following election in determining whether an Employee is a Higher Compensated Employee for such Plan Year:  (A) item (vii)(B) above shall be applied by substituting fifty thousand dollars "($50,000)" (or such higher amount adjusted in accordance with regulations prescribed by the Secretary of Treasury or his or her delegate under Code Section 414(q)) for seventy-five thousand dollars "($75,000)"; and (B) item (vii)(C) above shall not apply.

Notwithstanding the above, an Employee who fits in item (vii)(B), (vii)(C), or (vii)(D) above in the Determination Year, but not in the Look-Back Year, will not be a Higher Compensated Employee unless:  (A) he or she is a Five Percent Owner in the Determination Year or the Look-Back Year; or (B) he or she is one of the one hundred (100) highest paid Employees of the Employer during the Determination Year.  "Higher Compensated Employees" also means any individuals who were Employees, separated from service with the Company before the Determination Year, and were Higher Compensated Employees in the Plan Year they separated from service with the Company or any Plan Year ending on or after they attained age fifty-five (55).

If an Employee is, during a Determination Year or Look-Back Year, a Family Member of either a Five Percent Owner who is an active or former Employee or a Higher Compensated Employee who is one of the ten (10) most highly compensated Higher Compensated Employees ranked on the basis of Compensation paid by the

Company during such year, then the Family Member and the Five Percent Owner or top-ten Higher Compensated Employee shall be aggregated.  In such case, the Family Member and Five Percent Owner or top-ten Higher Compensated Employee shall be treated as a single Employee receiving Compensation and Plan contributions or benefits equal to the sum of such Compensation and contributions or benefits of the Family Member and Five Percent Owner or top-ten Higher Compensated Employee.

The determination of who is a Higher Compensated Employee, including determinations of the number and identity of Employees in the Top-Paid Group, the top one hundred (100) Employees, the number of Employees treated as officers, and the Compensation that is considered, will be made in accordance with Code Section 414(q) and the regulations thereunder.

Notwithstanding any language to the contrary in this subsection, effective for Plan Years beginning after December 31, 1996, the term “Higher Compensated Employees” shall for a given Determination Year mean solely Eligible Employees able to participate in the Plan during such Plan Year whether or not participating, and who:

In determining which Eligible Employees are Higher Compensated Employees for the first Plan Year after December 31, 1996, the family aggregation rules set forth in this subsection shall not be applied in such Plan Year or the proceeding Plan Year.

Each Plan Year the annual allocation derived from a Participant's Deferrals shall satisfy one of the following tests or any other test which might be prescribed under Code Section 401(k):

Notwithstanding the foregoing provisions of this subsection, effective for Plan Years beginning after December 31, 1996, the Actual Deferral Percentage for Lower Compensated Employees that shall, except as provided in the following sentence, be used in applying the tests set forth in this subsection for a Determination Year shall be the Actual Deferral Percentage for Lower Compensated Employees in the Determination Year.  The Company may elect (in a manner consistent with guidance prescribed by the Internal Revenue Service; provided such guidance is issued) to use, when applying the tests set forth in this subsection, the Actual Deferral Percentage of Lower Compensated Employees in the Look-Back Year instead of the Determination Year.  In the Plan Years beginning January 1, 1997, 1998, 1999, 2000 and 2001, the Company elected to utilize the Actual Deferral Percentage of Lower Compensated Employees for the Determination Year.

If the limits in Section 3.04(b) are exceeded in any Plan Year, the following provisions shall apply:

The Committee shall make the reduction on a uniform basis.  It shall first apply to Higher Compensated Employees then contributing the highest rate of Section 3.01 unmatched Deferrals and then to Higher Compensated Employees then contributing the next highest rate of Section 3.01 unmatched Deferrals and so on, in descending order, from the highest rate.  If the reduction of Section 3.01 unmatched Deferrals is not sufficient, then the reduction shall apply to Higher Compensated Employees then contributing the highest rate of Section 3.01 matched Deferrals and then to Higher Compensated Employees then contributing the next highest rate of Section 3.01 matched Deferrals and so on, in descending order from the highest rate.  The Committee shall establish such rules as the Committee, in its sole discretion, deems appropriate to carry out the provisions of this paragraph.

For the purposes of this subsection, the phrases “rate of Section 3.01 Unmatched Deferrals” and “rate of Section 3.01 Matched Deferrals” shall, for Plan Years beginning after December 31, 1996, refer to the dollar amount of such Deferrals.  In Plan Years beginning prior to January 1, 1997, the phrase “rate of Section 3.01 Unmatched Deferrals” shall refer to the ratio of a Higher Compensated Employee’s Unmatched Deferrals to Compensation and the phrase “rate of Section 3.01 Matched Deferrals” shall refer to the ratio of a Higher Compensated Employee’s Matched Deferrals to Compensation.

distributed to each Higher Compensated Employee, the Committee shall direct the Trustee to distribute the Deferrals allocated to Higher Compensated Employees for the Plan Year in which the Excess Contributions occurred to the extent necessary to prevent the Actual Deferral Percentage for the group of Higher Compensated Employees from exceeding the permissible Actual Deferral Percentage for the group.

The Committee shall direct the Trustee to make the distribution on a uniform basis.  It shall first be made with respect to Higher Compensated Employees with the highest Actual Deferral Ratio for the Plan Year and then with respect to Higher Compensated Employees with the next highest Actual Deferral Ratio for the Plan Year and so on, in descending order from the highest rate until the test in Section 3.04(b) is satisfied.

For the purposes of this subsection, the phrase “Actual Deferral Ratio” shall for Plan Years beginning after December 31, 1996, refer to the dollar amount of such Deferrals and for Plan Years beginning before January 1, 1997, shall mean the Actual Deferral Ratio of a Higher Compensated Employee.

The portion of the Excess Contributions applicable to each Higher Compensated Employee shall be distributed to the Higher Compensated Employee in a single payment.  The portion of each Higher Compensated Employee's Excess Contributions that is to be distributed in accordance with this Section 3.04 shall be reduced by any Excess Deferrals previously distributed to the Higher Compensated Employee with respect to the same Plan Year under Section 3.03.

date it is distributed.  The Committee shall establish such rules and give such timely directions to the Trustee as the Committee, in its sole discretion, deems appropriate to carry out the provisions of this paragraph.

In the case of a Higher Compensated Employee whose Actual Deferral Ratio is determined under the family aggregation rules, the determination of the amount of Excess Contributions shall be made by combining the Deferrals and Compensation of all Family Members, the Excess Contributions shall be reduced in accordance with the method described in subparagraphs (c)(I-iii) above and the Excess Contributions for the family unit shall be allocated among the Family Members in proportion to the Deferrals of each Family Member that have been combined to determine the Actual Deferral Ratio. Effective for Plan Years beginning after December 31, 1996, the aforesaid family aggregation rules shall no longer apply.

For purposes of this Section 3.05, the following terms shall have the following meanings:

or

Compensated Employees for such Plan Year; or (b) the Contribution Percentage of the Lower Compensated Employees for the Plan Year; and

If, during the Determination Year or Look-Back Year, an individual employed by the Company is an Employee and is a Family Member of either a Five Percent Owner, or a Higher Compensated Employee who is one of the ten (10) most Highly Compensated Employees of the Company (ranked on the basis of Compensation paid by the Company during such year), the Contribution Percentage Ratio for the Five Percent Owner or Higher Compensated Employee and such Family Member (who together shall be treated as one Higher Compensated Employee) must be determined by combining the Company Section 3.02 matching contributions, (and Deferrals, if the Company makes a Section 3.05(d) election) and Compensation of all Family Members.  Except to the extent taken into account in the immediately preceding sentence, the Company Section 3.02 matching contributions, (and Deferrals, if the Company makes a Section 3.05(d) election) and Compensation of all Family Members are disregarded in determining the Contribution Percentage for the groups of Higher Compensated Employees and Lower Compensated Employees. Effective for Plan Years beginning after December 31, 1996, the aforesaid family aggregation rules shall no longer apply.

The Company's Section 3.02 matching contribution will be taken into account in determining a Participant's Contribution Percentage Ratio for a Plan Year only if such contribution is made on account of the

Participant's Deferrals for the Plan Year, is (under the terms of the Plan) allocated to the Participant's applicable account as of a date within that year, and is actually paid to the Trust by no later than the twelfth (12th) month following the close of that year.  Qualified matching contributions which are used to meet the requirements of Code Section 401(k)(3)(A) are not to be taken into account for purposes of Section 3.05(a).

Each Plan Year the Company Section 3.02 matching contributions on behalf of Participants (and Deferrals, if the Company makes a Section 3.05(d) election) shall satisfy one of the following tests or any other test which might be prescribed under Code Section 401(m):

Notwithstanding the foregoing provisions of this subsection, effective for the Plan Years beginning after December 31, 1996, the Compensation Percentage for Lower Compensated Employees that shall, except as provided in the following sentence, be used in applying the tests set forth in this subsection for a Determination Year shall be the Compensation Percentage for Lower Compensated Employees in the Determination Year.  The Company may elect (in a manner consistent with guidance prescribed by the Internal Revenue Service; provided such guidance is issued) to use, when applying the tests set forth in this subsection, the Compensation Percentage of Lower Compensated Employees in the Look-Back  Year rather than that of the Determination Year.   Pursuant to the two foregoing sentences, in the Plan Years beginning January 1, 1997, 1998, 1999, 2000 and 2001, the Company elected to utilize the ACP of Lower Compensated Employees in the Determination Year.

For Plan Years beginning after December 31, 1988, if the sum of all Higher Compensated Employees' Actual Deferral Percentage and Contribution Percentage exceeds the Aggregate Limit, then the Contribution Percentage of Higher Compensated Employees shall be reduced in the manner set forth in Section 3.05(e) so that the Aggregate Limit is not exceeded.  The Actual Deferral Percentage and the Contribution Percentage of Higher Compensated Employees are determined after any corrections required to meet the tests set forth in Sections 3.04(b), 3.05(b) and (if applicable) 3.05(c).  Multiple use does not occur if both the Actual Deferral Percentage and the Contribution Percentage of Higher Compensated Employees do not exceed 1.25 multiplied by the Actual Deferral Percentage and the Contribution Percentage of Lower Compensated Employees.

The multiple use test described in Treasury Regulation section 1.401(m)-2 and in this subsection shall not apply for Plan Years beginning after December 31, 2001.

In computing the Contribution Percentage, the Company, in accordance with Treasury Regulation Section 1.401(m)-1(b)(5), may, to the extent allowed by such regulation, elect to use Deferrals in determining the Contribution Percentage.  The Committee shall establish such rules and give such directions to the Trustee as shall be appropriate to carry out Section 3.05(c).

If the limits in Sections 3.05(b) and (if applicable) 3.05(c) are exceeded in any Plan Year, the following provisions shall apply:

To determine the portion of the Excess Aggregate Contributions to be distributed to, or forfeited by, each Higher Compensated Employee, the Committee shall direct the Trustee to distribute, or cause to be forfeited, the Company Section 3.02 matching contributions (and Deferrals, if the Company makes a Section 3.05(d) election) allocated to the Higher Compensated Employee for the Plan Year in which the Excess Aggregate Contributions occurred to the extent necessary to prevent the Contribution Percentage for the group of Higher Compensated Employees from exceeding the permissible Contribution Percentage for the group.

The Committee shall direct the Trustee to make the distribution, or cause the forfeiture to be made, on a uniform basis.  It shall first be made with respect to the Higher Compensated Employee with the highest Contribution Percentage for the Plan Year and then with respect to the Higher Compensated Employee with the next highest Contribution Percentage for the Plan Year and so on, in descending order from the highest rate until the tests in Section 3.05(b) and (if applicable) 3.05(c) are satisfied.  For the purpose of this subparagraph, the phrase “Contribution Percentage” shall for Plan Years beginning after December 31, 1996, refer to the dollar amount of contributions that are considered in determining a Participant’s Contribution Percentage, and for Plan Years beginning before January 1, 1997, shall mean a Participant’s Contribution Percentage Ratio.

The portion of the Vested Excess Aggregate Contributions applicable to each Higher Compensated Employee shall be distributed to the Higher Compensated Employee in a single payment.  If the Company has elected under Section 3.05(d) to count Deferrals in the determination of Excess Aggregate Contributions, the portion of the Excess Aggregate Contributions applicable to each Higher Compensated Employee that is to be distributed or forfeited in accordance with this Section 3.05 shall be reduced by any Excess Deferrals and Excess Contributions previously distributed to the Higher Compensated Employee with respect to the same Plan Year under Sections 3.03 and 3.04.

forfeiture shall reduce the Participant's Company Matching Contribution Account, (and Deferral Account, if the Company makes a Section 3.05(d) election) as of the date it is distributed or forfeited, to the extent there is a distribution or forfeiture attributable to said Accounts.  The Committee shall establish such rules and give such timely directions to the Trustee as the Committee, in its sole discretion, deems appropriate to carry out the provisions of this paragraph.

Notwithstanding any provisions of this Plan to the contrary, the Annual Additions allocated to any Participant's Accounts for a Plan Year will not exceed the lesser of (i) twenty-five percent (25%) of the Participant's Compensation paid in such year, or (ii) $30,000, or, if greater, twenty-five percent (25%) of the dollar limitation in effect under Code Section 415(c)(1)(A) as adjusted by Code Section 415(d).

For purposes of this Section, "Annual Additions" means the total amount of Company Matching Contributions, Participant Deferrals, Participant after-tax contributions, if any, and forfeitures, if any, allocated to the Participant's Accounts during the Plan Year.

For Plan Years beginning before January 1, 2002, and notwithstanding any provision of this Plan to the contrary, the Annual Additions allocated to any Participant’s Accounts for a Plan Year will not exceed the lessor of (i) twenty-five percent (25%) of the Participant’s Compensation paid in such years, or (ii) $30,000, or, if greater, twenty-five percent (25%) of the dollar limitation in effect under Code Section 415(c)(1)(A) as adjusted by Code Section 415(d).

For Plan Years beginning after December 31, 2001, and notwithstanding any provisions of this Plan to the contrary (except to the extent permitted under Section 3.03(b) of the Plan and Code Section 414(v)), the Annual Additions that may be contributed or allocated to any Participant’s Accounts for a Plan Year will not exceed the lessor of (i)  $40,000, as adjusted for increases in the cost-of-living under Code Section 415(d), or (ii) one-hundred percent (100%) of the Participant’s Compensation, within the meaning of Code Section 415(c)(3) within such years.

The one-hundred percent (100%) Compensation limit referred to herein shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code Sections 401(h) or 419A(f)(2)) which is otherwise treated as an annual addition.

For purposes of this Section, “Annual Additions” means the total amount of Company Matching Contributions, Participant Deferrals, Participant after-tax contributions, if any, and forfeitures, if any, allocated to the Participant’s Accounts during the Plan Year, without regard to any rollover contribution as delineated in Code Section 415(c)(2).

The limitation of this Section 3.06 with respect to any Participant who at any time has participated in any other qualified defined contribution plan (as defined in ERISA Section 3(34) and Code Section 414(I)) maintained by an Affiliated Company will apply as if the total contributions allocated under all such defined contribution plans in which the Participant has participated were allocated under one Plan.

If a Participant has been a Participant in a qualified defined benefit plan (as defined in ERISA Section 3(35) and Code Section 414(j)) maintained by an Affiliated Company, the sum of the Participant's Defined Benefit Plan Fraction and Defined Contribution Plan Fraction for any year will not exceed 1.  For purposes of this subsection (c) only, the following words and phrases have the meanings specified below:

In the event that the Participant's Defined Benefit Plan Fraction and Defined Contribution Plan Fraction for any Plan Year exceed one, adjustments will be made by first reducing the amount in the numerator of the Defined Benefit Plan Fraction, to the extent possible, and then by reducing the amount in the numerator of the Defined Contribution Plan Fraction.

Effective for Plan Years beginning after 1999, the provisions of this subsection (c) shall no longer apply.

If as a result of an allocation of forfeitures, a reasonable error in estimating a Participant's Compensation, a reasonable error in determining a Participant's Deferrals, or other facts and circumstances that the Internal Revenue Service finds justifies the availability of this Section 3.06(d), the Annual Additions allocated to a Participant's Accounts for any Plan Year exceed the limitation in Section 3.06(a), the following provisions shall apply:

solely for the purpose of enabling the Company to withhold any federal, state, or local taxes due on such amounts.  The Company will pay all remaining amounts to the Participant.

Amounts forfeited pursuant to Section 6.05 will, except as otherwise provided in the Plan, be allocated quarterly, to Participants who are active or suspended as of the last day of the calendar quarter for which the forfeitures are being allocated.  Such forfeitures will be allocated to the Company Matching Contributions Account of such Participants by the fifteenth (15th) of the month following each quarter end.  The amount to be allocated, if administratively practicable, will bear the same ratio to the

total forfeitures for such calendar quarter as the Participant’s Company Matching

Contributions for the calendar quarter bear to the Company Matching Contributions of all Participants for the calendar quarter.

Effective January 1, 1993, the Committee shall decide whether to accept a transfer of assets from a Code Section 401(a)(31) eligible retirement plan with respect to a person who is or is about to become a Participant in this Plan, provided the transfer of such assets to this Plan qualifies as a direct or sixty (60) day rollover of a Code Section 401(a)(31)(C) eligible rollover distribution.

After December 31, 2001, the Committee shall decide whether to accept rollover distributions from Code Sections 401(a) and 403(a) qualified plans, Code Section 403(b) annuity contracts, and Code Section 457(b) eligible plans maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state with respect to a person who is or is about to become a Participant in this Plan, provided the transfer of such assets to this Plan qualifies as a direct or sixty (60) day rollover under the provisions of Code Section 401(a)(31).

The Committee shall require the Participant to provide reasonable evidence that any such amount meets the above requirements.  Failure of the Participant to provide such evidence will preclude the Plan's acceptance of any such amount.  Furthermore the Plan shall not be required to accept any transfer from another qualified plan.

The Committee may establish other uniform rules and procedures, consistent with the requirements of the Code and this Section 3.08, concerning the acceptance of rollover contributions, including rules that limit or prohibit wire transfers and other payments that are made directly to this Plan from another Plan in lieu of having the Participant receive a check payable to this Plan's Trustee for delivery to a Plan representative who is authorized to receive rollover contributions.

If the Company makes an incorrect Section 3.02 matching contribution on behalf of a Participant as a result of an error by the Company, then, notwithstanding Section 3.02, the Company shall increase or decrease Section 3.02 matching contributions to the Participant's Company Matching Contributions Account within a reasonable time after discovery of the error to the extent necessary, and allowed by law, to correct the error as long as the Section 3.02 matching contributions when averaged over the Plan Year equal the amount of contributions required under Section 3.02.  The Section 3.02 matching contributions shall be adjusted for earnings or losses which would have accrued to the Participant>s Company Matching Contributions

Account if the correct Section 3.02 matching contribution had been made. Alternatively, the Company may recover from the Trust Fund a Section 3.02 matching contribution made as a result of a mistake of fact if the requirements of the Trust are satisfied.

If the Company makes an incorrect Deferral on behalf of Participant as a result of an error by the Company, then, notwithstanding the percentage limitations set forth in Section 3.01, the Participant may elect to increase or decrease his or her Deferrals to the extent necessary to correct the error as long as his or her Deferrals when averaged over the Plan Year do not exceed the percentage limitations set forth in Sections 3.01.  The Deferrals made pursuant to this Section 3.09 shall not be adjusted for earnings or losses which would have accrued to the Participant's Accounts if the correct deposit had been made.

If the Company makes an incorrect Section 3.07 forfeiture allocation on behalf of a Participant as a result of an error by the Company, then, notwithstanding Section 3.07, the Company shall increase or decrease Section 3.07 forfeiture allocation to the Participant's Company Matching Contributions Account within a reasonable time after discovery of the error to the extent necessary, and allowed by law, to correct the error.  The Section 3.07 forfeiture allocation shall be adjusted for earnings or losses which would have accrued to the Participant's Company Matching Contributions Account if the correct Section 3.07 forfeiture allocation had been made.  Alternatively, the Company may recover from the Trust Fund a Section 3.07 forfeiture allocation made as a result of a mistake of fact if the requirements of the Trust are satisfied.

Notwithstanding the foregoing, any Deferrals and Company Section 3.02 matching contributions made pursuant to this Section 3.09 shall be subject to the limitations set forth in Sections 3.03, 3.04, 3.05, and 3.06.  Furthermore, any Company Section 3.07 forfeiture allocation made pursuant to this Section 3.09 shall be subject to the limitations set forth in Section 3.06.

If, in any Plan Year, a non Eligible Employee is erroneously included as a Participant in the Plan and discovery of such erroneous inclusion is not made until after a Deferral for the Plan Year has been made, the Company may, if allowed by law, recover the Deferral, and any earnings thereon, from the Trust Fund and refund it to such Employee, when a distributable event under Code Section 401(k) occurs.  The Company may recover a Section 3.02 matching contribution or a Section 3.07 forfeiture allocation from the Trust Fund if and only if the requirements of the Trust are satisfied.

The Committee will establish and maintain in the name of each Participant a Company Matching Contributions Account, a Deferral Account, a Frozen After Tax Account, and a Rollover Account.  A Participant's Accounts will be credited with contributions and forfeitures, charged with withdrawals and distributions, and adjusted for investment results as determined under the Plan and otherwise as set forth in the Plan.

Upon enrollment or reenrollment, each Participant will have his Accounts invested in the Trust Fund.  The Trust Fund will consist of those Investment Funds described in Schedule A attached to this Plan and incorporated as part of the Plan.  Each Participant will have the right upon enrollment, reenrollment, and during participation, to elect the Investment Fund(s) under which future contributions to his Deferral Account, Rollover Account and Frozen After Tax Account will be invested, by making such election through the Voice Response System or in such other manner as is allowed by the Committee from time to time.  The election will include the percentage, subject to the restrictions in Schedule A, of future contributions to be invested in each Investment Fund, with the total of the percentages equal to one hundred percent (100%).  Such election for future contributions will be effective as soon as administratively practicable on or after the Business Day such election is received by the Voice Response System or by the Committee and/or its designee if the Committee creates an alternative method of making such elections.

In addition, each Participant will also have the right to have all or any part of his Deferral Account, Rollover Account or Frozen After Tax Account transferred among and between the Investment Fund(s), subject to the restrictions set forth in Schedule A, by making such election through the Voice Response System.  Transfers in a Participant’s Accounts will take place as soon as administratively practicable on or after the Business Day such election is received by the Voice Response System.  The Committee may create alternative rules allowing for such transfers.

Except for Participant Deferrals invested in Employer Securities and as provided in Section 4.03 below, the Committee will exercise voting, tender, and other rights with respect to the Investment Funds.

All Company Matching Contributions shall be primarily invested in the Southwest Gas Stock Fund, and shall be a part of the Employee Stock Ownership Plan.  Such

contributions shall be based on the fair market value of the Company Stock at the time contributed by the Company or purchased by the Trustee from the Company, in the open market, or in privately negotiated transactions.  However, upon reaching age fifty (50), a Participant may elect the Investment Fund(s) in which the present balance of his Company Matching Contributions Account, as well as all future contributions to his Company Matching Contributions Account, will be invested, using the procedures and following the timing for a transfer of a Participant's Account set forth above in Section 4.02.

This Plan may acquire and hold qualifying securities of the Company.  If all or part of a Participant's Company Matching Contribution Account or other accounts is invested in Employer Securities, such Participant shall be entitled to the voting rights based on the value of such stock in his Account.  The Trustee will vote the Company Stock that is not voted by Participants in the same ratio that the stock is voted by the Participants who exercised their voting rights.  The Committee, in a nondiscriminatory manner, will make any other necessary decisions arising out of the acquisition or holding of Employer Securities.

All determinations of a Participant's Account balances shall be based on the value as of the last available or coincident Valuation Date.  Accounts are debited and credited on the actual date of a transaction.  Dividends and interest are posted on the date declared.  Realized gains and losses are debited or credited at the time of the transaction (i.e., exchanges, withdrawals).

Notwithstanding anything else in this Plan to the contrary, the Committee will, unless in its discretion it determines otherwise, decline to carry out a Participant's investment instructions if such instructions:

Furthermore, notwithstanding any language in this Plan to the contrary, the Committee may establish any and all rules and regulations it deems necessary to provide and allow for a change in Plan record keeper, and/or Trustee, or a change in Investment Funds, as determined by the Committee, that are available to Plan Participants.  Such rules and regulations may include, but not be limited to, limits or prohibitions, during specified time periods, on the availability of Participant enrollments, withdrawals, distributions, loans, rollover contributions, Investment Fund transfers, and/or changes in Deferral elections.

Through the Voice Response System, a Participant may withdraw, in cash, from his Frozen After Tax Account a minimum of five hundred dollars ($500) or one hundred percent (100%) of the value of his Frozen After Tax Account, if less, as of the date of the request.  Only Participants who are ERISA Section 3(14) parties in interest can request and receive such withdrawal.  Withdrawals from a Participant's Frozen After Tax Account will be first withdrawn from pre-1987 voluntary contributions and the remainder thereafter from pre-1987 earnings and post-1986 earnings.

Withdrawals will be processed as soon as administratively practicable on or after the Business Day the request for withdrawal is received by the Voice Response System.  A Participant will be permitted to make such a withdrawal once in any twelve (12) month period.

Through the Voice Response System, a Participant may withdraw, in a cash lump sum distribution, or Section 7.03 eligible rollover distribution, from his Company Matching Contributions Account a minimum of five hundred dollars ($500) or one hundred percent (100%) of the value of his Company Matching Contributions Account, if less, as of the date of the request.  Only Participants who are ERISA Section 3(14) parties in interest can request and receive such withdrawal.  A  Participant will be permitted to make such a withdrawal only if he has previously withdrawn all amounts available to him in accordance with section 5.01 and only if

his Company Matching Contributions Account is one hundred percent (100%) vested.  A Participant will be permitted to make such a withdrawal once in any twelve (12) month period.

Subject to the approval of the Committee, a Participant may be permitted to withdraw from the Participant's Deferral Account to meet the financial hardship.  Only Participants who are ERISA Section 3(14) parties in interest can request and receive such withdrawal.  The withdrawal will be divided among the Investment Funds in the same proportion as the Participant's Deferral Account is invested in the Investment Funds.  A Participant may not withdraw any interest earned on his Deferral Account.  The Committee shall establish rules for determining the value of the Participant's Deferral Account when a hardship withdrawal is requested.

The Committee will determine, in a nondiscriminatory manner, and in accordance with applicable Treasury Regulations, whether a Participant has a financial hardship.  A distribution may be made on account of financial hardship if the distribution is necessary in light of immediate and heavy financial need of the Participant and if such distribution is necessary to satisfy the need.

A hardship withdrawal application and procedures will be sent to the Participant as soon as practicable on or after the business day in which the request is received through the Voice Response System.  If the application is not received and approved within thirty (30) days from the date of request, the Participant will be required to reactivate his request for a withdrawal through the Voice Response System.  Distribution will be in a single cash payment; provided, however, if all or part of the distribution is a Section 7.03 Eligible Rollover Distribution, the distribution shall be made in one of the three following forms that the Participant must elect among:

Effective January 1, 1994, if a distribution is one to which Code Sections 401(a)(11) and 417 do not apply, such distribution may commence less than thirty (30) days after the notice required under Treasury Regulation Section 1.411(a)-11(c) is given, provided that:

A withdrawal by a Participant shall not impose undue administrative burden upon the Company, the Trustee or the Committee, or in any way adverse the rights or interests of other Participants.  Undue administrative burden will be subject to review and determination by the Committee.  A Participant shall not be permitted to make up any amounts withdrawn.

Pending its determination of whether a domestic relations order (DRO) is a Qualified Domestic Relations Order, the Committee shall in its discretion direct the Trustee to ban any loans or withdrawals from the Participant’s Plan Accounts, and to separately account for the amounts which would have been payable to the Alternate Payee during the determination period (described below) if the DRO had been determined to be a Qualified Domestic Relations Order.  Once the DRO is deemed to be a Qualified Domestic Relations Order, the Committee shall direct the Trustee to segregate the amount payable to the Alternate Payee into a separate account.  The law provides an 18-month period from the date on which the DRO requires the first payment to the Alternate Payee for the Committee to determine if the DRO is a

Qualified Domestic Relations Order.  If the Committee determines that the DRO is not a Qualified Domestic Relations Order or if the issue is not resolved within the 18-month period, the Committee shall direct the Trustee to pay the separate account, adjusted for earnings and losses thereon, to the person who would have been entitled to the amounts if there were no DRO.  Any determination that a DRO is a Qualified Domestic Relations Order made after the close of the 18-month period shall be applied prospectively only.

The Company Matching Contributions Account of a Participant will become, if it has not already done so, one hundred percent (100%) Vested on the date the Participant attains his Normal Retirement Age.  A Participant is always fully Vested in his Deferral Account, Frozen After Tax Account, and Rollover Account.  A Participant's retirement benefit shall be the amount credited to his Accounts as of the Valuation Date preceding distribution of such benefit plus Section 3 contributions to such Accounts on behalf of the Participant after such Valuation Date.

The Company Matching Contributions Account of a Participant whose employment with the Company is terminated because he is Permanently and Totally Disabled will become, if it has not already done so, one hundred percent (100%) Vested on the date the Participant's employment terminates due to the Participant becoming Permanently and Totally Disabled.  A Participant is always fully Vested in his Deferral Account, Frozen After Tax Account, and Rollover Account.  A Participant's disability benefit shall be the amount credited to his Accounts as of the Valuation Date preceding distribution of such benefit plus Section 3 contributions to such Accounts on behalf of the Participant after such Valuation Date.