NVR, INC. EMPLOYEE STOCK OWNERSHIP PLAN

Exhibit 10.1

NVR, INC.

EMPLOYEE STOCK OWNERSHIP PLAN

Originally Effective January 1, 1994

Amended and Restated Through January 1, 2002

Execution Copy

TABLE OF CONTENTS

Execution Copy

NVR, INC.

EMPLOYEE STOCK OWNERSHIP PLAN

(Originally Effective January 1, 1994
As Amended and Restated Through January 1, 2002)

1. NAME AND EFFECTIVE DATE

1.1 Name of the Plan.

     NVR, Inc. (the “Company”) maintains the NVR, Inc. Employee Stock Ownership Plan (the “Plan”), originally effective January 1, 1994, for the benefit of its eligible Employees and the Employees of any Affiliated Company that adopts the Plan in accordance with the terms of the Plan.

1.2 Purpose of the Plan.

     The Plan is designed to invest primarily in the capital stock of the Company (“Stock,” as further defined in Section 2 ). To facilitate investments by the Plan in Stock, the trustee (the “Trustee”) for the Plan and its related trust (the “Trust”) is authorized to obtain loans and other extensions of credit to finance the acquisition of Stock if directed to do so by the Company. Those loans and extensions of credit, which shall be referred to as “Acquisition Loans,” as further defined in Section 2 , may be secured by the shares of Stock acquired with the proceeds of those Acquisition Loans.

     The Company intends the Plan to constitute a stock bonus plan established pursuant to section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and intends the Plan to be funded with contributions by the Employer that qualify for the income tax deduction provided under Code Section 404. The Company also intends the Plan to constitute an employee stock ownership plan under section 407(d)(6) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and, to the extent that the acquisition of Stock is financed through one or more Acquisition Loans, intends the Plan to constitute an employee stock ownership plan under Code Section 4975(e)(7). The term “Employer” as used in this Plan includes the Company and any Affiliated Company (as defined in Section 2 ) that adopts the Plan and becomes a party to the Plan and any Trust Agreement for the Plan with the approval of the Board of Directors of the Company.

1.3 Restatement of Plan.

     The Company desires to amend and restate the provisions of the Plan, as set forth herein, effective through January 1, 2002, to reflect various changes, including but not limited to the laws governing the Plan.

     Unless an earlier effective date is indicated in this document as required by ERISA or the Code, the rights of any person whose status as a Member terminated before January 1, 2002 shall be determined pursuant to the Plan, as in effect on the date such employment terminated, unless a subsequently provision of the Plan is made applicable to such person.

2. DEFINITIONS

2.1 Definitions

          In this Plan the initially capitalized words shall have the following meanings unless the context clearly requires otherwise:

           “Acquisition Loan” means a loan (or other extension of credit) made to the Trustee for the purpose of financing the acquisition of Stock pursuant to and in accordance with the Plan. An Acquisition Loan, if any, shall constitute an extension of credit to the Trust Fund from a “party in interest” (as defined in ERISA Section 3(14)) and fall within the scope of the exemptions set forth in ERISA Section 408(b)(3) and Code Section 4975(d)(3).

           “Administrator” means the person or persons designated by the Company pursuant to Section 10 to administer the Plan. In the absence of any designation, the Company shall serve as Administrator through designated representatives and agents.

           “Affiliated Company” means any member of a controlled group of corporations of which the Employer is a member, or an unincorporated trade or business or affiliated service group which is under common control with the Employer as determined in accordance with Code Sections 414(b), 414(c) and 414(m) and regulations issued thereunder, or any other entity required to be aggregated with the Employer pursuant to Code Section 414(o) and the regulations promulgated thereunder.

           “Authorized Leave of Absence” means any absence authorized by the Employer under its standard personnel practices, provided that all Employees are treated alike in the authorization of absences.

           “Beneficiary” means the person or persons or trust or estate designated by a Member pursuant to the NVR, Inc. Profit Sharing Plan to receive any death benefit which may be payable under this Plan, or if the NVR Inc. Profit Sharing Plan has been terminated and there is no successor plan, the persons designated by the Member in accordance with Section 8.12 of the Plan.

           “Board of Directors” means the board of directors of NVR, Inc.

           “Break in Service” means a period of time commencing on the Member’s Severance Date and ending on the date (if any) on which the Member returns to active employment as an Employee.

           “Code” means the Internal Revenue Code of 1986, as amended.

           “Committee” means the Profit Sharing Committee appointed by the Board of Directors to act on behalf of the Company in administering the Plan as provided in Section 10 .

           “Company” means NVR, Inc. and its successors.

           “Compensation” means gross compensation paid during a Plan Year and shall include all salary, bonuses, wages, Voluntary Salary Reduction Contributions to the NVR, Inc. Profit Sharing Plan, Post-Tax Voluntary Contributions to the NVR, Inc. Profit Sharing Plan, salary reduction contributions made to the NVR, Inc. Flexible Benefit Plan (or successor plan), overtime and commissions paid to a Member by the Employer, and other similar payments, but shall not include expenses and reimbursements, the value of noncash trips or prizes, credits and benefits under the NVR, Inc. Profit Sharing Plan (other than Voluntary Salary Reduction Contributions and Post-Tax Voluntary Contributions), any excess contributions made under this Plan which are returned to a Member, or amounts contributed by the Employer to any employee pension, welfare, or health insurance plan, or any taxable income to a Member attributable to any present or future stock or deferred compensation plans. For purposes of Section 6.4 , in the case of a Member whose Employment Date is on or after July 2, “Compensation” for the Plan Year in which the Member first qualifies for membership under Section 3 shall include Compensation paid to such Member by the Employer for the period commencing with the Member’s Employment Date and ending on December 31 of the Plan Year that is previous to the Plan Year that the Member first qualifies for membership. For each Plan Year, the amount of a Member’s compensation that exceeds the Code Section 401(a)(17) limit shall not be a part of Compensation. For the Plan Year commencing January 1, 2002, this dollar limit is $200,000.

           “Effective Date” means January 1, 2002, the date as of which this amendment and restatement is effective, provided however, the provisions of this amended and restated Plan are effective as early as January 1, 1997 where reference is made to an earlier effective date.

           “Eligible Employee” means an Employee of an Employer who is paid on the U.S. payroll of the Employer, except any Employee:

          (a) Who is included in a unit of Employees covered by a collective bargaining agreement in which retirement benefits were the subject of good faith bargaining and which does not expressly provide for his or her participation in the Plan;

          (b) Who is a leased employee (within the meaning of Code Section 414(n)); or

          (c) Who is a nonresident alien and who is not receiving any U.S. source income from an Employer.

          An Eligible Employee shall not include any individual:

          (a) Who pursuant to an agreement between an Employer and a leasing organization is performing services for the Employer but who does not otherwise constitute a leased employee;

          (b) Who is not classified by an Employer as an Employee (including, but not limited to, an individual classified as an independent contractor) even if such individual is later determined to be an Employee; or

          (c) Who is subject to a written agreement that provides that such individual shall not be eligible to participate in the Plan.

          If, during any period, the Employer has not treated an individual as an Employee and, for that reason, has not withheld employment taxes with respect to that individual, then that individual shall not be an Eligible Employee for that period, even in the event that the individual is later determined, retroactively, to have been an Employee during all or any portion of that period.

           “Eligible Member” means, for any Plan Year, a Member who during the Plan Year is an Eligible Employee, completes at least 1,000 Hours of Service and is an Employee on the last day of the Plan Year or, if terminated prior to the end of the Plan Year, terminated due to death, Permanent and Total Disability (determined in accordance with Section 8.2 ) or retirement.

           “Employee” means any person who receives remuneration for personal services rendered to the Employer or an Affiliated Company or who would receive such remuneration except for an Authorized Leave of Absence. The term Employee includes any person who is a “leased employee” of the Employer (within the meaning of Code Section 414(n)).

           “Employer” means the Company, its respective successors, and each other corporation or business entity which has adopted this Plan for the benefit of its Employees in the manner set forth in Section 12.5 .

           “Employer Contributions” means the contributions made by the Employer to the Plan pursuant to Section 4.1(a) .

           “Employment Date” means the first day an Employee completes one Hour of Service following employment or reemployment.

           “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

           “Five Percent Owner” means a Member who owns more than five percent (5%) of the voting rights or value of the Company or any Affiliated Company. The Committee shall determine which Members are Five Percent Owners in accordance with Code Section 416(i)(1)(B)(i) and the regulations thereunder.

           “Financed Shares” means shares of Stock acquired by the Trust Fund with the proceeds of an Acquisition Loan, whether or not pledged as collateral to secure the repayment of that Acquisition Loan.

           “Fiscal Year” means the Employer’s accounting year of twelve calendar months, which is a calendar year.

           “Forfeiture” means the portion of a Member Account which is forfeited due to termination of employment before full vesting.

           “Hour of Service” means each hour (1) for which an Employee is directly or indirectly paid, or entitled to payment, by an Employer or an Affiliated Company during a Plan Year (including periods of vacation, jury duty, sickness, disability or Authorized Leave of Absence for which an Employee is paid or entitled to payment), and (2) for which back pay (irrespective of mitigation of damages) has either been awarded or agreed to by an Employer or an Affiliated Company; provided that hours shall not be credited under both (1) and (2) above. As an alternative to crediting Hours of Service on an hour for hour basis, Hours of Service may be credited to all Employees in a consistent manner at the rate of ten (10) hours per day if at least one Hour of Service would have been credited during that day. In any event, no more than 501 Hours of Service shall be credited under this Section on account of any single continuous period during which an Employee performs no duties, and no Hours of Service shall be credited if the payments are made or due either (a) under a Plan maintained solely for the purpose of complying with applicable workmen’s compensation, unemployment compensation or disability insurance law, or (b) to reimburse an Employee solely for medical or medically related expenses incurred by the Employee. Except as specifically provided herein, Hours of Service shall be credited as provided in Department of Labor Regulation Section 2530.200b-2. The provisions of the Department of Labor Regulation Sections 2530.200b-2(b) and (c) are incorporated herein by reference.

          Any Employee who (i) is absent from work by reason of pregnancy, birth of a child, placement of a child in connection with the adoption by the Employee of such a child or for purposes of caring for such a child during the period beginning immediately upon such birth or placement, (ii) does not otherwise receive credit for such period under the preceding paragraph, and (iii) furnishes the Committee in a timely manner with a written statement of the number of days of absence and that such absence was for a purpose described above shall receive credit for the number of hours which normally would have been credited to such individual but for such absence, or in the event that the Committee is unable to determine such number of hours, 8 hours of service per day of absence; provided, that the number of hours credited by reason of any such birth or placement shall not exceed 501. Hours of Service to be credited pursuant to this paragraph shall be credited to the year in which the absence begins, if the Employee would be prevented from incurring a One Year Break in Service in such year solely because of the crediting of the hours attributable to such absence or, in any other case, to the immediately succeeding year.

          Notwithstanding any other provision to the contrary, Hours of Service will be credited in accordance with the requirements of Code Section 414(u) and the Family Medical Leave Act.

          If the Board of Directors so determines in its discretion, for purposes of Sections 3.1 and 8.4 , the term “Hour of Service” shall include service that is performed by an individual on behalf of a corporation or other business entity prior to the date such entity adopts the Plan in accordance with Section 12.5 , provided such service would be credited as Hours of Service if performed for an Employer.

           “Lay-off” means the elimination of the Employee’s job by the Employer or the Affiliated Company under circumstances in which company policy or a collective bargaining agreement confers recall rights.

           “Member” means any Employee or former Employee who is participating in this Plan or has any interest in the Trust Fund.

           “Member Account” means the separate account maintained for each Member that represents the Member’s total interest in the Trust Fund, which account shall be divided into two sub-accounts: the Stock Account and the Other Investments Account.

           “NVR, Inc. Profit Sharing Plan” means the NVR, Inc. Profit Sharing Plan (formerly called the Profit Sharing Plan of NVR, Inc. and Affiliated Companies), as amended from time to time.

           “One Percent Owner” means a Member who owns more than one percent (1%) of the Company or any Affiliated Company. The Committee shall determine which Members are One Percent Owners in accordance with Code Section 416(i)(1)(B)(ii) and the regulations thereunder.

           “Other Investments Account” means the sub-account of a Member Account that reflects the Member’s interest in the Plan attributable to assets of the Trust Fund other than Stock.

           “Plan” means the NVR, Inc. Employee Stock Ownership Plan consisting of this document, as now in effect or hereafter amended from time to time.

           “Plan Year” means each 12-month period commencing January 1, and ending December 31.

           “Permanent and Total Disability” means a physical or mental condition occurring after an Employee becomes a Member and while employed by the Employer, resulting from bodily injury, disease, or mental disorder that permanently prevents the Member from performing the normal duties for which he or she is employed. The disability of a Member shall be determined by a licensed physician chosen by the Administrator. The determination shall be applied uniformly to all Members.

           “Retirement Date” means the Member’s sixtieth (60th) birthday.

           “Required Beginning Date” means the latest date benefit payments shall commence to a Member. Such date shall mean:

          (a) With regard to a Member who is not a five-percent owner (within the meaning of Code Section 416(i)), the April 1 that next follows the later of (i) the calendar year in which the Member turns age 70 ¹ / 2 , or (ii) the calendar year in which the Member ceases to be an Employee; and

          (b) With regard to a Member who is a five-percent owner (within the meaning of Code Section 416(i)), the April 1 that next follows the calendar year in which the Member attains age 70 ¹ / 2 .

          A Member shall be considered a five-percent owner for this purpose if such Member is a five-percent owner with respect to the Plan Year in which he or she attains age 70 ¹ / 2 .

           “Severance Date” means the earlier of (a) the date the Employee quits, retires, dies or is discharged or otherwise involuntarily terminated in a manner that does not constitute a Lay-off or (b) the day next following a period of twelve (12) consecutive months during which the Employee remained continuously absent from active employment as an Employee for reason other than quit, retirement, death, discharge or other non-Lay-off involuntary termination, such as, for example, Authorized Leave of Absence, military leave as defined under Code Section 414(u) or Lay-off. The Severance Date for an Employee who is absent from active employment on account of long-term disability (within the meaning of the Employer’s long-term disability policies) shall be the day next following twelve (12) consecutive months of the absence on account of the disability.

          Solely for purposes of determining whether an Employee has commenced a Break in Service, in the case of a Member who is absent from work by reason of the Member’s pregnancy, by reason of the birth of the Member’s child, by reason of the placement of a child with the Member in connection with the child’s adoption by the Member or for purposes of caring for a child beginning immediately after such birth or placement, the Severance Date means the second anniversary of the first day of such absence. The preceding sentence shall apply only if a Member demonstrates to the Employer on a timely basis that his or her absence is caused by one of the specified reasons. The period between the first and second anniversaries of the first day of such absence is neither counted towards a Year of Service nor counted towards a Break in Service.

           “Stock” means shares of common stock issued by NVR, Inc., that are readily tradable on an established securities market or that otherwise constitute “employer securities” within the meaning of Code Section 409(1) and “qualifying employer securities” within the meaning of Code Section 4975(e)(8) and ERISA Section 407(d)(5).

           “Stock Account” means the sub-account of a Member Account that reflects the Member’s interest in Stock that is held in the Trust Fund.

           “Total Break in Service” means, with respect to a Member who upon ceasing to be an Employee is not vested in his or her Member Account, a Break in Service that is not less than the greater of (a) sixty (60) consecutive months or (b) the number of Years of Service (including fractional periods) completed by the Member prior to such Break in Service.

           “Trust” means the Trust maintained in accordance with the Trust Agreement, as it amended from time to time.

           “Trust Agreement” means the Trust Agreement for the Plan, entered into by the Company with the Trustee, or as the same may hereafter be further amended from time to time.

           “Trust Fund” means the Stock, cash, and other assets of the Plan held by the Trustee for the benefit of the Members and their Beneficiaries pursuant to the Trust Agreement.

           “Trustee” means the trustee under the Trust Agreement and its successors in trust selected by the Board of Directors.

           “Valuation Date” means each business day of each Plan Year.

           “Year of Service” means a credit used to determine a Member’s vested percentage under Section 8.3 hereof. A Member’s Years of Service shall be determined by dividing the number of full calendar months in the period of eligibility service (defined below) by twelve (12). Any partial month in a period of eligibility service shall be converted to a fraction of a year by dividing the number of days in such partial month by 360. A Member’s period of eligibility service shall begin on his or her Employment Date and shall end on the Member’s Severance Date. A Member’s period of eligibility service includes any Authorized Leave of Absence and any military leave as defined by Code Section 414(u). In determining a Member’s period of eligibility service, the following rules shall be applied:

          (a) In the case of an Employee who quit, was discharged or retired during a leave of absence of twelve (12) months or less and then performs an Hour of Service within twelve (12) months of the date on which the Employee commenced the leave of absence, eligibility service shall include the period commencing as of the date of the Employee’s quit, discharge or retirement. Otherwise, in the case of an Employee who quit, retired, or was discharged, his or her period of eligibility service shall include the period following such quit, retirement, or discharge, if he or she is rehired as an Employee within twelve (12) months after the date he or she first became absent from active employment (whether by reason of such quit, retirement, or discharge or any other reason);

          (b) In the case of an Employee who incurred a Total Break in Service, any periods of eligibility service prior to any such Total Break in Service, shall be disregarded. Otherwise, in the case of a re-employed Employee, all of his or her separate periods of eligibility service shall be aggregated and treated as a single continuous period of eligibility service;

          (c) If the Board of Directors so determines in its discretion, for purposes of Section 8.4 , the term eligibility service shall include Service that is performed by an individual on behalf of a corporation or other business entity prior to the day such entity adopts the Plan in accordance with Section 12.5 , provided such service would be credited as eligibility service if performed for an Employer; and

          (d) An Employee’s period of eligibility service shall be determined by the Employer on the basis of employment records or on such other reasonable and nondiscriminatory basis as it may adopt. The Employer, pursuant to written rules, may recognize as eligibility service any period not otherwise described in this definition, subject to such conditions and limitations it may adopt.

3. MEMBERSHIP

3.1 Eligibility.

     (a) An Employee shall become a Member on the later of his or her Employment Date or the date the Employee becomes an Eligible Employee.

     (b) In the case of a corporation or other business entity that adopts the Plan on or after March 1, 1999 under the provisions of Section 12.5, any individual who was an employee of such organization immediately prior to the date of such adoption will become a Member on the date his employer adopts the Plan if the Board of Directors so determines in its discretion and if the individual otherwise is an Eligible Employee under this Plan and has satisfied the criteria of Section 3.1(a) .

     (c) In the event another entity is or will be merged or consolidated with the Company or an Employer on or after March 1, 1999, or if the Company or an Employer acquires or will acquire all or substantially all of the assets or outstanding voting stock of another entity on or after that date, any individual who is an employee of the merged or acquired entity immediately prior to such event and who becomes an Employee of the Company or Employer as part of such acquisition, merger or consolidation, will become a Member on the date he or she becomes an Eligible Employee and otherwise satisfies the criteria of Section 3.1(a) if the Board of Directors so determines in its discretion.

3.2 Notice.

     The Employer shall give notice to every Eligible Employee, before he or she becomes an Eligible Member for the first time, of the existence of this Plan and of such Eligible Employee’s participation therein. Such notice shall be given within such period and in such form as is required by law.

3.3 Reemployment.

     An Employee who was a Member, but who ceased to be a Member shall be entitled to again become a Member as of the Employment Date coinciding with the Member’s reemployment as an Eligible Employee.

4. CONTRIBUTIONS

4.1 In General.

     (a)  Employer Contributions. For each Plan Year during which the Plan is in effect, an amount determined from time to time by the Board of Directors, in its sole discretion, that shall be contributed to the Plan on behalf of the Eligible Members. Employer Contributions under the Plan are made by the Company.

     (b)  Required Contributions. Notwithstanding the foregoing, however, the aggregate Employer Contributions for a Plan Year must not in any event exceed the maximum amount allowable as a deduction to the Employer under the provisions of Code Section 404, except as required pursuant to Section 4.3 below. The aggregate Employer Contributions for a Plan Year, however, must equal or exceed the sum of any required principal and interest payments on all Acquisition Loans.

4.2 Form and Time of Employer Contributions.

     Employer Contributions, if any, for each Plan Year shall be paid to the Trustee at such times as the Employer may determine; however, all Employer Contributions and Matching Contributions must be paid to the Trustee no later than the time prescribed by law, including permitted extensions of time, for the filing of the Employer’s federal income tax return for the Fiscal Year with respect to which the Employer Contributions is made. Employer Contributions may be paid to the Trustee in cash, in shares of Stock (including Treasury shares or authorized but unissued shares), or other property, as determined by the Board of Directors in its sole discretion; provided, however, that Employer Contributions shall be paid to the Trustee in cash in such amounts and at such times as may be needed to provide the Trust Fund with cash sufficient to pay any currently maturing debt service obligation (including interest as well as principal) of the Trust Fund with respect to any outstanding Acquisition Loans. If and to the extent that Employer Contributions are made in shares of Stock, the value of the shares of such Stock for purposes of determining the amount of Employer Contributions shall be determined in accordance with paragraphs (a) and (b).

     (a) If there is a generally recognized market for the Stock, the value of the shares of Stock is either (i) the price of the Stock prevailing on a national securities exchange that is registered under Section 6 of the Securities Exchange Act of 1934 or (ii) if the Stock is not traded on a national securities exchange, a price no less favorable to the Plan than the offering price for the Stock as established by the current bid and asked prices quoted by persons independent of NVR, Inc., and of any party in interest (within the meaning of ERISA Section 3(14)).

     (b) If there is no generally recognized market for the stock, the value of the shares of Stock shall be the fair market value of the shares at the time of transfer of the shares to the Plan, determined in good faith and based upon all relevant factors as of the date of the transfer, which good faith determination shall be based upon an appraisal independently arrived at by an independent appraiser (within the meaning of Code Section 401(a)(28)(C).

4.3 Omission of Eligible Employee; Inclusion of Ineligible Employee.

     If for any Plan Year any Eligible Employee who should be included as a Member in the Plan is erroneously omitted and discovery of that omission does not occur until after Employer Contributions to the Plan by the Employer for the Plan Year has been made and allocated as provided for in Section 6.4 , a later Employer Contribution shall be made to the Plan with respect to that omitted Employee in the amount, if any, that would have been allocated to that Employee had he or she not been omitted. The contribution must occur without regard to whether or not it is deductible (in whole or in part) by the Employer under the applicable provisions of the Code. If for any Plan Year any Employee or other person who should not have been included as a Member in the Plan is erroneously included as a Member and discovery of that inclusion does not occur until after the Employer Contribution for that Plan Year has been made and allocated, the Employer is not entitled to recover the contribution made for that ineligible person, regardless of whether or not a deduction is available for that contribution. In such event, the amount that was contributed for that ineligible person shall be forfeited from the ineligible person’s Account for the Plan Year in which the erroneous inclusion is discovered and is reallocated within a reasonable period thereafter to Members eligible to share in the allocation of Employer Contributions for the Plan Year in which the forfeiture occurs.

4.4 Member Contributions.

     No Member is required or permitted to make contributions to this Plan.

5. INVESTMENT OF TRUST ASSETS; ACQUISITION LOANS

5.1 Investment of Trust Fund.

     The Plan is designed to invest primarily in Stock. The Trustee shall invest the Trust Fund in accordance with the Trust Agreement and the applicable provisions of the Code, ERISA, and any other laws affecting tax qualified pension benefit plans designed to qualify as employee stock ownership plans. The Trustee may purchase shares of Stock in the open market (including from former Members and Beneficiaries) or from the Employer, as the Company determines appropriate; provided, however, that no shares of Stock purchased with the proceeds of an Acquisition Loan shall be purchased from the Employer (other than the Company) or any Affiliate. All purchases of shares of Stock by the Trustee shall be made at prices that do not exceed the fair market value of such shares, as determined in good faith by the Trustee in accordance with Section 4.2 .

5.2 Acquisition Loans.

     The Company may direct the Trustee to incur Acquisition Loans from time to time to finance the acquisition by the Trust Fund of shares of Stock or to repay a prior Acquisition Loan. An Acquisition Loan may be made by a “party in interest” (as defined in ERISA Section 3(14)) and may be guaranteed by the Company or one or more Affiliates. Any Acquisition Loan must be primarily for the benefit of the Members and their Beneficiaries. In furtherance of the foregoing, the interest rate payable with respect to any Acquisition Loan and the price of any Stock to be acquired with the proceeds thereof must not be such that the Trust Fund might be “drained off” (as such term is used in the applicable regulations under Code Section 4975), and the terms of any Acquisition Loan, whether or not the lender is a “party in interest” (as defined in ERISA Section 3(14)), must at the time such Acquisition Loan is made be at least as favorable to the Trust Fund as the terms of a comparable loan resulting from arm’s length negotiations between independent parties.

     An Acquisition Loan must be for a specific term, must bear a reasonable rate of interest, and must not be payable upon demand except in the event of a default; however, if the lender of the Acquisition Loan is a “disqualified person” within the meaning of Code Section 4975(e)(2), the Acquisition Loan must be payable upon demand in the event of a default only to the extent of any default in any required payments due and payable under that Acquisition Loan (without regard to any rights of acceleration on the part of the lender). An Acquisition Loan may be secured by a collateral pledge of the Financed Shares acquired with the proceeds of that Acquisition Loan (or any prior Acquisition Loan repaid with the proceeds from the Acquisition Loan). No other assets of the Trust Fund (including any other shares of Stock held as part of the Trust Fund) may be pledged as collateral for an Acquisition Loan, and no Acquisition Loan lender shall have recourse against the Plan, the Trustee, or any assets of the Trust Fund, other than the Financed Shares pledged to secure such Acquisition Loan and not released from that pledge as provided in this Section 5.2 . Any pledge of Financed Shares as collateral for an Acquisition Loan shall provide that the value of the Financed Shares that are subject to that pledge and are transferred in satisfaction of the Acquisition Loan upon a default on that Acquisition Loan must not exceed the amount of that default. Any pledge of Financed Shares as collateral for an Acquisition Loan must also provide for the release of the Financed Shares so pledged on a pro-rata basis as principal and interest on such Acquisition Loan is paid by the Trustee.

     Unless the Trustee elects to apply the special rule for releasing Financed Shares under Treasury Regulation Section 54.4975-7(b)(8)(ii), the number of Financed Shares to be released from any such pledge in any Plan Year will be determined by multiplying (i) the total number of Financed Shares subject to that pledge immediately prior to the release for such Plan Year by (ii) a fraction, the numerator of which is the amount of principal and interest paid on that Acquisition Loan for the Plan Year and the denominator of which is the sum of the numerator plus all principal and interest to be paid with respect to that Acquisition Loan for all future years of the term of that Acquisition Loan (without regard to any possible extensions or renewal periods). For purposes of the preceding sentence, in the event that the interest rate payable with respect to such Acquisition Loan is variable, the interest to be paid in future years shall be determined using the interest rate in effect on the last day of the Plan Year for which the determination is made.

     If the Trustee elects to apply the special rule for releasing Financed Shares, the number of Financed Shares to be released from encumbrance is determined solely with reference to principal payments. The following requirements shall apply if the Trustee elects to apply the special rule for releasing Financed Shares: (i) the acquisition Loan must provide for annual payments of principal and interest at a cumulative rate that is not less rapid at any time than level annual payments of the amount for ten years; (ii) the interest included in any payment is disregarded only to the extent that it would be determined to be interest under standard loan amortization tables; and (iii) the special rule shall become inapplicable from the time that by reason of a renewal, extension, or refinancing the sum of the expired duration of the Acquisition Loan, the renewal period, the extension period, and the duration of a new Acquisition Loan exceeds ten years.

     Payments of principal or interest on any Acquisition Loan must be made by the Trustee (as directed by the Administrator) only from: (i) Employer Contributions paid in cash to enable the Trustee to repay the Acquisition Loan, (ii) any earnings of the Trust Fund attributable to such Employer Contributions, (iii) any cash dividends received by the Trust Fund on Financed Shares pledged to secure the repayment of the Acquisition Loan and any cash dividends on Stock already allocated to Member Accounts under the Plan, to the extent the Trustee allocates additional Stock to the Member Accounts in accordance with Code Section 404(k)(2)(B), and (iv) the proceeds from any sale of Financed Shares held in the Acquisition Loan Suspense Account (as defined in Section 6.2 ). Payments of principal or interest for any Acquisition Loan during any Plan Year must not exceed (x) the sum of the following for that Plan Year and all prior Plan Years: the aggregate Employer Contributions paid in cash to enable the Trustee to repay one or more Acquisition Loans; any earnings of the Trust Fund attributable to such Employer Contributions; any cash dividends received by the Trust Fund on Financed Shares pledged to secure one or more Acquisition Loans and any cash dividends on Stock already allocated to Member Accounts under the Plan, to the extent the Trustee allocates additional Stock to the Member Accounts in accordance with Code Section 404(k)(2)(B); and the proceeds from any sale of Financed Shares held in the Acquisition Loan Suspense Account (as defined in Section 6.2 ), less (y) all payments of principal or interest made with respect to Acquisition Loans in earlier Plan Years.

6. MEMBER’S ACCOUNTS

6.1 Maintenance of Member Accounts.

     The Administrator must establish and maintain in the name of each Member a Member Account, which shall be composed of two sub-accounts: a Stock Account and an Other Investments Account. The Administrator must credit to the Member Accounts as of each Valuation Date all amounts allocated to each Member as described in the remainder of Section 6 .

6.2 Stock Accounts: Acquisition Loan Suspense Account.

     (a) The Stock Account for each Member must be credited annually, or more frequently as determined by the Committee, with (i) the Member’s allocable shares of Stock (including fractional shares) attributable to Employer Contributions (including contributions in kind) or earnings thereon or with amounts held in the Member’s Other Investments Account and (ii) with any stock dividends received during the Plan Year on Stock allocated to the Member’s Stock Account or Other Investments Account. Forfeitures of Stock occurring during the Plan Year are credited to Eligible Members’ Member Accounts annually.

     (b) Any Financed Shares acquired with the proceeds of an Acquisition Loan or a prior Acquisition Loan refinanced with a new Acquisition Loan, whether or not pledged to secure repayment of an Acquisition Loan, must be credited to a separate account (the “Acquisition Loan Suspense Account”) and not to any Stock Account. A number of shares of Stock equal to the number of Financed Shares released from the pledge securing the repayment of an Acquisition Loan, as provided for in Section 5.2 (or, in the case of Financed Shares credited to the Acquisition Loan Suspense Account that are not pledged to secure repayment of an Acquisition Loan, that would have been so released had those Financed Shares been so pledged), must be withdrawn from the Acquisition Loan Suspense Account as of the Valuation Date for the Plan Year for which the release occurs (or would have occurred) and must be allocated to the Member Accounts of the Members as of that Valuation Date in the manner provided for in Section   6.4 .

6.3 Other Investments Account.

     The Other Investments Account maintained for each Member shall be credited (or debited) on each Valuation Date (i) with the Member’s allocable share of the net income (or loss) of the Trust Fund, (ii) with any cash dividends received during the Plan Year on Stock allocated to the Member’s Stock Account, and (iii) with Employer Contributions made in cash. Each Other Investments Account will be debited for its share of any cash payments made for the acquisition of Stock or for the repayment of principal and interest on an Acquisition Loan. Forfeitures from Other Investment Accounts will be credited to Eligible Members’ Member Accounts annually.

6.4 Allocations to Member Accounts.

     The allocations to Member Accounts for each Plan Year, subject to Sections 6.5 and 6.6 , must occur in accordance with this Section 6.4 . The Employer must provide the Administrator with all the information required by the Administrator to make a proper allocation in accordance with this Section 6.4 .

     (a)  Employer Contributions. Employer Contributions for any Plan Year shall be allocated proportionately among the Eligible Members as of the last day of such Plan Year in the following manner:

          The amount of each Eligible Member’s share of Employer Contributions for each Plan Year shall be separately determined by dividing the Eligible Member’s Compensation by the aggregate amount of Compensation paid to all Eligible Members who are entitled to share in such Contributions, respectively, and multiplying the quotient by the amount of the Employer Contribution, if any, for that Plan year.

          Compensation for purposes of this Section 6.4 means the Compensation paid to a Member for the portion of the Plan Year during which the Member is eligible to participate under the Plan. As determined by the Board of Directors in its discretion, Compensation for purposes of this Section may include any amounts received by a Member from their employer prior to the date such employer adopts the Plan in accordance with Section 12.5 if such amounts would have been included as Compensation for the Plan Year if the Member was employed by an Employer.

          To the extent that the Employer Contribution made for any Plan Year is applied to purchase Stock or is applied to pay principal or interest on an Acquisition Loan, with the result that shares of Stock are released from the Acquisition Loan Suspense Account, the shares of Stock so purchased or released shall be allocated among the Member Accounts of the Members in the same manner and proportion as Employer Contributions would be allocated. To the extent that Employer Contributions made for any Plan Year is not applied to purchase Stock or to pay principal or interest on an Acquisition Loan, the Employer Contributions shall be allocated among the Member Accounts of the Members in the manner set forth above.

     (b)  Forfeitures. As of the last day of the Plan Year, any amounts that became Forfeitures since the last day of the prior Plan Year shall be allocated among the Eligible Member Accounts by dividing each Eligible Member’s Compensation by the aggregate amount of Compensation paid to all Eligible Members who are entitled to share in such Forfeitures, respectively, and multiplying the quotient by the amount of the Forfeitures, if any, for that Plan Year.

          In the event the allocation of Forfeitures provided for herein shall cause the “annual addition” (as defined in Section 6.5(a) ) to any Member Account to exceed the amount allowable by the Code, the excess amount shall be reallocated as additional Forfeitures among all other Members who otherwise share in the allocation of Forfeitures for such Plan Year.

          Only Compensation paid to a Member for the portion of the Plan Year during which the Member is eligible to participate under the Plan shall be considered for purposes of determining a Member’s allocable share of Forfeitures. To the extent that any Forfeitures for any Plan Year consist of Stock, such Stock shall be allocated to the Stock Accounts of the Members sharing in such Forfeitures in the manner set forth above. Any Forfeitures from Other Investments Accounts shall be allocated among the Other Investments Accounts of the Members sharing in such Forfeitures in the manner set forth above.

          As determined by the Board of Directors in its discretion, Compensation for purposes of this Section may include any amounts received by a Member from their employer prior to the date such employer adopts the Plan in accordance with Section 12.5 if such amounts would have been included as Compensation for the Plan Year if the Member was employed by an Employer.

     (c)  Dividends. Any stock dividends received with respect to Stock must be credited pro rata to the Member Accounts (or, in the case of Financed Shares securing the repayment of an Acquisition Loan, to the Acquisition Loan Suspense Account) to which the corresponding shares of Stock on which the stock dividends are received are allocated as of the record date for which the stock dividends are declared.

          Any cash dividends received on shares of Stock allocated to the Stock Accounts as of the record date on which the dividends are declared shall be allocated to the Member Accounts of the Members to whose Member Accounts those shares of Stock are allocated as of the record date for which such cash dividends are declared, unless the cash dividends are applied to pay principal or interest on an Acquisition Loan as described in Code Section 404(k)(2)(A)(iii). Any cash dividends received on shares of Stock either not allocated to Member Accounts or not allocated to the Acquisition Loan Suspense Account as of the record date for which the dividends are declared shall be included in the computation of net income (or loss) of the Trust Fund and allocated as set forth in Section 6.4(d) below; however, to the extent that any cash dividends on Stock held under the Plan are applied to pay principal or interest on an Acquisition Loan, with the result that shares of Stock are released from the Acquisition Loan Suspense Account, the shares of Stock so released must be allocated among the Stock Accounts of the Members in the same proportion that the balance of the Member Account of each Member bears to the balance of the Member Accounts of all Members, determined in each case as of the immediately preceding Valuation Date (reduced in each case by the amount of any distributions from any Member Accounts since that Valuation Date).

     (d)  Net Appreciation (or Depreciation) of the Value of the Trust Fund. As of each Valuation Date, before the allocation of any contributions as of such date, any net appreciation (or net depreciation) in the value of the Trust Fund (taking into account expenses of the Plan, and excluding cash dividends on shares of Stock allocated to the

Stock Accounts of the Members as of the record date for which those dividends are declared, cash dividends on shares of Stock allocated to the Acquisition Loan Suspense Account as of the record date for which the dividends are declared to the extent that those dividends are applied to pay principal or interest on an Acquisition Loan, and any other amount applied to pay principal or interest on an Acquisition Loan) must be allocated among the Stock Accounts and the Other Investments Accounts of the Members in the same proportion that the balances of the Stock Account and the Other Investments Account of each Member bears to the aggregate balance of the Stock Accounts and Other Investments Accounts of all the Members, determined in each case as of the immediately preceding Valuation Date (reduced in each case by the amount of any distributions from such Member Accounts since the preceding Valuation Date). As of each Valuation Date the Trustee shall charge the Member Accounts of each Member with an allocable share of the expenses incurred by the Plan since the previous Valuation Date, using the method that the Trustee deems reasonable and equitable under the circumstances, consistent with the overall intent that general expenses of the Plan should be shared ratably in accordance with the relative balances of each of the Member Accounts and any sub-accounts of the Member Accounts and that special expenses attributable to a particular component of the Plan should be attributed to the component of the Plan that gave rise to the expenses.

     (e)  Members Whose Employment Terminates During Plan Year. Notwithstanding anything set forth in this Section 6.4 to the contrary, a Member whose employment terminates with the Employer during the Plan Year for any reason or whose employment terminated at any earlier time but has not yet received a distribution of that Member’s entire interest under the Plan shall share in the allocations provided for in Sections 6.4(c) and 6.4(d) , regardless of whether or not the Member received Compensation during the Plan Year or of the number of Hours of Service that the Member completed during that Plan Year.

6.5 Maximum Benefit and Contribution Limitations — In General.

     (a)  Definitions. For purposes of this Section 6.5 , the following words and phrases shall have the meanings set forth in clauses (i) through (iii).

          (i) “Annual Addition” means, with respect to a Member, the sum of:

               (1) the amount of the Employer Contributions allocated to the Member’s Member Account under this Plan and all employer contributions made on the Member’s behalf to all other Defined Contribution Plans (as defined below) for that Plan Year; however, to the extent permitted by Code Section 415(c)(6), the portion, if any, of the Employer Contribution applied to pay interest on one or more Acquisition Loans not later than the time prescribed by law (including permitted extensions of time) for filing the Employer’s federal income tax return for the Fiscal Year for which the Employer Contribution is made shall not be taken into account for purposes of this clause (1);

               (2) the sum of all of the Member’s employee contributions to all Defined Contribution Plans for the Plan Year;

               (3) the sum of the Member’s allocable share of all forfeitures under all Defined Contribution Plans for the Plan Year; however, to the extent permitted by Code Section 415(c)(6), forfeitures shall not be taken into account for purposes of this clause (3) to the extent that the forfeitures consist of shares of Stock purchased with the proceeds of one or more Acquisition Loans under this Plan; and

               (4) any amount described in Code Sections 419A(d)(2) or 415(l)(1) for the Plan Year, except that the limitations on annual additions shall not apply to any contributions for medical benefits after separation from service (within the meaning of Code Section 401(h) or 419(f)(2)) which otherwise would be treated as an annual addition.

          (ii) “Defined Benefit Plan” means any employee pension plan established by the Employer or any Affiliated Corporation and qualified under Code Section 401, other than a Defined Contribution Plan.

          (iii) “Defined Contribution Plan” means the Plan and any employee pension plan established by the Employer or any Affiliates and qualified under Code Section 401 that provides for an individual account for each Member and for benefits based solely on the amounts contributed to the Member’s account, any income, expenses, gains, and losses, and any forfeitures of accounts of other Members that are allocated to the Member’s account.

     (b)  Combining of Plans. For purposes of the limitations of this Section 6.5 , all Defined Benefit Plans (whether or not terminated) of the Employer and al