CP 401(k) SAVINGS PLAN (As Amended and Restated Effective October 27, 2014 and Reflecting the Merger with the Soo Savings Plan for TCU Employees and the Soo Line 401(k) Plan for Union Employees)

Sec. 1.1    Name of Plan. Effective October 27, 2014, the name of the profit sharing plan set forth herein is the CP 401(k) Savings Plan. It is sometimes herein referred to herein as the “Plan”. Prior to October 27, 2014, the Plan was known as the Canadian Pacific Savings Plan for U.S. Management Employees. Prior to that, the Plan was named the Canadian Pacific Railway Savings Plan for U.S. Management Employees. Prior to that the Plan was known as the CP Rail System Savings Plan for U.S. Management Employees and prior to that it was known as the Soo Line Railroad Savings Plan. Originally, the Plan was a stock bonus plan named the “Soo Line Railroad Tax Credit Employee Stock Ownership Plan”. The stock bonus plan feature was terminated as of December 1, 1998.

Sec. 1.2    Purpose. The Plan has been established so that eligible employees may have an additional source of retirement income.

Sec. 1.3    Effective Date. The “Effective Date” of the Plan, the date as of which the Plan was established, is January 1, 1979. This restatement of the Plan is generally effective October 27, 2014 (unless otherwise noted) and incorporates all amendments adopted effective through October 27, 2014.

Sec. 1.4    Company. The “Company” is the Soo Line Railroad Company, a Minnesota corporation, and any Successor Employer thereof.

Sec. 1.5    Participating Employer. The Company is a Participating Employer in the Plan. With the consent of the Company, any other employer may also become a Participating Employer in the Plan effective as of a date specified by it in its adoption of the Plan. Any Successor Employer to a Participating Employer shall also be a Participating Employer in the Plan. As of October 27, 2014, the following are the only Participating Employers in the Plan:

Canadian Pacific (U.S.) Finance ceased being a Participating Employer in the Plan as of December 31, 2004.

Sec. 1.6    Participating Union. “Participating Union” means any Union that adopts the Plan with the consent of the Company and pursuant to a collective bargaining agreement between the Participating Union and a Participating Employer.

Sec. 1.7    Construction and Applicable Law. The Plan is intended to meet the requirements for qualification under section 401(a) of the Code and the requirements for a qualified cash or deferred arrangement under section 401(k) of the Code. The Plan is also intended to be in

full compliance with applicable requirements of ERISA. The Plan shall be administered and construed consistent with said intent. It shall also be construed and administered according to the laws of the State of Minnesota to the extent that such laws are not preempted by the laws of the United States of America. All controversies, disputes, and claims arising hereunder shall be submitted to the United States District Court for the District of Minnesota, except as otherwise provided in any trust agreement entered into with a Funding Agency.

Sec. 1.8    Benefit Determinations and Applicability of Amendments. Except as may be specifically provided herein to the contrary, benefits under the Plan attributable to service prior to a Participant’s Termination of Employment shall be determined and paid in accordance with the provisions of the Plan as in effect as of the date the Termination of Employment occurred. Any amendment to the Plan shall apply only to benefits accrued by individuals who are employees of a Participating Employer or Affiliate on or after the effective date of such amendment, unless he or she becomes an Active Participant after that date and such active participation causes a contrary result under the provisions the Plan. Notwithstanding the foregoing:

that is consistent with a good faith interpretation of the legal requirements of USERRA.

Sec. 2.1    Account. “Account” means a Participant’s or Beneficiary’s interest in the Fund of any of the types described in Sec. 6.1.

Sec. 2.2    Active Participant. An employee is an “Active Participant” only while he or she is both a Participant and a Qualified Employee.

Sec. 2.3    Affiliate. “Affiliate” means any trade or business entity under Common Control with a Participating Employer, or under Common Control with a Predecessor Employer while it is such.

Sec. 2.4    Before Tax Deposit. A “Before Tax Deposit” is a contribution made on behalf of a Participant pursuant to Sec. 4.1.

Sec. 2.5    Beneficiary. “Beneficiary” means the person or persons designated as such pursuant to the provisions of Article VII.

Sec. 2.6    Board. The “Board” is the board of directors of the Company, and includes any executive committee thereof authorized to act for said board of directors.

Sec. 2.7    Catch-Up Contributions. A “Catch-Up Contribution” is a before-tax contribution made on behalf of a Participant pursuant to Sec. 4.3.

Sec. 2.8    Certified Earnings. “Certified Earnings” of a Participant from a Participating Employer for a Plan Year means the amount determined by the Participating Employer and reported to the Company to be the total earnings paid to the Participant by the Participating Employer during such Plan Year for service as an Active Participant, subject to the following:

rights or cash payments in lieu thereof, merchandise or service discounts, non-cash employee awards, benefits in the form of property or the use of property, earnings payable in a form other than cash, or other similar fringe benefits shall not be included in computing Certified Earnings, except as provided in subsection (b).

Sec. 2.9    Code. “Code” means the Internal Revenue Code of 1986 as from time to time amended.

Sec. 2.10    Common Control. A trade or business entity (whether a corporation, partnership, sole proprietorship or otherwise) is under “Common Control” with another trade or business entity (i) if both entities are corporations which are members of a controlled group of corporations as defined in Code section 414(b), or (ii) if both entities are trades or businesses (whether or not incorporated) which are under common control as defined in Code section 414(c), or (iii) if both entities are members of an affiliated service group as defined in Code section 414(m), or (iv) if both entities are required to be aggregated pursuant to regulations under Code section 414(o). Service for all entities under Common Control shall be treated as service for a single employer to the extent required by the Code; provided, however, that an individual shall not be a Qualified Employee by reason of this section. In applying the first sentence of this section for

purposes of Sec. 5.1, the provisions of subsections (b) and (c) of section 414 of the Code are deemed to be modified as provided in Code section 415(h).

    

Sec. 2.11    Company Stock. “Company Stock” means common stock of Canadian Pacific Railway Limited.

Sec. 2.12    Company Stock Fund. The “Company Stock Fund” is that portion of the entire Fund for the Plan which is invested primarily in Company Stock, and is available for Participant directed investment.

Sec. 2.13    Employment Commencement Date. “Employment Commencement Date” means the date on which an employee first becomes an employee of a Participating Employer (whether before or after the Participating Employer becomes such) or an Affiliate.

Sec. 2.14    ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974 as from time to time amended.

Sec. 2.15    Forfeitures. “Forfeitures” (or “Forfeited”) means that part of the Fund so recognized under Sec. 8.2(a), which provides for the forfeiture of non-vested employer Matching Contributions and any other amounts treated as Forfeitures under the terms of the Plan.

Sec. 2.16    Fund. “Fund” means the aggregate of assets described in Sec. 10.1.

Sec. 2.17    Funding Agency. “Funding Agency” is a trustee or trustees or an insurance company appointed and acting from time to time in accordance with the provisions of Sec. 10.2 for the purpose of holding, investing, and disbursing all or a part of the Fund.

Sec. 2.18    Highly Compensated Employee. Highly Compensated Employee” for any Plan Year means a Participant described in (a) or (b) below:

Sec. 2.19    Hours of Service. “Hours of Service” are determined according to the following subsections with respect to each applicable computation period. The Company may round up the number of Hours of Service at the end of each computation period or more frequently as long as a uniform practice is followed with respect to all employees determined by the Company to be similarly situated for compensation, payroll, and record keeping purposes.

period in which the award, agreement, or payment is made. Crediting of Hours of Service for back pay awarded or agreed to with respect to periods described in paragraph (2) shall be subject to the limitations set forth therein.

Sec. 2.20    Investment Fund. “Investment Fund” means any of the funds for investment of Plan assets established under Sec. 6.2.

Sec. 2.21    Leased Employees. “Leased Employees”, within the meaning of Code section 414(n)(2) and individuals who would meet those requirements but for failure to complete a year of leased service, shall be counted as employees of the Company or a Participating Employer to the extent required by the Code or regulations issued thereunder. “Leased Employee” means any person (other than an employee of the recipient) who, pursuant to an agreement between the recipient and any other person (“leasing organization”), has performed services for the recipient (or for the recipient and related persons determined in accordance with Code section 414(n)(6)), on a substantially full-time basis for a period of at least one year, and such services are performed under primary direction or control by the recipient. Contributions or benefits provided a leased employee by the leasing organization which are attributable to service performed for the recipient employer shall be treated as provided by the recipient employer. Leased Employees are not Participants in the Plan, however, and are not eligible to make Before Tax Deposits or to receive Matching Contributions under the Plan.

Sec. 2.22    Matching Contribution. A “Matching Contribution” is an amount contributed by a Participating Employer pursuant to Sec. 4.4.

Sec. 2.23    Named Fiduciary. The Company is a “Named Fiduciary” for purposes of ERISA with authority to control or manage the operation and administration of the Plan, including

control or management of the assets of the Plan. Other persons are also Named Fiduciaries under ERISA if so provided thereunder or if so identified by the Company, by action of the Board. Such other person or persons shall have such authority to control or manage the operation and administration of the Plan, including control or management of the assets of the Plan, as may be provided by ERISA or as may be allocated by the Company, by action of the Board.

Sec. 2.24    Non-Highly Compensated Employee. “Non-Highly Compensated Employee” means an Active Participant who is not a Highly Compensated Employee.

Sec. 2.25    Normal Retirement Age. “Normal Retirement Age” is age 65.

Sec. 2.26    Participant. A “Participant” is an individual described as such in Article III.

Sec. 2.27    Plan Year. The “Plan Year” is the 12-consecutive-month period commencing each January 1 and ending each December 31.

Sec. 2.28    Predecessor Employer. An employer shall be a Predecessor Employer if required by regulations prescribed by the Internal Revenue Service. In addition, any corporation, partnership, firm, or individual, a substantial part of the assets and employees of which are acquired by a successor is a “Predecessor Employer” subject to any conditions and limitations with respect thereto imposed by this section; provided, however, that any such corporation, partnership, firm or individual may be named as a Predecessor Employer only if all of its employees who at the time of the acquisition become employees of the successor and Participants hereunder are treated uniformly, the use of service with it does not produce discrimination in favor of Highly Compensated Employees, and there is no duplication of benefits for such service. To be considered a Predecessor Employer, the acquisition of assets and employees of a corporation, partnership, firm, or individual must be by a Participating Employer, by an Affiliate, or by another Predecessor Employer and, unless required by law, the Company recognizes that he entity is a Predecessor Employer for purposes of this Plan.

Sec. 2.29     Qualified Employee. “Qualified Employee” means an employee of a Participating Employer, subject to the following:

provisions of a collective bargaining agreement between his or her Participating Employer and a Participating Union, the employee will only be considered a

Qualified Employee for purposes of this Plan if the agreement expressly so provides. For purposes of this section only, such an agreement shall be deemed to continue after its formal expiration during collective bargaining negotiations pending the execution of a new agreement. In that regard:

individual is actually a common law employee) and is not eligible to make Before Tax Deposits or receive Matching Contributions.

Sec. 2.30    Recognized Break in Service. A “Recognized Break in Service” is a period of at least 12 consecutive months duration that begins on the day on which the individual’s Termination of Employment occurs and during which the individual has no Hours of Service. A Recognized Break in Service ends, if ever, on the day on which the individual again performs an Hour of Service for a Participating Employer, an Affiliate or a Successor Employer. Notwithstanding the foregoing, if an individual is absent from work for maternity or paternity reasons, a period of up to 12 months beginning with the first day of such absence shall not count as part of a Recognized Break in Service.

(a)    Because the individual was pregnant;

(b)    Because the individual gave birth to a child;

Sec. 2.31    Sick Leave Deposits. “Sick Leave Deposits” is an amount contributed by a Participating Employer pursuant to Sec. 4.2.

Sec. 2.32    Successor Employer. A “Successor Employer” is any entity that succeeds to the business of a Participating Employer through merger, consolidation, acquisition of all or substantially all of its assets, or any other means and which elects before or within a reasonable time after such succession, by appropriate action evidenced in writing, to continue the Plan; provided, however, that in the case of such succession with respect to any Participating Employer other than the Company, the acquiring entity shall be a Successor Employer only if consent thereto is granted by the Company.

Sec. 2.33    Testing Wages. A Participant’s “Testing Wages” for a Plan Year means the Participant’s compensation for the Plan Year as reported on Internal Revenue Service form W-2 subject to the following:

be used for all Participants for a particular year, but different definitions may be used for different years.

Sec. 2.34     Termination of Employment. The “Termination of Employment” of an employee for purposes of the Plan shall be deemed to occur upon resignation, discharge, retirement, death, failure to return to active work at the end of an authorized leave of absence or the authorized extension or extensions thereof, failure to return to work when duly called following a temporary layoff, a separation from service (for example, a furlough of one year or longer), the occurrence of a bodily injury or disease that the Company determines, in its sole discretion, makes the Participant permanently disabled from performing the normal duties of his or her position with the Company, or upon the happening of any other event or circumstance, which, under the policy of a Participating Employer or Affiliate as in effect from time to time, results in the termination of the employer-employee relationship; provided, however, that a Termination of Employment shall not be deemed to occur upon a transfer between any combination of Participating Employers and Affiliates. If the employer-employee relationship is terminated because of the entry of an employee into the armed forces of the United States and if the employee subsequently returns to employment with a Participating Employer or an Affiliate under circumstances such that he or she has reemployment rights under the provisions of any applicable federal law, for all purposes of the Plan and only for such purposes the employee shall be deemed to have been on authorized leave of absence during the period of military service. A change in employment status from a common law employee to a Leased Employee shall not constitute a Termination of Employment.

Sec. 2.35    Valuation Date. “Valuation Date” means the date on which the Fund and Accounts are valued as provided in Article VI. Each of the following is a Valuation Date:

Sec. 2.36    Years of Vesting Service    . An individual’s “Years of Vesting Service” are equal to the aggregate time elapsed between his or her original Employment Commencement Date and his or her most recent Termination of Employment or any other date as of which a determination of Years of Vesting Service is to be made, expressed in years and days, reduced by all Recognized Breaks in Service, subject to the following:

    

Sec. 3.1    Entry Date. “Entry Date” means the first day of each month. The Company may designate additional dates as Entry Dates.

Sec. 3.2    Eligibility for Participation. Effective October 27, 2014 and subject to Sec. 3.2(b) and Sec. 3.5 below, eligibility to participate in the Plan shall be determined as follows:

Sec. 3.3    Duration of Participation. A Participant shall continue to be such until the later of:

Sec. 3.4    No Guarantee of Employment. Participation in the Plan does not constitute a guarantee or contract of employment with the Participating Employers. Such participation shall in no way interfere with any rights the Participating Employers would have in the absence of such participation to determine the duration of an employee’s employment.

Sec. 3.5    Eligibility for Participation for TCU and Union 401(k) Employees. The Soo Savings Plan for TCU Employees (the “TCU Savings Plan”) and the Soo Line 401(k) Plan for

Union Employees (the “Union 401(k) Plan”) were merged into this Plan effective October 27, 2014. As a result, individuals who had satisfied the eligibility requirements under either of those plans prior to the merger became Participants in this Plan on October 27, 2014. With respect to individuals who were Qualified Employees in either the TCU Savings Plan or the Union 401(k) Plan on October 26, 2014 but had not yet satisfied the eligibility requirements under their applicable Plan as of October 26, 2014, eligibility to participate in this Plan shall be determined as follows:

For example, if an individual was a qualified employee in the TCU Savings Plan or the Union 401(k) Plan on October 26, 2014, but had not yet satisfied the eligibility requirement under the applicable plan, the individual will become a Participant in this Plan on December 1, 2014 (provided he or she had 30 days of service on or after October 27, 2014 and was still a Qualified Employee on December 1, 2014).

Sec. 4.1    Before Tax Deposits. Each Active Participant may elect to have his or her Participating Employer make Before Tax Deposits on his or her behalf, subject to the following:

shall comply with the provisions of ERISA and the Code that apply to automatic contribution arrangements.

 

Sec. 4.2    Sick Leave Deposits. Rule 58(i)(2), agreed to by the Company and the Transportation Communications International Union (“TCU”) in 1985 (as amended by Article IV of the December 19, 1991 Agreement), permits a Participant who is covered by a collective bargaining agreement between the Company and the TCU (“TCU Participants”) to elect to have his or her Participating Employer make Sick Leave Deposits to the Plan in lieu of days of unused sick leave. Each TCU Participant may elect to have his or her Participating Employer make Sick Leave Deposits up to the maximum amount available for him as specified by said Rule. Any Sick Leave Deposits shall be made by the Company at the time specified in the Rule and shall be credited to the TCU Participant’s Account as provided in Sec. 4.10 and Article VI. No Matching Contributions shall be made with respect to Sick Leave Deposits.

Sec. 4.3    Catch-Up Contributions. If a Participant is, or will be, 50 or older on the last day of a Plan Year, and has contributed the full amount permitted under Sec. 4.1 or otherwise would have his or her Before Tax Deposits limited under Sec. 4.6, Sec. 4.7 or Sec. 5.1, he or she may make additional “Catch-Up Contributions”, but not in excess of the amount determined from the following table:

If a Participant’s Before Tax Deposits would otherwise exceed any applicable limit imposed under the Plan or the Code for a Plan Year, the additional Catch-Up Contributions limit for that Plan Year shall automatically be applied to eliminate or minimize the need to return or otherwise decrease the Participant’s Before-Tax Deposits. Catch-Up Contributions shall not be taken into account under the Plan for purposes of implementing the required limitations of sections 402(g) and 415 of the Code. The Plan shall not be treated as failing to satisfy the requirements of section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the making of such Catch-Up Contributions. Otherwise, Catch-Up Contributions are treated as Before Tax Deposits for purposes of the Plan, except that no Matching Contribution shall be made with respect to Catch-Up Contributions.

Sec. 4.4    Matching Contributions. Matching Contributions to this Plan will be made by the Participating Employers pursuant to the following:

Sec. 4.5    Reduction of Before Tax Deposits. The Company may in its sole discretion reduce or limit, or direct a Participating Employer to limit, the amount of Before Tax Deposits for a Participant or a group of Participants to a whole or fractional percentage, which will enable the Plan to satisfy the requirements of Sec. 4.6, Sec. 4.7, Sec. 4.8 or Sec. 5.1.

Sec. 4.6    Limit on Before Tax and Sick Leave Deposits and Distribution of Excess Deferrals. The sum of a Participant’s Before Tax Deposits and Sick Leave Deposits may not exceed the limit under Code section 402(g) in effect for the Plan Year in which they are made. Notwithstanding any other provisions of the Plan if the 402(g) limit is exceeded, Excess Deferrals for a calendar year and income or losses allocable thereto shall be distributed in the case of Before Tax Deposits, or recredited to the Participant as unused sick leave in the case of Sick Leave Deposits no later than the following April 15 to Participants who claim (or are deemed to have claimed) such Excess Deferrals, subject to the following:

regulations, by the amount of excess Before Tax Deposits and income allocable thereto previously distributed to the Participant pursuant to Sec. 4.7 for the Plan Year and by the amount of any Sick Leave Deposits which are reduced and recredited to the Participant pursuant to Sec. 4.7 for the Plan Year.

Sec. 4.7    Adjustment of Before Tax and Sick Leave Deposits if Required by Code Section 401(k). For purposes of non-discrimination testing under Code section 401(k), employees whose terms and conditions of employment are subject to a collective bargaining agreement shall be tested separately and any adjustments necessary to satisfy Code section 401(k) shall be made separately from the group of employees whose employment is not subject to a collective bargaining agreement. If necessary to satisfy the requirements of Code section 401(k), Before Tax Contributions and/or Sick Leave Deposits shall be adjusted in accordance with the following:

        

            

For purposes of this subsection (a), average deferral percentages shall be calculated separately with respect to the employees represented by the Participating Unions and for salaried and hourly paid employees who are not represented by a Participating Union.

        

            

            

            

    

    

        

        

As noted above, any adjustments necessary to comply with Code §401(k) shall be determined and made separately with respect to employees covered under collective bargaining agreements and employees who are not covered under collective bargaining agreements.

            

December 31 of the following Plan Year. Furthermore, the Company shall attempt to distribute (or recredit) such amount by March 15 of the following Plan Year to avoid the imposition on the Company of an excise tax under Code section 4979. Income or losses allocable to excess Before Tax Deposits and/or Sick Leave Deposits shall equal the pro-rata portion of the income or loss for the year for which the contributions were made that the Company determines fairly reflects the portion of the Plan’s aggregate income or loss for said year properly attributable to the excess contributions. Effective for the 2008 Plan Year and subsequent Plan Years, any income or loss after the close of the year (“gap period income”) for which the contributions were made shall not be distributed unless the Plan is legally required to do so. The amount that would otherwise be distributed pursuant to this subsection shall be reduced by any Excess Deferrals (adjusted for income or loss) previously distributed to the Participant during the same Plan Year pursuant to Sec. 4.6. Before Tax Deposits shall be reduced before Sick Leave Deposits. Sick Leave Deposits that need to be reduced shall be recredited to the Participant as unused Sick Leave.

Sec. 4.8    Adjustment of Matching Contributions Required by Code Section 401(m). After the provisions of Sec. 4.6 and Sec. 4.7 have been satisfied, the requirements set forth in this section must also be met. Participants whose hours and wages are subject to a collective bargaining agreement between a Participating Union and a Participating Employer (“union employees”) are not included when determining any adjustments required under Code section 401(m) or this Sec. 4.8.

If necessary to satisfy the requirements of Code section 401(m), Matching Contributions for non-union employees during a Plan Year shall be adjusted in accordance with the following:

    

        

        

            

        

        

regardless of whether the individual is an Active Participant and/or a Non-Highly Compensated Employee for the current Plan Year.

        

            

    

        

        

Sec. 4.9    Time for Payment of Deposits. Before Tax Deposits by a Participating Employer for a Plan Year shall be paid to the Funding Agency as soon as practicable, but no later than the 15^th business day of the month following the month in which the Before Tax Deposits were withheld from the Participant’s pay. Sick Leave Deposits shall be paid to the Funding Agency no later than the time (including extensions) for filing the employer’s federal income tax return for the tax year in which the Plan Year ends.

Sec. 4.10    Allocations. Contributions to the Plan shall be allocated to the Accounts of Participants as follows:

Participants’ Accounts in a fair, equitable and non-discriminatory manner to reflect the time when contributions were actually received by the Funding Agency and allocated to Participant’s Accounts.

Sec. 4.11    Application of Forfeitures. Forfeitures recognized with respect to a Plan Year may, at the Company’s discretion, be applied in any of the following ways:

Sec. 5.1    Limitation on Allocations. Notwithstanding any provisions of the Plan to the contrary, allocations to Participants under the Plan shall not exceed the maximum amount permitted under Code section 415. For purposes of the preceding sentence, the following rules shall apply unless otherwise provided in Code section 415:

The compensation limit referred to in paragraph (2) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code section 401(h) or 419A(f)(2)) which is otherwise treated as an annual addition.

is to be made pursuant to procedures established by the Company and shall be completed by the close of the second Plan Year following the error.

Excess Deferrals (over the Code Section 402(g) limit) distributed pursuant to Sec. 4.6 are not Annual Additions. An Annual Addition with respect to a Participant’s Accounts shall be deemed credited thereto with respect to a Plan Year if it is allocated to the Participant’s Accounts under the terms of the Plan as of any date within such Plan Year.

Compensation shall include elective amounts that are not includable in the gross income of the employer under Code Section 132(f)(4).

Sec. 6.1    Accounts for Participants. The following Accounts may be established under the Plan for a Participant:

Additional Accounts may be established for a Participant if deemed advisable by the Company.

Sec. 6.2    Investment Funds. Investment Funds for the investment of amounts credited to Participants’ Accounts shall be established at the direction of the Company. The Company shall determine the types of investments to be held in each Investment Fund or the investment manager, trustee, or insurance company responsible for selecting investments. Income on the investments of each Investment Fund shall be reinvested by the appropriate Funding Agency in the appropriate Investment Fund. Notwithstanding the foregoing, the Fund shall include at least three investment alternatives for the investment of Before Tax Deposits, Sick Leave Deposits, Matching Contributions, Rollover Contributions, and any amounts transferred from other plans. Furthermore, at least three core Investment Funds shall be made available to Participants that have materially

different risk and return characteristics, with the intent of complying with U.S. Department of Labor guidelines set forth in the regulations issued under section 404(c) of ERISA. In addition, a Company Stock Fund comprised primarily of common stock of Canadian Pacific Railway Limited shall be available for the investment of Participant’s Accounts and contributions made on behalf of Participants. Pursuant to Section 401(a)(35)(C) of the Code and Sec. 6.3 of the Plan, Participants have the right to divest any amounts held in their Accounts that are invested in the Company Stock Fund and may reinvest any such divested amounts in any of the other Investment Funds available under the Plan for Participant directed investments. The Company shall from time to time designate the Investment Funds to be maintained by one or more Funding Agencies and shall arrange for Participants to receive appropriate information respecting the Investment Funds. The Company may impose limits on the amount, or percentage of a Participant’s total account balance under the Plan, that may be invested in the Company Stock Fund or any other Investment Fund. The Company may also designate one or more default Investment Funds which shall hold amounts for which no investment direction is given by Participants, provided that the Company Stock Fund shall not be used for this purpose.

Sec. 6.3    Participant Direction of Investments. Accounts shall be invested in the Investment Funds established pursuant to Sec. 6.2, pursuant to designations by the respective Participants (including an alternate payee with respect to a Participant) or Beneficiaries. A Participant may change his or her designation of the Investment Funds in which future Before Tax Deposits, Sick Leave Deposits, Matching Contributions, Rollover Contributions, or other transferred amounts shall be invested. A Participant or Beneficiary also may direct the investment of existing amounts in his or her Accounts among the various Investment Funds. Each investment direction shall remain in effect until a new direction is made and becomes effective. Investment directions under this Section shall be made in accordance with rules and procedures established by the Company. Said rules may require that the investment direction be made a reasonable time prior to the date it will become effective. The rules also may limit the frequency of such elections, but shall satisfy the requirements of the regulations issued under section 404(c) of ERISA. If a Participant fails to give proper investment directions with respect to his or her Accounts under the Plan, his or her Accounts shall be invested in a default Investment Funds or Funds established by the Company pursuant to Sec. 6.2.

Sec. 6.4    Valuation of Investment Funds. As of each Valuation Date, the Funding Agency shall determine, in accordance with a method consistently followed and uniformly applied, the fair market value of each Investment Fund. During any period that all or a part of any Investment Fund is held under a contract, of a type sometimes referred to as a “guaranteed income contract”, issued by an insurance company and invested by it and under which the insurance company pays a guaranteed minimum rate of return, and provided no event has occurred that would result in a payment by the insurance company under the contract at a discount from book value of the contract, the fair market value of the contract shall be deemed to equal its book value.

Sec. 6.5    Valuation of Accounts in Investment Funds. As of each Valuation Date the value of each Participant’s various Accounts in the Investment Funds shall be determined. The value of each such Account shall be adjusted to reflect the effect of income, realized and unrealized

profits and losses, withdrawals, interfund transfers, and all other transactions since the next preceding Valuation Date.

Sec. 6.6    Transfers from Other Plans. At the request of a Qualified Employee and with the consent of the Company, which shall be granted in its sole discretion and only if it determines that the transfer of funds is consistent with the provisions of the Code, the Plan may accept from another plan a direct trustee to trustee transfer of funds credited to the employee under such other plan (provided such plan is a qualified plan under Code section 401(a)). The transferred funds and the Qualified Employee shall be subject to the following:

        

        

    

Sec. 6.7    Direct and Indirect Rollover Contributions. With the consent of the Company, a Qualified Employee may make an Eligible Rollover Contribution to the Plan. The Company shall consent only if it has reasonably concluded that the amount to be transferred will constitute an Eligible Rollover Contribution. The following shall apply with respect to an Eligible Rollover Contribution and to the employee making the rollover:

    

Sec. 7.1    Persons Eligible to Designate. Any Participant may designate a Beneficiary to receive any amount payable from the Fund as a result of the Participant’s death, provided that the Beneficiary survives the Participant. The Beneficiary may be one or more persons, natural or otherwise. By way of illustration, but not by way of limitation, the Beneficiary may be an individual, trustee, executor, or administrator. A Participant may also change or revoke a designation previously made, without the consent of any Beneficiary named therein.

Sec. 7.2    Special Requirements for Married Participants. Notwithstanding the provisions of Sec. 7.1, if a Participant is married at the time of his or her death, the Beneficiary shall be the Participant’s spouse unless the spouse has consented in writing to the designation of a different Beneficiary, the spouse’s consent acknowledges the effect of such designation, and the spouse’s consent is witnessed by a representative of the Plan or a notary public. Such consent shall be deemed to have been obtained if it is established to the satisfaction of the Company that such consent cannot be obtained because there is no spouse, because the spouse cannot be located, or because of such other circumstances as may be prescribed by federal regulations. Any consent by a spouse shall be irrevocable. Any designation of a Beneficiary or form of benefits which has received spousal consent may be changed (other than by being revoked) without spousal consent only if the consent by the spouse expressly permits subsequent designations by the Participant without any requirement of further consent of the spouse. Any such consent shall be valid only with respect to the spouse who signed the consent, or in the case of a deemed consent, the designated spouse.

Sec. 7.3    Form and Method of Designation. Any designation or a revocation of a prior designation of Beneficiary shall be in writing on a form acceptable to the Company and shall be filed with the Company. The Company and all other parties involved in making payment to a Beneficiary may rely on the latest Beneficiary designation on file with the Company at the time of payment or may make payment pursuant to Sec. 7.4 if an effective designation is not on file, shall be fully protected in doing so, and shall have no liability whatsoever to any person making claim for such payment under a subsequently filed designation of Beneficiary or for any other reason.

Sec. 7.4    No Effective Designation. If there is not on file with the Company or recordkeeper an effective designation of Beneficiary by a deceased Participant, or if the designated Beneficiary fails to survive the Participant, the Beneficiary shall be the person or persons surviving the Participant in the first of the following classes in which there is a survivor, share and share alike:

Determination of the identity of the Beneficiary in each case shall be made by the Company.

Sec. 7.5    Successor Beneficiary. If a Beneficiary who survives the Participant subsequently dies before receiving all payments to which the Beneficiary was entitled, the successor Beneficiary, determined in accordance with the provisions of this Section, shall be entitled to the balance of any remaining payments due. Only a Beneficiary who is the surviving spouse of the Participant may designate a successor Beneficiary. A Beneficiary who is the surviving spouse may designate a successor Beneficiary only if the Participant specifically authorized such designations on the Participant’s Beneficiary designation form. If a Beneficiary is permitted to designate a successor Beneficiary, each such designation shall be made according to the same rules (other than Sec. 7.2) applicable to designations by Participants. If a Beneficiary is not permitted to designate a successor Beneficiary, or is permitted to do so but fails to make such a designation, the balance of any payments remaining due will be payable to a contingent Beneficiary if the Participant’s Beneficiary designation so specifies, and otherwise to the personal representative (executor or administrator) of the deceased Beneficiary.

Sec. 7.6    Disclaimers by Beneficiaries. A Beneficiary entitled to all or a portion of a deceased Participant’s Accounts may disclaim his or her interest therein, subject to the following:

to be an assignment or alienation of benefits in violation of any federal law prohibiting the assignment or alienation of benefits under this Plan.

Sec. 7.7    Definition of Spouse and Marriage    . Effective September 16, 2013, the Plan will recognize any marriage (same sex or otherwise) that is valid either under the laws of the State of Minnesota or the state in which the marriage took place. This Section shall be administered in accordance with guidance issued by the Department of Treasury.

Sec. 8.1    Benefit on Retirement, Disability or Death. If a Participant (i) Terminates Employment after he or she has reached age 65, (ii) becomes totally and permanently disabled while employed (as determined by the Company in its sole discretion), or (iii) dies while employed by a Participating Employer or Affiliate, the Participant shall be 100% vested and shall be entitled to a benefit equal to the value of all of his or her Accounts. The benefit shall be paid at the time and in the manner determined under Article IX. The value of each Account shall be adjusted as provided in Sec. 6.5 until the Account has been distributed in full.

Sec. 8.2     Other Termination of Employment. If a Participant’s Termination of Employment occurs under circumstances such that the Participant is not entitled to a benefit under Sec. 8.1, the Participant shall be entitled to a benefit equal to the value of his or her 401(k) Account, Sick Leave Account, Rollover Account, Restricted Distribution Account and QNEC Account (if any). In addition, the Participant is entitled to the vested portion of his or her Matching Contribution Account, if any.

In that regard, all Participants are fully vested in their Matching Contribution Accounts, except for DM&E Participants described in Sec. 4.4(c) who are represented by a Participating Union (“DM&E Union Participants”). These DM&E Union Participants become vested as follows:

If the DM&E Union Participant has completed three or more Years of Vesting Service, the Participant is fully vested and is entitled to a benefit equal to the value of his or her Matching Contribution Account, if any.

If the DM&E Union Participant has less than three years of Vesting Service, he or she shall be entitled to the vested portion of his or her Matching Contribution Account according to the following schedule:

Years of Vesting Service        Vested Percentage

Less than One                     0%

One but less than Two                33%

Two but less than Three            66%

Three or More                 100%

The value of all Participants’ Accounts shall continue to be adjusted as provided in Sec. 6.5 until all of the Accounts have been distributed in full, subject, however, to the following:

Matching Contribution Account shall be treated as a Forfeiture by the end of the Plan Year in which the distribution of the entire vested balance in all of the Participant’s Accounts was made. In that regard, if a Participant is zero percent vested in all of his or her Accounts (which means that the Participant must not have made any Salary Reduction Contributions), he or she will be treated as having received a distribution of the entire vested balance in all of his or her Accounts in the Plan Year in which he or she Terminates Employment.

Otherwise, if the Participant does not receive a distribution of the entire vested balance of in all of his or her Accounts, the non-vested amounts in the Participant’s Matching Contribution Account shall not be forfeited until after the Participant has a Recognized Break in Service of 60 months. The undistributed Accounts shall continue to share in investment earnings and losses until the Forfeiture occurs. Forfeitures shall be applied as provided in Sec. 4.11 and shall be reinstated as provided in paragraph (b) below.

Sec. 8.3    Withdrawals While Employed. Withdrawals from Restricted Distribution Accounts and QNEC Accounts cannot be made prior to Termination of Employment, Disability or age 59 ½. A Participant may request a cash withdrawal from his or her Before Tax, Sick Leave, Matching and Rollover Accounts at any time prior to the date benefits first become payable to the Participant under Sec. 8.1 pursuant to the following:

Sec. 8.4    Loans to Participants. The Company may authorize a loan to an Active Participant, or to a Participant who is transferred to a position with an Affiliate (whether or not the Affiliate is a Participating Employer in the Plan), who makes application therefor. Each such loan shall be subject to the following provisions:

For purposes of this section, a related plan is any “qualified employer plan,” as defined in Code section 72(p)(4), sponsored by the Participant’s Participating Employer or any related employer, determined according to Code section 72(p)(2)(D).

shall be repaid through payroll deductions. The Participant shall execute any documents required to authorize such deductions.

Sec. 9.1    Time and Method of Payment. Except as otherwise provided in this Section, the benefit to which a Participant or Beneficiary may become entitled under Sec. 8.1 or 8.2 shall be distributed at such time and according to such method as he or she elects, subject to the following:

The 30-day advance notice period may be waived by the Participant provided that the distribution of benefits still cannot commence until at least eight days after the distribution notices are provided. The Company may require Participants to apply for benefits under the Plan before benefit payments will commence. Since Participants can elect to receive benefits at any time following Termination of Employment, the requirements of Code Section 401(a)(14) are satisfied.

Sec. 9.2    Accounts Totaling $5,000 or Less. If the total value of the Accounts of the Participant (or a Beneficiary following the Participant’s death) is $5,000 or less when benefit payments can commence due to Termination of Employment, disability or death, partial distributions and installment payments are not available. In that case, if the Participant (or spouse Beneficiary) has failed to make an election between a Direct Rollover (pursuant to Sec. 9.3) or a single sum cash distribution within 90 days following receipt of his or her distribution election form, the following rules shall apply:

Sec. 9.3    Direct Rollovers to IRAs and Other Eligible Plans. A distributee may elect, at the time and in the manner prescribed by the Company, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee (a “direct rollover”). The following definitions shall be used in administering the provisions of this section.

required minimum distribution rules of Code section 401(a)(9). Also, any required minimum distributions that would otherwise be due to the Participant or Beneficiary shall be made to the Beneficiary before any such direct transfer is made to the inherited IRA. The inherited IRA must be established in a manner that identifies it as an inherited IRA with respect to the deceased Participant and must also identify the Beneficiary. Transfers under this Section shall be administered in accordance with applicable regulations or other guidance issued by the Department of Treasury.

Sec. 9.4    Accounting Following Termination of Employment. If distribution of all or any part of a benefit is deferred or delayed for any reason, the undistributed portion of any Account shall continue to be revalued as of each Valuation Date as provided in Article VI.

Sec. 9.5    Source of Benefits. All benefits to which persons become entitled hereunder shall be provided only out of the Fund and only to the extent that the Fund is adequate therefor. No benefits are provided under the Plan except those expressly described herein.

Sec. 9.6    Incompetent Payee. If in the opinion of the Company a person entitled to payments hereunder is disabled from caring for his or her affairs because of mental or physical condition, or age, payment due such person may be made to such person’s guardian, conservator, or other legal personal representative upon furnishing the Company with evidence satisfactory to the Company of such status. Prior to the furnishing of such evidence, the Company may cause payments due the person under disability to be made, for such person’s use and benefit, to any person or institution then in the opinion of the Company caring for or maintaining the person under disability. The Company shall have no liability with respect to payments so made. The Company shall have no duty to make inquiry as to the competence of any person entitled to receive payments hereunder.

Sec. 9.7    Benefits May Not Be Assigned or Alienated. Except as otherwise expressly permitted by the Plan or required by law, the interests of persons entitled to benefits under the Plan may not in any manner whatsoever be assigned or alienated, whether voluntarily or involuntarily, or directly or indirectly. However, the Plan shall comply with the provisions of any court order which the Company determines is a qualified domestic relations order as defined in Code section 414(p). Any expenses relating to review or administration of a domestic relations order may be charged against the Accounts of the Participant and/or the alternate payee. Notwithstanding any provisions in the Plan to the contrary, an individual who is entitled to payments from the Plan as an “alternate payee” pursuant to a qualified domestic relations order may receive a lump sum payment from the Plan as soon as administratively feasible after the Valuation Date coincident with or next following the date of the Company’s determination that the order is a qualified domestic relations order, unless the order specifically provides for payment to be made at a later time or in a different form of payment that is permitted under Sec. 9.1.

Sec. 9.8    Payments Pursuant to a Qualified Domestic Relations Order. Notwithstanding any provisions in the Plan to the contrary, an individual who is entitled to payments from the Plan as an “alternate payee” pursuant to a qualified domestic relations order may receive a lump sum payment from the Plan (or have a Direct Rollover made on his or her behalf pursuant to Sec. 9.3) as soon as administratively feasible after the Valuation Date coincident with or next

following the date of the Company’s determination that the order is a qualified domestic relations order, unless the order specifically provides for payment to be made at a later time or in a different form permitted under Sec. 9.1.

Sec. 9.9    Payment of Taxes. The Funding Agency may pay any estate, inheritance, income, or other tax, charge, or assessment attributable to any benefit payable hereunder which in the Funding Agency’s opinion it shall be or may be required to pay out of such benefit. The Funding Agency may require, before making any payment, such release or other document from any taxing authority and such indemnity from the intended payee as the Funding Agency shall deem necessary for its protection.

Sec. 9.10    Conditions Precedent. No person shall be entitled to a benefit hereunder until his or her right thereto has been finally determined by the Company nor until the person has submitted to the Company relevant data reasonably requested by the Company, including, but not limited to, proof of birth or death.

Sec. 9.11    Company Directions to Funding Agency. The Company shall designate an individual or individuals to give such written directions to the Funding Agency as are necessary to accomplish distributions to the Participants and Beneficiaries in accordance with the provisions of the Plan.

Sec. 9.12    Transfers to Other Plans. At the request of a Qualified Employee and with the consent of the Company, which shall be granted in its sole discretion and only if it determines that the transfer of funds is consistent with the provisions of the Code, the Plan may make a direct trustee to trustee transfer of funds (that is not eligible for a Direct Rollover under Sec. 9.3) credited to the employee under this Plan to another tax qualified plan. Notwithstanding the foregoing, no transfer of amounts subject to the withdrawal restrictions of Code section 401(k) or Sec. 8.3 of this Plan shall be made unless the Company reasonably concludes that the plan accepting the transfer will continue to maintain the distribution limitations that apply under this Plan and the Code. Also, no transfer to another plan will be allowed with respect to a Participant’s Accounts if the Participant has an outstanding loan balance under this Plan.

Sec. 10.1    Composition. All sums of money and all securities and other property received by the Funding Agency for purposes of the Plan, together with all investments made therewith, the proceeds thereof, and all earnings and accumulations thereon, and the part from time to time remaining shall constitute the “Fund”. The Company may cause the Fund to be divided into any number of parts for investment purposes or any other purposes necessary or advisable for the proper administration of the Plan.

Sec. 10.2    Funding Agency. The Fund may be held and invested as one fund or may be divided into any number of parts for investment purposes. Each part of the Fund, or the entire Fund if it is not divided into parts for investment purposes, shall be held and invested by one or more trustees or by an insurance company. The trustee or trustees or the insurance company so acting with respect to any part of the Fund is referred to herein as the Funding Agency with respect to such part of the Fund. The selection and appointment of each Funding Agency shall be made by the Company. The Company shall have the right at any time to remove a Funding Agency, in which case the Company shall appoint a successor thereto, subject only to the terms of any applicable trust agreement or group annuity contract. The Company shall have the right to determine the form and substance of each trust agreement and group annuity contract under which any part of the Fund is held, subject only to the requirement that they are not inconsistent with the provisions of the Plan. Any such trust agreement may contain provisions pursuant to which the trustee will make investments on direction of a third party.

Sec. 10.3    Compensation and Expenses of Funding Agency. The Funding Agency shall be entitled to receive such reasonable compensation for its services as may be agreed upon with the Company. The Funding Agency shall also be entitled to reimbursement for all reasonable and necessary costs, expenses, and disbursements incurred by it in the performance of its services. Such compensation and reimbursements shall be paid from the Fund, except as specifically agreed to in writing by the Company.

Sec. 10.4    No Diversion. The Fund shall be for the exclusive purpose of providing benefits to Participants under the Plan and their beneficiaries and defraying reasonable expenses of administering the Plan. Such expenses may include premiums for the bonding of Plan officials required by ERISA. No part of the corpus or income of the Fund may be used for, or diverted to, purposes other than for the exclusive benefit of employees of the Participating Employers or their beneficiaries. Notwithstanding the foregoing:

In the case of any such return of contribution the Company shall cause such adjustments to be made to the Accounts of Participants as the Company considers fair and equitable under the circumstances resulting in the return of such contribution.

Sec. 11.1    Administration by Company. The Company is the “administrator” of the Plan for purposes of ERISA. Except as expressly otherwise provided herein, the Company, and not the other Participating Employers, shall control and manage the operation and administration of the Plan and make all decisions and determinations incident thereto. In carrying out its Plan responsibilities, the Company shall have the discretionary authority to construe the terms of the Plan. Except in cases where the Plan expressly provides to the contrary, action on behalf of the Company may be taken by any of the following:

Sec. 11.2    Certain Fiduciary Provisions. For purposes of the Plan:

Each Named Fiduciary (other than the Company), each other fiduciary, each person employed pursuant to subsection (b) above, and each investment manager shall be entitled to receive reasonable compensation for services rendered, or for the reimbursement of expenses properly and actually incurred in the performance of their duties with the Plan and to payment therefor from the Fund if not paid directly by the Participating Employers in such proportions as the Company shall determine. Notwithstanding the foregoing, no person so serving who already receives full-time pay from any employer or association of employers whose employees are Participants, or from an employee organization whose members are Participants, shall receive compensation from the Plan, except for reimbursement of expenses properly and actually incurred.

Sec. 11.3    Discrimination Prohibited. No person or persons in exercising discretion in the operation and administration of the Plan shall discriminate in favor of Highly Compensated Employees.

Sec. 11.4    Evidence. Evidence required of anyone under this Plan may be by certificate, affidavit, document, or other instrument which the person acting in reliance thereon considers to be pertinent and reliable and to be signed, made, or presented to the proper party.

Sec. 11.5    Correction of Errors. It is recognized that in the operation and administration of the Plan certain mathematical and accounting errors may be made or mistakes may arise by reason of factual errors in information supplied to the Company or Funding Agency. The Company shall have power to cause such equitable adjustments to be made to correct for such errors as the Company in its discretion considers appropriate. Such adjustments shall be final and binding on all persons. Any return of a contribution due to a mistake in fact will be subject to Sec. 10.4.

Sec. 11.6    Records. Each Participating Employer, each fiduciary with respect to the Plan, and each other person performing any functions in the operation or administration of the Plan or the management or control of the assets of the Plan shall keep such records as may be necessary or appropriate in the discharge of their respective functions hereunder, including records required by ERISA or any other applicable law. Records shall be retained as long as necessary for the proper administration of the Plan and at least for any period required by ERISA or other applicable law.

Sec. 11.7    General Fiduciary Standard. Each fiduciary shall discharge its duties with respect to the Plan solely in the interests of Participants and their beneficiaries and with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

Sec. 11.8    Prohibited Transactions. A fiduciary with respect to the Plan shall not cause the Plan to engage in any prohibited transaction within the meaning of ERISA.

Sec. 11.9    Claims Procedure. The Company shall establish a claims procedure consistent with the requirements of ERISA. Such claims procedure shall provide adequate notice in writing to any Participant or beneficiary whose claim for benefits under the Plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the claimant and shall afford a reasonable opportunity to a claimant, whose claim for benefits has been denied, for a full and fair review by the appropriate Named Fiduciary of the decision denying the claim. No person claiming a benefit under the Plan may initiate a civil action regarding the claim until all steps under the claims procedure (including appeals) have been completed.

Sec. 11.10    Bonding. Plan personnel shall be bonded to the extent required by ERISA. Premiums for such bonding may, in the sole discretion of the Company, be paid in whole or in part from the Fund. Such premiums may also be paid in whole or in part by the Participating Employers in such proportions as the Company shall determine. The Company may provide by agreement with any person that the premium for required bonding shall be paid by such person.

Sec. 11.11    Waiver of Notice. Any notice required hereunder may be waived by the person entitled thereto.

Sec. 11.12    Agent for Legal Process. The Company shall be the agent for service of legal process with respect to any matter concerning the Plan, unless and until the Company designates some other person as such agent.

Sec. 11.13    Indemnification. In addition to any other applicable provisions for indemnification, the Participating Employers jointly and severally agree to indemnify and hold harmless, to the extent permitted by law, each director, officer, and employee of the Participating Employers against any and all liabilities, losses, costs, or expenses (including legal fees) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against such person at any time by reason of such person’s services as a fiduciary in connection with the Plan, but only if such person did not act dishonestly, or in bad faith, or in willful violation of the law or regulations under which such liability, loss, cost, or expense arises. The Company shall have the right, but not the obligation, to select counsel and control the defense and settlement of any action against the indemnitee for which the indemnitee may be entitled to indemnification under this Section.

    

Sec. 11.14    Expenses of Administration. Investment management and brokerage fees shall be charged against the Participants’ Accounts to which such fees are attributable. In addition, the Company may, to the extent permitted by ERISA, allocate and charge other expenses of Plan administration against Participants’ Accounts.

Sec. 12.1    Amendment. Subject to the non-diversion provisions of Sec. 10.4, the Company (and not the other Participating Employers) by action of the Board, or by action of a person so authorized by resolution of the Board, may amend the Plan at any time and from time to time. No amendment of the Plan shall have the effect of changing the rights, duties, and liabilities of any Funding Agency without its written consent. Also, no amendment shall divest a Participant or Beneficiary of Accounts accrued prior to the amendment.

Sec. 12.2    Permanent Discontinuance of Contributions. A Participating Employer, by action of its board of directors, may completely discontinue contributions in support of the Plan. In such event, notwithstanding any provisions of the Plan to the contrary, no employee of such employer shall become a Participant after such discontinuance. Subject to the foregoing, all of the provisions of the Plan shall continue in effect, and upon entitlement thereto distributions shall be made in accordance with the provisions of Article IX.

Sec. 12.3    Reorganizations of Participating Employers. In the event two or more Participating Employers shall be consolidated or merged or in the event one or more Participating Employers shall acquire the assets of another Participating Employer, the Plan shall be deemed to have continued, without termination and without a complete discontinuance of contributions, as to all the Participating Employers involved in such reorganization and their employees. In such event, in administering the Plan the corporation resulting from the consolidation, the surviving corporation in the merger, or the employer acquiring the assets shall be considered as a continuation of all of the Participating Employers involved in the reorganization.

Sec. 12.4    Termination. A Participating Employer, by action of its board of directors, may terminate the Plan as applicable to such Participating Employer and its employees. After a termination no employee of such employer shall become a Participant. The Accounts of each Participant in the employ of such Participating Employer at the time of such termination shall be nonforfeitable, the Participant shall be entitled to a benefit equal to the value of those Accounts determined as of the Valuation Date coincident with or next following the termination of the Plan, distributions shall be made to Participants and Beneficiaries as soon as administratively practicable (and, taking into account the provisions of Sec. 12.6) after the termination of the Plan, but not before the earliest date permitted under the Code and applicable regulations, and the Plan and any related trust agreement or group annuity contract shall continue in force for the purpose of making such distributions.

Sec. 12.5    Partial Termination. If there is a partial termination of the Plan, either by operation of law, by amendment of the Plan, or for any other reason, which partial termination shall be confirmed by the Company, the Accounts of each Participant with respect to whom the partial termination applies shall be nonforfeitable. Subject to the foregoing, all of the provisions of the Plan shall continue in effect as to each such Participant, and upon entitlement thereto distributions shall be made in accordance with the provisions of Article IX.

    

Sec. 12.6    Merger, Consolidation, or Transfer of Plan Assets. In the case of any merger or consolidation of the Plan with any other plan, or in the case of the transfer of assets or liabilities of the Plan to any other plan, provision shall be made so that each Participant and Beneficiary would (if such other plan then terminated) receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit he or she would have been entitled to receive immediately before the merger, consolidation, or transfer (if the Plan had then terminated). No such merger, consolidation, or transfer shall be effected until such statements with respect thereto, if any, required by the Code or ERISA to be filed in advance thereof have been filed and the Company has determined that the merger, consolidation, or transfer complies with the requirements of the Code and ERISA, and regulations issued thereunder. In that regard:

Sec. 12.7    Deferral of Distributions. Notwithstanding any provisions of the Plan to the contrary, in the case of a complete discontinuance of contributions to the Plan or of a complete or partial termination of the Plan, the Company or the Funding Agency may defer any distribution of benefit payments to Participants and Beneficiaries with respect to which such discontinuance or termination applies (except for distributions which are required to be made under Sec. 9.1) until after the following have occurred:

Sec. 13.1    Effective Date. Unless otherwise provided herein, top heavy plan provisions shall apply to Plan Years beginning after December 31, 2001. For Plan Years prior to January 1, 2002, the top heavy status of the Plan shall be determined according to the provisions of the Plan then in effect.

Sec. 13.2    Key Employee Defined. “Key Employee” means any employee or former employee (including any deceased employee) who at any time during the Plan Year that includes the determination date was an officer of the Company or an Affiliate having annual compensation greater than $170,000 (as adjusted under Code section 416(i)(1) for Plan Years beginning after December 31, 2015), a five-percent owner of the Company or an Affiliate, or a one-percent owner of the Company having annual compensation of more than $150,000. For this purpose, annual Compensation means Compensation within the meaning of Code section 415(c)(3), as defined in Sec. 5.1(e) of the Plan. The determination of who is a Key Employee will be made in accordance with Code section 416(i)(1) and the applicable regulations and other guidance of general applicability issued thereunder.

Sec. 13.3    Determination of Top-Heavy Status. The top-heavy status of the Plan shall be determined according to Code Section 416 and the regulations thereunder, using the following standards and definitions:

Notwithstanding paragraphs (1) and (2) above, the Plan is not a Top-Heavy Plan with respect to a Plan Year if it is part of a permissive aggregation group of plans for which the top-heavy ratio does not exceed 60 percent.

        

    

date) of all employees under the Plan or plans as of the determination date. (The “Plans” referred to in the preceding sentence are the plans in the required or permissive aggregation group, as applicable.) The preceding provisions shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Code section 416(g)(2)(A)(i). Both the numerator and denominator of the top-heavy ratio shall be adjusted to reflect any contribution not actually made as of the determination date but which is required to be taken into account on that date under Code section 416 and the regulations thereunder. In the case of a distribution made for a reason other than severance from employment, death or disability, the “one-year period” shall be applied by substituting “five-year period” for “one-year period”.

Sec. 13.4    Minimum Contribution Requirement. For any Plan Year with respect to which the Plan is a Top-Heavy Plan, the employer contributions and Forfeitures allocated to each Active Participant who is not a Key Employee and whose Termination of Employment has not occurred prior to the end of such Plan Year shall not be less than the minimum amount determined in accordance with the following:

Sec. 13.5    Definition of Employer. For purposes of this Article XIII, the term “employer” means all Participating Employers and trade or business entity under Common Control with a Participating Employer.

Sec. 13.6    Exception for Collective Bargaining Unit. Section 13.4 shall not apply with respect to any employee included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers if there is evidence that retirement benefits were the subject of good faith bargaining between such employee representative and such employer or employers.

Sec. 14.1    Insurance Company Not Responsible for Validity of Plan. No insurance company that issues a contract under the Plan shall have any responsibility for the validity of the Plan. An insurance company to which an application may be submitted hereunder may accept such application and shall have no duty to make any investigation or inquiry regarding the authority of the applicant to make such application or any amendment thereto or to inquire as to whether a person on whose life any contract is to be issued is entitled to such contract under the Plan.

Sec. 14.2    Headings. Headings at the beginning of articles and sections hereof are for convenience of reference, shall not be considered a part of the text of the Plan, and shall not influence its construction.

Sec. 14.3    Capitalized Definitions. Capitalized terms used in the Plan shall have their meaning as defined in the Plan unless the context clearly indicates to the contrary.

Sec. 14.4    Gender. Any references to the masculine gender include the feminine and vice versa.

Sec. 14.5    Use of Compounds of Word “Here”. Use of the words “hereof,” “herein,” “hereunder,” or similar compounds of the word “here” shall mean and refer to the entire Plan unless the context clearly indicates to the contrary.

Sec. 14.6    Construed as a Whole. The provisions of the Plan shall be construed as a whole in such manner as to carry out the provisions thereof and shall not be construed separately without relation to the context.

Sec. 14.7    Benefits of Reemployed Veterans. Notwithstanding any provisions of this Plan to the contrary, contributions, benefits and service credit with respect to Qualified Military Service will be provided in accordance with Code section 414(u). For this purpose:

reemployment within the time frame required by USERRA, the following provisions shall apply:

The employee can elect to have “make up” Before Tax Deposits made out of his or her Certified Earnings following his or her period of Qualified Military Service to the extent he or she could have made Before Tax Deposits had he or she remained a Participant in the Plan during the period of his or her Qualified Military Service. The deadline for a returning participant to make up Before Tax Deposits is three times the period of Qualified Military Service but not more than five years. Such Before Tax Deposits shall be matched in the same way as other Before Tax Deposits would have been, but the Before Tax Deposits and Matching Contributions shall not be subject to the provisions of Sec. 4.7 or Sec. 4.8 of the Plan.

The Participant may elect to have his or her loan payments under the Plan suspended and the interest rate on the loan capped in accordance with USERRA and the Servicemembers Civil Relief Act (“SCRA”).

The Plan shall comply with the provisions of the Heroes Earnings Assistance and Relief Tax Act (the “HEART Act”), which amended certain provisions of USERRA. The HEART Act is generally effective January 1, 2007 and provides as follows:

If a Participant dies while performing “qualified military service” (as defined in USERRA), the Participant’s survivors shall receive the same benefits under the Plan as if the Participant died while employed by a Participating Employer. This rule does not, however, require survivors to be provided with any additional benefit accruals relating to the period of qualified military service.

If a Participant is receiving military shift differential pay (which is the amount of pay, if any, that the Participant is receiving from his or her

Participating Employer while performing qualified military service), he or she may make Before Tax Deposits out of the military shift differential pay. After December 31, 2008, military shift differential pay is subject to federal income tax withholding if the employee is on active duty with the uniformed services for more than 30 days. In addition, the military shift differential pay shall be treated as Certified Earnings under the Plan. FICA and FUTA withholding, however, is not required. If a Participant receiving military differential pay takes a distribution described in paragraph (3) below, however, he or she cannot make Before Tax Deposits for six months following the date of the distribution.

If a Participant receiving military shift differential pay is performing qualified military service for at least 30 days, he or she may take a distribution of part or all of his or her Accounts under the Plan as if he or she had a Termination of Employment. Individuals who take such a distribution have the option to repay the distribution within the two-year period after the end of the qualified military service.

The foregoing provisions are intended to provide the benefits required by USERRA and the HEART Act, and are not intended to provide any other benefits. This section shall be construed consistently with said intent.

Sec. 15.1    Review Board. Except as expressly provided herein to the contrary, a Review Board shall be established for the purpose of hearing and determining all disputes which may arise concerning eligibility for participation in, or benefits payable under, the Plan, but only with respect to Participants whose hours and wages are subject to the terms of a collective bargaining agreement between a Participating Employer and a Participating Union. The Review Board shall act pursuant to the following:

Sec. 15.2    Powers of the Review Board. The Review Board shall determine all disputes which may arise concerning eligibility for participation in the Plan or benefits payable under the Plan. The Review Board shall have full power to affirm, reverse or otherwise modify

any decision or administrative action or proposed action which gave rise to any dispute involving matters described in the previous sentence. Notwithstanding the foregoing, any determination of disability made by the Company pursuant to Sec. 2.34, for purposes of determining whether a Termination of Employment has occurred, or any Company determination with respect to a qualified domestic relations order pursuant to Sec. 9.8 shall be final and not subject to reversal or modification by the Review Board. In carrying out its Plan responsibilities, the Review Board shall have the final discretionary authority to construe the terms of the Plan. The Review Board shall have no power to add to or subtract from or modify any of the terms of the Plan. The Review Board shall have the power to establish rules of procedure for the conduct of its business and of hearings before it, which rules shall not be inconsistent with the provisions of the Plan.

Sec. 15.3    Review Functions. The Review Board shall have the following rights and review functions:

Sec. 15.4    Liability. The Review Board and any members thereof shall be entitled to rely upon the correctness of any information furnished by the Company and the Participating Unions. Neither the Review Board nor any of its members, nor the Participating Unions, nor any officers or other representatives of the Participating Unions, nor any officers or other representatives of the Participating Employers, nor the Company, nor any officers or other representatives of the Company, shall be liable because of any act or failure to act on the part of the Review Board, or any of its members, except that nothing herein shall be deemed to relieve any such individual from liability for his own fraud or bad faith.

Sec. 15.5    Indemnity. The Company as to employer members and alternate employer members of the Review Board and the Participating Unions as to employee members and alternate employee members of the Review Board, shall indemnify, save and hold harmless such members, respectively, from any and all liability, loss, costs, damage or expense which such members or any of them may incur or sustain, arising out of the discharge of the responsibilities under the Plan of the Review Board, but only if such person did not act dishonestly or in bad faith or in willful violation of the law or regulations under which such liability, loss, cost or expense arises. The Company as to employer members and alternate employee members of the Review Board and the Participating

Unions as to employee members and alternate employee members of the Review Board shall have the right, but not the obligation, to select counsel and

control the defense and settlement of any action against the indemnitee for which the indemnitee may be entitled to indemnification under this section.

Sec. 15.6     Company Records. The Company, the Participating Employers, and the Funding Agency shall keep or cause to be kept such records as may be necessary or appropriate in the discharge of their respective duties hereunder. The records and reports maintained or received by the Company, the Participating Employers or the Funding Agency in connection with the administration of eligibility and benefit determination, hardship withdrawals and Investment Funds under the Plan shall be available for inspection at all reasonable times by the Review Board or the Participating Unions and such consultants as they may employ.

        

Participating Union     Effective Date of Participation

International Association of Machinists & Aerospace Workers    January 1, 1992

United Transportation Union    April 1, 1995

National Conference of Firemen & Oilers    January 1, 1992

American Railway & Airway Supervisors Association --         

Police/Technical Engineers (Division of TCU)    January 1, 1992

Soo Line Locomotive and Car Foreman’s Association    January 1, 1992

International Brotherhood of Boilermakers, Iron Ship Builders,        

Blacksmiths, Forgers & Helpers    January 1, 1992

Brotherhood of Railway Carmen (Division of TCU)    April 1, 1992

Brotherhood of Locomotive Engineers    January 1, 1992

International Brotherhood of Electrical Workers    January 1, 1992

Brotherhood of Railroad Signalmen    July 1, 1992

Brotherhood of Maintenance of Way Employees    January 1, 1992

Sheet Metal Workers International Association    September 1, 1992

American Train Dispatchers Department (Division of BLE)    January 1, 1992

United Transportation Union -- Yardmasters    January 1, 1992

Participating Unions        

Participating Union        Effective Date of Participation

American Railway Supervisors Association (Mechanical)    October 28, 1998

Brotherhood of Locomotive Engineers and Trainmen     October 28, 1998

Brotherhood of Railroad Signalmen     October 28, 1998

International Association of Machinist & Aerospace Workers     October 28, 1998

International Brotherhood of Electrical Workers     October 28, 1998

The National Conference of Firemen & Oilers     October 28, 1998

Transportation Communications International Union     October 28, 1998

Allied Services Division/TCU (Police)     October 28, 1998

Brotherhood of Railway Carmen (Division of TCU)     October 28, 1998

United Transportation Union     October 28, 1998

United Transportation Union - Yardmasters     October 28, 1998

Sheet Metal Workers International Association     October 28, 1998

Brotherhood of Maintenance of Way Employees    February 1, 1999

American Railway Supervisors Association (Engineering)    September 1, 1999