10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ý  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 28, 2005

OR

o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to              

Commission File Number:  333-62775

BERTUCCI’S CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	06-1311266
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
155 Otis Street, Northborough, MA	01532
(Address of principal executive offices)	(Zip Code)

(508) 351-2500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
None

Securities registered pursuant to Section 12(g) of the Act:

None

Title of class

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  o  No  ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes  ý  No  o

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  o  No  ý

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer    oAccelerated filer    oNon-accelerated filer    ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o  No  ý

3,012,982 shares of the registrant’s Common Stock, $0.01 par value per share, were outstanding on March 28, 2006.

Documents Incorporated By Reference None

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

All statements other than statements of historical facts included in this Annual Report on Form 10-K, including, without limitation, statements set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding Bertucci’s future financial position, business strategy, budgets, projected costs, plans, and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our or the foodservice industry’s actual results, performance or achievements to be materially different from any expected results, performance or achievements. Forward-looking statements include, but are not limited to statements regarding:

•Our highly competitive business environment;

•Exposure to food prices;

•Risks associated with the foodservice industry such as changes in consumer tastes and adverse publicity resulting from food quality, illness, injury or other health concerns;

•Our ability to retain and attract new employees;

•Government regulations;

•Our high geographic concentration in the Northeast and Mid-Atlantic states;

•The attendant weather patterns in locations in which we operate;

•The number of expected restaurant openings, including the appropriate conditions needed to meet new opening targets;

•Our ability to service our debt and other obligations;

•Our ability to meet ongoing financial covenants contained in our debt instruments; and

•Matters relating to litigation.

Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,”  “will,” “expect,” “intend,” “estimate,” “anticipate” or “believe” or the negative thereof or variations thereon or similar terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from any expected results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. Although we believe the expectations reflected in such forward-looking statements will prove to be correct, we can give no assurance such expectations will prove to be correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Factors causing or contributing to such differences include those discussed in the risk factors set forth in Item 1A below (the “Risk Factors”) as well as those discussed elsewhere herein.

Unless the context indicates otherwise, references herein to “we”, “us”, “our,” “Bertucci’s” or the “Company” refer to Bertucci’s Corporation, its predecessors and its consolidated subsidiaries.

PART I

ITEM 1. BUSINESS

Overview

We are a Delaware corporation which owns and operates a chain of full-service casual dining, Italian-style restaurants under the names of Bertucci’s Brick Oven Pizzeria® and Bertucci’s Brick Oven Ristorante®. We incorporated in 1994 as NE Restaurant Company, Inc. and formally changed our name to Bertucci’s Corporation on August 16, 2001. As of December 28, 2005, we operated 92 restaurants located primarily in the northeastern United States.

In July 1998, we completed our acquisition of Bertucci’s Restaurant Corp.’s parent entity, Bertucci’s, Inc., for a purchase price, net of cash received, of approximately $89.4 million (the “Acquisition”). We financed the Acquisition primarily through the issuance of $100 million of 10¾% senior notes due 2008 (the “Senior Notes”). $85.3 million in principal of the Senior Notes are still outstanding.

Concept

Our restaurants are full-service, casual dining restaurants offering high quality, moderately priced Italian food. We are open seven days a week for lunch and dinner, appealing to both families and the adult market. We differentiate ourselves from other

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restaurants by offering a variety of distinctive and freshly prepared foods using high quality ingredients, brick oven baking techniques and an open-kitchen design. Our first restaurant opened in Somerville, Massachusetts in 1981.

Restaurant Overview and Menu

Our restaurants offer a distinctive menu and a classic Tuscan-style design providing a unique dining experience at a reasonable price. We specialize in a wide assortment of Italian regional pasta, chicken, veal and seafood dishes, salads, and premium brick oven pizzas. Our signature pizzas are prepared in brick ovens baking at unusually high temperatures, enabling the production of a light crust and preservation of natural flavors and moisture of toppings. Natural fresh ingredients are used to ensure high quality and freshness. We make our own dough, sauces and toppings in each restaurant and prepare our menu fresh each day. In addition, our menu features a variety of appetizers, soups, calzones, and desserts. We believe our original recipes and brick oven baking techniques combine to produce superior products difficult to duplicate. Wine and beer are available at all of our locations and full bar service is available at most of our restaurants. Our price points generally range from $7.50 to $9.99 for lunch entrees and $9.25 to $15.99 for dinner entrees. Most items on our menu may be purchased for take-out service or delivery, which together accounted for approximately 21.6% of our net sales in fiscal 2005.

Restaurant Design

Our restaurants are freestanding or in-line buildings averaging approximately 6,000 square feet in size with an average seating capacity of approximately 170 people. Each restaurant features a classic Tuscan-style, open-kitchen design centered around brick ovens. Ingredients are displayed and food is prepared on polished granite counters located in front of the brick ovens, in plain view of our guests. We have historically built our restaurants in varying sizes and designs, with no two interior decors exactly alike. Because we believe unit economics benefit from a standardized design, in 2000 we developed a prototype design. The first restaurant with this prototypical design opened in January 2001. We have since modified the prototype design which currently envisions approximately 5,800 square feet and 200 seats per location. The first restaurant with the modified prototypical design opened in December 2003 and as of December 31, 2005 this prototypical design was in place at four of our restaurants. Key features of the current prototype design are a separate carryout designation, a bar/waiting area and modification of interior elements, including new floor and ceiling materials and new furniture. In order to remain distinctive, we are currently developing the design for the next generation prototype.

Restaurant Development

Expansion. We expect to grow through the opening of new Bertucci’s restaurants over the next several years, although it is anticipated there will be only one opening in fiscal 2006. We expect to finance the development of Bertucci’s restaurants through a combination of cash on hand and cash from operations. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.

Site Selection and Construction. We devote significant time and resources to identify and analyze potential new restaurant sites, as we believe site selection is crucial to our success. Our site selection strategy focuses on high-density, high-traffic, high-visibility sites which are, for the most part, positioned within existing markets to take advantage of certain operational efficiencies. We seek out sites with a mixture of retail, office, residential and entertainment concentration which promote both lunch and dinner business. In addition, we believe multiple locations in defined geographic areas will result in increased market penetration and brand recognition, and will permit advertising, management, purchasing and administrative efficiencies. The typical time period required to select a site and build and open a full-service restaurant averages 15 to 18 months.

Franchising. We do not currently have any franchisees or plans to develop a franchise program.

Quality Control

Each of our restaurants typically has a general manager and two or three assistant managers who are responsible for assuring compliance with our operating procedures and for the training and supervision of restaurant employees. The general managers report to area directors who oversee, on average, between six and nine of our restaurants. We believe our quality control operations are enhanced by the work of regional chefs who provide support to restaurant management and ensure quality of food preparation.

Training

We place significant emphasis on the proper training of our employees. Training is designed to increase product quality, operational safety, overall productivity and guest satisfaction and to foster the concept of “continuous improvement.”

We require new non-management employees to undergo extensive training administered by restaurant-level managers to improve the confidence, productivity, proficiency, and customer relations skills of such employees.

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We also require new managers to complete our Company-developed comprehensive management training program. There are two major components comprising this eight week program. Restaurant specific training is conducted in one of our certified training restaurants and classroom training is conducted at Bertucci’s University located at our corporate office. In the certified training restaurant the new manager spends seven weeks learning detailed, concept-specific food preparation standards and procedures as well as administrative and human resource functions, including sanitation, safety, and hospitality. The program also uses position specific training manuals and other written guides. At the Bertucci’s University component of management training, the new manager spends one week immersed in training at our headquarters where we also teach hospitality, human resource processes, leadership training, computer and information systems, responsible alcohol service and applied foodservice sanitation. At the end of the process, we test our trainee’s skills by a variety of means including a full-day written examination. We believe the rigorous training and testing during these sessions assures graduating managers are better prepared for running our restaurants. This management training program is typically followed up by periodic supplemental training modules such as situational leadership or time management skills.

When we open a new restaurant, we typically staff management positions with personnel who have had previous experience in a management position at another one of our restaurants. In addition, a highly experienced training team assists in opening the restaurant. Prior to opening, this team conducts a week of intensive training with our hourly staff for that specific restaurant.

Advertising and Marketing

Our marketing objective is to increase the frequency of guest visits in primary markets and grow brand awareness in less penetrated markets, thereby increasing revenues, profitability and market share. Key strategies include limited time only seasonal offerings, local store marketing, direct marketing initiatives, frequency driven promotions, and advertising. We have designed our advertising plan to differentiate our brand from our competitors’ and increase our market share through media coverage in key markets. We use radio, which affords continuity at competitive levels, as our primary advertising vehicle in all key markets and intend to supplement the important Boston market with television in 2006.

Purchasing

We negotiate directly with suppliers of food and beverage products and other restaurant supplies to ensure consistent quality and freshness of products and to obtain competitive prices. Although we believe essential restaurant supplies and products are available on short notice from several sources, we use one full-service distributor for a substantial portion of our restaurant supplies and product requirements, with such distributor charging us fixed mark-ups over prevailing wholesaleprices. We have a contract with our full-service distributor which terminates in 2011. There are no required quantity purchases under this agreement. We also have arrangements with several smaller regional distributors for the balance of our purchases. These distribution arrangements have allowed us to benefit from economies of scale and have resulted in lower commodity costs. Smaller day-to-day purchasing decisions are made at the individual restaurant level. We have not experienced any significant delays in receiving food and beverage inventories or restaurant supplies.

Information Systems and Restaurant Reporting

Information Systems. Our information systems provide detailed monthly financial statements for each restaurant, bi-monthly restaurant inventories, menu mix, cash management and payroll analysis. Preliminary financial reports are available within two days of the period close and we consolidate our restaurant-level information at our headquarters. Sales, menu mix, cash management and basic operating information are each processed daily and reported in our internal system. As a result, restaurant managers are able to respond to changes in their business daily, weekly or monthly, as necessary.  We consolidate and process our other varying levels of systems data at our headquarters daily, weekly or monthly, as we deem appropriate.

Point of Sale (“POS”). All of our restaurants use the Micros 3700 POS system. We believe the consistency and reliability of the POS system is the backbone of our technical infrastructure. The consistency between restaurants provides us with efficiencies for multi-restaurant operations, training and support. We retrieve our POS data from each restaurant daily and process this data at our headquarters.

Data Warehouse. We manage a data warehouse, tracking information as minute as guest check detail. We believe the data warehouse provides multiple views of operational data which enables us to identify trends, evaluate price sensitivity and track new menu items/combinations.

Trademarks, Service Marks and Other Intellectual Property

We have registered, among others, the names “Bertucci’s®”, “Bertucci’s Brick Oven Pizzeria®”,  “Bertucci’s Brick Oven Ristorante®”, and “What’s Not to Love ^SM” as service marks and trademarks with the United States Patent and Trademark Office.

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We are aware of names similar to Bertucci’s used by third parties in certain limited geographical areas. Such third-party use may prevent us from licensing the use of the Bertucci’s mark for restaurants in such areas. Except for these areas, we are not aware of any infringing uses materially affecting our business.

Competition

Our business, and the restaurant industry in general, is highly competitive and is often affected by changes in consumer tastes and dining preferences, by local and national economic conditions and by population and traffic patterns. We compete directly or indirectly with all restaurants, from national and regional chains to local establishments, as well as with other foodservice providers. Many of our competitors are significantly larger than us and have substantially greater resources.

Employees

At December 28, 2005, we had approximately 1,778 full-time employees (of whom 70 are based at our headquarters) and approximately 4,768 part-time employees.None of our employees are covered by a collective bargaining agreement. We believe our relations with our employees are good.

We anticipate our continued success will depend to a large degree on our ability to attract and retain high quality management employees. While we expect to continually address the high level of employee attrition normal in the food-service industry, we have taken steps to attract and keep qualified management personnel through the implementation of a variety of employee benefit plans, including a management incentive plan, a 401(k) plan, and an equity incentive plan under which we grant equity awards to our management employees.

Government Regulations

Each of our restaurants is subject to licensing and regulation by a number of governmental authorities on matters which include, among other things, health, safety, fire and alcoholic beverage control in the state or municipality in which the restaurant is located. Difficulties or failures in obtaining required licenses or approvals could delay or prevent the opening of a new restaurant in a particular area. In addition, failure to maintain a required license or approval could result in the temporary or permanent closing of an existing restaurant.

Alcoholic beverage control regulations require each of our restaurants to apply to a state authority and, in certain locations, county or municipal authorities for a license or permit to sell alcoholic beverages on the premises and to provide service for extended hours and on Sundays. Typically, licenses or permits must be renewed annually and may be revoked or suspended for cause at any time. Alcoholic beverage control regulations involve numerous aspects of the daily operations of our restaurants, including minimum age of patrons and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling, storage, and dispensing of alcoholic beverages.

We are also subject to various other federal, state and local laws relating to the development and operation of restaurants, including those concerning preparation and sale of food, relationships with employees (including minimum wage requirements, overtime and working conditions and citizenship requirements), land use, zoning and building codes, as well as other health, sanitation, safety and environmental matters.

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ITEM 1A. RISK FACTORS

Risk Factors

This Report contains forward-looking statements involving risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this Report should be read as being applicable to all forward- looking statements wherever they appear in this Report. Our actual results could differ materially from those discussed herein. Factors causing or contributing to such differences include those discussed below, as well as those discussed elsewhere in this Report.

Our substantial debt could harm our business.

We are highly leveraged. At the end of fiscal 2005, our aggregate outstanding indebtedness was $92.2 million; total stockholders’ deficit was $17.3 million and we had a working capital deficit of $1.1 million.

Our high degree of leverage could have important consequences, including, but not limited to:

•an inability to obtain additional financing for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes;

•a substantial portion of our cash flow from operations must be dedicated to the payment of principal and interest on our debt, which could reduce the funds available to us for our operations and other purposes, including investments in development and capital spending;

•we may be substantially more leveraged than certain of our competitors, which may place us at a competitive disadvantage; and

•a limiting of our flexibility to adjust to changing market conditions, a reduction of our ability to withstand competitive pressures and a vulnerability to a downturn in general economic and industry conditions.

Our ability to service our debt will depend on many factors that are not within our control.

Our ability to repay or to refinance our obligations with respect to our debt will depend on our future financial and operating performance, which, in turn, will be subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors, many of which are beyond our control. These factors could include:

•operating difficulties;

•increased operating costs;

•product pricing pressures;

•the response of competitors;

•regulatory developments; and

•delays in implementing strategic projects.

Our ability to meet our debt service and other obligations may depend in significant part on the extent to which we can successfully implement our business strategy. There can be no assurance, however, we will be able to implement our strategy fully or that the anticipated results of our strategy will be realized.

If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek to obtain additional equity capital, or to refinance or restructure our debt. There can be no assurance our cash flow and capital resources will be sufficient for payment of principal of, and premium, if any, and interest on, our debt in the future, or any such alternative measures would be successful or would permit us to meet our scheduled debt service obligations.

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Covenants in our Indenture currently restrict our discretion in operating our business and failure to comply with these covenants could result in the acceleration of our obligations under the Senior Notes.

Our Indenture for the Senior Notes imposes significant operating and other restrictions on us. Such restrictions will affect, and in many respects significantly limit or prohibit, among other things, our ability to:

•incur additional debt;

•pay dividends or make other distributions;

•make certain investments;

•create certain liens;

•sell certain assets;

•enter into certain transactions with affiliates; and

•engage in certain mergers or consolidations.

A failure by us to comply with these restrictions could lead to a default under the terms of the Indenture. In the event of a default, all amounts borrowed pursuant thereto could be declared immediately due and payable, together with a premium and accrued and unpaid interest. In such event, there can be no assurance that we would be able to make such payments or borrow sufficient funds from alternative sources to make any such payments. Even if we were able to obtain additional financing, there can be no assurance such financing would be on terms favorable or acceptable to us.

We may not be able to grow at a rate necessary to achieve profitable future operating results.

Our future operating results will depend largely upon our ability to open and operate new restaurants successfully and to manage a growing business profitably. This will depend on a number of factors (some of which are beyond our control), including the:

•selection and availability of suitable restaurant locations;

•negotiation of acceptable lease or financing terms;

•securing of required governmental permits and approvals;

•timely completion of necessary construction or remodeling of restaurants;

•hiring and training of skilled management and personnel;

•successful integration of new or newly acquired restaurants into our existing operations; and

•recognition and response to regional differences in guest menu and concept preferences.

There can be no assurance that we can achieve our expansion plans on a timely and profitable basis, if at all, that we will be able to achieve results similar to those achieved in existing locations in prior periods, or that such expansion will not result in reduced sales at existing restaurants. Any failure to successfully and profitably execute our expansion plans could have a material adverse effect on us.

Our food costs and supplies could be adversely affected by many factors not under our control.

Our profitability is dependent on, among other things, our continuing ability to offer fresh, high quality food at moderate prices. Various factors beyond our control, such as adverse weather, labor disputes, increased pricing or other unforeseen circumstances, may affect our food costs and supplies. While management has been able to anticipate and react to changing food costs and supplies to date through our purchasing practices and menu price adjustments, there can be no assurance we will be able to do so in the future.

We also obtain approximately 75% to 80% of our supplies through a single vendor pursuant to a contract for delivery and distribution, with the vendor charging fixed mark-ups over prevailing wholesale prices. This contract expires in 2011. Although we believe that we would be able to replace any vendor if we were required to do so, any disruption in supply from vendors could result

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in short-term supply shortages and we could be required to purchase supplies at higher prices until we are able to secure an alternative supply source. Any delay we experience in replacing vendors or distributors on acceptable terms could increase our food costs or, in extreme cases, require us to temporarily remove items from our menus.

Increasing labor costs could adversely affect our profitability.

Our restaurant operations are also subject to federal and state laws governing such matters as wages, hours, working conditions, civil rights and eligibility to work. Some states have set minimum wage requirements higher than the federal level. Significant numbers of hourly personnel at our restaurants are paid at rates related to the federal minimum wage and, accordingly, increases in the minimum wage at a federal and/or state level could increase labor costs at our restaurants. Other governmental initiatives such as mandated health insurance, if implemented, could adversely affect us as well as the restaurant industry in general. We are currently operating under a Tip Rate Alternative Commitment (“TRAC”) agreement with the Internal Revenue Service. Through increased educational and other efforts in the restaurants, the TRAC agreement reduces the likelihood of potential chain-wide employer-only FICA assessments for unreported tips, but we cannot ensure that the implementation of the TRAC agreement will eliminate FICA assessments for unreported tips.

Increased energy costs may adversely affect our profitability.

Our success depends in part on our ability to absorb increases in energy costs. The northeastern United States has recently experienced significant increases in energy prices. If these increases should recur on a regular basis or become permanent, they may have an adverse effect on our profitability.

We are vulnerable to fluctuations in economic conditions, particularly those in the New England and Mid-Atlantic regions of the United States.

Our business is sensitive to our guests’ spending patterns, which in turn are subject to prevailing regional and national economic conditions such as unemployment, interest rates, taxation and consumer confidence. In addition, most of our restaurants are located in the northeastern United States, with a large concentration in New England. We also anticipate that substantially all restaurants we open in the future will be in states where we presently have operations or in contiguous states.

Consequently, any adverse changes in economic conditions, particularly in the New England or Mid-Atlantic regions of the country, may have a material adverse effect on us.

We may not be able to compete successfully with other restaurants and other “dining sources”, which could reduce our revenues.

The restaurant industry is intensely competitive with respect to, among other things, price, service, location and food quality. We compete with many well-established national, regional and locally-owned foodservice companies with substantially greater financial and other resources and longer operating histories, which, among other things, may better enable them to react to changes in the restaurant industry. With respect to quality and cost of food, size of food portions, decor and quality service, we compete with casual dining, family-style restaurants offering eat-in and take-out menus, including, but not limited to, Olive Garden, Romano’s Macaroni Grill, Carrabba’s, Applebee’s, TGI Friday’s, Ruby Tuesday, Pizzeria Uno Restaurants and Chili’s. Many of our restaurants are located in areas of high concentration of such restaurants. We also vie with all competitors in attracting guests, in obtaining premium locations for restaurants (including shopping malls and strip shopping centers) and in attracting and retaining employees.

We also face growing competition from the supermarket industry, which now offers “convenient meals” in the form of improved entrees and side dishes from the deli section. We expect intense competition to continue, and possibly increase, in this area.

Regulations affecting the operation of our restaurants, including “dram-shop” statutes could impair our profitability, increase our operating costs and/or restrict our growth.

The restaurant industry is subject to extensive federal, state and local laws and regulations, including those relating to building and zoning requirements and those relating to the preparation and sale of food. The development and operation of restaurants depend to a significant extent on the selection and acquisition of suitable sites, which are subject to zoning, land use, environmental, traffic and other regulations and requirements. We are also subject to licensing and regulation by state and local authorities relating to health, sanitation, safety and fire standards and liquor licenses, federal and state laws governing our relationships with employees (including the Fair Labor Standards Act and applicable minimum wage requirements, overtime,  family leave, tip credits, working conditions, safety standards and citizenship requirements), federal and state laws which prohibit discrimination and other laws

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regulating the design and operation of facilities, such as the Americans With Disabilities Act of 1990. In addition, we are subject to a variety of federal, state and local laws and regulations relating to the use, storage, discharge, emission, and disposal of hazardous materials. The impact of current laws and regulations, the effect of future changes in laws or regulations that impose additional requirements and the consequences of litigation relating to current or future laws and regulations could increase our compliance and other costs of doing business and therefore have an adverse effect on our results of operations.

Failure to comply with the laws and regulatory requirements of federal, state and local authorities could result in, among other things, revocation of required licenses, administrative enforcement actions, fines and civil and criminal liability.

In addition, we are subject in certain states to “dram-shop” statutes; which generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. We carry liquor liability coverage as part of our existing comprehensive general liability insurance. There can be no assurance, however, that this insurance will pay for all liabilities arising from a “dram-shop” lawsuit. We may also, in certain jurisdictions, be required to comply with regulations limiting smoking in restaurants.

Our business may be harmed by highly publicized incidents at one or more of our restaurants.

Multi-unit food service businesses, such as ours, can be materially and adversely harmed by publicity resulting from poor food quality, illness, injury or other health concerns or employee relations or other operating issues stemming from one location or a limited number of locations, whether or not the company is liable, or from consumer concerns with respect to the nutritional value of certain food. In addition, we cannot guarantee that our internal controls and training will be fully effective in preventing all food-borne illnesses. Some food-borne illness incidents could be caused by third party food suppliers and transporters outside of our control. Any outbreak of such illness attributed to one or more of our restaurants or to a similar multi-unit restaurant chain, or the perception of such an outbreak, could harm our business.

We may not be able to satisfactorily resolve other litigation matters.

Our business is subject to the risk of litigation by employees, consumers, suppliers, shareholders or others through private actions, class actions, administrative proceedings, regulatory actions or other litigation. The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify. Plaintiffs in these types of lawsuits may seek recovery of very large or indeterminate amounts, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend future litigation may be significant. There may also be adverse publicity associated with litigation that could decrease customer acceptance of our services, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition and results of operations.

Any failure of, or disruption to, our information systems, could adversely affect our operations.

We rely on various information systems to manage our operations and regularly make investments to upgrade, enhance or replace such systems. Any failure of, or disruption to, our information systems could adversely affect our operations and have a material adverse effect on us.

We have previously identified deficiencies in our internal control over financial reporting and disclosure controls and procedures, which, if not properly remediated, could result in misstatements in our financial statements in future periods.

In the first quarter of 2005, we restated our historical financial statements for numerous periods to correct for errors in our lease accounting policies. In addition, during the first quarter of 2006 we restated our historical financial statements again to record an additional aggregate depreciation expense of approximately $3.5 million and adjust our income tax expense. These restatements were the result of material weaknesses in the design or operation of our internal control over financial reporting and indicated our disclosure controls and procedures were not effective. In light of these weaknesses in our internal control over financial reporting and the ineffectiveness of our disclosure controls and procedures, we have instituted improvements we believe will reduce the likelihood of similar errors. If the remedial policies and procedures we have implemented are insufficient to address the material weaknesses in our internal control over financial reporting or the deficiencies in our disclosure controls and procedures or if additional material weaknesses in our internal control over financial reporting or other conditions relating to our disclosure controls and procedures are discovered in the future, we may fail to meet our future reporting obligations, our financial statements may contain misstatements and/or our operating results may be adversely affected. Although we believe we have addressed our weaknesses in internal control over financial reporting and the deficiencies in our disclosure controls and procedures, we cannot guarantee the measures we have taken to date or any future  measures will remediate the weaknesses and deficiencies identified or that any additional weaknesses or deficiencies will not arise in the future due to a failure to implement and maintain adequate internal controls over financial reporting or disclosure controls and procedures.

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A failure to attract and retain qualified employees may adversely affect us.

Our success and the success of our restaurants depend upon our ability to attract and retain a sufficient number of qualified employees, including skilled management, customer service personnel and wait and kitchen staff. We face significant competition in the recruitment of qualified employees. Our inability to recruit and retain qualified individuals may delay the planned openings of new restaurants, result in higher employee turnover, and affect our ability to provide a high quality customer experience in restaurants or exert pressure on wages or other employee benefits to attract qualified personnel. Any of these consequences could have a material adverse effect on our business and results of operations.

We may not be able to protect our trademarks and other proprietary rights.

We believe our trademarks and other proprietary rights are important to our success and competitive position. Accordingly, we devote substantial resources to the establishment and protection of our trademarks and proprietary rights. The actions we take to protect our intellectual property, however, may be inadequate to prevent imitation of our products and concepts by others.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our executive office is located in Northborough, Massachusetts. The office is occupied under the terms of a lease covering approximately 20,000 square feet scheduled to expire in 2006 but has two three-year options to renew. We have not yet determined whether we will exercise the three-year option for this office that matures in August 2006. A separate office leased by us in Westborough, Massachusetts is being sub-leased to a third party.

Restaurant Locations

The table below identifies the location of the restaurants operated by us during fiscal 2005.

State	Open as of 12/29/2004	Openings	Closings	Open as of 12/28/2005
Connecticut	11	—	—	11
Delaware	2	—	—	2
District of Columbia	2	—	—	2
Maryland	6	—	—	6
Massachusetts	39	—	—	39
New Hampshire	3	—	—	3
New Jersey	6	—	—	6
New York	3	—	—	3
North Carolina	2	—	—	2
Pennsylvania	7	1	—	8
Rhode Island	2	—	—	2
Virginia	8	—	—	8
Total	91	1	—	92

We lease all but one of the 92 restaurants operated by us at December 28, 2005. We own one restaurant in fee. Leases for existing restaurants are generally for terms of 15 to 20 years and provide for additional option terms ranging from five to 20 years and a specified annual rental. Most of these leases provide for additional rent based on sales volumes exceeding specified levels. Leases for future restaurants will likely include similar rent provisions. Remaining restaurant lease terms range from less than one year to 24 years.

ITEM 3. LEGAL PROCEEDINGS

We are involved in various legal proceedings from time to time incidental to the conduct of our business. In our opinion, any ultimate liability arising out of such proceedings will not have a material adverse effect on our financial condition or the results of our operations.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

As of March 28, 2006, there was no established public trading market for our common equity security.

Record Holders

As of March 28, 2006, we had 94 holders of our Common Stock, $.01 par value per share and we did not have any other class of common equity security issued or outstanding.

Dividends

We have not paid any dividends since 1998. Furthermore, we do not foresee declaring or paying any cash dividends in the immediate future. Moreover, the indenture governing the Senior Notes significantly limits, and in certain cases prohibits, payment of cash dividends without the indenture trustee’s approval.

Recent Sales of Unregistered Securities

None.

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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The data for fiscal years ended 2001 through 2005 are derived from our audited financial statements. Selected consolidated financial data should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and the Notes thereto included elsewhere in this Form 10-K. Historical results are not necessarily indicative of results to be expected in the future. The Brinker Sale in 2001 affects the comparability of results prior to 2002.

	Statement of Operations Data (in thousands except share and per share amounts)
	Fiscal Year Ended
	December 28,			December 29,			December 31,			January 1,			January 2,
	2005			2004			2003			2003			2002
Net sales	$	204,784		$	200,408		$	186,172		$	162,319		$	186,638
Cost of sales and expenses
Cost of sales	47,611			49,231			43,544			35,667			44,855
Operating expenses	123,253			122,056			113,036			96,413			111,795
General and administrative expenses	14,442			13,065			11,320			12,124			12,548
Deferred rent, depreciation, amortization and preopening expenses	11,228			12,657			14,123			12,413			14,378
Asset impairment charge	982			6,749			3,580			—			1,986
Closed restaurants charge	—			—			—			236			3,654
Cost of sales and expenses	197,516			203,758			185,603			156,853			189,216
Income (loss) from operations	7,268			(3,350		)	569			5,466			(2,578		)
Other (expense) income
Gain on Brinker Sale (b)	—			—			650			—			36,932
Gain on retirement of Senior Notes	—			—			—			—			2,290
Interest expense, net	(10,411		)	(10,613		)	(10,133		)	(9,587		)	(11,365		)
Other (expense) income	(10,411		)	(10,613		)	(9,483		)	(9,587		)	27,857
(Loss) income before income tax provision	(3,143		)	(13,963		)	(8,914		)	(4,121		)	25,279
Income tax provision	—			—			—			4,145			10,854
Net (loss) income	$	(3,143	)	$	(13,963	)	$	(8,914	)	$	(8,266	)	$	14,425
Basic (loss) income per share	$	(1.06	)	$	(4.74	)	$	(3.00	)	$	(2.77	)	$	4.84
Weighted average shares outstanding - basic	2,960,025			2,943,841			2,970,403			2,978,955			2,978,955
Diluted (loss) income per share	$	(1.06	)	$	(4.74	)	$	(3.00	)	$	(2.77	)	$	4.43
Weighted average shares outstanding - diluted	2,960,025			2,943,841			2,970,403			2,978,955			3,252,605
Comparable restaurant sales (a)	0.2		%	1.4		%	4.1		%	5.8		%	2.2		%

	Balance Sheet Data (in thousands)
	December 28,			December 29,			December 31,			January 1,		January 2,
	2005			2004			2003			2003		2002
Total assets	$	112,545		$	112,221		$	124,416		$	123,121	$	131,961
Long term obligations	$	92,179		$	92,307		$	92,981		$	87,167	$	87,995
Total stockholders’ (deficit) equity	$	(17,303	)	$	(14,732	)	$	(490	)	$	8,495	$	16,761

	Cash Flow Data (in thousands)
	December 28,			December 29,			December 31,			January 1,			January 2,
	2005			2004			2003			2003			2002
Cash flows provided by operating activities	$	12,927		$	7,881		$	9,071		$	9,169		$	4,326
Cash flows (used in) provided by investing activities	(4,108		)	(7,872		)	(9,358		)	(19,271		)	23,251
Cash flows provided by (used in) financing activities	272			(365		)	(199		)	—			(11,944		)
Increase (decrease) in cash	$	9,091		$	(356	)	$	(486	)	$	(10,102	)	$	15,633

(a)We define comparable restaurant sales as net sales from restaurants open for at least one full fiscal year at the beginning of the year.

(b)In April 2001, we completed the sale of 40 Chili’s Grill and Bar (“Chili’s”) and seven On The Border Mexican Cantina (“OTB”) restaurants to Brinker International, Inc. (“Brinker”) for a total consideration of $93.5 million (the “Brinker Sale”). Brinker acquired the inventory, facilities, equipment and management teams associated with these restaurants, as well as the four Chili’s restaurants under development by us. Further, Brinker assumed the mortgage debt on our Chili’s and OTB restaurants. We recorded a gain in 2001 on the Brinker Sale of $36.9 million before income taxes. During fiscal 2003 we concluded certain liabilities recorded in connection with the Brinker Sale were no longer required and accordingly reversed $650,000 of accrued liabilities as an additional gain on the Brinker Sale.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with “Item 1. Business”, “Item 1A. Risk Factors”, “Item 6. Selected Financial Data”, and our Consolidated Financial Statements and Notes thereto.

General

We are a Delaware corporation and the owner and operator of a chain of full-service casual dining, Italian-style restaurants under the names Bertucci’s Brick Oven Pizzeria® and Bertucci’s Brick Oven Ristorante®. We incorporated in 1994 as NE Restaurant Company, Inc. and formally changed our name to Bertucci’s Corporation on August 16, 2001. As of December 28, 2005, we operated 92 restaurants located primarily in the northeastern United States.

In July 1998, we completed our acquisition of Bertucci’s Restaurant Corp.’s parent entity, Bertucci’s, Inc., for a purchase price, net of cash received, of approximately $89.4 million (the “Acquisition”). We financed the Acquisition primarily through the issuance of $100 million of 10¾% senior notes due 2008 (the “Senior Notes”). $85.3 million in principal of the Senior Notes are still  outstanding.

Results of Operations

For all our restaurants, net sales consist of food, beverage and alcohol sales. Cost of sales consists of food, beverage and alcohol costs as well as supplies used in carry-out and delivery sales. Total operating expenses consist of five primary categories:  (i) labor expenses; (ii) restaurant operations; (iii) facility costs; (iv) office expenses; and (v) other expenses, which include such items as advertising expenses, rent and insurance. General and administrative expenses include costs associated with our departments assisting in restaurant operations and management of the business, including multi-unit supervision, accounting, management information systems, training, executive management, purchasing and construction.

The following table sets forth the percentage-relationship to net sales, unless otherwise indicated, of certain items included in our consolidated statements of operations, for the periods indicated:

STATEMENT OF OPERATIONS DATA

(Percentage of Net Sales for Fiscal Years Presented)

	December 28,		December 29,		December 31,
	2005		2004		2003
Net sales	100.0		100.0		100.0
Cost of sales and expenses:
Cost of sales	23.2		24.6		23.4
Operating expenses	60.2		60.9		60.7
General and administrative expenses	7.1		6.5		6.1
Deferred rent, depreciation, amortization and preopening expenses	5.5		6.3		7.6
Asset impairment charge	0.5		3.4		1.9
Total cost of sales and expenses	96.5		101.7		99.7
Income (loss) from operations	3.5		(1.7	)	0.3
Other expense:
Adjustment of gain on Brinker Sale	—		—		0.3
Interest expense, net	(5.0	)	(5.3	)	(5.4	)
Other expense	(5.0	)	(5.3	)	(5.1	)
Loss before income tax provision	(1.5	)	(7.0	)	(4.8	)
Income tax provision	—		—		—
Net loss	(1.5	)	(7.0	)	(4.8	)

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Year Ended December 28, 2005 Compared to Year Ended December 29, 2004

Net Sales. Total net sales increased by $4.4 million, or 2.2%, to $204.8 million during fiscal 2005 from $200.4 million during fiscal 2004. The increase was due to a 0.2% increase in our 89 comparable Bertucci’s restaurants, the incremental 49 restaurant weeks resulting from full year operations of two new restaurants opened during 2004 and the addition of one new restaurant opening in 2005 (an incremental 47 restaurant weeks). Our comparable restaurant dine-in sales decreased 0.5% while our comparable restaurant carry-out and delivery sales increased 2.9% in fiscal 2005. The comparable guest counts, measured on dine-in business only, were essentially flat in 2005 versus 2004. The 89 comparable restaurants’ sales average during 2005 was $2.2 million per restaurant while the sales average for the two restaurants opened during 2004 was $1.9 million. The average weekly sales for the one restaurant opened during 2005 was $43,500 during the 47 weeks it was opened in 2005.

Cost of Sales. Cost of sales as a percentage of net sales decreased to 23.2% during fiscal 2005 from 24.6% during fiscal 2004. The decrease was primarily attributable to a decrease in certain ingredient costs, primarily cheese and oil, increased inventory controls, as well as a menu mix shift to lower cost items introduced during 2005.

Operating Expenses. Operating expenses increased by $1.2 million, or 1.0%, to $123.3 million during fiscal 2005 from $122.1 million during fiscal 2004. Expressed as a percentage of net sales, operating expenses decreased to 60.2% in 2005 from 60.9% in 2004. The key components of operating expenses are payroll (including related employer taxes), utilities, restaurant facilities maintenance, rent and advertising. The dollar increase in these expenses is primarily attributable to increased occupancy and general facility expenses ($1.7 million) and utility costs (primarily natural gas) ($1.4 million); offset by reduced payroll and benefits ($0.8 million), advertising ($0.8 million), and property and liability insurance premiums ($0.3 million).

General and Administrative Expenses. General and administrative expenses increased by $1.3 million, or 9.9%, to $14.4 million during fiscal 2005 from $13.1 million during fiscal 2004. Expressed as a percentage of net sales, general and administrative expenses increased to 7.1% in fiscal 2005 from 6.5% during fiscal 2004. The dollar and percentage increases were primarily due to higher incentive compensation expense ($1.5 million) as our internal earnings target was achieved and this triggered additional compensation obligations.

Deferred Rent, Depreciation, Amortization and Preopening Expenses. Deferred rent, depreciation, amortization and preopening expenses decreased by approximately $1.5 million, or 11.8%, to $11.2 million during fiscal 2005 from $12.7 million during fiscal 2004. As we only opened one restaurant in 2005, preopening expenses totaled only $185,000, a $300,000 decrease from 2004 during which there were two restaurant openings. Deferred rent decreased by approximately $500,000 as many leases with step rent provisions now require cash payments in excess of the calculated pro-rata rent expense. Depreciation decreased by approximately $800,000 in 2005 as prior period impairment charges have reduced the cost basis of certain assets and the associated depreciation expense. Additionally, equipment acquired in the Acquisition has become fully depreciated during 2005. These items more than offset incremental depreciation from fiscal 2005 and 2004 restaurant openings of approximately $273,000.

Asset Impairment Charge. In 2005, we assessed certain non-performing restaurants for recoverability of recorded amounts. As a result of our evaluation, we determined an impairment of fixed assets existed at six restaurant locations during 2005. We estimated the fair value of these assets based on the net present value of the expected cash flows from the restaurants and determined the carrying amount of the assets exceeded their fair value by approximately $982,000. We recorded an impairment charge in that amount to reflect the write down of the affected assets to fair value.

Interest Expense, net. Interest expense decreased by approximately $200,000 to $10.4 million during fiscal 2005 from $10.6 million during fiscal 2004. Interest expense in 2005 was primarily comprised of $9.2 million paid on the Senior Notes in semi-annual installments and was consistent with interest expense recorded in fiscal 2004. Interest income increased by $232,000 primarily due to increased overnight investment funds resulting from reduced capital expenditures and higher short term interest rates in 2005. A reduction in interest capitalized of $60,000 partially offset the increased interest income.

Income Taxes. We have an historical trend of recurring pre-tax losses. During the fourth quarter of 2002 we recorded a full valuation allowance for our net deferred tax asset. We also provided a full valuation allowance relating to the tax benefits generated since 2002 (primarily from our operating losses). As of December 28, 2005, we had net operating loss and tax credit carryforwards totaling $13.1 million.

Year Ended December 29, 2004 Compared to Year Ended December 31, 2003

Net Sales. Total net sales increased by $14.2 million, or 7.6%, to $200.4 million during fiscal 2004 from $186.2 million during fiscal 2003. The increase was due to a 1.4% increase in the 79 comparable Bertucci’s restaurants, the incremental 264.7 restaurant weeks resulting from full year operations of ten new restaurants built during 2003 and the addition of two new restaurant openings in 2004 which contributed an incremental 54.9 restaurant weeks. Our comparable restaurant dine-in sales increased 1.7%

14

while our comparable restaurant carry-out and delivery sales increased 0.6% for fiscal 2004. The comparable guest counts, measured on dine-in business only, decreased by 4.3% in 2004 versus 2003. We believe the majority of the comparable sales increases were the result of a shift in menu mix and an approximate 3.6% price increase in January 2004. The aforementioned combined price increase and shift in menu mix combined to drive a 6.5% increase in dine-in revenue per person in 2004 versus 2003. The 79 comparable restaurants’ sales average during 2004 was $2.2 million while the sales average for the ten restaurants opened during 2003 and were opened for the full year of 2004 was also $2.2 million. The average weekly sales for the two restaurants opened during 2004 were $36,500.

Cost of Sales. Cost of sales as a percentage of net sales increased to 24.6% during fiscal 2004 from 23.4% during fiscal 2003. The increase was primarily attributable to an increase in certain ingredient costs, primarily cheese and oil, as well as a menu mix shift to higher cost items introduced in 2004.

Operating Expenses. Operating expenses increased by $9.0 million, or 8.0%, to $122.0 million during fiscal 2004 from $113.0 million during fiscal 2003. The key components of operating expenses were payroll (including related employer taxes), utilities, restaurant facilities maintenance, rent and advertising. The dollar increase in these expenses was primarily attributable to the additional restaurants being operated and a $1.0 million increase in advertising expense which totaled $6.6 million in 2004. The increase as a percentage of net sales to 60.9% in fiscal 2004 from 60.7% in fiscal 2003 resulted primarily from the advertising expense increase.

General and Administrative Expenses. General and administrative expenses increased by $1.8 million, or 15.9%, to $13.1 million during fiscal 2004 from $11.3 million during fiscal 2003. Expressed as a percentage of net sales, general and administrative expenses increased to 6.5% in fiscal 2004 from 6.1% during fiscal 2003. The dollar and percentage increases were primarily due to higher benefit expenses and higher professional fees.

Deferred Rent, Depreciation, Amortization and Preopening Expenses. Deferred rent, depreciation, amortization and preopening expenses decreased by approximately $1.4 million, or 9.9%, to $12.7 million during fiscal 2004 from $14.1 million during fiscal 2003. Due to only two restaurant openings in 2004, preopening expenses totaled $519,000, a $1.6 million decrease over 2003 during which there were ten restaurant openings. Deferred rent decreased by approximately $300,000 as many leases with step rent provisions now require cash payments in excess of the calculated pro-rata rent expense. The additional restaurant openings in both fiscal 2004 and 2003 resulted in an incremental $800,000 of depreciation expense in fiscal 2004.

Asset Impairment Charge. We assessed certain non-performing restaurants for recoverability of recorded amounts in 2004 and determined an impairment of fixed assets existed at twelve restaurant locations. We estimated the fair value of these assets based on the net present value of the expected cash flows from the restaurants and determined that the carrying amount of the assets exceeded their fair value by approximately $6.7 million. We recorded an impairment charge in that amount to reflect the write down of the affected assets to fair value.

Interest Expense, net. Interest expense increased by approximately $500,000 to $10.6 million during fiscal 2004 from $10.1 million during fiscal 2003. Interest expense was primarily comprised of $9.2 million paid on the Senior Notes in semi-annual installments. In fiscal 2004, $539,000 of interest was incurred on capital lease obligations, $229,000 higher than in 2003 when certain underlying sale leaseback transactions were recorded (See Note 6 of Notes to Consolidated Financial Statements). Interest capitalized to construction decreased $161,000 in 2004 from 2003 due to fewer restaurant openings. Additionally, interest income decreased by $41,000 in 2004 primarily due to lower interest rates. Lastly, deferred finance costs amortization increased approximately $40,000 in conjunction with the sale leaseback transactions consummated in 2003.

Income Taxes. We have an historical trend of recurring pre-tax losses. During the fourth quarter of 2002 we recorded a full valuation allowance for our net deferred tax asset. We also provided a full valuation allowance relating to the tax benefits generated since 2002 (primarily from its operating losses). As of December 29, 2004, we had net operating loss and tax credit carryforwards totaling $7.8 million.

Liquidity and Capital Resources

	2005			2004			2003
Cash flows provided by operating activities	$	12,927		$	7,881		$	9,071
Cash flows used in investing activities	(4,108		)	(7,872		)	(9,358		)
Cash flows provided by (used in) financing activities	272			(365		)	(199		)
Net increase (decrease) in cash	$	9,091		$	(356	)	$	(486	)

15

We have historically met our capital expenditures and working capital needs through a combination of operating cash flow, bank and mortgage borrowings, the sale of the Senior Notes, the sale of Common Stock, and, in fiscal 2003, two sale leaseback transactions. We expect our future capital and working capital needs will be funded from operating cash flow and cash on hand.

Net cash flows from operating activities were $12.9 million for fiscal 2005 as compared to $7.9 million for fiscal 2004. While the fiscal 2005 net loss decreased $10.8 million from fiscal 2004, included in the net loss in 2004 was a $6.7 million non-cash asset impairment charge compared to an asset impairment charge of $1.0 million in 2005. As of December 28, 2005, we had $21.4 million in cash and cash equivalents.

Our capital expenditures were $4.3 million, $8.6 million, and $17.4 million, for fiscal 2005, 2004, and 2003, respectively. In fiscal 2005, $3.9 million of our capital spending was attributable to remodeling and upgrading facilities in our existing restaurants and $400,000 was used for new restaurant development. We anticipate fiscal 2006 capital expenditures will be approximately $6.5 million.

As of December 28, 2005, we had $92.2 million in consolidated indebtedness, $85.3 million pursuant to the Senior Notes, $6.1 million of capital lease obligations, and $0.8 million of promissory notes. The Senior Notes contain no financial covenants and we are in compliance with all non-financial covenants as of March 28, 2006. The Senior Notes bear interest at the rate of 10 ¾% per annum, payable semi-annually on January 15 and July 15. The Senior Notes are due in full on July 15, 2008. Through July 15, 2006, we may, at our option, redeem any or all of the Senior Notes at face value, plus a declining premium, which is 1.79% through July 15, 2006. After July 15, 2006, the Senior Notes may be redeemed at face value. Additionally, under certain circumstances, including a change of control or following certain asset sales, the holders of the Senior Notes may require us to repurchase the Senior Notes at a redemption price of 101% of face value. See Note 5 of Notes to Consolidated Financial Statements.

We are operating without a line of credit and are funding all of our growth, debt reductions and operating needs out of cash flows from operations and cash on hand.

We have established a $4.0 million (maximum) letter of credit (expiring in December 2006) as collateral with third party administrators for self insurance reserves. As of December 28, 2005, this facility is collateralized with $2.2 million of cash restricted from general use. Letters of Credit totaling $2.2 million were outstanding on December 28, 2005, a $200,000 decrease from the fiscal 2004 ending balance.

Our future operating performance and ability to service or refinance the Senior Notes will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. Significant liquidity demands will arise from debt service on the Senior Notes.

The table below depicts our future contractual obligations committed as of December 28, 2005:

	Payments Due by Fiscal Year
	(Dollars in Thousands)
Contractual Obligations:	Total		2006		2007 - 2008		2009 - 2010		After 2010
Operating Leases (a)	$	96,954	$	15,269	$	25,859	$	19,825	$	36,001
Capital Leases (a)	12,749		693		1,419		1,416		9,221
Senior Notes (b)	103,652		9,171		94,481		—		—
Promissory Notes (c)	802		97		228		276		201
Closed restaurants reserve, net of sublease income	372		270		102		—		—
Total Contractual Obligations	$	214,529	$	25,500	$	122,089	$	21,517	$	45,423

(a)	–	See Note 6 of Notes to Consolidated Financial Statements
(b)	–	including interest at 10 ¾% per annum to maturity in July 2008.
(c)	–	including interest at a weighted average rate of 7.35% per annum.

We believe the cash flow generated from our operations and cash on hand should be sufficient to fund our debt service requirements, lease obligations, expected capital expenditures and other operating expenses through 2006. Beyond 2006 and up to the 2008 maturity of our Senior Notes, we expect to be able to service our debt, but the lack of short term borrowing availability may impede our growth. We are evaluating various refinancing alternatives for our Senior Notes upon their maturity in 2008.

16

Impact of Inflation

Inflationary factors such as increases in labor, food or other operating costs could adversely affect our operations. We do not believe inflation has had a material impact on our financial position or results of operations for the periods discussed above. We believe through the proper leveraging of purchasing size, labor scheduling, and restaurant development analysis, inflation will not have a material adverse effect on our income during the foreseeable future. There can be no assurance inflation will not materially adversely affect us.

Seasonality

Our quarterly results of operations have fluctuated and are expected to continue to fluctuate depending on a variety of factors, including the timing of new restaurant openings and related preopening and other startup expenses, net sales contributed by new restaurants, increases or decreases in comparable restaurant sales, competition and overall economic conditions. Our business is also subject to seasonal influences of consumer spending, dining out patterns and weather. As is the case with many restaurant companies, we typically experience lower net sales and net income during the first and fourth fiscal quarters. Because of these fluctuations in net sales and net loss, the results of operations of any quarter are not necessarily indicative of the results that will be achieved for the full year or any future quarter.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments affecting the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, estimates are evaluated, including those related to the impairment of long-lived assets, self-insurance, and closed restaurants reserve. Estimates are based on historical experience and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affect the more significant judgments and estimates used in our preparation of our consolidated financial statements.

Impairment of Long-Lived Assets

We evaluate property and equipment held and used in the business for impairment whenever events or changes in circumstances indicate the carrying amount of a restaurant’s assets may not be recoverable. An impairment is determined to exist if the estimated undiscounted future operating cash flows (which we estimate using historical cash flows and other relevant facts and circumstances) for a restaurant exceeds the carrying amount of its assets. If an impairment exists, the amount of impairment is measured as the excess of the carrying amount over the estimated discounted future operating cash flows of the asset and the expected proceeds upon sale of the asset. The estimates and assumptions used during this process are subject to a high degree of judgment.

During 2005 we assessed certain non-performing restaurants for recoverability of recorded amounts and determined an impairment of fixed assets existed at six restaurant locations. We estimated the fair value of these assets based on the net present value of the expected cash flows from the restaurants and determined the carrying amount of the assets exceeded their fair value by approximately $982,000. We recorded an impairment charge in that amount to reflect the write down of the affected assets to fair value.

During 2004, we assessed certain non-performing restaurants for recoverability and determined an impairment of fixed assets existed at twelve restaurant locations. We estimated the fair value of these assets based on the net present value of the expected cash flows of the restaurants and determined that the carrying amount of the assets exceeded their fair value by approximately $6.7 million. Consequently, we recorded an impairment charge in this amount to reflect the write down of the affected assets to their fair value in 2004.

Our similar analysis in 2003 determined the carrying amount of the assets in four restaurants exceeded their fair value by approximately $3.6 million. Accordingly, we recorded an impairment charge to reflect the write down of the affected assets to fair value in 2003.

In addition, at least annually, we assess the recoverability of goodwill and other intangible assets related to our restaurant concept. These impairment tests require us to estimate fair values of our restaurant concept by making assumptions regarding future cash flows and other factors. If these assumptions change in the future, we may be required to record impairment charges for these assets. To date, such analysis has indicated no impairment of goodwill and other intangible assets has occurred.

17

Income Tax Valuation Allowances

The future tax benefits which give rise to the deferred tax asset remain statutorily available to us. We consider both negative and positive evidence in determining if a valuation allowance is appropriate. We had net operating losses and tax credit carry forwards of $6.0 million as of December 28, 2005 which expire at various dates through 2019. We have an historical trend of recurring pre-tax losses. Based on the recent losses and the historical trend of losses, we concluded a valuation allowance for the net deferred tax asset remains appropriate. Actual amounts realized will be dependent on generating future taxable income.

Self-Insurance

We are self-insured for certain losses related to general liability, group health insurance, and workers’ compensation. We maintain stop loss coverage with third party insurers to limit our total exposure. The self-insurance liability represents an estimate of the ultimate cost of claims incurred as of the balance sheet date. The estimated liability is not discounted and is established based upon analysis of historical data and estimates of the ultimate costs of claims incurred, and are reviewed by us on a quarterly basis to ensure the liability is appropriate. If actual trends, including the severity or frequency of claims, differ from our estimates, our financial results could be impacted. To date we are not aware of any activity requiring significant adjustments to these reserves.

Closed Restaurants Reserve

We remain primarily liable on leases for 11 closed locations. We review the specifics of each site on a quarterly basis to estimate our net remaining liability over the remaining lease term. Certain locations have subtenants in place while others remain vacant. Estimates must be made of future sublease income or lease assignment possibilities. If subtenants default on their subleases or projected future subtenants are not obtained, actual results could differ from our estimates, thereby impacting our financial results. Such a review resulted in a charge of $236,000 in 2002 when a restaurant was closed prior to its lease termination. All other activity in fiscal 2002 through 2005 has been consistent with reserves and no additional increases in the reserve were necessary.

Recent Accounting Pronouncements

In June 2005, the Emerging Issues Task Force of the Financial Accounting Standards Board (“FASB”) reached a consensus on Issue No. 05-6, Determining the Amortization Period for Leasehold Improvements (“EITF 05-6”). The guidance requires that leasehold improvements acquired in a business combination or purchased subsequent to the inception of a lease be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date of the business combination or purchase. The guidance is effective for periods beginning after June 29, 2005. The adoption of EITF 05-6 did not have a material effect on our consolidated financial position or results of operations.

In December 2004, the FASB issued SFAS No. 123R which requires all share-based payments to employees to be recognized in the financial statements based on their fair values. SFAS No. 123R replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion No. 25, or APB Opinion No. 25, Accounting for Stock Issued to Employees. Effective December 29, 2005, we will adopt the provisions of SFAS No. 123R using the modified prospective method. Under this method, compensation expense is recorded for all unvested options over the related vesting period beginning in the quarter of adoption. We currently apply the intrinsic value based method prescribed in APB Opinion No. 25 in accounting for employee stock-based compensation. Upon adoption of SFAS No. 123R, we will recognize stock-based compensation costs rateably over the service period. This statement also amends SFAS No. 95, Statement of Cash Flows, to require that excess tax benefits be reflected as financing cash inflows rather than operating cash inflows. In March 2005, the SEC issued Staff Accounting Bulletin, or SAB No. 107 regarding the Staff’s interpretation of SFAS No. 123R. This interpretation provides the Staff’s views regarding interactions between SFAS No. 123R and certain SEC rules and regulations and provides interpretations of the valuation of share-based payments for public companies. The interpretive guidance is intended to assist companies in applying the provisions of SFAS No. 123R and investors and users of the financial statements in analyzing the information provided. We will follow the guidance prescribed in SAB No. 107 in connection with our adoption of SFAS No. 123R. The impact of the adoption of SFAS No. 123R and SAB No. 107 is estimated to result in a compensation charge for fiscal year 2006 of approximately $100,000.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

We have no exposure to specific risks related to derivatives or other “hedging” types of financial instruments.  In addition, we do not have operations outside of the United States of America which expose us to foreign currency risk and substantially all of our outstanding debt has fixed interest rates.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary data are listed under Part IV, Item 15 in this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures. We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and such information is accumulated and communicated to management, including our Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, we recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we necessarily were required to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures.

During the fourth quarter of fiscal 2005, we performed an evaluation under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). In performing this evaluation, we became aware of errors in our detailed property and equipment records. These errors involved the calculation of depreciation expense on multiple property records and the related impact on income taxes during the period of 1998 through 2004, inclusive, and the first two fiscal quarters of 2005 (the “Relevant Period”).

Management then conducted an investigation concerning the extent and magnitude of these errors. As a result of this inquiry, on January 12, 2006 the Audit Committee and management concluded, among other things, that: (1) our depreciation and income tax expense accounting practices were not appropriate as of December 28, 2005; (2) an aggregate additional depreciation expense of approximately $3.5 million needed to be recorded in our financial statements for the Relevant Period; and (3) income tax expense was not properly adjusted in connection with the restatement of our financial statements in April 2005. In connection with these conclusions, we determined our financial statements relating to the Relevant Period were required to be restated (the “Restatement”). Based on the determination our depreciation and income tax expense accounting practices were not appropriate as of December 28, 2005, our CEO and CFO concluded our disclosure controls and procedures were not effective as of that date.

Internal Control Over Financial Reporting. Based on the definition of “material weakness” in the Public Company Accounting Oversight Board’s Auditing Standard No. 2, (An Audit of Internal Control Over Financial Reporting Performed in Conjunction With an Audit of Financial Statements), the Restatement was a strong indicator of the existence of a “material weakness” in the design or operation of internal control over financial reporting. Based on the evaluation of our controls and procedures, we concluded a material weakness existed in our internal control over financial reporting as it related to our depreciation expense accounting practices, and disclosed this to the Audit Committee and to the Company’s independent registered public accounting firm.

Remediation Steps to Address Material Weakness. To remediate this material weakness in our internal control over financial reporting, in the first quarter of 2006 the Company re-performed all of the necessary calculations and added sufficient review and approval procedures to assure management the material weakness has been corrected.

Change in Internal Control Over Financial Reporting. There were no significant changes in our internal control over financial reporting that occurred during our fourth fiscal quarter of 2005 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We did, however, make changes to our internal control over financial reporting in the first quarter of fiscal 2006, by making the changes to our depreciation and income tax expense accounting practices set forth above.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information with respect to our executive officers and directors at the time of this filing:

Name	Age	Position
Stephen V. Clark	52	Vice Chairman of the Board of Directors, Chief Executive Officer
David G. Lloyd	42	President, Chief Financial Officer and Director
Benjamin R. Jacobson	61	Chairman of the Board of Directors and Treasurer
Sally M. Dungan	52	Director *
James J. Morgan .	63	Director #
James N. Moriarty	39	Director *
Heywood Wilansky	58	Director * #
James R. Parish.	59	Director

*Member of Audit Committee

#Member of Compensation Committee

Stephen V. Clark. Mr. Clark became Chief Executive Officer in August 2004 and was named Vice Chairman of the Board of Directors in August 2005. He was President from October 2004 through August 2005, and has served as a director since April 2002. Mr. Clark was the President and Chief Executive Officer of Taco Bueno, a quick service Mexican restaurant chain of over 120 stores, from June 2001 through August 2005 (during which time he was also our Chief Executive Officer beginning in August 2004 and our President beginning in October 2004). He previously served as Taco Cabana Inc.’s Chief Executive Officer from November 1996 through April 2001 and was previously the President, Chief Operating Officer, and Director at Taco Cabana from April 1995 through November 1996. Prior to that, Mr. Clark held various positions with Church’s Chicken, a division of America’s Favorite Chicken, over seventeen years, the last having been Senior Vice President and Concept General Manager.

David G. Lloyd. Mr. Lloyd became our Chief Financial Officer in November 2004, assumed the role of President in August 2005 and became a director in September 2005. Mr. Lloyd was the Chief Financial Officer of Taco Bueno, a quick service Mexican restaurant chain of over 120 stores, from June 2001 through August 2005 (during which time he was also our Chief Financial Officer beginning in November 2004). He previously served as Taco Cabana Inc.’s Chief Financial Officer from November 1994 through February 2001. Prior to that, Mr. Lloyd, a Certified Public Accountant, was with Deloitte & Touche LLP from 1985 through 1994.

Benjamin R. Jacobson. Mr. Jacobson has been Chairman of the Board of Directors since 1991 and was our Chief Executive Officer from October 1999 until August 2004. Since 1989, Mr. Jacobson has served as the Managing General Partner of Jacobson Partners, which specializes in direct equity investments. Mr. Jacobson is a director of a number of other privately-held corporations.

Sally M. Dungan. Ms. Dungan became a director and member of our audit committee in February 2004. She is the Chief Investment Officer (“CIO”) of Tufts University where she is responsible for the investment policy and total fund structure of Tufts’ $1.0 billion in endowment and long term funds portfolio. Prior to assuming the CIO position in September of 2002, Ms. Dungan was the Director of Pension Fund Management for Siemens Corporation. Ms. Dungan is a Chartered Financial Analyst.

James J. Morgan. Mr. Morgan became a director in December 1997. From 1963 until his retirement in 1997, Mr. Morgan was employed by Philip Morris U.S.A. where he served as President and Chief Executive Officer from 1994 until his retirement in 1997. Prior to 1994, Mr. Morgan served in various capacities at Philip Morris including Senior Vice President of Marketing, and Corporate Vice President of Marketing Planning of the Philip Morris Companies Inc. Mr. Morgan is a Partner in Jacobson Partners.

James N. Moriarty. Mr. Moriarty became a director and chairman of our audit committee in February 2004. He has been a partner in the accounting firm of Vitale, Caturano & Company, P.C., a full service CPA and business advisory firm, since 2002. He is head of the firm’s Restaurant practice. Prior to that, Mr. Moriarty was with Arthur Andersen LLP for 14 years, the last four years as a partner in that firm. He is a member of the AICPA and the Massachusetts Society of CPA’s.

James R. Parish. Mr. Parish was named a director in September 2005. He has been a principal of Parish Partners, Inc., an investment, advisory and consulting firm, since 1991. Parish Partners, Inc. provides executive-level strategic advice and counseling to a wide range of restaurant industry executive teams. Mr. Parish also serves on the board of directors of Spirit Finance Corporation (NYSE: SFC) and as a member of their audit committee. Mr. Parish previously served on our Board of Directors from July 1998 through August 2003. Prior to forming Parish Partners in 1991, Mr. Parish was Executive Vice President, Chief Financial Officer, and member of the executive committee and Board of Directors of Chili’s, Inc., the predecessor company to Brinker International (NYSE: EAT), now one of the largest multi-concept companies in the restaurant industry.

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Heywood Wilansky. Mr. Wilansky became a director and member of our audit committee in May 2004. He became a member of the compensation committee in November 2004. Mr. Wilansky has been the President and Chief Executive Officer of Retail Ventures, Inc. (NYSE:RVI) (“RVI”) since November 2004, and was named a director of DSW Shoe Warehouse (NYSE: DSW) (“DSW”) in March, 2005. RVI owns a controlling interest in DSW. From February 2003 through November 2004, he was the President and Chief Executive Officer of Filene’s Basement, Inc. Prior to that, he was a Professor at the University of Maryland, Smith School of Business from August 2002 through January 2003. He was the President and CEO of Strategic Management Resources, LLC, a management consulting service, from July 2000 through January 2003 and was the President and CEO of Bon-Ton Stores, Inc. from 1995 through 2000.

Term of Directors

Our directors serve in such capacity until the next annual meeting of our shareholders or until their successors are duly elected and qualified.

Audit Committee

We have an Audit Committee, which consists of Sally M. Dungan, Heywood Wilansky, and James N. Moriarty (Chairman). The Board of Directors has reviewed the qualifications of Ms. Dungan, Mr. Wilansky and Mr. Moriarty and have determined they are “independent” under the applicable definition contained in Rule 4200(a)(15) of the NASD’s listing standards. Mr. Moriarty was formerly a partner with Arthur Andersen LLP which audited the Company’s financial statements prior to fiscal 2002 and he was involved in the audit of those financial statements. Mr. Moriarty has no relationship with Deloitte & Touche LLP, our current auditor. The Board of Directors appointed Mr. Moriarty to the Audit Committee because of his auditing and accounting expertise. Our Board of Directors has determined Mr. Moriarty qualifies as an Audit Committee Financial Expert, as defined in Item 401(h) of Regulation S-K.

Code of Ethics

We have adopted a Code of Ethics for Senior Financial Officers including our principal executive officer, principal financial officer, principal accounting officer and controller, and other persons performing similar functions. If we make any substantive amendments to the Code of Ethics or grant any waivers, including any implicit waiver, from a provision of the Code of Ethics to any of our principal executive officer, principal financial officer, principal accounting officer, controller or other persons performing similar functions, we must disclose the nature of such amendment or waiver, the name of the person to whom the waiver was granted and the date of the amendment or waiver. A copy of our Code of Ethics for Senior Financial Officers is filed as Exhibit 14.1 to our Annual Report for the fiscal year ended December 31, 2003. In addition, we will provide any person, without charge, a copy of the Code of Ethics for Senior Financial Officers, if such person delivers a written request to us at Bertucci’s Corporation, 155 Otis Street, Northborough, MA 01532, Attn: Compliance Officer.

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ITEM 11. EXECUTIVE COMPENSATION

Executive Compensation

The following table summarizes the compensation for the most current three fiscal years for our Chief Executive Officer and other most highly compensated executive officer (the Chief Executive Officer and such other officers, collectively, the “Named Executive Officers”):

		Annual Compensation			Long Term Compensation
Name and Principal Position		Salary($)	Bonus($)	Other Annual Compensation ($) (c)	Securities Underlying Options (#)
Stephen V. Clark (a)	2005	288,462	259,615	—	170,000
Chief Executive Officer, Vice	2004	61,731	100,000	—	—
Chairman of the Board of Directors	2003	—	—	—	—
David G. Lloyd (b)	2005	237,692	213,923	85,971	170,000
Chief Financial Officer, President	2004	41,154	67,000	—	—
	2003	—	—	—	—

(a)	Mr. Clark was named President and CEO in August, 2004 and became Vice - Chairman in August 2005.
(b)	Mr. Lloyd joined the Company in September 2004 and was named CFO in November 2004 and became President in August 2005.
(c)	Other compensation is primarily relocation expenses.

Options Granted in Last Fiscal Year

The following table sets forth the stock options granted to our Named Executive Officers during the fiscal year ended December 28, 2005.

	Individual Grants
Name	Number of Securities Underlying Options Granted (1)	% of Total Options Granted to Employees in Fiscal Year		Exercise Price ($/share)(2)			Expiration Date	Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term (3)
								5% ($)			10% ($)
Stephen V. Clark	170,000	28.2	%	$	17.51		9/27/15	$	4,156,450		$	6,618,453
David G. Lloyd	170,000	28.2	%	$		17.51	9/27/15	$		4,156,450	$	6,618,453

(1)	We granted these options under our Amended and Restated 1997 Equity Incentive Plan and the underlying shares of Common Stock vest 25% annually beginning in 2007 through 2010.
(2)	Our Board of Directors has determined the fair value of a share of Common Stock on December 28, 2005 was $15.01, based on a valuation model which assumes the sale of a controlling interest in the Company.
(3)	The 5% and 10% assumed rates of annual compounded stock price appreciation are set forth in the rules of the Securities and Exchange Commission (the “SEC”) and do not represent our estimate or projection of future Common Stock prices. Note these amounts reflect exercise prices below those of the options listed above.

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Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Values

The following table sets forth information concerning option exercises during fiscal 2005 (none) and the fiscal year-end value of unexercised options for each of the Named Executive Officers.

Name	Shares Acquired on Exercise	Value Realized		Number Of Securities Underlying At Fiscal Year-End Exerciseable/Unexercisable		Value Of Unexercised In-The-Money Options At Fiscal Year-End Exerciseable/ Unexerciseable(a)
Stephen V. Clark	—	$	—	—	170,000	$	—	$	—
David G. Lloyd	—	$	—	—	170,000	$	—	$	—

(a)Based upon a stock price of $15.01.

Employment Agreements

Our Board of Directors elects our executive officers and such officers serve at the discretion of the Board. At the date of this filing, we have not entered into any employment agreements with any of our executive officers.

Equity Incentive and Other Plans for Employees

Equity Incentive Plan. Our Amended and Restated 1997 Equity Incentive Plan (“Equity Incentive Plan”), which provides for the issuance of nonqualified stock options, among other kinds of awards, allows us to provide equity incentives to our key employees and directors. On September 27, 2005, the Company’s Board of Directors approved the amendment and restatement of the Equity Incentive Plan which increased the number of shares of Common Stock that are available for issuance under the Equity Incentive Plan from 750,000 to 1,100,000. The Board of Directors administers the Equity Incentive Plan and may modify or amend it in any respect.

Generally, options granted to employees under the Equity Incentive Plan are exercisable either: (a) cumulatively at the rate of 25% on or after each of the second, third, fourth and fifth anniversaries of the date of grant; or (b) only upon the fifth anniversary of the date of grant. Options granted to non-employee directors under the Equity Incentive Plan are generally exercisable immediately upon grant. Options granted under the Equity Incentive Plan to date expire 90 days following either the fifth or the tenth anniversary of the date of the grant. In addition, unvested options generally vest immediately and in full upon a transaction that constitutes a “change of control” of the Company.

The following table summarizes option activity since September 15, 1997 through December 28, 2005:

Year of Original Issue	Average Original Issue Price			Originally Granted	Since Forfeited		Exercised		Outstanding at December 28, 2005
1997	$		11.63	331,123	(245,692	)	(11,020	)	74,411
1998	$	17.51		58,429	(58,429	)	—		—
1999	$	15.00		23,541	(15,541	)	—		8,000
2000	$	13.37		199,750	(84,750	)	(1,125	)	113,875
2001	$	17.51		332,500	(289,800	)	—		42,700
2002	$	17.51		26,000	(20,000	)	—		6,000
2003	$	14.48		40,079	(3,636	)	—		36,443
2004	$	17.51		111,000	(23,000	)	—		88,000
2005	$	17.51		602,500	(1,000	)	—		601,500
				1,724,922	(741,848	)	(12,145	)	970,929

On December 28, 2005, 129,071 shares of Common Stock were available for grants under the Equity Incentive Plan.

Executive Savings and Investment Plan. In 1999, we established the Bertucci’s Corporation Executive Savings and Investment Plan, a non-qualified compensation plan, to which our highly compensated executives may elect to defer a portion of their salary and/or earned bonus. We replaced the original trustee of the Executive Savings and Investment Plan, Scudder Kemper Investments

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(“Scudder”), in December 2004 with Reliance Trust Company (“Reliance”) pursuant to a new Trust Agreement. The Trust Agreement between us and Reliance is for the purpose of paying benefits under Executive Savings and Investment Plan and its terms are substantially similar to the trust agreement the Company entered into with Scudder in 1999. We have established an irrevocable grantor trust under the Trust Agreement and we are the grantor.

The trust assets are held separately from our other funds, but remain subject to claims of our general creditors in the event of our insolvency. As of December 28, 2005, there were 21 participants in the plan with assets in the trust having an aggregate market value of approximately $565,000.

401(k) Plan. We maintain the Bertucci’s 401(k) Plan, a defined contribution plan. Under the Bertucci’s 401(k) Plan, substantially all of our exempt and non-exempt corporate office employees may defer a portion of their current salary, on a pretax basis, to the 401(k) Plan. We make a matching contribution to the Bertucci’s 401(k) Plan. The matching contribution is allocated to the participants based on a formula as defined by the Bertucci’s 401(k) Plan. Matching contributions made by us under the 401(k) Plan for the years ended December 28, 2005, December 29, 2004, and December 31, 2003, were approximately $130,000, $98,000, and $81,000 respectively.

Compensation of Directors

We reimburse our directors for any expenses incurred by them in connection with their attendance at meetings of the Board of Directors, or any committee thereof. In addition, all directors are eligible to receive options under our equity incentive plans.

Independent directors are paid: (1) a quarterly stipend of $2,500 for serving on the Board of Directors; (2) a payment of $2,500 for each Board of Directors meeting they attend (either in person or telephonically); and (3) if they are a member of the Audit Committee, a payment of $1,000 for each Audit Committee meeting they attend (either in person or telephonically).

Directors receive no other compensation from us for serving on the Board of Directors or a committee of the Board of Directors.

Compensation Committee Interlocks and Insider Participation

Effective as of January 1, 1998, the Board of Directors appointed a Compensation Committee. During fiscal 2005, Mr. Morgan and Mr. Wilansky were the only members of the Compensation Committee. Mr. Morgan has been a Partner with Jacobson Partners since 2001. We entered into a financial advisory services agreement with Jacobson Partners in 1998 pursuant to which we have been paying Jacobson Partners consulting fees and reimbursing Jacobson Partners for certain travel and other incidental expenses. We paid Jacobson Partners $250,000 in fiscal 2005 and $425,000 in fiscal 2004 for its services under this agreement. See “Item 13. Certain Relationships And Related Transactions.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table provides information at March 28, 2006, with respect to ownership of our Common Stock, $0.01 par value per share, by (i) each beneficial owner of five percent or more of our Common Stock, (ii) each of our directors who beneficially owns shares of Common Stock, (iii) each of the Named Executive Officers and (iv) all directors and executive officers as a group. For the purpose of computing the percentage of the shares of Common Stock owned by each person or group listed in this table, shares which are subject to options exercisable within 60 days after March 28, 2006 have been deemed to be outstanding and owned by such person or group, but have not been deemed to be outstanding for the purpose of computing the percentage of the shares of Common Stock owned by any other person. Except as indicated in the footnotes to this table, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them.

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Name and Address of Beneficial Owner	Shares Beneficially Owned	Percent of Class
Benjamin R. Jacobson (1)	1,009,011	31.9	%
595 Madison Avenue
New York, New York 10022
Thomas R. Devlin (2)	316,660	10.3	%
1313 North Webb Road
P.O. Box 782170
Wichita, Kansas 67206
Dennis D. Pedra (3)	230,605	7.8	%
James J. Morgan (4)	51,833	1.7	%
Stephen V. Clark	46,192	1.5	%
David G. Lloyd	39,716	1.3	%
James R. Parish	17,422	*
Sally M. Dungan	4,000	*
Heywood Wilansky	4,000	*
James N. Moriarty	2,500	*
All directors and executive officers as a group (8 persons) (5)	1,174,674	36.9	%

* Less than 1%

(1)Includes (a) 613,273 shares of Company Common Stock held by J.P. Acquisition Fund II, L.P., a Delaware limited partnership (“JPAF II”), (b) 149,599 shares of Company Common Stock issuable upon exercise of outstanding stock options within the parameters described above, and (c) 21,217 shares of Company Common Stock held by trusts for the benefit of Mr. Jacobson’s children, with respect to which a third party is trustee and has voting control. JPAF, Limited Partnership, a Delaware limited partnership (“JPAF LP”) is the General Partner of JPAF II. The General Partner of JPAF LP is JPAF, Inc., a Delaware corporation. Mr. Jacobson is the president and majority shareholder of JPAF, Inc. Mr. Jacobson disclaims beneficial ownership of the shares described (i) in clause (a) above, except to the extent of his general partnership interest in JPAF II, and (ii) in clause (c) above.

(2)Includes (a) 67,834 shares of Company Common Stock held by JPAF II, representing Mr. Devlin’s pro rata interest as a limited partner of JPAF II; and (b) 4,000 shares of Company Common Stock issuable upon exercise of outstanding stock options within the parameters described above.

(3)Includes 33,000 shares of Company Common Stock held by trusts for the benefit of Mr. Pedra’s children, with respect to which Mr. Pedra’s sister is trustee and has sole voting control.

(4)Includes (a) 8,482 shares of Company Common Stock held by JPAF II, representing Mr. Morgan’s pro rata interest as a limited partner of JPAF II; and (b) 6,000 shares of Company Common Stock issuable upon exercise of outstanding stock options within the parameters described above.

(5)Includes (a) 161,599 shares of Company Common Stock issuable upon exercise of outstanding stock options within the parameters described above; and (b) the 8,482 shares described in (4) above.

Shareholders Agreement

We are a party to a shareholder agreement with our current shareholders (collectively, the “Shareholder Agreement”).

The Shareholder Agreement provides, among other things, that (i) a shareholder may not transfer his or its shares in the Company, whether voluntarily or by operation of law, other than in certain limited circumstances specified therein, including transfers through a right of first refusal procedure, distributions by certain legal entities to the constituents of such entities (i.e. a partnership to its partners), transfers by will or intestate succession, transfers approved by the Board of Directors to an affiliate of a shareholder or to another shareholder, transfers to family members or trusts for their benefit, and any transfer unanimously approved by the Board of Directors, (ii) we have the option to purchase the shares of any shareholder who is an employee of ours following the termination of such shareholder’s employment with us for any reason at a purchase price equal to the fair market value or original purchase price (plus accrued interest in certain circumstances) depending upon the reason for such termination, (iii) we have the option to purchase the shares of any shareholder who is an employee of ours following certain transfer events, including such shareholders’ bankruptcy or a court-ordered transfer of such shareholder’s stock, (iv) if we fail to exercise our option to purchase as described in the immediately preceding clause (iii), the remaining shareholders have the option to purchase the applicable shares, (v) in the event an employee shareholder leaves our employment due to death, disability or hardship or, with respect to certain shares, is terminated by us without cause, such shareholder has a one-time option to require us to purchase such shareholder’s shares at the greater of fair market value or the original purchase price, subject to certain approval by the Board of Directors, excluding effected employees, (vi) no transfer of

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shares may occur unless the transferee thereof agrees to be bound by the terms of the Shareholders Agreement and (vii) all share certificates must bear customary legends and all share transfers must be in compliance with applicable securities laws.

Equity Compensation Plan Information

We maintain equity compensation plans for employees, officers, directors and others whose efforts contribute to our success. The table below sets forth certain information as of our fiscal year ended December 28, 2005 regarding shares of our Common Stock available for grant or granted under the equity compensation plans that (i) were approved by our stockholders; and (ii) were not approved by our stockholders.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)		(c)
Equity compensation plans approved by security holders	610,929	$	16.33	—
Equity compensation plans not approved by security holders	360,000	$	17.51	129,071
Total	970,929	$	16.77	129,071

In 1997, the Board of Directors adopted the Equity Incentive Plan, pursuant to which we authorized 750,000 shares of Common Stock for issuance in connection with equity incentive awards. Our shareholders originally approved the Equity Incentive Plan in 1997. In 2005, however, the Board of Directors increased the total number of shares of Common Stock authorized for issuance under the Equity Incentive Plan to 1,100,000 shares without seeking additional shareholder approval. Accordingly, in the foregoing chart, shares of Common Stock subject to awards under the Equity Incentive Plan are included in columns (a) and (c) under both the “approved by security holders” and “not approved by security holders” categories. Shares of Common Stock covered by awards that expire or otherwise terminate will again become available for grant. A copy of the Equity Incentive Plan is attached as Exhibit 10.22 to our Current Report on Form 8-K filed with the SEC on October 3, 2005.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Benjamin R. Jacobson, our Chairman of the Board of Directors and Treasurer, is the Managing Partner of Jacobson Partners. In addition, James Morgan, one of our directors and a member of our compensation committee, is a Partner of Jacobson Partners. In connection with the Acquisition, in 1998 we entered into a financial advisory services agreement with Jacobson Partners. Under this agreement (a) Jacobson Partners provides various financial advisory services to us, including, among other things, assistance in preparing internal budgets, performing cash management activities, maintaining and improving accounting and other management information systems, negotiating financing arrangements, complying with public reporting and disclosure requirements and communicating with creditors and investors, and (b) we pay Jacobson Partners consulting fees and reimburse Jacobson Partners for certain travel and other incidental expenses. We paid Jacobson Partners $250,000 in fiscal 2005 and $425,000 in fiscal 2004 for its services under this agreement. We believe the financial advisory services agreement was made on terms no less favorable to us than those obtainable from an unrelated party.

J.P. Acquisition Fund II, L.P., a Delaware limited partnership (“JPAF II”), owns approximately 20.8% (a controlling interest) of our outstanding Common Stock. JPAF, Limited Partnership, a Delaware limited partnership (“JPAF LP”) is the General Partner of JPAF II. The General Partner of JPAF LP is JPAF, Inc., a Delaware corporation. Benjamin R. Jacobson, Chairman of our Board of Directors, is the president and majority shareholder of JPAF, Inc. J.P. Acquisition Fund III, L.P., a Delaware limited partnership (“JPAF III”), previously owned a controlling interest in Taco Bueno (“Taco Bueno”). The General Partner of JPAF III is JPAF III, LLC, a Delaware limited liability company (“JPAF III, LLC”). Jacobson Partners is the sole shareholder of JPAF III, LLC. Mr. Jacobson is the Managing General Partner of Jacobson Partners. Stephen V. Clark, our Chief Executive Officer and Vice Chairman of our Board of Directors, and David G. Lloyd, our President and Chief Financial Officer, were, respectively, the Chief Executive Officer and Chief Financial Officer of Taco Bueno until August 2005, when JPAF III sold its interest in Taco Bueno. After August 10, 2005, Messrs. Jacobson, Clark, and Lloyd have no financial interests in, or management commitments to, Taco Bueno.

During 1999, we established the Bertucci’s Corporation, Inc. Executive Savings and Investment Plan to which our highly compensated executives may elect to defer a portion of their salary and (or) earned bonus. We maintain an irrevocable grantor trust which has been established by us, as grantor, pursuant to a Trust Agreement with Reliance Trust Company, dated December 2004. The agreement is between us and Reliance Trust Company, as trustee, is for the purpose of paying benefits under the Executive

26

Savings and Investment Plan. The trust assets are held separately from our other funds, but remain subject to claims of our general creditors in the event of our insolvency. As of December 28, 2005, there were 21 participants in the plan with assets in the trust with an aggregate market value of approximately $565,000.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following is a summary of the fees billed to us by Deloitte & Touche LLP (“Deloitte”) for professional services rendered for the fiscal years ended December 28, 2005 (fiscal 2005) and December 29, 2004 (fiscal 2004):

Fee Category	Fiscal 2005 Fees		Fiscal 2004 Fees
Audit Fees	$	228,750	$	184,070
Audit-Related Fees	7,950		15,500
Tax Fees	51,000		102,726
All Other Fees	99,007		84,500
Total Fees	$	386,707	$	386,796

Audit Fees. The Audit Fees consist of aggregate fees billed for professional services rendered for the audit of our consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports.

Audit-Related Fees. The Audit-Related Fees consist of aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services were primarily for benefit compensation plan audits.

Tax Fees. The Tax Fees consist of aggregate fees billed for professional services for tax compliance, tax advice and tax planning. These services included assistance regarding federal and state tax compliance, and tax audit defense.

All Other Fees. Fees billed for professional services rendered in connection with the restatements of our financial statements are included in All Other Fees.

Audit Pre-Approval of Policies and Procedures

We formed our Audit Committee in February 2004. The Audit Committee’s policy since February 2004 has been to pre-approve all audit and permissible non-audit services provided by our independent auditors. These services may include audit services, audit-related services, tax services and other services. The Audit Committee may also pre-approve particular services on a case-by-case basis.

Audit Committee Approval of Fees

Our Audit Committee approved all Audit-Related Fees, Tax Fees and All Other Fees listed above and provided by Deloitte to us during fiscal 2005.

27

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	The following documents are filed as part of this report:
	(1)	Financial Statements:
		Report of Independent Registered Public Accounting Firm
		Consolidated Balance Sheets as of December 28, 2005 and December 29, 2004
		Consolidated Statements of Operations for each of the years ended December 28, 2005, December 29, 2004, and December 31, 2003
		Consolidated Statements of Stockholders’ Equity for each of the years ended December 28, 2005, December 29, 2004, and December 31, 2003
		Consolidated Statements of Cash Flows for each of the years ended December 28, 2005, December 29, 2004, and December 31, 2003
		Notes to Consolidated Financial Statements
	(2)	Exhibit Index

28

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BERTUCCI’S CORPORATION
By:		/s/ Stephen V. Clark
	Stephen V. Clark, Chief Executive Officer and Director
Date: March 28, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

SIGNATURE	TITLE	DATE
/s/ Benjamin R. Jacobson	Chairman of the Board of Directors	March 28, 2006
Benjamin R. Jacobson
/s/ Stephen V. Clark	Vice Chairman of the Board of Directors, Chief Executive Officer and Director (Principal Executive Officer)	March 28, 2006
Stephen V. Clark
/s/ David G. Lloyd	President, Chief Financial Officer and Director	March 28, 2006
David G. Lloyd	(Principal Financial and Accounting Officer)
/s/ James N. Moriarty	Director	March 28, 2006
James N. Moriarty
/s/ Sally M. Dungan	Director	March 28, 2006
Sally M. Dungan
/s/ James J. Morgan	Director	March 28, 2006
James J. Morgan
/s/ Heywood Wilansky	Director	March 28, 2006
Heywood Wilansky
/s/ James R. Parish	Director	March 28, 2006
James R. Parish

29

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Bertucci’s Corporation

Northborough, Massachusetts

We have audited the accompanying consolidated balance sheets of Bertucci’s Corporation and subsidiaries (the “Company”) as of December 28, 2005 and December 29, 2004, and the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 28, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2005 and December 29, 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2005 in conformity with accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE LLP

Boston, Massachusetts

March 28, 2006

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BERTUCCI’S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
	December 28,			December 29,
	2005			2004
ASSETS
Current Assets:
Cash and cash equivalents	$	21,382		$	12,291
Restricted cash	2,187			2,403
Accounts receivable	771			1,334
Inventories	1,534			1,388
Prepaid expenses and other current assets	897			534
Total current assets	26,771			17,950
Property and Equipment, at cost:
Land	259			259
Buildings	697			697
Capital leases - land and buildings	5,764			5,764
Leasehold improvements	68,433			66,632
Furniture and equipment	46,787			44,537
	121,940			117,889
Less - accumulated depreciation and amortization	(67,509		)	(57,101		)
	54,431			60,788
Construction work in process	—			1,567
Net property and equipment	54,431			62,355
Goodwill	26,127			26,127
Deferred finance costs, net	2,165			2,862
Liquor licenses, net	2,358			2,414
Other assets	693			513
TOTAL ASSETS	$	112,545		$	112,221
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Promissory notes - current portion	$	42		$	40
Capital lease obligations - current portion	107			74
Accounts payable	8,603			7,819
Accrued expenses	19,129			16,457
Total current liabilities	27,881			24,390
Promissory notes, net of current portion	738			781
Captial lease obligations, net of current portion	5,982			6,102
Senior Notes	85,310			85,310
Deferred gain on sale leaseback transaction	1,892			2,002
Other long-term liabilities	8,045			8,368
Total liabilities	129,848			126,953
Commitments and Contingencies
Stockholders’ Deficit:
Common stock, $.01 par value
Authorized - 8,000,000 shares
Issued - 3,764,995 and 3,667,495 shares, respectively;
Outstanding - 3,012,982 and 2,915,482 shares, respectively	38			37
Less 752,013 treasury shares at cost	(8,480		)	(8,480		)
Additional paid-in capital	29,617			29,046
Accumulated deficit	(38,478		)	(35,335		)
Total stockholders’ deficit	(17,303		)	(14,732		)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	112,545		$	112,221

The accompanying notes are an integral part of these consolidated financial statements.

31

BERTUCCI’S CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share and per share data)
	December 28,			December 29,			December 31,
	2005			2004			2003
Net sales	$	204,784		$	200,408		$	186,172
Cost of sales and expenses:
Cost of sales	47,611			49,231			43,544
Operating expenses	123,253			122,056			113,036
General and administrative expenses	14,442			13,065			11,320
Deferred rent, depreciation, amortization and preopening expenses	11,228			12,657			14,123
Asset impairment charge	982			6,749			3,580
Total cost of sales and expenses	197,516			203,758			185,603
Income (loss) from operations	7,268			(3,350		)	569
Other expense:
Adjustment of gain on Brinker Sale	—			—			650
Interest expense, net	(10,411		)	(10,613		)	(10,133		)
Other expense	(10,411		)	(10,613		)	(9,483		)
Loss before income tax provision	(3,143		)	(13,963		)	(8,914		)
Income tax provision	—			—			—
Net loss	$	(3,143	)	$	(13,963	)	$	(8,914	)
Basic and diluted loss per share	$	(1.06	)	$	(4.74	)	$	(3.00	)
Weighted average shares outstanding - basic and diluted	2,960,025			2,943,841			2,970,403

The accompanying notes are an integral part of these consolidated financial statements.

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BERTUCCI’S CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands except share data)

	Common Stock					Treasury Stock						Additional Paid In Capital			Accumulated Deficit			Total Stockholder Equity (Deficit)
	Number of Shares	Amount				Number of Shares		Amount
Balance January 1, 2003	3,666,370	$	37			(687,415	)	$		(8,088	)	$		29,004	$	(12,458	)	$	8,495
Net loss	—	—				—		—				—			(8,914		)	(8,914			)
Compensation expense associated with option grants	—	—				—		—				31			—			31
Purchase of common stock for treasury	—	—				(17,403	)	(102			)	—			—			(102			)
Balance December 31, 2003	3,666,370	$			37	(704,818	)	$		(8,190	)	$	29,035		$	(21,372	)	$		(490	)
Net loss	—	—				—		—				—			(13,963		)	(13,963			)
Sale of common stock from exercise of options	1,125	—				—		—				11			—			11
Purchase of common stock for treasury	—	—				(47,195	)	(290			)	—						(290			)
Balance December 29, 2004	3,667,495	$	37			(752,013	)	$		(8,480	)	$	29,046		$	(35,335	)	$	(14,732		)
Net loss	—	—				—		—				—			(3,143		)	(3,143			)
Issuance of common stock	37,500	—				—		—				172			—			172
Sale of common stock	60,000	1				—		—				399			—			400
Balance December 28, 2005	3,764,995	$		38		(752,013	)	$	(8,480		)	$		29,617	$	(38,478	)	$	(17,303		)

The accompanying notes are an integral part of these consolidated financial statements.

33

BERTUCCI’S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
	December 28, 2005			December 29, 2004			December 31, 2003
Cash flows from operating activities
Net loss	$	(3,143)		$	(13,963)		$	(8,914)
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustment of gain on Brinker Sale	—			—			(650		)
Loss on sale leaseback transaction	—			—			59
Non-cash stock compensation expense	172			—			31
Loss on equipment disposals	170			—			—
Asset impairment charge	982			6,749			3,580
Deferred rent, depreciation, and amortization	11,568			12,863			12,658
Changes in operating assets and liabilities
Inventories	(146		)	(120		)	(368		)
Prepaid expenses and receivables	200			643			1,217
Other accrued expenses	2,270			2,186			106
Income taxes payable	—			(413		)	409
Accounts payable	784			(607		)	457
Tenant allowances received	250			577			658
Other operating assets and liabilities	(180		)	(34		)	(172		)
Total adjustments	16,070			21,844			17,985
Net cash provided by operating activities	12,927			7,881			9,071
Cash flows from investing activities
Additions to property and equipment	(4,324		)	(8,598		)	(17,396		)
Net proceeds from sale leaseback transactions	—			—			8,977
Decrease (increase) in restricted cash	216			726			(661		)
Acquisition of liquor licenses	—			—			(278		)
Net cash used in investing activities	(4,108		)	(7,872		)	(9,358		)
Cash flows from financing activities
Sale of common stock from exercise of options	400			11			—
Purchase of treasury shares	—			(290		)	(102		)
Payment on promissory note	(40		)	(39		)	(81		)
Principal payments under capital lease obligations	(88		)	(47		)	(16		)
Net cash provided by (used in) financing activities	272			(365		)	(199		)
Net incease (decrease) in cash and cash equivalents	9,091			(356		)	(486		)
Cash and cash equivalents, beginning of year	12,291			12,647			13,133
Cash and cash equivalents, end of year	$	21,382		$	12,291		$	12,647
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	10,096		$	10,090		$	9,804
Cash paid (refunded) for income taxes	$	—		$	377		$	(408	)
Capital leases entered into during period	$	—		$	175		$	6,066
Promissory note issued in exchange for liquor license rights	$	—		$	—		$	555
Promissory note issued in exchange for settlement of lease liability	$	—		$	—		$	386

The accompanying notes are an integral part of these consolidated financial statements.

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BERTUCCI’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 28, 2005

(1)ORGANIZATION AND OPERATIONS

Bertucci’s Corporation, a Delaware corporation (the “Company”), is the owner and operator of a chain of full-service casual dining, Italian-style restaurants under the names Bertucci’s Brick Oven Pizzeria® and Bertucci’s Brick Oven Ristorante®. The Company was incorporated in 1994 as NE Restaurant Company, Inc. and formally changed its name to Bertucci’s Corporation on August 16, 2001. As of December 28, 2005, the Company operated 92 restaurants located primarily in the northeast United States.

In July 1998, the Company completed its acquisition of Bertucci’s Restaurant Corp.’s parent entity, Bertucci’s, Inc., for a purchase price, net of cash received, of approximately $89.4 million (the “Acquisition”). The Company financed the Acquisition primarily through the issuance of $100 million of 10¾% senior notes due 2008 (the “Senior Notes”). $85.3 million in principal of the Senior Notes are still outstanding.

Fiscal Year End

The Company’s fiscal year is the 52 or 53-week period ending on the Wednesday closest to December 31st. All years presented consist of 52 weeks.

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

(2)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

The Company records revenue from the sale of food, beverage and alcohol when sales occur. Proceeds from the sale of gift cards are recorded as deferred revenue and recognized as income when redeemed by the holder.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of demand and interest bearing accounts with original maturities of no more than sixty days. The Company utilizes zero balance disbursement accounts for cash management purposes and maintains a cash balance sufficient to cover disbursements from these accounts when checks are presented for payment. Outstanding checks written against the disbursement accounts of $0.9 million at December 28, 2005 are included in accounts payable in the accompanying consolidated balance sheets.

Restricted Cash

The Company is required to maintain cash as collateral for outstanding letters of credit under its letter of credit facility.

Inventories

Inventories are carried at the lower of cost (first-in, first-out) or market value, and consist of the following (dollars in thousands):

	2005		2004
Food	$	847	$		750
Liquor	578		542
Supplies	109		96
Total inventory	$	1,534	$	1,388

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Property and Equipment

Property and equipment are carried at cost. The Company provides for depreciation and amortization using the straight-line method to charge the cost of property and equipment to expense over the estimated useful lives of the assets. The lives used are as follows:

Asset Classification	Estimated Useful Life
Buildings	20 years
Leasehold improvements	Shorter of term of the lease (ranging between 10-20 years), or life of asset
Furniture and equipment	3-7 years

The Company evaluates property and equipment held and used in the business for impairment whenever events or changes in circumstances indicate the carrying amount of a restaurant’s assets may not be recoverable. An impairment is determined by comparing estimated undiscounted future operating cash flows for a restaurant to the carrying amount of its assets. If an impairment exists, the amount of impairment is measured as the excess of the carrying amount over the estimated discounted future operating cash flows of the asset and the expected proceeds upon sale of the asset.

The Company regularly assesses restaurants’ performance for recoverability to determine if an impairment of fixed assets exists at any location. The Company estimates the fair value of assets based on the net present value of the expected cash flows for each restaurant. If the carrying amount of the assets (including any nontransferable liquor licenses) exceeds the fair value of the assets, the Company records an impairment charge to reflect the write down of the affected assets to fair value. Impairment charges were $1.0 million, $6.7 million, and $3.6 million in fiscal 2005, 2004, and 2003, respectively.

Capitalized Interest

The Company capitalizes interest costs (in leasehold improvements) based on new restaurant capital expenditures. Total interest costs incurred and amounts capitalized are as follows (dollars in thousands):

	2005		2004		2003
Total interest expense	$	10,425	$	10,690	$	10,371
Less - Amount capitalized	14		77		238
Interest expense, net	$	10,411	$	10,613	$	10,133

Self-Insurance

The Company is self-insured for certain losses related to general liability, group health insurance, and workers’ compensation. The Company maintains stop loss coverage with third party insurers to limit its total exposure. The self-insurance liability is not discounted and represents an estimate of the ultimate cost of claims incurred as of the balance sheet date based upon analysis of historical data and estimates.

36

Accrued Expenses

Accrued expenses consisted of the following as of December 28, 2005 and December 29, 2004 (dollars in thousands):

	2005		2004
Accrued payroll and related benefits	$	5,994	$		4,810
Unredeemed gift cards	4,392		3,857
Accrued interest	4,228		4,254
Other accrued liabilities	2,669		2,018
Accrued rent and other occupancy costs	1,576		1,034
Store closing reserves, current portion	270		484
TOTAL	$	19,129	$	16,457

Goodwill

The Company tests goodwill for impairment annually on the first day after the fiscal year end. This same impairment test is performed at other times during the course of the year should an event occur indicating goodwill may be impaired. There was no impairment of goodwill at December 28, 2005 or December 29, 2004.

Deferred Finance Costs

Underwriting, legal and other direct costs incurred in connection with the issuance of the Senior Notes and the completion of the sale-leaseback transactions discussed in Note 6 have been capitalized and are being amortized into interest expense over the life of the related borrowings and underlying leases, respectively.

Liquor Licenses

Transferable liquor licenses are accounted for at the lower of cost or market and are not amortized. Annual renewal fees are expensed as incurred. Non-transferable liquor licenses are amortized on a straight-line basis over the contractual life of the license. The carrying value of transferable liquor licenses was $2.0 million at each of December 28, 2005 and December 29, 2004. Amortization expense for non-transferable liquor licenses was $56,000, $82,000, and $58,000 in fiscal 2005, 2004, and 2003, respectively. For existing licenses, amortization expense is expected to be $56,000 per year for each of the next five fiscal years.

Fair Value of Financial Instruments

The Company’s financial instruments mainly consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and long-term debt. The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments.The fair value of the Company’s long term debt, consisting of the Senior Notes, is based on the present value of remaining principal and interest payments discounted at a comparable borrowing rate each fiscal year (see Note 5 of Notes to Consolidated Financial Statements).

Comprehensive Income

Comprehensive income is equal to net income as reported for all three fiscal years reported herein.

Preopening Expenses

Preopening costs are expensed as incurred. These costs include the training of new restaurant management teams; travel and lodging for both the training and opening unit management teams; and the food, beverage and supplies costs incurred to perform the training and testing of all equipment, concept systems and recipes.

37

Advertising

Advertising costs are expensed as incurred. Advertising costs were $5.8 million, $6.6 million and $5.5 million in fiscal 2005, 2004, and 2003, respectively, and are included in operating expenses in the consolidated statements of operations.

Earnings Per Share

Basic earnings per share is computed by dividing net loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if options or other contracts to issue common stock were exercised or converted into common stock. For the fiscal years ended December 28, 2005, December 29, 2004, and December 31, 2003 options representing 970,929, 548,171, and 594,396 shares of common stock, respectively, were excluded from the calculation of diluted loss per share because of their anti-dilutive effect.

Stock-Based Compensation

As allowed by SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS No. 123”), the Company has elected to account for stock-based compensation under the intrinsic value method with disclosure of the effects of fair value accounting on net income and earnings per share on a pro forma basis. The Company’s stock-based compensation plan is described more fully in Note 9. The Company accounts for this plan under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. In 2005, stock based employee compensation expense resulted from the granting of shares to key employees and independent directors. In 2003, such cost resulted from the modification of a stock option grant. All options granted had an exercise price equal to, or in excess of, the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net loss and loss per share if the Company had applied the fair value recognition provisions of SFAS No. 123 (in thousands, except per share data):

	2005			2004					2003
Net loss, as reported	$	(3,143	)	$	(13,963			)	$	(8,914		)
Add: Stock-based employee compensation expense included in reported net loss.	172			—					31
Deduct: Net stock-based employee compensation expense determined under fair value based method for all awards.	(116		)	(77				)	(580			)
Pro forma net loss	$	(3,087	)	$			(14,040	)	$	(9,463		)
Basic and diluted loss per share
As reported	$	(1.06	)	$		(4.74		)	$	(3.00		)
Pro forma	$	(1.04	)	$	(4.77			)	$		(3.19	)

Recent Accounting Pronouncements

In June 2005, the Emerging Issues Task Force of the Financial Accounting Standards Board (“FASB”) reached a consensus on Issue No. 05-6, Determining the Amortization Period for Leasehold Improvements (“EITF 05-6”). The guidance requires that leasehold improvements acquired in a business combination or purchased subsequent to the inception of a lease be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date of the business combination or purchase. The guidance is effective for periods beginning after June 29, 2005. The adoption of EITF 05- 6 did not have a material effect on our consolidated financial position or results of operations.

In December 2004, the FASB issued SFAS No. 123R which requires all share-based payments to employees to be recognized in the financial statements based on their fair values. SFAS No. 123R replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion No. 25, or APB Opinion No. 25, Accounting for Stock Issued to Employees. Effective December 29, 2005, we will adopt the provisions of SFAS No. 123R using the modified prospective method. Under this method, compensation expense is recorded for all unvested options over the related vesting period beginning in the quarter of adoption. We currently apply the intrinsic value based method prescribed in APB Opinion No. 25 in accounting for employee stock-based compensation. Upon adoption of SFAS No.

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123R, we will recognize stock-based compensation costs rateably over the service period. This statement also amends SFAS No. 95, Statement of Cash Flows, to require that excess tax benefits be reflected as financing cash inflows rather than operating cash inflows. In March 2005, the SEC issued Staff Accounting Bulletin, or SAB No. 107 regarding the Staff’s interpretation of SFAS No. 123R. This interpretation provides the Staff’s views regarding interactions between SFAS No. 123R and certain SEC rules and regulations and provides interpretations of the valuation of share-based payments for public companies. The interpretive guidance is intended to assist companies in applying the provisions of SFAS No. 123R and investors and users of the financial statements in analyzing the information provided. We will follow the guidance prescribed in SAB No. 107 in connection with our adoption of SFAS No. 123R. The impact of the adoption of SFAS No. 123R and SAB No. 107 is estimated to result in a compensation charge for fiscal year 2006 of approximately $100,000.

Segment Reporting

The Company’s operations have been aggregated into one single reporting segment, as permitted SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, since its operations have similar economic characteristics, products, production processes, types of customers and distribution methods.

Use of Management Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the reserve for closed restaurant locations, impairment analysis on closed locations, and insurance reserves. Actual results could differ from those estimates.

(3)RESTAURANT SALES AND CLOSURES

Brinker Sale

In April 2001, the Company completed the sale of a number of non-Bertucci’s brand restaurants (the “Brinker Sale”) and recorded a gain of $36.9 million before income taxes. During 2003 the Company concluded certain liabilities recorded in connection with the Brinker Sale were no longer required as part of the final settlement and accordingly reversed $650,000 of accrued liabilities as an additional gain on the Brinker Sale.

Closed Restaurants Reserve

Prior to fiscal 2002, the Company had recorded reserves relating to lease commitments at certain closed locations, including other exit costs for which the Company was still primarily liable. It was originally expected the Company would be able to exit these locations, sublease the locations or otherwise be released from the related leases. However, due to market conditions, the Company was unable to sell, sublease or exit certain of these leases as originally anticipated. Additionally, in 2002, the Company closed one restaurant and recorded a charge of $0.2 million primarily related to estimated lease termination costs.

During 2003, the Company terminated a lease for one of its closed locations in exchange for issuing a promissory note of $0.4 million, payable in varying installments through 2010. The note does not bear interest, and accordingly the Company has recorded imputed interest on the note. The obligation was reclassified from the closed restaurants reserve to other long-term obligations in the accompanying balance sheet.

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Activity within the Company’s closed restaurants reserve was as follows (dollars in thousands):

	2005			2004			2003
Balance, beginning of year	$	659		$	1,449		$	2,499
Promissory note issued	—			—			(386		)
Lease and related costs charged to reserve	(287		)	(790		)	(664		)
Balance, end of year	$	372		$	659		$	1,449
Current portion	$	270		$	484		$	615
Noncurrent portion	102			175			834
	$	372		$	659		$	1,449

The closed restaurant reserve was calculated net of sublease income at ten locations partially or fully subleased as of December 28, 2005. The Company remains primarily liable for the remaining lease obligations should the sublessee default. Total sublease income excluded from the reserve is approximately $5.9 million for subleases expiring at various dates through 2017. One tenant has defaulted under the terms of the Company’s sublease but the net exposure to the Company has been provided for in the reserves above.

(4)INCOME TAXES

The components of the provision for income taxes for the years ended December 28, 2005, December 29, 2004, and December 31, 2003 are as follows (dollars in thousands):

	2005			2004			2003
Current:
Federal	$	—		$	—		$	—
State	—			—			—
	—			—			—
Deferred:
Federal	(1,473		)	(5,669		)	(3,752		)
State	(95		)	(413		)	(270		)
	(1,568		)	(6,082		)	(4,022		)
Valuation allowance	1,568			6,082			4,022
Total provision for income taxes	$	—		$	—		$	—

A reconciliation of the amount computed by applying the statutory federal income tax rate of 35% to the loss before income tax provision for the years ended December 28, 2005, December 29, 2004, and December 31, 2003, respectively, is as follows (dollars in thousands):

	2005				2004				2003
Income tax benefit computed at federal statutory rate	$	(1,100		)	$	(4,887		)	$	(3,120	)
State taxes, net of federal benefit	(95			)	(413			)	(270		)
Employment related tax credits, net	(983			)	(782			)	(632		)
Net operating loss carryforwards and other	610				—				—
Valuation allowance	1,568				6,082				4,022
Income tax provision	$		—		$		—		$	—

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Significant items giving rise to deferred tax assets and deferred tax liabilities at December 28, 2005 and December 29, 2004 are as follows (dollars in thousands):

	2005			2004
Deferred tax assets—
Net operating loss and tax credit carryforwards	$	6,418		$	4,356
Property and equipment, including impairment charges		5,931			6,086
Deferred rent	3,226			3,195
Accrued expenses and other	1,946			1,042
Deferred and accrued compensation	414			201
Store closing write downs and liabilities	145			1,694
	18,080			16,574
Deferred tax liabilities—
Liquor licenses	(234		)	(296		)
	(234		)	(296		)
Total net deferred tax assets	17,846			16,278
Valuation allowance	(17,846		)	(16,278		)
Carrying value of net deferred tax assets	$	—		$	—

The future tax benefits which give rise to the deferred tax asset remain statutorily available to the Company. The Company considers both negative and positive evidence in determining if a valuation allowance is appropriate. The Company had net operating losses and tax credit carryforwards of $13.1 million as of December 28, 2005 which expire at various dates through 2024. The Company has an historical trend of recurring pre-tax losses. Based on the recent losses and the historical trend of losses, the Company concluded a valuation allowance for the net deferred tax asset remains appropriate. Actual amounts realized will be dependent on generating future taxable income.

(5)SENIOR NOTES PAYABLE

The Company has outstanding 10¾% Senior Notes with a face value of $85.3 million due 2008 (the “Senior Notes”). Interest on the Senior Notes is payable semi-annually on January 15 and July 15. Through July 15, 2006, the Company may, at its option, redeem any or all of the Senior Notes at face value, plus a declining premium, which is 1.79% through July 15, 2006. After July 15, 2006, the Senior Notes may be redeemed at face value. Under certain circumstances, including a change of control or following certain asset sales, the holders of the Senior Notes may require the Company to repurchase the Senior Notes, at a redemption price of 101%. The Senior Notes are fully and unconditionally guaranteed, on a joint and several basis, on an unsecured senior basis, by all of the Company’s subsidiaries. The Company’s parent company has no independent assets or operations. The Senior Notes contain no financial covenants and the Company is in compliance with all non-financial covenants as of December 28, 2005.

The fair values of the Company’s long-term debt, including current portion at December 28, 2005 and December 29, 2004 were as follows (dollars in thousands):

	2005				2004
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes	$	85,310	$	85,268	$	85,310	$	86,556
Promissory Notes	781		710		821		737
	$	86,091	$	85,978	$	86,131	$	87,293

The fair values of the long term obligations above were determined based on the present value of remaining principal and interest payments discounted at the Company’s estimates of comparable borrowing rates as of December 28, 2005 (10.5%) and December 29, 2004 (10.0%), respectively.

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(6)COMMITMENTS AND CONTINGENCIES

Letter of Credit Facility

The Company has a $4.0 million (maximum) letter of credit facility. As of December 28, 2005, this facility was collateralized with $2.2 million of cash restricted from general use. Letters of credit totaling $2.2 million were outstanding pursuant to this facility as of December 28, 2005 and December 29, 2004 and expire in December 2006. Restricted cash is presented as current based on the December 2006 letter of credit expiration date.

Operating Leases

The Company has entered into numerous lease arrangements, primarily for restaurant land, equipment and buildings, which are non-cancelable and expire on various dates through 2027.

Some operating leases contain rent escalation clauses whereby the rent payments increase over the term of the lease. Rent expense includes base rent amounts, percentage rent payable periodically, as defined in each lease, and rent expense accrued to recognize lease escalation provisions on a straight-line basis over the lease term. Rent expense recognized in operating expenses in the accompanying consolidated statements of income was approximately $15.5 million, $14.8 million, and $13.4 million for the years ended December 28, 2005, December 29, 2004, and December 31, 2003, respectively. The annual difference of accrued rent versus amounts paid is classified as deferred rent in the accompanying consolidated statements of operations and the cumulative difference is included in other long-term liabilities in the accompanying consolidated balance sheets. Certain leases require the payment of an additional amount, calculated as a percentage of annual sales, as defined in the lease agreement, which exceeds annual minimum rentals. Such percentage rent expense was $200,000, $154,000, and $264,000, for fiscal 2005, 2004, and 2003, respectively.

Future minimum rental payments due under all non-cancelable operating leases as of December 28, 2005 were as follows (dollars in thousands):

Year-
2006	$	15,269
2007	13,834
2008	12,025
2009	10,709
2010	9,116
Thereafter	36,001
	$	96,954

In addition to the leases summarized above, the Company is primarily liable on ten locations for approximately $6.3 million in gross lease commitments over the remaining terms of the leases. Nine of those locations are subleased to tenants under sublease obligations aggregating $5.9 million. The difference of $372,000 represents the Company’s closed restaurant reserve at December 28, 2005.

Capital Leases

During 2003, the Company completed two sale-leaseback transactions on four restaurant properties. In the first transaction, the Company sold three properties for $7.2 million in cash (net of fees of approximately $300,000), resulting in a gain of $2.2 million. The gain has been deferred and will be amortized into income over the lease term. The properties sold included land and buildings at each location which the Company agreed to lease back for a 20-year period. The portion of the contractual obligation relating to the buildings is recorded at its net present value of $3.8 million (at inception) as an obligation under a capital lease. The land portion of the obligation is classified as an operating lease, requiring future payments to be classified as operating expenses. In the second transaction, the Company sold a property consisting of land and a building for $1.8 million in cash (net of fees of approximately $210,000). In connection with this transaction the Company recorded a charge of $59,000 representing the excess of the property’s carrying value over its fair market value. The fair value of the land is less than 25% of the transaction value and therefore the entire contractual obligation is recorded at its net present value of $1.9 million (at inception) as a capital lease obligation. The Company agreed to lease back the property for a 20-year period. Both leases include two five-year renewal terms, which the Company may exercise at its option. The Company is required to maintain the properties for the term of the leases and to pay all taxes, insurance,

42

utilities and other costs associated with those properties. Under the leases, the Company agreed to customary indemnities and, in the event the Company defaults on any lease, the landlord may terminate the lease, accelerate rental payments and collect liquidated damages.

Payments under capital lease commitments for these restaurants are as follows (dollars in thousands):

Year
2006	$			693
2007	704
2008	715
2009	725
2010	691
Thereafter	9,221
	12,749
Less amount representing interest	6,660
Present value of minimum payments	$		6,089
Current portion	107
Long-term portion	5,982
	$	6,089

Contingencies

The Company is subject to various legal proceedings arising in the ordinary course of business. Based on consultation with the Company’s legal counsel, management believes the amount of ultimate liability with respect to these actions will not be material to the financial position, cash flows or results of operations of the Company.

(7)RELATED PARTIES

Under the terms of the Company’s agreements, the stockholders have consented to the payment of an ongoing financial consulting fee to Jacobson Partners, a stockholder of the Company. Fees of $250,000 were paid to Jacobson Partners for each of the fiscal years ended December 28, 2005, December 29, 2004, and December 31, 2003, respectively. Additionally, the Board of Directors approved an additional fee of $175,000 paid in fiscal 2004. All fees are included in general and administrative expenses in the accompanying consolidated statements of operations.

J.P. Acquisition Fund II, L.P., a Delaware limited partnership (“JPAF II”), owns a controlling interest in the Company. JPAF, Limited Partnership, a Delaware limited partnership (“JPAF LP”), is the General Partner of JPAF II. The General Partner of JPAF LP is JPAF, Inc., a Delaware corporation. Benjamin R. Jacobson, Chairman of the Company, is the president and majority shareholder of JPAF, Inc. J.P. Acquisition Fund III, L.P., a Delaware limited partnership (“JPAF III”), previously owned a controlling interest in Taco Bueno. The General Partner of JPAF III is JPAF III, LLC, a Delaware limited liability company (“JPAF III, LLC”). Jacobson Partners is the sole shareholder of JPAF III, LLC. Mr. Jacobson is the Managing General Partner of Jacobson Partners. Stephen V. Clark, Vice Chairman of the Board of Directors and Chief Executive Officer of the Company, and David G. Lloyd, President and Chief Financial Officer of the Company, held senior management positions with Taco Bueno until August 2005, when JPAF III sold its interest in Taco Bueno.

(8)401(k) PROFIT SHARING PLAN AND DEFERRED COMPENSATION PLAN

The Company maintains a defined contribution plan known as the Bertucci’s 401(k) Plan. Under the Bertucci’s 401(k) Plan, substantially all salaried employees of the Company may defer a portion of their current salary, on a pretax basis. The Company makes a matching contribution to the Bertucci’s 401(k) Plan allocated, based on a formula as defined by the Bertucci’s 401(k) Plan, to Plan participants. Matching contributions made by the Company for the years ended December 28, 2005, December 29, 2004, and December 31, 2003 were approximately $130,000, $98,000, and $81,000, respectively.

In 1999, the Company established the Bertucci’s Corporation Executive Savings and Investment Plan, a non-qualified compensation plan, to which highly compensated executives of the Company may elect to defer a portion of their salary and/or earned bonus.

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The assets are held separately from other funds of the Company, but remain subject to claims of the Company’s general creditors in the event of the Company’s insolvency. As of December 28, 2005, there were 21 participants in the plan with assets with an aggregate market value of approximately $565,000. The assets are included in other assets in the consolidated balance sheet. A corresponding liability is included in other long term liabilities.

(9)COMMON STOCK AND EQUITY INCENTIVE PLAN

On September 15, 1997, the Board of Directors of the Company established the 1997 Equity Incentive Plan, which included a nonqualified stock option plan, in order to provide equity incentive awards for certain key employees and directors. On September 27, 2005, the Company’s Board of Directors approved the adoption of the Amended and Restated 1997 Equity Incentive Plan (the “Equity Incentive Plan”) which increased the number of shares of Common Stock that are available for issuance under the Equity Incentive Plan from 750,000 to 1,100,000. The Equity Incentive Plan is administered by the Board of Directors of the Company and may be modified or amended by the Board of Directors in any respect. As of December 28, 2005 there were 129,071 authorized shares of Common Stock remaining for issuance under the Equity Incentive Plan.

The options granted under the Equity Incentive Plan are generally exercisable as follows:

Two years beyond option grant date	25%
Three years beyond option grant date	50%
Four years beyond option grant date	75%
Five years beyond option grant date	100%

A summary of the Equity Incentive Plan activity for the years ended December 28, 2005, December 29, 2004, and December 31, 2003 is presented in the table and narrative below.

	2005					2004					2003
	Shares		Weighted Average Exercise Price			Shares		Weighted Average Exercise Price			Shares		Weighted Average Exercise Price
Outstanding at beginning of year	548,171		$	15.47		594,396		$	15.42		652,549		$	15.44
Granted	602,500		$	17.51		111,000		$	17.51		40,079		$	14.48
Exercised	—		$	—		(1,125	)	$	(9.22	)	—		$	—
Forfeited	(179,742	)	$	(15.30	)	(156,100	)	$	(16.80	)	(98,232	)	$	(15.13	)
Outstanding at end of year	970,929		$	16.77		548,171		$	15.47		594,396		$	15.42
Exercisable at end of year	285,179		$	15.06		256,377		$	13.61		294,603		$	14.12
Range of Exercise Price per share			$	9.22 - $17.51				$	9.22 - $17.51				$	9.22 - $17.51
Weighted average fair value of each option granted			$	—				$	—				$	2.83

The 970,929 shares of Common Stock subject to outstanding options at December 28, 2005 have a remaining weighted average contractual life of approximately 7.9 years. Options granted under the Equity Incentive Plan to date expire 90 days following either the fifth or the tenth anniversary of the date of the grant.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Weighted average risk-free interest rates of 3.99%, 3.53%, and 3.18% were used in 2005, 2004, and 2003, respectively. Weighted average expected lives of five years and an expected volatility of 0% were used in all three years.

The Company’s shareholders are parties to a shareholder agreement (the “Shareholder Agreement”) which restrict their

44

ability to transfer their shares without the approval of the Company’s Board of Directors. The Shareholder Agreement provides, among other things, that (i) a shareholder may not transfer his or its shares in the Company, whether voluntarily or by operation of law, other than in certain limited circumstances specified therein, including transfers through a right of first refusal procedure, distributions by certain legal entities to the constituents of such entities (i.e. a partnership to its partners), transfers by will or intestate succession, transfers approved by the Board of Directors to an affiliate of a shareholder or to another shareholder, transfers to family members or trusts for their benefit, and any transfer unanimously approved by the Board of Directors, (ii) the Company has the option to purchase the shares of any shareholder who is an employee of the Company following the termination of such shareholder’s employment with the Company for any reason at a purchase price equal to the fair market value or original purchase price (plus accrued interest in certain circumstances) depending upon the reason for such termination, (iii) the Company has the option to purchase the shares of any shareholder who is an employee of the Company following certain transfer events, including such shareholders’ bankruptcy or a court-ordered transfer of such shareholder’s stock, (iv) if the Company fails to exercise its option to purchase as described in the immediately preceding clause (iii), the remaining shareholders have the option to purchase the applicable shares, (v) in the event an employee shareholder leaves the Company due to death, disability or hardship or, with respect to certain shares, is terminated by the Company without cause, such shareholder has a one-time option to require the Company to purchase such shareholder’s shares at the greater of fair value or the original purchase price, subject to certain approval by the Board of Directors, excluding effected employees, (vi) no transfer of shares may occur unless the transferee thereof agrees to be bound by the terms of the Shareholder Agreement, and (vii) all share certificates must bear customary legends and all share transfers must be in compliance with applicable securities laws.

Additionally, the Company has the option to purchase shares held by employee stockholders (approximately 136,629 shares at December 28, 2005) upon their termination at a purchase price equal to either fair market value or the original purchase price (plus accrued interest in certain circumstances), depending on the reason for termination. Employee shareholders, or their estate, may require the Company to purchase their shares upon their death or disability and with respect to certain shares if they are terminated without cause, at the greater of fair value or the original purchase price, subject to certain approval by the Board of Directors.

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(10)QUARTERLY RESULTS

The unaudited quarterly information depicted below details results of operations for each of the fiscal quarters of 2005 and 2004.

	Quarter 1 March 30, 2005			Quarter 2 June 29, 2005			Quarter 3 September 28, 2005			Quarter 4 December 28, 2005			Year December 28, 2005
Net sales	$	49,952		$	52,580		$	49,654		$	52,598		$	204,784
Cost of sales and expenses:
Cost of sales	11,860			12,322			11,316			12,113			47,611
Operating expenses	30,454			31,391			30,051			31,357			123,253
General and administrative expenses	3,499			3,283			3,740			3,920			14,442
Deferred rent, depreciation, amortization and preopening expenses	3,142			3,029			2,601			2,456			11,228
Asset impairment charge	—			907			—			75			982
Total cost of sales and expenses	48,955			50,932			47,708			49,921			197,516
Income from operations	997			1,648			1,946			2,677			7,268
Other expense:
Interest expense, net	(2,650		)	(2,621		)	(2,613		)	(2,527		)	(10,411		)
Other expense	(2,650		)	(2,621		)	(2,613		)	(2,527		)	(10,411		)
Net loss	$	(1,653	)	$	(973	)	$	(667	)	$	150		$	(3,143	)
Basic and diluted loss per share	$	(0.57	)	$	(0.33	)	$	(0.23	)	$	0.05		$	(1.06	)
Weighted average shares outstanding - basic and diluted	2,925,520			2,947,691			2,953,864			3,012,982			2,960,025

	Quarter 1 March 31, 2004			Quarter 2 June 30, 2004			Quarter 3 September 29, 2004			Quarter 4 December 29, 2004			Year December 29, 2004
Net sales	$	49,426		$	51,754		$	49,260		$	49,968		$	200,408
Cost of sales and expenses:
Cost of sales	11,556			12,883			12,256			12,536			49,231
Operating expenses	29,627			33,469			29,509			29,451			122,056
General and administrative expenses	3,093			3,478			2,655			3,839			13,065
Deferred rent, depreciation, amortization and preopening expenses	3,166			3,108			3,244			3,139			12,657
Asset impairment charge	—			3,894			—			2,855			6,749
Total cost of sales and expenses	47,442			56,832			47,664			51,820			203,758
Income (loss) from operations	1,984			(5,078		)	1,596			(1,852		)	(3,350		)
Other expense:
Interest expense, net	(2,638		)	(2,661		)	(2,664		)	(2,650		)	(10,613		)
Other expense	(2,638		)	(2,661		)	(2,664		)	(2,650		)	(10,613		)
Net loss	$	(654	)	$	(7,739	)	$	(1,068	)	$	(4,502	)	$	(13,963	)
Basic and diluted loss per share	$	(0.22	)	$	(2.63	)	$	(0.36	)	$	(1.54	)	$	(4.74	)
Weighted average shares outstanding - basic and diluted	2,958,436			2,945,040			2,944,337			2,928,740			2,943,841

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EXHIBIT LISTING AND INDEX

Exhibit No.	Description
2.1 (a)	Agreement and Plan of Merger, dated as of May 13, 1998 among Bertucci’s, Inc., NE Restaurant Company, Inc. (“NERCO”) and NERC Acquisition Corp.
3.1 (a)	Certificate of Incorporation of NERCO.
3.2 (a)	Certificate of Amendment of Certificate of Incorporation of NERCO, dated August 1, 1998.
3.3 (a)	Certificate of Amendment of Certificate of Incorporation of NERCO, dated August 20, 1998.
3.4 (a)	By-laws of NERCO.
3.25 (d)	Certificate of Amendment of Certificate of Incorporation of NERCO, dated August 16, 2001.
4.1 (a)	Indenture, dated July 20, 1998 between NERCO and United States Trust Company of New York (“U.S. Trust”) as Trustee (including the form of 10 ¾% Senior Note due July 15, 2008).
4.2 (a)	Supplemental Indenture, dated as of July 21, 1998 by and among Bertucci’s, Inc., Bertucci’s Restaurant Corp., Bertucci’s Securities Corporation, Berestco, Inc., Sal & Vinnie’s Sicilian Steakhouse, Inc., Bertucci’s of Anne Arundel County, Inc., Bertucci’s of Columbia, Inc., Bertucci’s of Baltimore County, Inc., Bertucci’s of Bel Air, Inc. and Bertucci’s of White Marsh, Inc. (collectively, the “Guarantors”), NERCO and U.S. Trust
4.3 (a)	Purchase Agreement, dated July 13, 1998 by and among NERCO, Chase Securities Inc. and BancBoston Securities Inc.
4.4 (a)	Amendment No. 1 to the Purchase Agreement, dated July 21, 1998 by and among NERCO, Chase Securities Inc., BancBoston Securities Inc. and the Guarantors
4.5 (a)	Exchange and Registration Rights Agreement, dated July 20, 1998 by and among NERCO, Chase Securities Inc. and BancBoston Securities Inc.
4.6 (a)	Amendment No. 1 to Exchange and Registration Rights Agreement, dated July 21, 1998 by and among NERCO, Chase Securities Inc., BancBoston Securities Inc. and the Guarantors.
4.9 (d)	Form of Stockholders Agreement, dated March 14, 2000 by and among certain stockholders of NERCO and NERCO.
10.1 (f)	The Company’s Amended and Restated 1997 Equity Incentive Plan for certain key employees and directors of the Company.*
10.21 (a)	Financial Advisory Services Agreement, dated July 21, 1998 by and between the Company and Jacobson Partners.
10.32 (b)	Primary Distribution Agreement dated as of May 13, 1999 by and between Maines Paper & Food Service, Inc. and Bertucci’s Corporation
10.33 (g)	Bertucci’s Corporation Savings and Investment Plan amended as of December 15, 2004.*
10.34 (g)	Bertucci’s Corporation Executive Savings and Investment Plan amended as of December 15, 2004.*
14.1 (e)	Code of Ethics for Senior Financial Officers.
21.1 (e)	Subsidiaries of Registrant.
31.1 (g)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by Stephen V. Clark.
31.2 (g)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by David G. Lloyd.
99-1 (c)	Asset Purchase and Sales Agreement dated November 20, 2000 and fully executed on April 12, 2001.

(a)Filed as an Exhibit, with the same Exhibit number, to Amendment No. 3 to the Company’s registration statement on Form S-4 filed with the Securities and Exchange Commission on November 12, 1998.

(b)Filed as an Exhibit, with the same Exhibit number, to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 15, 2000.

(c)Filed as an Exhibit, with the same Exhibit number, to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 18, 2001.

(d)Filed as an Exhibit, with the same Exhibit number, to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2002.

(e)Filed as an Exhibit, with the same Exhibit number, to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2004.

(f)Filed as Exhibit 10.22 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on October 3, 2005.

(g)Filed herewith.

*Management compensation plan or arrangement.

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EX-10.33

Exhibit 10.33

BERTUCCI’S CORPORATION SAVINGS
AND INVESTMENT PLAN

Table of Contents

ARTICLE ONE—DEFINITIONS

1.1 Account
1.2 Administrator
1.3 Beneficiary
1.4 Break in Service
1.5Code
1.6 Compensation
1.7 Effective Date
1.8 Employee
1.9 Employer
1.10 Employment Date
1.11 Highly Compensated Employee
1.12 Hour of Service
1.13 Leased Employee
1.14 Non-highly Compensated Employee
1.15Normal Retirement Date
1.16 Participant
1.17 Plan
1.18 Plan Year
1.19 Trust
1.20 Trustee
1.21 Valuation Date
1.22 Year of Service

ARTICLE TWO—SERVICE DEFINITIONS AND RULES

2.1 Year of Service
2.2 Break in Service
2.3 Leave of Absence
2.4 Rule of Parity on Return to Employment
2.5 Service in Excluded Job Classifications, with Related Companies or as a Leased Employee
2.6 Special Rules Relating to Veterans Reemployment Rights

ARTICLE THREE—PLAN PARTICIPATION

3.1 Participation
3.2 Reemployment of Former Participant
3.3 Termination of Eligibility
3.4 Election Not to Participate

ARTICLE FOUR—ELECTIVE DEFERRALS, CONTRIBUTIONS, ROLLOVERS AND TRANSFERS FROM OTHER PLANS

4. 1 Elective Deferrals
4.2 Employer Contributions
4.3 Rollovers and Transfers from Other Plans
4.4 Employer Contributions Are Discretionary
4.5 Timing of Contributions

ARTICLE FIVE—ACCOUNTING RULES

5.1 Investment of Accounts and Accounting Rules
5.2 Participants Omitted in Error

ARTICLE SIX—VESTING, RETIREMENT AND DISABILITY BENEFITS

6.1 Vesting
6.2 Forfeiture of Nonvested Balance
6.3 Return to Employment Before Distribution of Vested Account Balance
6.4 Normal Retirement
6.5 Permanent and Total Disability

ARTICLE SEVEN—MANNER AND TIME OF DISTRIBUTING BENEFITS

7.1 Manner of Payment
7.2 Time of Commencement of Benefit Payments
7.3 Furnishing Information
7.4 Minimum Distribution Rules for Installment Payments
7.5 Joint and Survivor Annuity
7.6 Death Benefit

7.7 Designation of Beneficiary
7.8 Time and Mode of Distributing Death Benefits
7.9 Qualified Pre-Retirement Survivor Annuity
7.10 In-Service Withdrawals
7.11 Involuntary Cash-Outs
7.12 Direct Rollover of Eligible Rollover Distributions

ARTICLE EIGHT—ADMINISTRATION OF THE PLAN

8.1 Plan Administration
8.2 Claims Procedure
8.3 Trust Agreement and Designation of Trustee

ARTICLE NINE—SPECIAL COMPLIANCE PROVISIONS

9.1 Distribution of Excess Elective Deferrals
9.2 Limitations on 40 1(k) Contributions
9.3 Nondiscrimination Test for Employer Matching Contributions
9.4 Limitation on the Multiple Use Alternative

ARTICLE TEN—LIMITATIONS ON ANNUAL ADDITIONS TO A PARTICIPANT’S ACCOUNT

10.1 Rules and Definitions

ARTICLE ELEVEN—AMENDMENT AND TERMINATION

11.1 Amendment
11.2 Termination of the Plan

ARTICLE TWELVE—TOP-HEAVY PROVISIONS

12.1 Applicability
12.2 Definitions
12.3 Allocation of Employer Contributions for a Top-Heavy Plan Year
12.4 Vesting

ARTICLE THIRTEEN—LOANS AND HARDSHIP DISTRIBUTIONS

13.1 Loans
13.2 Hardship Distributions

ARTICLE FOURTEEN—MISCELLANEOUS PROVISIONS

14.1 Plan Does Not Affect Employment
14.2 Successor to the Employer
14.3 Repayments to the Employer
14.4 Benefits not Assignable
14.5 Merger of Plans
14.6 Investment Experience not a Forfeiture
14.7 Distribution to Legally Incapacitated Person
14.8 Construction
14.9 Governing Documents
14.10 Governing Law
14.11 Headings
14.12 Counterparts
14.13 Location of Participant or Beneficiary Unknown

ARTICLE FIFTEEN—MULTIPLE EMPLOYER PROVISIONS

15.1 Adoption of the Plan
15.2 Service
15.3 Plan Contributions
15.4 Determining Compensation
15.5 Transferring Employees
15.6 Delegation of Authority
15.7 Termination

SIGNATURE PAGE

BERTUCCI’S CORPORATION SAVINGS AND INVESTMENT PLAN

WHEREAS, Bertucci’s Corporation (hereinafter referred to as the “Emp1oyer) adopted the Bertucci’s Corporation Savings and Investment Plan (hereinafter referred to as the ‘Plan”) for the benefit of its Employees, effective as of September 1, 1992; and

WHEREAS, Article XVI of said Plan provides that the Employer may amend the Plan; and

WHEREAS, the Employer wishes to amend the Plan; and

WHEREAS, it is intended that the Plan is to be a qualified plan under Section 40 1(a) of the Internal Revenue Code and is to be for the exclusive benefit of the Participants and their Beneficiaries;

NOW, THEREFORE, the Plan is hereby amended by restating the Plan in its entirety as follows:

ARTICLE ONE—DEFINITIONS

For purposes of the Plan, unless the context or an alternative definition specified within another Article provides otherwise, the following words and phrases shall have the definitions provided:

1.1 “ACCOUNT” shall mean the individual bookkeeping accounts maintained for a Participant under the Plan which shall record (a) the Participant’s allocations of Employer contributions, (b) amounts of Compensation deferred to the Plan pursuant to the Participant’s election, (c) any amounts transferred to this Plan under Article Four from another qualified retirement plan, and (d) the allocation of Trust investment experience.

1.2 “ADMINISTRATOR” shall mean the Plan Administrator appointed from time to time in accordance with the provisions of Article Eight hereof.

1.3 “BENEFICIARY” shall mean any person, trust, organization, or estate entitled to receive payment under the terms of the Plan upon the death of a Participant.

1.4 “BREAK IN SERVICE” is defined in Article Two.

1.5 “CODE” shall mean the Internal Revenue Code of 1986, as amended from time to time.

1.6 “COMPENSATION” shall mean the compensation paid to a Participant by the Employer for the Plan Year which is reportable on Form W-2, but exclusive of commissions, compensation paid prior to the Participant’s entry into the Plan, and exclusive of any program of deferred compensation or additional benefits payable other than in cash. Compensation shall include elective contributions that are made by the Employer on behalf of a Participant that are not includible in gross income under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b), and, for Plan Years beginning on or after January 1, 2001, 132(f)(4).

For purposes of determining who is a Highly Compensated Employee, Compensation shall mean compensation as defined in Code Section 414(q) (4).

In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provisions of the Plan to the contrary, the annual compensation of each Employee taken into account under the Plan shall not exceed the OBRA ‘93 annual compensation limit. The OBRA ‘93 annual compensation limit is $150,000, as adjusted by the Commissioner for increases in the cost-of-living in accordance with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA ‘93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.

Any reference in this Plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA ‘93 annual compensation limit set forth in this provision.

If compensation for any prior determination period is taken into account in determining an Employee’s benefits accruing in the current Plan Year, the compensation for that prior determination period is subject to the OBRA ‘93 annual compensation limit in effect for that prior determination period. For this purpose, the OBRA ‘93 annual compensation limit is $150,000, as adjusted by the Commissioner for increases in the cost-of-living in accordance with Section 401(a)(17)(B) of the Code.

1.7 “EFFECTIVE DATE” The Plan’s initial Effective Date was September 1, 1992. The Effective Date of this restated Plan, on and after which it supersedes the terms of the existing Plan document, is January 1, 2005, except where the provisions of the Plan shall otherwise specifically provide. The rights of any Participant who separated from the Employer’s service prior to this date shall be established under the terms of the Plan and Trust as in effect at the time of the Participant’s separation from service, unless the Participant subsequently returns to service with the Employer. Rights of spouses and beneficiaries of such Participants shall also be governed by those documents.

1.8 “EMPLOYEE” shall mean a common law employee of the Employer. Employee shall not include any individual who the Employer has classified as an independent contractor solely on account of his reclassification by the Internal Revenue Service as an employee.

1.9 “EMPLOYER” shall mean the Employer named as party to the Plan, and shall include any successor(s) thereto which adopt this Plan. If, under state law, the Employer at any time is not governed by directors but instead by its stockholders, or if the Employer is an unincorporated business and is governed by its owners, reference herein to the Board of Directors shall be deemed to refer to the individual(s) empowered to vote on the Employer’s affairs.

1.10 “EMPLOYMENT DATE” shall mean the first date as of which an Employee is credited with an Hour of Service, provided that, in the case of a Break in Service, the Employment Date shall be the first date thereafter as of which an Employee is credited with an Hour of Service.

1.11 “HIGHLY COMPENSATED EMPLOYEE” shall mean:

(a)   Any Employee of the Employer who:

(1)           was a five percent (5%) owner of the Employer (as defined in Section 416(i)(1) of the Code) during the current or the preceding year; or

(2)           for the preceding year had Compensation from the Employer in excess of $80,000 (as adjusted by the Secretary of the Treasury pursuant to Section 41 5(d) of the Code).

(b)   A former Employee shall be treated as a Highly Compensated Employee if: (1) such Employee was a Highly Compensated Employee when such Employee separated from service, or (2) such Employee was a Highly Compensated Employee at any time after attaining age 55.

(c)   The determination of who is a Highly Compensated Employee, including the determination of the number and identity of the Employees in the top-paid group, will be made in accordance with

Section 4 14(q) of the Code, the regulations thereunder and other applicable guidance.

(d)   For purposes of this Section 1.11, the term “Compensation” means compensation within the meaning of Section 415(c)(3) of the Code. The determination will be made without regard to Sections 125, 402(e)(3), 402(h)(1)(B), and, for Plan Years beginning on or after January 1,2001, 132(f)(4) of the Code, and in the case of employer contributions made pursuant to a salary reduction agreement, without regard to Section 403(b) of the Code. For Plan Years beginning after December 31, 1997, for purposes of this Section 1.11, the term “Compensation” means compensation within the meaning of Section 415(c)(3) of the Code.

(e)   For purposes of this Section 1.11, an Employee is in the top-paid group of Employees for any year if such Employee is in the group consisting of the top twenty percent (20%) of the Employees when ranked on the basis of Compensation paid during such year.

The provisions of this Section 1.11 are effective for Plan Years beginning after December 3 1, 1996, except that, in determining whether an Employee is a Highly Compensated Employee in 1997, this provision is treated as having been in effect in 1996.

1.12 “HOUR OF SERVICE” shall mean:

(a) each hour for which an Employee is paid or entitled to payment for the performance of duties for the Employer. These hours shall be credited to the Employee for the computation period in which the duties are performed; and

(b) each hour for which an Employee is paid, or entitled to payment, by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, or leave of absence. No more than 501 Hours of Service shall be credited under this subsection for any single continuous period during which no duties are performed (whether or not such period occurs in a single computation period). An hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed shall not be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker’s compensation, or unemployment compensation or disability insurance laws. Hours of Service shall not be credited for a payment which solely reimburses an Employee for medical or medically related expenses by the Employee. Hours under this subsection shall be calculated and credited pursuant to Section 2530.200b-2(b) and (c) of the Department of Labor regulations which is incorporated herein by this reference; and

(c) each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Flours of Service shall not be credited both under subsection (a) or subsection (b), as the case may be, and under this subsection (c). These hours shall be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement, or payment is made.

1.13 “LEASED EMPLOYEE” shall mean any person (other than an Employee of the Employer) who pursuant to an agreement between the Employer and any other person (“leasing organization”) has performed services for the Employer (or for the Employer and related persons determined in accordance with Section 414(n)(6) of the Code) on a substantially full-time basis for a period of at

least one year, and such services are performed under primary direction or control by the Employer. A person will not be considered a Leased Employee if the total number of Leased Employees does not exceed 20% of the Nonhighly Compensated Employees employed by the Employer, and if any such person is covered by a money purchase pension plan providing: (a) a nonintegrated employer contribution rate of at least 10% of compensation, as defined in Section 415(c)(3) of the Code, but including amounts contributed pursuant to a salary reduction agreement which are excludable from the employee’s gross income under Section 125, 402(e)(3), 402(h)(1)(B), or 403(b) of the Code; (b) immediate participation; and (c) full and immediate vesting. The provisions of this Section 1.13 are effective for Plan Years beginning after December 31, 1996.

1.14 “NONIIIGHLY COMPENSATED EMPLOYEE” shall mean an Employee of the Employer who is not a Highly Compensated Employee.

1.15 “NORMAL RETIREMENT DATE” shall mean the date a Participant reaches age 59’/2.

1.16 “PARTICIPANT” shall mean any Employee who has satisfied the eligibility requirements of Article Three and who is participating in the Plan, including any such Employee who elects not to make elective deferrals under Section 4.1.

1.17 “PLAN” shall mean this Plan as set forth herein and as it may be amended from time to time.

1.18 “PLAN YEAR” shall mean the 12-consecutive-month period beginning January 1 and ending December 31.

1.19 “TRUST” shall mean the Trust Agreement entered into between the Employer and the Trustee forming part of this Plan, together with any amendments thereto. “Trust Fund” shall mean any and all property held by the Trustee pursuant to the Trust Agreement, together with income therefrom.

1.20 “TRUSTEE” shall mean the Trustee or Trustees appointed by the Employer, and any successors thereto.

1.21 “VALUATION DATE” shall mean each day of the Plan Year.

1.22 “YEAR OF SERVICE” or “SERVICE” and the special rules with respect to crediting Service are in Article Two of the Plan.

ARTICLE TWO—SERVICE DEFINITIONS AND RULES

Service is the period of employment credited under the Plan. Definitions and special rules related to Service are as follows:

2.1 YEAR OF SERVICE. For purposes of determining an Employee’s initial or continued eligibility to participate in the Plan (if a Year of Service is ever required for eligibility) and/or his nonforfeitable right to that portion of his Account attributable to Employer contributions, an Employee shall receive credit for each of the twelve (12)-month computation periods commencing on his Employment Date (or reemployment date) and anniversaries of that date and ending on the date a Break in Service begins.

2.2 BREAK IN SERVICE. A Break in Service or period of severance shall be a continuous period (as used for measuring Years of Service for vesting) in which an Employee is not employed by the Employer. Such period shall begin on the date the Employee retires, quits, or is discharged or dies or, if earlier, the (12)-month anniversary of the date on which the Employee otherwise ceased employment with the Employer.

2.3 LEAVE OF ABSENCE. A Participant on an unpaid leave of absence pursuant to the Employer’s normal personnel policies shall be credited with an Hour of Service for each twelve (12)-consecutive- month period while on such leave, provided the Employer acknowledges in writing that the leave is with its approval. These hours will be credited only for purposes of determining if a Break in Service has occurred and, unless specified otherwise by the Employer in writing, shall not be credited for eligibility to participate in the Plan, vesting, or qualification to receive an allocation of Employer contributions. However, if the Participant fails to return to Service prior to the expiration of such authorized leave, a Break in Service will be deemed to have commenced on the date such authorized leave commenced.

For any individual who is absent from work for any period by reason of the individual’s pregnancy, birth of the individual’s child, placement of a child with the individual in connection with the individual’s adoption of the child, or by reason of the individual’s caring for the child for a period beginning immediately following such birth or placement, the twelve (12)-consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a Break in Service.

2.4 RULE OF PARITY ON RETURN TO EMPLOYMENT. An Employee who returns to employment after a Break in Service shall retain credit for his pre-Break Years of Service, subject to the following rules:

(a) If a Participant incurs five (5)or more consecutive Breaks in Service, any Years of Service performed thereafter shall not be used to increase the vesting in his Account accrued prior to such five (5) or more consecutive Breaks in Service. Separate accounting shall be maintained thereafter with respect to that portion of such Participant’s Account accrued before and after such Breaks in Service occurred.

(b) If when a Participant incurred a Break in Service, he had not completed sufficient Years of Service to be vested in his Account, his pre-Break Years of Service shall be disregarded for vesting purposes if his consecutive Breaks in Service equal or exceed the greater of five (5)or the aggregate number of pre-Break Years of Service.

2.5 SERVICE IN EXCLUDED JOB CLASSIFICATIONS, WITH RELATED COMPANIES, OR AS A LEASED EMPLOYEE.

(a) Preamble. An Employee is not eligible to receive an allocation of Employer contributions or to participate under the Plan if his job classification is specifically excluded under Section 3.1. However, Employees in an ineligible job classification are entitled, together with Leased Employees and Employees of certain related businesses, to credit for their Service in the event that such Employees become employed in an eligible job classification.

(b) Definitions.

(1) Eligible Classification: An Employee will be considered in an eligible class of Employees for such period when his Employer has adopted the Plan and such Employee is not in an ineligible class of Employees.

(2) Ineligible Classification: An Employee will be considered in an ineligible class of Employees for any period when:

(A) the Employee is a Leased Employee;

(B) the Employee is employed in a job classification which is excluded under Section 3.1; or

(C) the Employee is an employee of an employer who is a member of a controlled group of businesses or an affiliated service group (as defined in Section 414 of the Code), which employer has not adopted this Plan.

(c) Service Rules for Ineligible Classifications. Hours of Service in an ineligible classification will be credited for purposes of determining Years of Service for eligibility to participate in the Plan under Section 3.1 and for purposes of determining the Employee’s vesting percentage in the event the Employee participates in the Plan.

(d) Construction. This Section is included in the Plan to comply with the Code provisions regarding the crediting of Service, and not to extend any additional rights to Employees in ineligible classifications other than as required by the Code and regulations thereunder.

2.6 SPECIAL RULES RELATING TO VETERANS’ REEMPLOYMENT RIGHTS.

Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code. The provisions of this Section 2.6 are effective December 12, 1994.

ARTICLE THREE—PLAN PARTICIPATION

3.1 PARTICIPATION. All Employees participating in this Plan prior to the Plan’s restatement shall continue to participate, subject to the terms hereof. Each other Employee shall become a Participant under the Plan effective as of the first day of the month coincident with or next following the later of the Employee’s completion of one Month of Service or attainment of age 21.

For purposes of this Section 3.1, an Employee shall be deemed to have completed one Month of Service on the one-month anniversary of his Employment Date.

In no event, however, shall any Employee participate under the Plan or be credited for Service under its terms (except as provided in Section 2.5): (1) while he is included in a unit of Employees covered by a collective bargaining agreement between the Employer and the Employee representatives under which retirement benefits were the subject of good faith bargaining (unless the collective bargaining agreement requires participation in this Plan); (2) while he is a nonresident alien employee who receives no earned income (within the meaning of Code Section 911(d)(2)) from the Employer which constitutes income from sources within the United States (within the meaning of Code Section 861(a)(3)); (3) while he is a Highly Compensated Employee; or (4) while he is an hourly paid employee other than a corporate administrative employee.

3.2 REEMPLOYMENT OF FORMER PARTICIPANT. A Participant whose participation ceased because of termination of employment with the Employer will immediately participate upon his reemployment and shall be eligible to make elective deferrals upon reemployment.

3.3 TERMINATION OF ELIGIBILITY. If a Participant shall become ineligible to participate in the Plan because the Participant’s job classification is specifically excluded under Section 3.1 or Section 2.5(b)(2), such Participant shall continue to vest in his Account under the Plan for each Year of Service completed while an ineligible Employee until such time as his Account is distributed to him pursuant to the terms of the Plan. If a Participant becomes ineligible during a Plan Year, such Participant shall receive an allocation of Employer contributions under Section 4.2 based upon the Participant’s Compensation as determined as of his termination of eligibility, provided such Participant is eligible to receive an allocation of Employer contributions under Section 4.2. Any such Participant’s Account shall continue to share in the allocation of investment experience under Section 5.1.

3.4ELECTION NOT TO PARTICIPATE. An Employee may, subject to the approval of the Employer, elect voluntarily not to participate in the Plan. The election not to participate in the Plan is irrevocable and must be communicated to the Employer, in writing, prior to the Participant’s date of initial eligibility to participate in the Plan.

ARTICLE FOUR—ELECTIVE DEFERRALS, CONTRIBUTIONS,
ROLLOVERS AND TRANSFERS FROM OTHER PLANS

4.1. ELECTIVE DEFERRALS.

(a) Elections. A Participant may elect in writing to defer a portion of his Compensation up to the maximum amount which will not cause the Plan to violate the provisions of Sections 9.2 and 10.1, or cause the Plan to exceed the maximum amount allowable as a deduction to the Employer under Code Section 404. A Participant may elect in writing to defer all or a portion of any cash bonus received during the Plan Year on a single sum basis; provided, however, that the limitation in the preceding sentence with respect to Compensation for the entire Plan Year is not exceeded. The amount of a Participant’s Compensation that is deferred in accordance with the Participant’s election shall be withheld by the Employer from the Participant’s Compensation on a ratable basis throughout the Plan Year and/or on a nonratable, single-sum basis. The amount deferred on behalf of each Participant shall be contributed by the Employer to the Plan and allocated to the Participant’s Account.

(b) Changes in Election. A Participant may prospectively elect to change or revoke the amount (or percentage) of his elective deferral during the Plan Year by filing an election with the Employer. The Participant shall be entitled to change the amount (or percentage) of his elective deferral which change shall be effective as of January 1, April 1, July 1 or October 1. A Participant’s revocation of his elective deferrals shall be effective as soon as possible following his election to cease deferrals. A Participant who has revoked his elective deferral may reenter the Plan on any January 1, April 1, July 1 or October 1 following his prior revocation of deferrals.

(c) Limitations on Deferrals. No Participant shall defer an amount which exceeds $9,500, or such amount in effect at the beginning of the calendar year as adjusted for cost-of-living increases under Section 402(g)(5) of the Code. All other plans, contracts, or arrangements of the Employer which permit elective deferrals (as defined in Code Section 402(g)(3)) shall be aggregated with this Plan in the calculation of the aforementioned limitation.

(d) Administrative Rules. All elections made under this Section 4.1, including the amount and frequency of deferrals, shall be subject to the rules of the Administrator which shall be consistently applied and which may be changed from time to time.

4.2EMPLOYER CONTRIBUTIONS.

(a) Allocation of Employer Matching Contributions. For each Plan Year, the Employer may contribute to the Plan, on behalf of each Participant eligible under Section 4.2(b) a discretionary matching contribution equal to a percentage of the eligible Participant’s elective deferrals that each such Participant is making under Section 4.1.

The Employer, by action of its Board of Directors, shall determine the amount, if any, of the Employer matching contribution. The Employers Board of Directors may also determine to raise, suspend or reduce its contributions under this Section for any Plan Year. Allocations under this Section shall be subject to the special rules of Section 12.3 in any Plan Year when the Plan is a Top-Heavy Plan.

Forfeitures which arise from Employer matching contributions shall first be used to pay any administrative expenses of the Plan. Any remaining forfeitures shall be used to reduce any Employer contribution.

(b) Eligibility for Employer Matching Contributions. To be eligible for a share of Employer matching contributions under Section 4.2(a), an Employee must (1) be qualified as a Participant under Section 3.1, (2) have made elective deferrals under Section 4.1, and (3) be employed on the last day of the Plan Year, unless not employed on account of disability, death, or retirement on or after Normal Retirement Date during the Plan Year.

(c) Discretionary Employer Contributions. In addition to any Employer matching contributions made under Section 4.2(a), Employer contributions may be made at the discretion of the Board of Directors of the Employer for any Plan Year, subject to limits for tax deductions under the Code and provided that the special allocation in Section 12.3 has been satisfied if the Plan is a Top-Heavy Plan. Forfeitures which arise from discretionary Employer contributions shall first be used to pay any administrative expenses of the Plan. Any remaining forfeitures shall be used to reduce any Employer contribution.

(d) Eligibility for Discretionary Employer Contributions. To be eligible for an allocation of discretionary Employer contributions under Section 4.2(c) for a Plan Year, an Employee must (1) be qualified as a Participant under Section 3.1, and (2) be employed on the last day of the Plan Year, unless not employed on account of disability, death, or retirement on or after Normal Retirement Date during the Plan Year.

(e) Allocation of Discretionary Employer Contributions. Any contribution made under Section 4.2(c) shall be allocated among Accounts of eligible Participants in accordance with the ratio that each such eligible Participant’s Compensation bears to the total Compensation of all such eligible Participants for the Plan Year.

4.3 ROLLOVERS AND TRANSFERS FROM OTHER PLANS. With the approval of the Administrator, there may be paid to the Trustee amounts which have been held under other plans qualified under Section 401 of the Code either (a) maintained by the Employer which have been discontinued or terminated with respect to any Employee, or (b) maintained by another employer with respect to which any Employee has ceased to participate. Any such transfer or rollover may also be made by means of an Individual Retirement Account qualified under Section 408 of the Code, where the Individual Retirement Account was used as a conduit from the former plan. Any amounts so transferred on behalf of any Employee shall be nonforfeitable and shall be maintained under a separate Plan account, to be paid in addition to amounts otherwise payable under this Plan. The amount of any such account shall be equal to the fair market value of such account as adjusted for income, expenses, gains, losses, and withdrawals attributable thereto.

If an Employee has not satisfied the eligibility requirements of Section 3.1 but has either transferred or rolled over an amount from another qualified retirement plan, the Employee shall be considered a Participant under the Plan but only to the extent of the amount transferred or rolled over to the Plan.

4.4 EMPLOYER CONTRIBUTIONS ARE DISCRETIONARY. This Plan is intended to be a discretionary profit sharing plan within the provisions of Section 401(a)(27) of the Code. Employer

contributions shall be made without regard to current or accumulated profits and may be modified or suspended by the Employer’s Board of Directors for any Plan Year.

4.5 TIMING OF CONTRIBUTIONS. Employer contributions shall be made to the Plan no later than the time prescribed by law for filing the Employer’s Federal income tax return (including extensions) for its taxable year ending with or within the Plan Year. Elective deferrals under Section 4.1 shall be paid to the Plan as soon as administratively possible but no later than the fifteenth business day of the calendar month following the calendar month to which such elective deferrals are applicable.

ARTICLE FIVE—ACCOUNTING RULES

5.1INVESTMENT OF ACCOUNTS AND ACCOUNTING RULES.

(a) Investment Funds. The investment of Participants’ Accounts shall be made in a manner consistent with the provisions of the Trust. The Administrator, in its discretion, may allow the Trust to provide for separate funds for the directed investment of each Participant’s Account.

(b)Participant Direction of investments. If the Administrator chooses to provide more than one investment fund, then each Participant may direct how his Account is to be invested among available investment funds in the percentage multiples established by the Administrator. A Participant may change his investment direction after advance notice to the Administrator, in accordance with uniform rules established by the Administrator. An investment direction may apply to the investment of future contributions and/or amounts previously accumulated in the Account. In the event a Participant makes no investment election, his Account shall be invested in the investment fund selected by the Administrator for all such similarly situated Accounts. If the Plan’s record keeper or investment manager is changed, the Administrator may suspend the Participant’s investment direction of his Account. If Participant direction of investments is suspended, the Administrator shall invest the Participants’ Accounts in an interest-bearing account(s) until such change has been completed.

The Plan is intended to constitute a qualified retirement plan described in Section 404(c) of the Employee Retirement Income Security Act of 1974, as amended, and regulations thereunder. As a result, the fiduciaries of the Plan may be relieved of liability for any losses which are the direct and necessary result of investment instructions given by a Participant.

(c) Safe Investment Option. The Administrator may provide that one of the investment funds offers both a reasonable safety of the principal amount invested and a reasonable rate of interest return. An investment fund composed of guaranteed interest contracts through an insurance company, a pooled fund of short-term bonds and notes, or a money market fund shall be deemed to meet these standards.

(d) Allocation of Investment Experience. As of each Valuation Date, the investment fund(s) of the Trust shall be valued at fair market value, and the income, loss, appreciation and depreciation (realized and unrealized), and any paid expenses of the Trust attributable to such fund shall be apportioned among Participants’ Accounts within the fund based upon the value of each Account within the fund as of the preceding Valuation Date. Adjustment of Accounts for investment experience shall be deemed to be made as of the Valuation Date to which the adjustment relates, even if actually made on a later date.

(e) Allocation of Elective Deferrals and Employer Contributions. Elective deferrals and Employer contributions shall be allocated to the Account of each eligible Participant as of the last day of the period for which the contributions are made.

(f)Manner and Time of Debiting Distributions. For any Participant who receives a distribution from his Account, distribution shall be made in accordance with the provisions dealing with the timing of commencement of benefit payments in Section 7.2. The distribution shall be equal to the fair market value of the Participant’s vested Account as of the Valuation Date preceding the distribution.

5.2 PARTICIPANTS OMITTED IN ERROR. In the event a Participant is not allocated a share of the Employer contribution as a result of an administrative error in any Plan Year, the Employer may elect to either (a) make an additional contribution on behalf of such omitted Participant in an appropriate amount, or (b) deduct the appropriate amount from the next succeeding Employer contribution and allocate such amount to the Participant’s Account prior to making the allocations set forth under Section 5.1(e).

ARTICLE SIX—VESTING, RETIREMENT AND DISABILITY
BENEFITS

6.1 VESTING. A Participant shall at all times have a nonforfeitable (vested) right to his Account derived from elective deferrals, Employer “fail-safe” contributions under Section 9.2 and/or 9.3, and rollovers or transfers from other plans, adjusted for investment experience. Except as otherwise provided with respect to Normal Retirement, disability, or death, a Participant shall have a nonforfeitable (vested) right to a percentage of his Account derived from Employer matching contributions and discretionary Employer contributions as follows:

Years of Service	Vested Percentage
Less than 2 years	0	%
2 years but less than 3	50	%
3 years but less than 4	75	%
4 years and thereafter	100	%

Notwithstanding the foregoing, any Participant who was a Participant in the Plan prior to January 1, 2005 shall be 25% vested upon completion of one Year of Service. Such Participant’s vested percentage after two or more7 Years of Service shall be determined in accordance with the schedule above.

6.2 FORFEITURE OF NON VESTED BALANCE. The nonvested portion of a Participant’s Account shall be forfeited as of the earlier of the last day of the Plan Year in which the Participant receives a complete distribution of his vested Account or the last day of the Plan Year in which the Participant incurs two (2) consecutive Breaks in Service (subject to restoration by the Employer if the Participant returns prior to incurring five (5) consecutive Breaks in Service). The amount forfeited shall be: (1) used to pay administrative expenses; (2) used to reduce Employer contributions; and/or (3) allocated as an Employer contribution, as set forth in Section 4.2.

If the Participant returns to the employment of the Employer prior to incurring five (5) consecutive Breaks in Service and prior to receiving a distribution of his vested Account the nonvested portion shall be restored. However, if the nonvested portion of the Participant’s Account was allocated as a forfeiture as the result of the Participant receiving a distribution of his vested Account balance, the nonvested portion shall be restored if:

(a) the Participant resumes employment prior to incurring five (5) consecutive Breaks in Service; and

(b) the Participant repays to the Plan, as of the earlier of (i) the date which is five (5) years after his reemployment date or (ii) the date which is the last day of the period in which the Participant incurs five (5) consecutive Breaks in Service following the date of distribution, an amount equal to the total distribution derived from Employer contributions under Sections 4.2 and 12.3.

The nonvested amount shall be restored to the Participant’s Account, without interest or adjustment for interim Trust valuation experience, by a special Employer contribution or from the next succeeding Employer contribution and forfeitures, as appropriate. Notwithstanding the foregoing, if the Participant’s nonvested amount was forfeited prior to the earlier of five (5) consecutive Breaks in Service and prior to distribution of the Participant’s vested Account, the nonvested amount shall be restored to the Participant’s Account, with interest or adjustment for interim Trust valuation experience, by a special Employer contribution or from the next succeeding Employer contribution and forfeitures, as appropriate.

A zero percent vested Participant shall be considered to have received a complete distribution of his vested Account as of the date of his first Break in Service, and if he returns to the employment of the Employer prior to incurring five (5) consecutive Breaks in Service, he shall be considered to have repaid such distribution as of his completion of one Year of Service after his resumption of employment.

6.3 RETURN TO EMPLOYMENT BEFORE DISTRIBUTION OF VESTED ACCOUNT BALANCE. If distribution is made to an Employee of less than the Employee’s entire vested Account, and if the Employee returns to Service, a separate record shall be maintained of said Account balance. The Employee’s vested interest at any time in this separate account shall be an amount equal to the formula P(AB+D)-D, where P is the vested percentage at the relevant time, AB is the Account balance at the relevant time, and D is the amount of the distribution made to the Employee.

6.4 NORMAL RETIREMENT. A Participant who is in the employment of the Employer at his Normal Retirement Date shall have a nonforfeitable interest in 100% of his Account if not otherwise 100% vested under the appropriate vesting schedule. A Participant who continues in employment after his Normal Retirement Date shall continue to participate under the Plan, but may elect in writing to have his Account payable at the time and in the manner specified in Article Seven.

6.5 PERMANENT AND TOTAL DISABILITY. If a Participant incurs a permanent and total disability while in the employ of the Employer, the Participant shall have a nonforfeitable interest in 100% of his Account, if not otherwise 100% vested under the appropriate vesting schedule. Payment of his Account balance will be made at the time and in a manner specified in Article Seven, following receipt by the Plan Administrator of the Participant’s distribution request. “Permanent and total disability” shall mean suffering from a physical or mental condition that, in the opinion of the Administrator and based upon appropriate medical advice and examination, can be expected to result in death or can be expected to last for a continuous period of no less than 12 months. The condition must, in accordance with uniform and consistent rules, be determined by the Administrator to prevent a Participant from engaging in substantial gainful activity. Receipt of a Social Security disability award shall be deemed proof of disability.

ARTICLE SEVEN—MANNER AND TIME OF DISTRIBUTING BENEFITS

7.1 MANNER OF PAYMENT. Effective January 1, 2005, with respect to distributions commencing on and after April 1, 2005, except as provided under Sections 7.5 and 7.9, the Participant’s vested Account shall be distributed to the Participant (or to the Participant’s Beneficiary in the event of the Participant’s death) in a single lump-sum payment.

Prior to April 1, 2005, except as provided under Sections 7.5 and 7.9, the Participant’s vested Account shall be distributed to the Participant (or to the Participant’s Beneficiary in the event of the Participant’s death) by any of the following methods, as elected by the Participant or, when applicable, the Participant’s Beneficiary:

(a) in a single lump-sum payment; or

(b) in periodic installments (at least annually), subject to the minimum distribution rules of Section 7.4.

7.2TIME OF COMMENCEMENT OF BENEFIT PAYMENTS.

(a) Normal or Late Retirement. Participants whose employment has terminated shall have distribution of their Account commence approximately 60 days following their Normal Retirement Date, unless the Participant elects to defer receipt of his Account. A Participant who has reached Normal Retirement Date but has not terminated employment may request distribution of his Account to commence approximately 60 clays following receipt by the Plan Administrator of his valid election.

(b) Disability Retirement. A Participant whose employment has terminated due to total and permanent disability may request the distribution of his Account to commence approximately 60 days following receipt by the Plan Administrator of his valid election.

(c) Pre-retirement Termination of Employment. If a Participant terminates employment for any reason other than Normal Retirement, disability or death, distribution of his vested Account balance shall commence upon the later of:

(1) The 60th day following the day on which he terminated employment; or

(2) The 60th day after a Participant’s election to commence payment is delivered to the Administrator.

Payment of benefits attributable to elective deferrals made pursuant to Section 4.1 may begin (notwithstanding this Section 7.2) prior to a Participant’s termination of employment and within a reasonable time after the occurrence of any of the following events: (l)termination of the Plan without the establishment of another defined contribution plan, other than an employee stock ownership plan (as defined in Section 4975(e)(7) of the Code), a simplified employee pension plan (as defined in Code

Section 408(k)) or a Simple IRA plan as defined in Code Section 408(p);  (2) the disposition by a corporation to an unrelated corporation of substantially all of the assets (within the meaning of Section 409(d)(2) of the Code) used in a trade or business of such corporation if such corporation continues to maintain the Plan after the disposition, but only with respect to employees who continue employment with the corporation acquiring such assets; or (3) the disposition by a corporation to an unrelated entity of such corporation’s interest in a subsidiary (within the meaning of Section 409(d)(3) of the Code) if such corporation continues to maintain the Plan, but only with respect to employees who continue employment with such subsidiary. All distributions that may be made pursuant to one or more of the foregoing distributable events are subject to the spousal and participant consent requirements (if applicable) of Sections 40l(a)(11) And 417 of the Code. In addition, such distributions must be made in a lump sum.

Unless the Participant elects otherwise, distribution of his vested Account shall begin no later than the 60th day after the latest of the close of the Plan Year in which:

(1) the Participant attains age sixty-five (65);

(2) occurs the tenth anniversary of the year in which the Participant commenced participation in the Plan; or

(3) the Participant terminates Service with the Employer.

(d) Latest Commencement Date. Effective January 1, 1997 or when first used by the Employer, if later, a Participant may elect to defer receipt of his retirement benefits; provided, however, in no event shall the distribution of benefits commence later than the April 1st of the calendar year following the later of: (I) the calendar year in which the Participant attains age 70½ or (2) the calendar year in which the Participant retires. In the case of a 5-percent owner (as defined in Section 416 of the Code), in no event shall the distribution of benefits commence later than the April 1 of the calendar year following the calendar year in which the Participant attains age 70½.

(1) Any Participant (other than a 5-percent owner) attaining age 70½ in years after 1995 may elect by April 1 of the calendar year following the year in which the Participant attained age 70½ (or by December 31, 1997 in the case of a Participant attaining age 70½ in 1996) to defer distributions until the April 1 of the calendar year following the calendar year in which the Participant retires. If no such election is made, the Participant will begin receiving distributions by the April 1 of the calendar year following the calendar year in which the Participant attained age 70½ (or by December 31, 1997 in the case of a Participant attaining age 70½ in 1996).

(2) The pre-retirement age 70½ distribution option is only eliminated with respect to Employees who reach age 70½ in or after a calendar year that begins after December 31, 1998. The pre-retirement age 70½ distribution option is an optional form of benefit under which benefits payable in a particular distribution form (including any modifications that may be elected after benefit commencement) commence at a time during the period that begins on or after January 1 of the calendar year in which an Employee attains age 70½ and ends April 1 of the immediately following calendar year.

The provisions of this Section 7.2(d) (relating to required distributions) are intended to comply with Section 401(a)(9) of the Code, the regulations thereunder and any other applicable guidance, and shall be so interpreted.

(e) If a distribution is one to which Sections 401(a)(11) and 417 of the Code do not apply, such distribution may commence less than 30 days after the notice required under Section 1.41 1(a)-11(c) of the Income Tax Regulations is given, provided that:

(1) the Administrator clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and

(2) the Participant, after receiving the notice, affirmatively elects a distribution.

(f) Notwithstanding the foregoing provisions of this Section 7.2, a distribution may be made to an “alternate payee” pursuant to, and if required by, a “Qualified Domestic Relations Order” even if the affected Participant has not separated from service and has not attained the “earliest retirement age” under the Plan. For purposes of this subsection (f), “Qualified Domestic Relations Order”, “alternate payee” and “earliest retirement age” shall have the meanings set forth in Section 414(p) of the Code.

7.3 FURNISHING INFORMATION. Prior to the payment of any benefit under the Plan, each Participant or Beneficiary may be required to complete such administrative forms and furnish such proof as is deemed necessary or appropriate by the Employer, Administrator, and/or Trustee.

7.4 MINIMUM DISTRIBUTION RULES FOR INSTALLMENT PAYMENTS. If a distribution is made in installments the following rules shall apply:

(a) Payments to Participant and Beneficiary. Payments shall commence no later than a date provided for in Section 7.2. The amount to be distributed each year shall be at least equal to the vested balance in the Participant’s Account as of the last day of the Plan Year in the prior calendar year multiplied by the following fraction: the numerator shall be one and the denominator shall be the life expectancy of the Participant or the joint life expectancy of the Participant and the Participant’s Beneficiary computed as of the aforementioned last day of the Plan Year and reduced by one for each succeeding year. Payments shall be restricted under this option to insure compliance with the minimum distribution incidental death benefit and other minimum distribution requirements of Section 401(a)(9) of the Code and the regulations promulgated thereunder.

Accordingly, in the case of a non-spouse Beneficiary, the lesser of the “applicable divisor” from the appropriate Table appearing in Proposed Regulation 1.401 (a)(9) - 2 Q. & A. 4 as modified by superseding regulation, and the joint life expectancy of the Participant and his Beneficiary shall be used in the denominator. All life expectancies will be determined by use of the expected return multiples in Tables V and VI of Section 1.72-9 of Income Tax Regulations.

(b) Beneficiaries for purposes of this Section shall be determined in accordance with regulations issued pursuant to Code Section 401(a)(9).

With respect to distributions under the Plan made for calendar years beginning on or after January 1, 2001, the Plan will apply the minimum distribution requirements of Section 401(a)(9) of the Code in

accordance with the Regulations under Section 401(a)(9) that were proposed on January 17, 2001, notwithstanding any provision of the Plan to the contrary. This amendment shall continue in effect until the end of the last calendar year beginning before the effective date of final Regulations under Section 401(a)(9) or such other date as may be specified in guidance published by the Internal Revenue Service.

7.5 JOINT AND SURVIVOR ANNUITY. This Section shall apply only to a Participant whose Account includes funds transferred from a plan subject to the provisions of Sections 401 (a)( Ii) and 417 of the Code and who does not die prior to the “annuity starting date.”

(a) If distribution of a Participant’s Account balance commences during his lifetime, his vested Account (subject to the provisions of this Section 7.5) shall be applied to the purchase of an annuity for the life of the Participant or, if the Participant is married as of his benefit commencement date, applied to the purchase of a “qualified joint and survivor annuity” for the life of the Participant and his “eligible spouse”. For this purpose, a “qualified joint and survivor annuity” is an immediate annuity for the life of the Participant with a survivor annuity for the life of the spouse which is 50% of the amount of the annuity which is payable during the joint lives of the Participant and his spouse.

(b) The Participant may elect to waive the life annuity or qualified joint and survivor annuity form of benefit at any time during the election period. Such an election must be made in writing in a form acceptable to the Administrator. However, an election to waive a qualified joint and survivor annuity shall not take effect unless the Participant’s spouse consents in writing to such election and the spouse’s consent acknowledges the effect of such election and is witnessed by a Plan representative or a Notary Public. In the event of such an election, distribution of the portion of the Participant’s Account otherwise subject to the provisions of this Section shall be paid to the Participant in the manner selected by the Participant under Section 7.1 above.

(c) “Eligible Spouse” is the spouse who (i) is married to the Participant for the one-year period ending prior to the earlier of benefit commencement or the date of the Participant’s death, or (ii) becomes married within the one-year period prior to benefit commencement and remains married for at least one year. A divorce occurring after benefit payments have commenced to the Participant will not cause an “eligible spouse” to lose such status, unless the spouse agrees to give up rights hereunder pursuant to the terms of a qualified domestic relations order described in Code Section 414(p). The divorce or death of an “eligible spouse” shall not entitle a subsequent spouse to status as an “eligible spouse.”

(d) The spousal waiver made in accordance with this Section must specify the non-spouse beneficiary, if any, and the alternative form of distribution neither of which may be changed unless a new spousal consent is obtained pursuant to Section 7.5(b). In addition, any waiver made in accordance with this Section may be revoked at any time prior to the commencement of benefits under the Plan. A Participant is not limited to the number of revocations or elections that may be made hereunder.

(e) The “election period” under this Section shall be the 90-day period prior to the “annuity starting date”, which date shall be the first day of the first period in which an amount is payable as an annuity or, if such benefit is not payable as an annuity, the first day on which the Participant may begin to receive a distribution from the Plan.

The written explanation described in Section 417(a)(3)(A) of the Code may be provided after the annuity starting date. The 90-day “applicable election period” to waive the qualified joint and survivor annuity described in Section 417(a)(6)(A) of the Code shall not end before the 30th day after the date on which such explanation is provided. The Secretary of the Treasury may, by regulations, limit the period of time by which the annuity starting date precedes the provision of the written explanation other than by providing that the annuity starting date may not be earlier than termination of employment. A Participant may elect (with any applicable spousal consent) to waive any requirement that the written explanation be provided at least 30 days before the annuity starting date (or to waive the 30-day requirement set forth above) if the distribution commences more than seven (7) days after such explanation is provided. The provisions of this Section 7.5(e) are effective for Plan Years beginning after December 31, 1996.

(f) The Administrator shall provide to each Participant, not more than ninety (90) days prior to the commencement of benefits, a written explanation of:

(1) the terms and conditions of the qualified joint and survivor annuity or life annuity;

(2) the Participant’s right to make, and the effect of an election to waive, such applicable annuity;

(3) the rights of the Participant’s spouse regarding the required consent to an election to waive the qualified joint and survivor annuity; and

(4) the right to make, and the effect of, a revocation of an election to waive the applicable annuity.

(g) Notwithstanding anything contained herein to the contrary, if the vested balance of the Participant’s Account is less than $5,000 ($3,500 prior to August 6, 1997 or when $5,000 first used by the Employer, if later than August 6, 1997), distribution of the Participant’s Account shall be made in the form of a lump sum payment. However, no distribution shall be made pursuant to this subsection after the first day of the first period for which an amount is received as an annuity unless the Participant and the Participant’s spouse, if applicable, consent in writing to such distribution. Notwithstanding the foregoing provisions of this Section 7.5(g), the first sentence of this Section 7.5(g) shall not apply with respect to: (1) distributions that are not subject to the qualified joint and survivor annuity requirements of this Section 7.5 and are made prior to March 22, 1999; and (2) distributions that are subject to the qualified joint and survivor annuity requirements of this Section 7.5 and are made prior to October 17, 2000, unless the vested balance of the Participant’s Account is less than $5,000 (or $3,500, as applicable) at the time of the distribution and at any time prior to the distribution.

7.6 DEATH BENEFIT.

(a) Death While an Employee. In the event of the death of a Participant while in the employ of the Employer, vesting in the Participant’s Account shall be 100% if not otherwise 100% vested under Section 6.1. The Account shall constitute the Participant’s death benefit to be distributed under this Article to the Participant’s Beneficiary.

(b) Death After Termination of Employment. In the event of the death of a former Participant after termination of employment but prior to the complete distribution of his vested Account balance under

the Trust, the undistributed vested balance of the Participant’s Account shall be paid to the Participant’s Beneficiary.

7.7 DESIGNATION OF BENEFICIARY. Each Participant shall file with the Administrator a designation of Beneficiary to receive payment of death benefits payable hereunder if such Beneficiary should survive the Participant. However, no married Participant’s designation of a Beneficiary other than his “eligible spouse” (as defined in Section 7.5(c)) shall be effective unless the Participant’s eligible spouse has signed a written consent witnessed by a Plan representative or a Notary Public, which consent provides for a designation of an alternative Beneficiary and the alternate form of distribution. Such designation of an alternative Beneficiary or alternative form may not be changed unless a new consent is signed by the eligible spouse.

Subject to the above, Beneficiary designations may include primary and contingent Beneficiaries, and may be revoked or amended at any time in similar manner or form, and the most recent designation shall govern. In the absence of an effective designation of Beneficiary, or if the Beneficiary dies before complete distribution of the Participant’s benefits, all amounts shall be paid to the surviving spouse of the Participant, if living, or otherwise equally to the Participant’s then-surviving children, whether by marriage or adopted, and the surviving issue of any deceased children, per stirpes, or, if none, to the Participant’s estate. Notification to Participants of the death benefits under the Plan and the method of designating a Beneficiary shall be given at the time and in the manner provided by regulations and rulings under the Code.

7.8 TIME AND MODE OF DISTRIBUTING DEATH BENEFITS. The Beneficiary shall be allowed to designate both the time and the mode of receiving benefits in accordance with Section 7.1 unless the Participant had designated a method or time in writing and indicated that either was not to be revocable by the Beneficiary. The Beneficiary’s election shall be delivered to the Administrator no later than the last day of the calendar year following the calendar year in which the Participant died. If such election is not made, payments shall commence at the “required time” specified in the next paragraph and shall be paid in a lump sum, subject to the special rules for surviving spouses.

The “required time” for commencement of distribution of any death benefit hereunder shall be within the period ending on the last day of the calendar year following the calendar year in which the Participant died, or in the case of a surviving spouse, within a reasonable time after the Participant’s death or, if the surviving spouse so elects, no later than the last day of the calendar year in which the Participant would have attained age 70½. If a surviving spouse dies before distributions begin, this paragraph shall be applied as if the surviving spouse were the Participant.

If payment commences at the “required time” and if all payments are designated to or for the benefit of one or more natural persons, the following distribution modes shall be available:

(a) a lump sum; or

(b) payments of installments (in a like manner to that in Section 7.4) over a period not to exceed the life expectancy of the Beneficiary calculated as of the “required time” in accordance with Table V of Section 1.72-9 of Income Tax Regulations.

To the extent payments are not designated to or for the benefit of a natural person, or if payments commence after the “required time,” the following distribution modes shall be available:

(1) a lump sum payable at any time within five (5) years of the Participant’s death; or

(2) payments of installments at such time and in such amount as determined by the Beneficiary, provided that all amounts be paid from the Trust within five (5) years of the Participant’s death.

If a Participant dies after payments have commenced, any survivor’s benefit must be paid no less rapidly than the method of payment in effect at the time of the Participant’s death.

7.9 QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY.

The provisions of this Section shall apply only to a Participant whose Account includes funds transferred from a plan subject to the provisions of Section 401(a)(11) and 417 of the Code and on whose behalf death benefits (including voluntary contributions) would amount to at least $5,000.

(a) If a Participant dies before distribution of benefits has commenced and is survived by his “eligible spouse” (as defined in Section 7.5(c)), one-half of the entire death benefit payable under the Plan shall be applied to the purchase of an annuity for the life of the Participant’s surviving spouse.

(b) The Participant may elect to waive such survivor annuity death benefit during the period commencing on the first day of the Plan Year in which the Participant attains age 35 (or the date he terminates employment, if earlier) and ending on the date of his death. Such an election must be made in writing and must include the Participant’s designation of a Beneficiary which designation may not be changed unless a new consent is signed by the “eligible spouse”. Spousal consent, hereunder, shall not take effect unless the Participant’s eligible spouse consents in writing to such election which consent acknowledges the effect of such election and is witnessed by a Plan representative or a Notary Public.

Any waiver made in accordance with this Section 7.9(b) may be revoked at any time prior to the commencement of benefits under the Plan. A Participant is not limited to the number of revocations or elections that may be made under this Section 7.9.

In the event of such an election, any death benefit otherwise subject to the provisions of this Section 7.9, shall be paid to the Participant’s Beneficiary in a manner selected by the Beneficiary or Participant, subject to the provisions of Section 7.8.

(c) The Administrator shall furnish each Participant with a written explanation of: (i) the terms and conditions of the survivor annuity; (ii) the Participant’s right to make, and the effect of, an election to waive the survivor annuity, and to revoke its election; and (iii) the right of the Participant’s eligible spouse to prevent such an election by withholding the necessary consent. Such explanation shall be provided to the Participant within the period beginning on the later of the first day of the Plan Year in which the Participant attains age 32 and ending on the last day of the Plan Year preceding the Plan Year in which the Participant attains age 35, or within a reasonable period after the Participant commences participation in the Plan, or after the Participant separates from Service if the Participant

has not attained age 35at the time of separation from Service.

7.10 IN-SERVICE WITHDRAWALS. Notwithstanding the foregoing provisions of this Article Seven, a Participant who is in the employ of the Employer and has attained age 59Y2 may withdraw all or a portion of his vested Account by filing a request with the Administrator at least 30 days before the proposed withdrawal date.

A Participant may withdraw the portion of his Account derived from rollover contributions at any time by filing a request with the Administrator at least 30 days before the proposed withdrawal date.

7.11 INVOLUNTARY CASH-OUTS. If a Participant terminates employment for any reason and his vested Account balance does not exceed $5,000, the Administrator may distribute such amount in a lump sum payment to the Participant without the consent of the Participant or his spouse. This Section is applicable only to Plan Years beginning after August 5, 1997 and subject to the date that the Plan first complied or will comply with this provision in operation.

7.12 DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS.

(a) Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee’s election, a Distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

(b) Definitions:

(1) Eligible Rollover Distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the Distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributees designated Beneficiary, or for a specified period often years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; any hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the Code; and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

(2) Eligible Retirement Plan: An eligible retirement plan is an Individual Retirement Account described in Section 408(a) of the Code, an Individual Retirement Annuity described in Section 408(b) of the Code, an Annuity Plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the Distributee’s Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the surviving spouse, an eligible retirement plan is an Individual Retirement Account or Individual Retirement Annuity.

(3) Distributee: A distributee includes an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving spouse and the Employee’s or former Employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 4.14(p) of the Code, are distributees with regard to the interest of the spouse or former spouse.

(4) Direct Rollover: A direct rollover is a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

ARTICLE EIGHT—ADMINISTRATION OF THE PLAN

8.1 PLAN ADMINISTRATION. The Employer shall be the Plan Administrator, hereinbefore and hereinafter called the Administrator, and named fiduciary of the Plan, unless the Employer, by action of its Board of Directors, shall designate a person or committee of persons to be the Administrator and named fiduciary. The administration of the Plan, as provided herein, including a determination of the payment of benefits to Participants and their Beneficiaries, shall be the responsibility of the Administrator. The Administrator shall have the right to construe and interpret the Plan, decide all questions of eligibility and determine the amount, manner and time of payment of any distributions under the Plan to the fullest extent provided by law and in its sole discretion; and interpretations or decisions made by the Administrator will be conclusive and binding on all persons having an interest in the Plan. In the event more than one party shall act as Administrator, all actions shall be made by majority decisions. In the administration of the Plan, the Administrator may (a) employ agents to carry out nonfiduciary responsibilities (other than Trustee responsibilities), (b) consult with counsel, who may be counsel to the Employer, and (c) provide for the allocation of fiduciary responsibilities (other than Trustee responsibilities) among its members. Actions dealing with fiduciary responsibilities shall be taken in writing and the performance of agents, counsel and fiduciaries to whom fiduciary responsibilities have been delegated shall be reviewed periodically.

The expenses of administering the Plan and the compensation of all employees, agents, or counsel of the Administrator, including the accounting fees, the record keeper’s fees, and the fees of any benefit consulting firm, shall be paid by the Plan, or shall be paid by the Employer if the Employer so elects. No compensation may be paid by the Plan to full-time Employees of the Employer.

The Administrator shall obtain from the Trustee, not less often than annually, a report with respect to the value of the assets held in the Trust Fund, in such form as is required by the Administrator.

The Administrator shall administer the Plan and adopt such rules and regulations as, in the opinion of the Administrator, are necessary or advisable to implement and administer the Plan and to transact its business.

8.2 CLAIMS PROCEDURE. Pursuant to procedures established by the Administrator, adequate notice in writing shall be provided to any Participant or Beneficiary whose claim for benefits under the Plan has been denied within 90 days of receipt of such claim. Such notice shall set forth the specific reason for such denial, shall be written in a manner calculated to be understood by the claimant, and shall advise of the right to administrative review. If such review is requested by the claimant or his authorized representative within 90 days after receipt by the claimant of written notification of denial of his claim, the Administrator shall afford a reasonable opportunity for a full and fair review by the Administrator of the decision denying the claim. The review shall focus on the additional facts, legal interpretations or material, if any, presented by the claimant. A hearing at its place of business may be scheduled by the Administrator, but a hearing is not required under the review procedure.

8.3 TRUST AGREEMENT AND DESIGNATION OF TRUSTEE. The Employer has created and entered into a Trust Agreement with the Trustee as designated therein. The Employer may designate any number of persons, parties, corporate fiduciaries, or any combination thereof to act as Trustees, as the Employer deems appropriate. The Employer may appoint an investment manager or managers to manage (including the power to acquire and dispose of) all or any part of the Trust assets, as provided more fully in the Trust Agreement.

ARTICLE NINE—SPECIAL COMPLIANCE PROVISIONS

9.1 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS. If, as the result of administrative error, the amount of any elective deferral made by a Participant exceeds the dollar limitation of Section 4.1(c), then the excess amount, and any income allocable thereto, shall be distributed to such Participant by the April 15 following the calendar year in which the excess elective deferral is made to the Plan. All Employer matching contributions which relate to distributions of excess elective deferrals shall be forfeited.

9.2 LIMITATIONS ON 401(k) CONTRIBUTIONS.

(a) Average Actual Deferral Percentage Test. Amounts contributed as elective deferrals under Section 4. 1(a) and any “fail-safe” contributions made under this Section are all considered to be amounts deferred pursuant to Section 401(k) of the Code. For purposes of this Article, these amounts are referred to as the “deferred amounts.”

As of the last day of each Plan Year, the deferred amounts for the Plan Year for the Participants who are Highly Compensated Employees shall satisfy either of the following tests:

(1) The average actual deferral percentage for the Plan Year for the eligible Participants who are Highly Compensated Employees shall not exceed the average actual deferral percentage for the prior Plan Year for eligible Participants who were Nonhighly Compensated Employees multiplied by 1.25; or

(2) The average actual deferral percentage for the Plan Year for eligible Participants who are Highly Compensated Employees shall not exceed the average actual deferral percentage for the prior Plan Year for eligible Participants who were Nonhighly Compensated Employees multiplied by 2, provided that the average actual deferral percentage for the Plan Year for eligible Participants who are Highly Compensated Employees does not exceed the average actual deferral percentage for the prior Plan Year for eligible Participants who were Nonhighly Compensated Employees by more than two (2) percentage points, or such lesser amount as the Secretary of the Treasury shall prescribe to prevent the multiple use of this alternative limitation with respect to any Highly Compensated Employee. If elected by the Employer, the average actual deferral percentage tests in (1) and (2) above shall be applied by comparing the current Plan Year’s average actual deferral percentage for Participants who are Highly Compensated Employees with the current Plan Year’s average actual deferral percentage for Participants who are Nonhighly Compensated Employees. Once made, this election can only be undone if the Plan meets the requirements for changing to prior year testing as set forth in Internal Revenue Service Notice 98-1 (or superseding guidance).

A Participant is a Highly Compensated Employee for a particular Plan Year if he meets the definition of Highly Compensated Employee in effect for that Plan Year. Similarly, a Participant is a Nonhighly Compensated Employee for a particular Plan Year if he does not meet the definition of a Highly Compensated Employee in effect for that Plan Year.

For purposes of the above tests, the “actual deferral percentage” shall mean the ratio (expressed as a percentage) of the deferred amounts on behalf of the “eligible Participants” for the Plan Year bears to

the eligible Participants’ Compensation. The “average actual deferral percentage” shall mean the average (expressed as a percentage) of the actual deferral percentages of the eligible Participants in each group. “Eligible Participants” shall mean each Employee who is eligible to have elective deferrals contributed to his Account.

A deferred amount will be taken into account under the actual deferral percentage test for a Plan Year only if it relates to Compensation that either would have been received by the Participant in the Plan Year (but for the deferral election) or is attributable to services performed by the Participant in the Plan Year and would have been received by the Participant within 2 ‘/2 months after the close of the Plan Year (but for the deferral election). In addition, a deferred amount will be taken into account under the actual deferral percentage test for a Plan Year only if it is allocated to the Participant as of a date within that Plan Year. For this purpose, a deferred amount is considered allocated as of a date within a Plan Year if the allocation is not contingent on participation or performance of services after such date and the deferred amount is actually paid to the Trust no later than twelve (12) months after the Plan Year to which the deferred amount relates.

For purposes of this Section 9.2, the actual deferral percentage for any eligible Participant who is a Highly Compensated Employee for the Plan Year and who is eligible to have elective deferrals allocated to his account under two or more plans or arrangements described in Section 401(k) of the Code that are maintained by the Employer or an affiliated employer shall be determined as if all such deferrals were made under a single arrangement. In the event that this Plan satisfies the requirements of Section 410(b) or Section 401(a)(4) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of Section 410(b) or Section 401 (a)(4)of the Code only if aggregated with this Plan, then the provisions of this Section 9.2 shall be applied by determining the actual deferral percentage of eligible Participants as if all such plans were a single plan.

The determination and treatment of elective deferrals and the actual deferral percentage of any Participant shall be subject to the prescribed requirements of the Secretary of the Treasury.

In the event the rate of deferrals made by eligible Participants who are Highly Compensated Employees is in excess of the deferral rate allowed under this Section 9.2(a) or the contribution rate allowed under Section 9.3(a), and the Employer has elected to use the current year testing method pursuant to this Section 9.2(a), the Employer in its discretion may make a “qualified nonelective contribution” for Participants who are Nonhighly Compensated Employees who are eligible to have elective deferrals contributed to their Accounts and who have been credited with 1,000 Hours of Service in the Plan Year and who are employed on the last day of the Plan Year, to be allocated among their Accounts in proportion to their Compensation for the Plan Year, as a uniform percentage of Compensation as determined by the Board of Directors, as a fixed dollar amount as determined by the Board of Directors, or in any other nondiscriminatory manner as determined by the Board of Directors. A “qualified nonelective contribution” is a contribution (other than a matching contribution or a qualified matching contribution) made by the Employer and allocated to Participants’ accounts that the Participants may not elect to receive in cash until distributed from the Plan; that are nonforfeitable when made; and that are distributable only in accordance with the distribution provisions that are applicable to elective deferrals and qualified matching contributions. The provisions of Regulation Section 1.401(k) - 1(b)(5) are incorporated herein by reference.

The provisions of Section 401(k)(3)(A) of the Code, as amended by the Small Business Job Protection Act of 1996, are incorporated herein by reference.

The provisions of Section 9.2(a) are effective for Plan Years beginning after December 31, 1996.

(b) Distributions of Excess Contributions.

(1) In General. If the average actual deferral percentage test of Section 9.2(a) is not satisfied for a Plan Year, then the “excess contributions” and income allocable thereto shall be distributed to the extent allowable under Treasury regulations no later than the last day of the Plan Year following the Plan Year for which the excess contributions were made. However, if such excess contributions are distributed later than 2 ½ months following the last day of the Plan Year in which such excess contributions were made, a 10% excise tax will be imposed upon the Employer with respect to these excess contributions. Excess contributions are reduced by excess deferrals previously distributed pursuant to Section 402(g) of the Code.

(2) Excess Contributions. For purposes of this Section 9.2(b), “excess contributions” shall mean, with respect to any Plan Year, the excess of the aggregate amount of Participant deferred amounts under Section 4.1 actually taken into account in computing the actual deferral percentage of Highly Compensated Employees for such Plan Year over the maximum amount of all such contributions permitted under the test under Section 9.2(a) (determined by reducing contributions made on behalf of Highly Compensated Employees in order of the actual deferral percentages, beginning with the highest of such percentages). Excess contributions are allocated to the Highly Compensated Employees with the largest amounts of employer contributions taken into account in calculating the average actual deferral percentage test for the year in which the excess arose, beginning with the Highly Compensated Employee with the largest amount of such employer contributions and continuing in descending order until all the excess contributions have been allocated. For purposes of the preceding sentence, the “largest amount” is determined after distribution of any excess contributions. The amount of excess contributions to be distributed shall be reduced by excess elective deferrals previously distributed for the taxable year ending in the same Plan Year and excess elective deferrals to be distributed for a taxable year shall be reduced by excess contributions previously distributed for the Plan Year beginning in such taxable year.

The provisions of Section 9.2(b)(2) are effective for Plan Years beginning after December 31, 1996.

(3) Determination of Income. The income allocable to excess contributions shall be determined by multiplying the income allocable to the Participant’s “deferred” amounts for the Plan Year by a fraction, the numerator of which is the excess contributions made on behalf of the Participant for the preceding Plan Year, and the denominator of which is the sum of the Participant’s Account balances attributable to Participant’s deferred amounts on the last day of the preceding Plan Year. Income allocable to the period between the last day of the preceding Plan Year and the date of distribution shall be disregarded in determining income.

(4) Maximum Distributable Amount. The excess contributions to be distributed to a Participant shall be adjusted for income and, if there is a loss allocable to the excess contribution, shall in no event be less than the lesser of the Participant’s Account under the Plan or the Participant’s elective deferrals for the Plan Year. Excess contributions shall be distributed from that portion of the Participant’s Account attributable to Participant elective deferrals to the extent allowable under Treasury

regulations.

(5) Distribution of Employer Matching Contributions. All Employer matching contributions which relate to distributions of excess contributions shall be forfeited.

9.3 NONDISCRIMINATION TEST FOR EMPLOYER MATCHING CONTRIBUTIONS.

(a) Average Contribution Percentage Test. The provisions of this Section 9.3 shall apply if Employer matching contributions are made in any Plan Year under Section 4.2(b) and such matching contributions are not used to satisfy the average actual deferral percentage test of Section 9.2.

As of the last day of each Plan Year, the average contribution percentage for Highly Compensated Employees for the Plan Year shall satisfy either of the following tests:

(1) The average contribution percentage for the Plan Year for eligible Participants who are Highly Compensated Employees shall not exceed the average contribution percentage for the prior Plan Year for eligible Participants who were Nonhighly Compensated Employees for the prior Plan Year multiplied by 1.25; or

(2) The average contribution percentage for the Plan Year for eligible Participants who are Highly Compensated Employees shall not exceed the average contribution percentage for the prior Plan Year for eligible Participants who were Nonhighly Compensated Employees for the prior Plan Year multiplied by 2, provided that the average contribution percentage for the Plan Year for eligible Participants who are Highly Compensated Employees does not exceed the average contribution percentage for the prior Plan Year for eligible Participants who were Nonhighly Compensated Employees by more than two (2) percentage points or such lesser amount as the Secretary of the Treasury shall prescribe to prevent the multiple use of this alternative limitation with respect to any Highly Compensated Employee.

For purposes of the above tests, the “average contribution percentage” shall mean the average (expressed as a percentage) of the contribution percentages of the “eligible participants” in a group. The “contribution percentage” shall mean the ratio (expressed as a percentage) that any Employer matching contributions under the Plan on behalf of the eligible Participant for the Plan Year bears to the eligible Participant’s Compensation for the Plan Year. “Eligible Participants” shall mean each Employee who is eligible to receive an allocation of Employer matching contributions.

If elected by the Employer, the average contribution percentage tests in (1) and (2) above shall be applied by comparing the current Plan Year’s average contribution percentage for Participants who are Highly Compensated Employees with the current Plan Year’s average contribution percentage for Participants who are Nonhighly Compensated Employees. Once made, this election can only be undone if the Plan meets the requirements for changing to prior year testing as set forth in Internal Revenue Service Notice 98-1 (or superseding guidance).

A Participant is a Highly Compensated Employee for a particular Plan Year if he meets the definition of Highly Compensated Employee in effect for that Plan Year. Similarly, a Participant is a Nonhighly Compensated Employee for a particular Plan Year if he does not meet the definition of a Highly Compensated Employee in effect for that Plan Year.

For purposes of this Section 9.3, the contribution percentage for any eligible Participant who is a Highly Compensated Employee for the Plan Year and who is eligible to receive Employer matching contributions, or elective deferrals allocated to his account under two or more plans described in Section 401(a) of the Code or under arrangements described in Section 401(k) of the Code that are maintained by the Employer or an affiliated employer, shall be determined as if all such contributions and elective deferrals were made under a single plan.

In the event that this Plan satisfies the requirements of Section 410(b) or Section 401(a)(4) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of Section 410(b) or Section 401(a)(4) of the Code only if aggregated with this Plan, then the provisions of this Section 9.3 shall be applied by determining the contribution percentages of eligible Participants as if all such plans were a single plan.

The determination and treatment of the contribution percentage of any Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.

In the event the rate of contributions made by eligible Participants who are Highly Compensated Employees is in excess of the contribution rate allowed under this Section 9.3(a) or the deferral rate allowed under Section 9.2(a), and the Employer has elected to use the current year testing method pursuant to this Section 9.3(a), the Employer in its discretion may make a special “qualified matching contribution” contribution for Participants who are Nonhighly Compensated Employees who are eligible to receive Employer matching contributions and who have been credited with 1,000 Hours of Service in the Plan Year and who are employed on the last day of the Plan Year, to be allocated among their Accounts in proportion to their Compensation for the Plan Year, as a uniform percentage of Compensation as determined by the Board of Directors, as a fixed dollar amount as determined by the Board of Directors, or in any other nondiscriminatory manner as determined by the Board of Directors. A “qualified matching contribution” is a matching contribution which is subject to the distribution and nonforfeitability requirements under Section 401(k) of the Code when made. The provisions of Regulation Sections 1.401(k)-1(b)(5), 1.401(k)-1(g)(13) and 1.401(m)-1(b)(5) are incorporated herein by reference.

The provisions of Section 401(m)(2)(A) of the Code, as amended by the Small Business Job Protection Act of 1996, are incorporated herein by reference.

The provisions of Section 9.3(a) are effective for Plan Years beginning after December 31, 1996.

(b) Distribution of Excess Employer Matching Contributions.

(1) In General. If the nondiscrimination tests of Section 9.3(a) are not satisfied for a Plan Year, then the “excess contributions” and any income allocable thereto shall be forfeited, if otherwise forfeitable, no later than the last day of the Plan Year following the Plan Year for which said nondiscrimination tests are not satisfied, and shall be used to reduce Employer contributions under Section 4.2 1(a). To the extent that such “excess contributions” are nonforfeitable, such excess contributions shall be distributed to the Participant on whose behalf the excess contributions were made no later than the last day of the Plan Year following the Plan Year for which such “excess contributions” are made. However, if such excess contributions are distributed later than 2V2 months following the last day of the Plan Year in which such excess contributions were made, a 10% excise tax will be imposed upon the Employer with respect to those excess contributions.

(2) Excess contributions. For purposes of this Section 9.3(b), “excess contributions” shall mean, with respect to any Plan Year, the excess of the aggregate amount of Employer matching contributions and, if applicable, elective deferrals and Employer contributions attributable to elective deferrals actually made on behalf of Highly Compensated Employees for such Plan Year over the maximum amount of all such contributions permitted under the nondiscrimination tests under Section 9.3(a) (determined by reducing contributions made on behalf of Highly Compensated Employees in order of their contribution percentages, beginning with the highest of such percentages). Excess contributions are allocated to the Highly compensated Employees with the largest amounts of employer

contributions taken into account in calculating the average contribution percentage test for the year in which the excess arose, beginning with the Highly Compensated Employee with the largest amount of such employer contributions and continuing in descending order until all the excess contributions have been allocated. For purposes of the preceding sentence, the “largest amount” is determined after distribution of any excess contributions.

The provisions of Section 9.3(b)(2) are effective for Plan Years beginning after December 31, 1996.

(3) Determination of Income. The income allocable to excess contributions shall be determined by multiplying the income allocable to the Employer matching contributions for the Plan Year by a fraction, the numerator of which is the excess contributions on behalf of the Participant for the Plan Year, and the denominator of which is the sum of the Participant’s Account balances attributable to Employer matching contributions on the last day of the preceding Plan Year. Income allocable to the period between the last day of the preceding Plan Year and the date of distribution shall be disregarded in determining income.

9.4LIMITATION ON THE MULTIPLE USE ALTERNATIVE. The sum of the average actual deferral percentage of Highly Compensated Employees under Section 9.2(a) and the average contribution percentage of Highly Compensated Employees under Section 9.3(a) shall not exceed the following:

(a) 125% of the average actual deferral percentage of the Nonhighly Compensated Employees under Section 9.2(a) or the average contribution percentage of the Nonhighly Compensated Employees under Section 9.3(a), whichever is greater; and

(b) two (2) percentage points more than the average actual deferral percentage of the Nonhighly Compensated Employees under Section 9.2(a) or the average contribution percentage of the Nonhighly Compensated Employees under Section 9.3(a), whichever is smaller, and in no event more than two (2) times such lesser amount.

(c) If the limits set forth herein are exceeded, the average contribution percentage of the Highly Compensated Employees shall be reduced in accordance with the provisions of Section 9.3(b) by forfeiting “excess contributions”, if forfeitable, or distributing “excess contributions”, if nonforfeitable, as set forth in Section 9.3(b). In lieu of reducing the average contribution percentage, in accordance with Section 9.3(b), the Administrator may reduce the average actual deferral percentage of the Highly Compensated Employees in accordance with the provisions of Section 9.2(b) by distributing “excess contributions” as set forth in Section 9.2(b). The reductions under this Section shall be made only to the extent necessary to comply with the restrictions on the multiple use set forth in Code Section 401 (m)(9).

ARTICLE TEN—LIMITATIONS ON ANNUAL ADDITIONS
TO A PARTICIPANT’S ACCOUNT

10.1 RULES AND DEFINITIONS.

(a) Rules. The following rules limit additions to Participants1 Accounts:

(1) If the Participant does not participate, and has never participated, in another qualified plan maintained by the Employer, the amount of annual additions which may be credited to the Participant’s Account for any limitation year will not exceed the lesser of the maximum permissible amount or any other limitation contained in this Plan. If the Employer contribution that would otherwise be allocated to the Participant’s Account would cause the annual additions for the limitation year to exceed the maximum permissible amount, the amount allocated will be reduced so that the annual additions for the limitation year will equal the maximum permissible amount.

(2) Prior to determining the Participant’s actual Compensation for the limitation year, the Employer may determine the maximum permissible amount for a Participant on the basis of a reasonable estimation of the Participant’s Compensation for the limitation year, uniformly determined for all Participants similarly situated.

(3) As soon as is administratively feasible after the end of the limitation year, the maximum permissible amount for the limitation year will be determined on the basis of the Participant’s actual Compensation for the limitation year.

(4) If, as a result of the allocation of forfeitures, a reasonable error in estimating a Participant’s Compensation, a reasonable error in determining the amount of elective deferrals (within the meaning of Code Section 402(g)(3)) that may be made with respect to any Participant, or other facts and circumstances to which Regulation Section 1.415-6(b)(6) shall be applicable, there is an excess amount, the excess will be disposed of as follows:

(A) Any elective deferral contributions, to the extent they would reduce the excess amount, will be returned to the Participant.

(B) If an excess amount still exists after the application of subparagraph (A) and the Participant is covered by the Plan at the end of the limitation year, the excess amount in the Participant’s Account will be used to reduce Employer contributions (including any allocation of forfeitures) for such Participant in the next limitation year, and each succeeding limitation year if necessary.

(C) If an excess amount still exists after the application of subparagraphs (A) and (B), and the Participant is not covered by the Plan at the end of the limitation year, the excess amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future Employer contributions (including allocation of any forfeitures) for all remaining Participants in the next limitation year, and each succeeding limitation year if necessary.

(D) If a suspense account is in existence at any time during the limitation year pursuant to this Section, it will not participate in the allocation of the Trust’s investment gains and losses. If a suspense account is in existence at any time during a particular limitation year, all amounts in the suspense account must be allocated and reallocated to Participants’ Accounts before any

Employer or any Employee contributions may be made to the Plan for that limitation year. Excess amounts may not be distributed to Participants or former Participants.

(E) If, in addition to this Plan, the Participant is covered under another defined contribution plan maintained by the Employer during any limitation year, the annual additions which may be credited to a Participant’s Account under all Plans for any such limitation year will not exceed the maximum permissible amount. Benefits will be reduced under any defined contribution discretionary contribution plan before they are reduced under any defined contribution pension plan. If both plans are discretionary contribution plans they shall first be reduced under this Plan. Any excess amount attributable to this Plan will be disposed of in the manner described in Section 10.l(a)(4).

(F) If the Employer maintains, or at any time maintained, a qualified defined benefit plan covering any Participant in this Plan, the sum of the Participant’s defined benefit plan fraction and defined contribution plan fraction will not exceed 1.0 in any limitation year. The annual additions which may be credited to the Participant’s Account under this Plan for any limitation year will be limited so that if the limitations of Code Section 415(e)become applicable that benefits under a defined benefit plan shall have first been provided before benefits under a defined contribution plan are provided. The provisions of this Section 10.l(a)(4)(F) shall not apply to limitation years commencing on or after January 1, 2000.

(G) In any Plan Year in which the Plan becomes a Super Top-Heavy Plan as defined in Section 12.2, the denominators of the defined benefit fraction and defined contribution fraction shall be computed using 100% of the maximum dollar limitation instead of 125%.

In any year in which the Plan is a Top-Heavy Plan (but not a Super Top-Heavy Plan), the limitations shall be similarly reduced, subject to the special provisions of Section 12.3, which provide for the use of the 125% limitation subject to the added minimum allocations.

(5)Notwithstanding anything contained in this Article Ten to the contrary, a Participant’s defined benefit fraction (including preservation of his accrued benefit) and/or defined contribution fraction may be adjusted in accordance with transitional rules contained in Section 235 of the Tax Equity and Fiscal Responsibility Act of 1982 and Section 1106 of the Tax Reform Act of 1986.

(b) Definitions.

(1) Annual additions: The following amounts credited to a Participant’s Account for the limitation year are treated as annual additions to a defined contribution plan.

(A) Employer contributions; and

(B) Employee contributions; and

(C) Forfeitures; and

(D) Amounts allocated to an individual medical account, as defined in Section 415(l)(2) of the Code, which is part of a pension or annuity plan maintained by the Employer. Also, amounts derived from contributions paid or accrued in taxable years ending after such date which are attributable to post-retirement medical benefits allocated to the separate account of a Key Employee, as

defined in Section 419A(d)(3), and amounts under a welfare benefit fund, as defined in Section 419(e), maintained by the Employer, are treated as annual additions to a defined contribution plan.

For this purpose, any excess amount applied under Section 10.1(a)(4) in the limitation year to reduce Employer contributions will be considered annual additions for such limitation year.

(2) Compensation: For purposes of determining maximum permitted benefits under this Section, Compensation shall include all of a Participant’s earned income, wages, salaries, and fees for professional services, and other amounts received for personal services actually rendered in the course of employment with the Employer maintaining the Plan, including, but not limited to, commissions paid to salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses, and excluding the following:

(A) Employer contributions to a plan of deferred compensation which are not included in the Employee’s gross income for the taxable year in which contributed, or Employer contributions under a simplified employee pension plan (funded with individual retirement accounts or annuities) to the extent such contributions are deductible by the Employee, or any distributions from a plan of deferred compensation;

(B) Amounts realized from the exercise of a nonqualified stock option, or when restricted stock (or property) held by the Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;

(C) Amounts realized from the sale, exchange, or other disposition of stock acquired under a qualified stock option; and

(D) Other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) toward the purchase of an annuity described in Section 403(b) of the Code (whether or not the amounts are actually excludable from the gross income of the Employee).

Compensation shall be measured on the basis of compensation paid in the limitation year.

For purposes of applying the limitations of this Article Ten, compensation paid or made available during such limitation year shall include any elective deferral (as defined in Code Section 402(g)(3)), and any amount which is contributed or deferred by the Employer at the election of the Employee and which is not includible in the gross income of the Employee by reason of Code Section 125,457, and, for Limitation Years beginning on or after January 1, 2001, 132(f)(4). The provisions of this paragraph are effective for Plan Years beginning after December 31, 1997.

(3) Defined benefit fraction. This shall mean a fraction, the numerator of which is the sum of the Participant’s projected annual benefits under all the defined benefit plans maintained or previously maintained by the Employer, and the denominator of which is the lesser of 125% of the dollar limitation in effect for the limitation year under Section 415(b)(1)(A) of the Code or 140% of the amount which may be taken into account under Code Section 415(b)(1)(B). In determining the Participant’s defined benefit fraction hereunder, a Participant with a benefit accrued under a defined benefit plan previously maintained by the Employer shall have his years of participation in this Plan aggregated with years of participation in a defined benefit plan.

(4) Defined contribution fraction: This shall mean a fraction, the numerator of which is the sum of the annual additions to the Participant’s Account under all the defined contribution plans (whether or not terminated) maintained by the Employer for the current and all prior limitation years (including the annual additions attributable to the Participant’s nondeductible Employee contributions to this and all other qualified plans, whether or not terminated, maintained by the Employer), and the denominator of which is the sum of the maximum aggregate amounts for the current and all prior limitation years with the Employer (regardless of whether a defined contribution plan was maintained by the Employer).

The maximum aggregate amount in any limitation year is the lesser of 125% of the dollar limitation then in effect under Section 415(c)(l)(A) of the Code or 35% of the Participant’s Compensation for such year.

(5) Defined contribution dollar limitation: Notwithstanding any other provisions of the Plan, contributions and other additions with respect to a participant exceed the limitation of Code Section 415(c) if, when expressed as an Annual Addition (within the meaning of Code Section 415(c)(2)) to the Participant’s Account, such Annual Addition is greater than the lesser of:

(A) $30,000, as adjusted under Code Section 415(d); or

(B) 25 percent of the Participant’s compensation (as defined in Code Section 41 5(c)(3)).

The provisions of this Section 10.1(b)(5) are effective for Plan Years beginning after December 31, 1994.

(6) Employer: This term refers to the Employer that adopts this Plan, and all members of a controlled group of corporations (as defined in Section 414(b) of the Code, as modified by Section 415(h)), commonly-controlled trades or businesses (as defined in Section 4 14(c) as modified by Section 415(h)), or affiliated service groups (as defined in Section 4 14(m)) of which the adopting employer is a part.

(7) Highest average compensation: This means the average Compensation for the three consecutive limitation years with the Employer that produces the highest average.

(8) Limitation year. The Plan Year shall be the 12-consecutive-month period used to measure Compensation in this Plan for benefit purposes.

(9) Maximum permissible amount: This amount is the lesser of the defined contribution dollar limitation or 25% of the Participant’s Compensation for the limitation year. If a short limitation year is created because of an amendment changing the limitation year to a different 12-consecutive-month period, the maximum permissible amount will not exceed the defined contribution dollar limitation multiplied by the following fraction:

Number of months in the short limitation year

12

(10) Projected annual benefit: This is the annual retirement benefit (adjusted to an actuarially equivalent straight life annuity if such benefit is expressed in a form other than a straight life annuity or qualified joint and survivor annuity) to which the Participant would be entitled under the terms of the Plan, assuming:

(A) the Participant will continue employment until normal retirement age under the Plan (or current age, if later), and

(B) the Participant’s Compensation for the current limitation year and all other relevant factors used to determine benefits under the Plan will remain constant for all future limitation years.

ARTICLE ELEVEN—AMENDMENT AND TERMINATION

11.1 AMENDMENT. The Employer shall have the right to amend, alter, or modify the Plan at any time, or from time to time, in whole or in part. Any such amendment shall become effective under its terms upon adoption by the Employer. The amendment shall be adopted by formal action of the Employer’s Board of Directors. However, no amendment affecting the duties, powers or responsibilities of the Trustee may be made without the written consent of the Trustee. No amendment shall be made to the Plan which shall:

(a) make it possible (other than as provided in Section 14.3) for any part of the corpus or income of the Trust Fund (other than such part as may be required to pay taxes and administrative expenses) to be used for or diverted to purposes other than the exclusive benefit of the Participants or their beneficiaries; or

(b) alter the schedule for vesting in a Participant’s Account with respect to any Participant with three (3) or more Years of Service without his consent or deprive any Participant of any nonforfeitable portion of his Account.

Notwithstanding the other provisions of this Section or any other provisions of the Plan, any amendment or modification of the Plan may be made retroactively if necessary or appropriate to conform to or to satisfy the conditions of any law, governmental regulation, or ruling, and to meet the requirements of the Employee Retirement Income Security Act of 1974, as it may be amended.

11.2 TERMINATION OF THE PLAN. The Employer reserves the right at any time and in its sole discretion to discontinue payments under the Plan and to terminate the Plan. In the event the Plan is terminated, or upon complete discontinuance of contributions under the Plan by the Employer, or in the event of a partial termination of the Plan, the rights of each Participant to his Account on the date of such termination or discontinuance of contributions, to the extent of the fair market value under the Trust Fund, shall become fully vested and nonforfeitable. The Employer shall direct the Trustee to distribute the Trust Fund in accordance with the Plan’s distribution provisions to the Participants and their Beneficiaries, each Participant or Beneficiary receiving a portion of the Trust Fund equal to the value of his Account as of the date of distribution. These distributions may be implemented by the continuance of the Trust and the distribution of the Participants’ Account shall be made in such time and such manner as though the Plan had not terminated, or by any other appropriate method, including rollover into Individual Retirement Accounts. Upon distribution of the Trust Fund, the Trustee shall be discharged from all obligations under the Trust and no Participant or Beneficiary shall have any further right or claim therein. If a partial termination of the Plan is deemed to have occurred, this Section shall apply only to those Participants affected by such partial termination.

ARTICLE TWELVE—TOP-HEAVY PROVISIONS

12.1 APPLICABILITY. The provisions of this Article shall become applicable only for any Plan Year in which the Plan is a Top-Heavy Plan. The determination of whether the Plan is a Top-Heavy Plan shall be made each Plan Year by the Administrator.

12.2 DEFINITIONS. For purposes of this Article, the following definitions shall apply:

(a) “Key Employee” shall mean any Employee or former Employee (and the Beneficiaries of such Employee) who, at any time during the determination period, was (i) an officer of the Employer earning Compensation greater than 50% of the dollar limitation under Section 415(b)(1)(A) of the Code, (ii) an owner (or considered an owner under Section 318 of the Code) of both more than a one-half percent (V2%) interest in the Employer and one of the ten largest interests in the Employer if such individual’s Compensation exceeds the dollar limitation under Section 415(c)(1)(A) of the Code, (iii) a 5% owner of the Employer, or (iv) a 1% owner of the Employer who has an annual Compensation of more than $150,000. The determination period of the Plan is the Plan Year containing the determination date as defined in Section 12.2(c)(4) and the four preceding Plan Years. The determination of who is a Key Employee (including the terms “5% owner” and “1% owner”) will be made in accordance with Section 416(i)(1) of the Code and the regulations thereunder. “Non-Key Employee” shall mean any Employee or Beneficiary of such Employee or former Employee or Beneficiary of such former Employee who is not or was not a Key Employee during the Plan Year ending on the determination date, nor during the four preceding Plan Years.

(b) “Super Top-Heavy Plan” shall mean a plan which meets the test for status as a Top-Heavy Plan, where “90%” is substituted for “60%” at each place in Section 12.2(c).

(c) “Top-Heavy Plan” shall mean a plan where any of the following conditions exist:

(1) Top-Heavy status defined:

(A) The Plan is a Top-Heavy Plan if the top-heavy ratio for the Plan exceeds 60% and the Plan is not part of any required aggregation group or permissive aggregation group of plans; or

(B) The Plan is a Top-Heavy Plan if the Plan is a part of a required aggregation group of plans (but is not part of a permissive aggregation group) and the top-heavy ratio for the group of plans exceeds 60%; or

(C) The Plan is a Top-Heavy Plan if the Plan is a part of a required aggregation group of plans and part of a permissive aggregation group and the top-heavy ratio for the permissive aggregation group exceeds 60%.

(2) If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan funded with individual retirement accounts or annuities) and the Employer maintains or has maintained one or more defined benefit plans which have covered or could cover a Participant in this Plan, the top-heavy ratio is a fraction, the numerator of which is the sum of account balances under the defined contribution plans for all Key Employees and the actuarial equivalents of accrued benefits under the defined benefit plans for all Key Employees, and the denominator of which is the sum of the account balances under the defined contribution plans for all Participants and the

actuarial equivalents of accrued benefits under the defined benefit plans for all Participants. Both the numerator and denominator of the top-heavy ratio shall include any distribution of an account balance or an accrued benefit made in the five-year period ending on the determination date and any contribution due to a defined contribution pension plan but unpaid as of the determination date. In determining the accrued benefit of a Non-Key Employee who is participating in a plan that is part of a required aggregation group, the method of determining such benefit shall be either (a) in accordance with the method, if any, that uniformly applies for accrual purposes under all plans maintained by the Employer or any related employer under Code Section 414, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional accrual rate of Code Section 411(b)(1)(C).

(3) For purposes of (1) and (2) above, the value of Account balances and the actuarial equivalents of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the determination date. The Account balances and accrued benefits of a Participant who is not a Key Employee but who was a Key Employee in a prior year will be disregarded. The accrued benefits and Account balances of Participants who have performed no Flours of Service with any Employer maintaining the Plan for the five-year period ending on the determination date will be disregarded. The calculations of the top-heavy ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made under Section 416 of the Code and regulations issued thereunder. Deductible Employee contributions will not be taken into account for purposes of computing the top-heavy ratio. When aggregating plans, the value of account balances and accrued benefits will be calculated with reference to the determination dates that fall within the same calendar year.

(4) Definition of terms for Top-Heavy status:

(A) “Top-heavy ratio” shall mean the following:

(1) If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan funded with individual retirement accounts or annuities) and the Employer has never maintained any defined benefit plans which have covered or could cover a Participant in this Plan, the top-heavy ratio is a fraction, the numerator of which is the sum of the Account balances of all Key Employees as of the determination date (including any part of any Account balance distributed in the five-year period ending on the determination date), and the denominator of which is the sum of the Account balances (including any part of any Account balance distributed in the five-year period ending on the determination date) of all Participants as of the determination date. Both the numerator and the denominator shall be increased by any contributions due but unpaid to a defined contribution pension plan as of the determination date.

(2) If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan funded with individual retirement accounts or annuities) and the Employer maintains or has maintained one or more defined benefit plans which have covered or could cover a Participant in this Plan, the top-heavy ratio is a fraction, the numerator of which is the sum of account balances under the defined contribution plans for all Key Employees and the actuarial equivalent of accrued benefits under the defined benefit plans for all Key Employees, and the denominator of which is the sum of the account balances under the defined contribution plans for all Participants and the actuarial equivalent of accrued benefits under the defined benefit plans for all Participants. Both the numerator and denominator of the top-heavy ratio shall include any distribution

of an account balance or an accrued benefit made in the five-year period ending on the determination date and any contribution due but unpaid to a defined contribution pension plan as of the determination date.

(3) For purposes of(l) and (2) above, the value of Account balances and the actuarial equivalent of accrued benefits will be determined as of the most recent valuation date that falls within or ends with the 12-month period ending on the determination date. The accrued benefits and Account balances of participants who have performed no services for any employer maintaining the Plan for the five-year period ending on the determination date will be disregarded. The calculations of the top- heavy ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made under Section 416 of the Code and regulations issued thereunder. Deductible employee contributions will not be taken into account for purposes of computing the top-heavy ratio. When aggregating plans, the value of account balances and accrued benefits will be calculated with reference to the determination dates that fall within the same calendar year.

(B) “Permissive aggregation group” shall mean the required aggregation group of plans plus any other plan or plans of the Employer which, when considered as a group with the required aggregation group, would continue to satisfy the requirements of Sections 401(a)(4) and 410 of the Code.

(C) “Required aggregation group” shall mean (1) each qualified plan of the Employer (including any terminated plan) in which at least one Key Employee participates, and (2) any other qualified plan of the Employer which enables a plan described in (1) to meet the requirements of Sections 401(a)(4) or 410 of the Code.

(D) “Determination date” shall mean, for any Plan Year subsequent to the first Plan Year, the last day of the preceding Plan Year. For the first Plan Year of the Plan, “determination date” shall mean the last day of that Plan Year.

(E) “Valuation Date” shall mean the last day of the Plan Year.

(F) Actuarial equivalence shall be based on the interest and mortality rates utilized to determine actuarial equivalence when benefits are paid from any defined benefit plan. If no rates are specified in said plan, the following shall be utilized: pre- and post-retirement interest — 5%; post- retirement mortality based on the Unisex Pension (1984) Table as used by the Pension Benefit Guaranty Corporation on the date of execution hereof.

12.3 ALLOCATION OF EMPLOYER CONTRIBUTIONS FOR A TOP-HEAVY PLAN YEAR.

(a) Except as otherwise provided below, in any Plan Year when the Plan is a Top-Heavy Plan the Employer contributions allocated on behalf of any Participant who is a Non-Key Employee shall not be less than the lesser of 3% of such Participant’s Compensation as defined in Section 10.1(b)(2) or the largest percentage of Employer contributions (including elective deferrals under Section 4.1) as a percentage of the first $150,000 (or such amount as prescribed by the Secretary of the Treasury or his delegate) of the Key Employee’s Compensation, allocated on behalf of any Key Employee for that Plan Year. This minimum allocation shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the Plan Year because of insufficient Employer contributions under Section 4.2 or the

Participant’s failure to complete 1,000 Hours of Service or the Participant’s failure to make elective deferrals under Section 4.1.

(b) The minimum allocation under this Section shall not apply to any Participant who was not employed by the Employer on the last day of the Plan Year.

(c) The minimum allocation under this Section shall be reduced by any allocation of Employer contributions under Section 4.2 and will be used as an offset against any such required allocation under any other defined contribution plan of the Employer with a Plan Year ending in the same calendar year as the Valuation Date.

(d) Neither elective deferrals nor matching contributions (as defined in Code Sections 402(g)(3) and 401 (m)(4)(A), respectively) shall be taken into account for the purpose of satisfying the minimum allocation requirements of this Section, but are included for purposes of determining the percentage of Employer contributions allocated to Key Employees.

(e) There shall be no duplication of the minimum benefits required under Code Section 416. Benefits shall be provided under defined benefit plans before under any defined contribution plans. If a defined benefit plan (active or frozen) is part of the permissive or required aggregation group of plans of the Employer, the minimum allocation in subparagraph (a) shall be deemed to be 5% and shall be offset by a Participant’s accrued benefit under a defined benefit plan according to the following equivalencies: a 1% “qualifying benefit accrual” under a defined benefit plan equals a 2.5% allocation under a defined contribution plan. To be a “qualifying benefit accrual,” the pension under the defined benefit plan must be converted to a pension payable for life based on the average of the five consecutive years of the Participant’s highest compensation, payable at that plan’s normal retirement date. Accordingly, for a Participant whose “qualifying benefit accrual” equals 2% multiplied by each year of his participation in the Plan while a Top-Heavy Plan, there shall be no minimum allocation hereunder. If the “qualifying benefit accrual” is a lesser amount than 2% for each such year, the minimum allocation under this Plan shall be provided on a pro rata basis, adjusted on the basis of the above equivalencies. Except as provided in subparagraph (f), in no event will additional minimum allocations be provided for any Participant who has earned a “qualifying benefit accrual” equal to 20% of his Compensation (as defined in Article Ten) averaged over the five consecutive years in which such Compensation was the highest.

(f) There shall be no duplication of the minimum benefits required under Code Section 416. Benefits shall be provided under defined benefit plans before under defined contribution plans. If a defined benefit plan (active or frozen) is part of the permissive or required aggregation group of plans, and if any Participant in the Plan would have his benefits limited due to the application of the special Code limitation rule in Section 10.1 in a year when the Plan is a Top-Heavy Plan but not a Super Top- Heavy Plan, the allocation method of subparagraph (e) above shall apply, except that “3%” shall be substituted for “2%” and “30%” shall be substituted for “20%.”

12.4 VESTING. The provisions contained in Section 6.1 relating to vesting shall continue to apply in any Plan Year in which the Plan is a Top-Heavy Plan, and apply to all benefits within the meaning of Section 411(a)(7) of the Code except those attributable to Employee contributions and elective deferrals under Section 4.1, including benefits accrued before the effective date of Section 416 and benefits accrued before the Plan became a Top-Heavy Plan. Further, no reduction in vested benefits may occur in the event the Plan’s status as a Top-Heavy Plan changes for any Plan Year and the

vesting schedule is amended. In addition, if a Plan’s status changes from a Top-Heavy Plan to that of a non-Top-Heavy Plan, a Participant with three (3) or more Years of Service for vesting purposes shall continue to have his vested rights determined under the schedule which he selects, in the event the vesting schedule is subsequently amended.

Payment of a Participant’s vested Account balance under this Section shall be made in accordance with the provisions of Article Seven.

ARTICLE THIRTEEN—LOANS AND HARDSHIP DISTRIBUTIONS

13.1 LOANS.

(a) Permissible Amount and Procedures. Upon the application of a Participant, the Administrator may, in accordance with a uniform and nondiscriminatory policy, direct the Trustee to grant a loan or loans to a Participant at a reasonable rate of interest. The Participant’s signature shall be required on a promissory note. In no event shall the amount of a loan or loans to a Participant exceed the vested value of the Participant’s Account, which shall be security for such loan. The Administrator shall impose a rate of interest which provides the Plan with a return commensurate with the interest rates charged by persons in the business of lending money for loans which would be made under similar circumstances. The terms of any loan shall be arrived at by mutual agreement between the Administrator and the Participant, subject to the approval of the Trustee. Participant loans shall be treated as segregated investments, and interest repayments will be credited only to the Participant’s Account. In the event a Participant terminates employment while any loan is outstanding, the unpaid balance and any interest due thereon shall become due and payable, within thirty (30) days of such termination of employment. If such amount is not paid to the Plan, it shall be charged against the amounts that are otherwise payable to the Participant or the Participant’s Beneficiary under the provisions of the Plan.

(b) Limitation on Amount of Loans. A Participant’s loan or loans, when aggregated with all other outstanding loan balances under this Plan and any other qualified retirement plan maintained by the Employer, shall not exceed the lesser of:

(1) $50,000. which amount shall be reduced by the highest outstanding balance of loans, if any, during the preceding 12-month period over the current outstanding balance of loans; or

(2) one-half ( ½)of the vested value of the Participant’s Account.

Any loan must be repaid within five (5) years. If the loan was made for the purpose of acquiring the primary residence of the Participant, then such loan must be repaid within fifteen (15) years. The repayment of any loan must be made in at least quarterly installments of principal and interest with level periodic payments.

In the case of a Participant who has loans outstanding from this Plan or other plans of the Employer (or a member of any affiliated service group or controlled group of businesses), the Administrator shall be responsible for reporting to the Trustee the existence of said loans in order to aggregate all such loans within the above limits as required by the Code.

13.2 HARDSHIP DISTRIBUTIONS. The Administrator may direct the Trustee to distribute to any Participant or his Beneficiary in any one Plan Year all or a portion of the Participant’s nonforfeitable interest in his Account exclusive of amounts attributable to earnings on elective deferral contribution amounts, valued as of the preceding Valuation Date, on account of an immediate and heavy financial need provided that the distribution is necessary to satisfy such financial need. The portions of the Participant’s Account attributable to and qualified nonelective contributions (as defined in Section 9.2(a)) and matching contributions which are used to satisfy the average actual deferral percentage test of Section 9.2 may not be distributed to him under the terms of this Section. Distributions paid pursuant to this Section shall be deemed to be made as of the first day of the Plan Year and the Participant’s Account shall be reduced accordingly.

(a) Deemed Immediate and Heavy Financial Need. A distribution made on account of medical expenses (as described in Code Section 213(d)) incurred by the Participant, his spouse or his dependents (as defined in Code Section 152), or for purchase of the Participant’s principal residence (excluding mortgage payments), or for payment of educational expenses for the next twelve months of post- secondary education for the Participant, his spouse or his children or dependents, or to prevent the eviction of the Participant from his principal residence or foreclosure on same shall be deemed to be made on account of an immediate and heavy financial need.

(b) Deemed Necessity to Satisfy Financial Need. A distribution shall be deemed necessary to satisfy a Participant’s immediate and heavy financial need if the amount of the distribution does not exceed the amount of the financial need, and the Participant has obtained all currently available distributions and nontaxable loans under all plans maintained by the Employer, and the Participant makes a written irrevocable election to suspend his rights to make elective deferrals and employee contributions under all plans maintained by the Employer for a 6-month period following receipt of the distribution and such irrevocable election limits the amount of his elective deferrals in his taxable year immediately following the taxable year of the hardship distribution equal to the applicable limit under Code Section 402(g) less the amount of his deferrals made in the taxable year of the distribution.

(c) Application Procedure. The Administrator shall require that requests for hardship distributions be made under procedures which include the Participant’s statement of the facts causing the hardship, the amount of the financial need and any other information required to ascertain the facts. No distribution will be granted unless the amount attributable to Employer contributions has been in the Trust for a period of two (2) years or, alternatively, the Participant has been a Participant for five (5) or more years.

The provisions of this Section (relating to hardship distributions) are intended to comply with Treasury regulations issued under Section 401(k) of the Code, and shall be so interpreted.

ARTICLE FOURTEEN—MISCELLANEOUS PROVISIONS

14.1 PLAN DOES NOT AFFECT EMPLOYMENT. Neither the creation of this Plan nor any amendment thereto nor the creation of any fund nor the payment of benefits hereunder shall be construed as giving any legal or equitable right to any Employee or Participant against the Employer, its officers or Employees, or against the Trustee, and all liabilities under this Plan shall be satisfied, if at all, only out of the Trust Fund held by the Trustee. Participation in the Plan shall not give any Participant any right to be retained in the employ of the Employer, and the Employer hereby expressly retains the right to hire and discharge any Employee at any time with or without cause, as if the Plan had not been adopted, and any such discharged Participant shall have only such rights or interests in the Trust Fund as may be specified herein.

14.2 SUCCESSOR TO THE EMPLOYER. In the event of the merger, consolidation, reorganization or sale of assets of the Employer, under circumstances in which a successor person, firm, or corporation shall carry on all or a substantial part of the business of the Employer, and such successor shall employ a substantial number of Employees of the Employer and shall elect to carry on the provisions of the Plan, such successor shall be substituted for the Employer under the terms and provisions of the Plan upon the filing in writing with the Trustee of its election to do so.

14.3 REPAYMENTS TO THE EMPLOYER. Notwithstanding any provisions of this Plan to the contrary, and in the sole discretion of the Employer:

(a) Any monies or other Plan assets attributable to any contribution made to this Plan by the Employer because of a mistake of fact may be returned to the Employer within one year after the date of contribution. Earnings attributable to the excess contribution may not be returned to the Employer, but losses attributable thereto must reduce the amount to be so returned. Furthermore, if the withdrawal of the amount attributable to the excess contribution would cause the balance of the individual account of any Participant to be reduced to less than the balance which would have been in the account had the amount not been contributed, then the amount to be returned to the Employer must be limited so as to avoid such reduction.

(b) Any monies or other Plan assets attributable to any contribution made to this Plan by the Employer for any fiscal year for which initial Plan qualification under the Code is denied may be refunded to the Employer within one year after the date such qualification of the Plan is denied or within one year of the resolution of any judicial or administrative process with respect to the disallowance.

(c) Any monies or other Plan assets attributable to any contribution made to this Plan by the Employer may be refunded to the Employer, to the extent the income tax deduction for such contribution is disallowed, within one taxable year after the date of such disallowance or within one year of the resolution of any judicial or administrative process with respect to the disallowance.

Earnings attributable to the excess contribution may not be returned to the Employer, but losses attributable thereto must reduce the amount to be so returned. Furthermore, if the withdrawal of the amount attributable to the excess contribution would cause the balance of the individual account of any

Participant to be reduced to less than the balance which would have been in the account had the amount not been contributed, then the amount to be returned to the Employer must be limited so as to avoid such reduction.

Provided, however, the provisions of this Section shall not apply to elective deferrals made by a Participant under Section 4.1.

14.4 BENEFITS NOT ASSIGNABLE. Except as provided in Section 414(p) of the Code with respect to “qualified domestic relations orders”, the rights of any Participant or his Beneficiary to any benefit or payment hereunder shall not be subject to voluntary or involuntary alienation or assignment. Notwithstanding the prior provisions of this Section 14.4, an offset to a Participant’s benefit against an amount that the Participant is ordered or required to pay the Plan with respect to a judgment, order, or decree issued, or a settlement entered into, on or after August 5, 1997, shall be permitted in accordance with Sections 401(a)(13)(C) and (D) of the Code.

14.5 MERGER OF PLANS. In the case of any merger or consolidation of this Plan with, or transfer of the assets or liabilities of the Plan to, any other plan, the terms of such merger, consolidation or transfer shall be such that each Participant would receive (in the event of termination of this Plan or its successor immediately thereafter) a benefit which is no less than what the Participant would have received in the event of termination of this Plan immediately before such merger, consolidation or transfer.

14.6 INVESTMENT EXPERIENCE NOT A FORFEITURE. The decrease in value of any Account due to adverse investment experience will not be considered an impermissible “forfeiture” of any vested balance.

14.7 DISTRIBUTION TO LEGALLY INCAPACITATED PERSON. In the event any benefit is payable to a minor or to a person deemed to be incompetent or to a person otherwise under legal disability, or who is by sole reason of advanced age, illness, or other physical or mental incapacity incapable of handling the disposition of his property, the Administrator, may direct the Trustee to apply all or any portion of such benefit directly to the care, comfort, maintenance, support, education or use of such person or to pay or distribute the whole or any part of such benefit to (a) the spouse of such person, (b) the parent of such person, (c) the guardian, committee, or other legal representative, wherever appointed, of such person, (d) the person with whom such person shall reside, (e) any other person having the care and control of such person, or (f) such person. The receipt of any such payment or distribution is a complete discharge of liability for Plan obligations.

14.8 CONSTRUCTION. Wherever appropriate, the use of the masculine gender shall be extended to include the feminine and/or neuter or vice versa; and the singular form of words shall be extended to include the plural; and the plural shall be restricted to mean the singular.

14.9 GOVERNING DOCUMENTS. A Participant’s rights shall be determined under the terms of the Plan as in effect at the Participant’s date of separation from eligible Service.

14.10 GOVERNING LAW. The provisions of this Plan shall be construed under the laws of the state of the situs of the Trust, except to the extent such laws are preempted by Federal law.

14.11 HEADINGS. The Article headings and Section numbers are included solely for ease of reference. If there is any conflict between such headings or numbers and the text of the Plan, the text shall control.

14.12 COUNTERPARTS. This Plan may be executed in any number of counterparts, each of which shall be deemed an original; said counterparts shall constitute but one and the same instrument, which may be sufficiently evidenced by any one counterpart.

14.13 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN. In the event that all or any portion of the distribution payable to a Participant or to a Participant’s Beneficiary hereunder shall, at the expiration of five (5)years after it shall become payable, remain unpaid solely by reason of the inability of the Administrator to ascertain the whereabouts of such Participant or Beneficiary, after sending a registered letter, return receipt requested, to the last known address, and after further diligent effort, the amount so distributable shall be reallocated in the same manner as a forfeiture under Section 6.2 pursuant to this Plan. In the event a Participant or Beneficiary is located subsequent to the reallocation of his Account balance, such Account balance shall be restored without interest or adjustment for interim Trust valuation experience, by a special Employer contribution or from the next succeeding Employer contribution, as appropriate.

ARTICLE FIFTEEN—MULTIPLE EMPLOYER PROVISIONS

15.1 ADOPTION OF THE PLAN. With the Employer’s consent, this Plan may be adopted by any other corporation or entity for its employees, which adopting Employer shall be known as a “Participating Employer.” All assets may either be held within one Trust Fund, or each Participating Employer may maintain a separate trust fund attributable to its portion of Plan assets. Separate accounting shall be maintained for the Accounts of employees of each adopting Participating Employer.

15.2 SERVICE. For purposes of vesting, eligibility to participate in the Plan, and determining eligibility for allocation of Participating Employer contributions, an Employee shall be credited with all of his Hours of Service with any Participating Employer which has adopted the Plan after the effective date of that adoption. Pre-adoption Service will be credited in accordance with the rules in Article Two for such periods of time when the Employees were part of a controlled group of corporations, trades or businesses under common control or affiliated service group. Service during such time when there was no controlled or affiliated service group will be credited only for eligibility to participate in the Plan. These rules may be modified by an instrument of adoption.

15.3 PLAN CONTRIBUTIONS. All contributions made by a Participating Employer, as provided for in this Plan and unless modified by an instrument of adoption, shall be determined separately by each Participating Employer, and shall be paid to and held by the Trustee for the exclusive benefit of the Employees of such Participating Employer and the Beneficiaries of such Employees, subject to all the terms and conditions of this Plan. Any forfeiture by an Employee of a Participating Employer subject to allocation during each Plan Year shall be allocated only for the exclusive benefit of the Participants of such Participating Employer in accordance with the provisions of this Plan, unless modified by an instrument of adoption.

15.4 DETERMINING COMPENSATION. In the case of any Employee who is paid by more than one Participating Employer, all of his Compensation from the Participating Employers shall be aggregated for purposes of determining benefits if the Plan is integrated with Social Security.

15.5 TRANSFERRING EMPLOYEES. The Administrator shall adopt equitable procedures whereby contributions and forfeitures are equitably allocated in the case of Employees transferring from the employment of one Participating Employer to another Participating Employer. Similarly, rules shall be adopted whereby Account records may be transferred from the records of one Participating Employer to another Participating Employer.

15.6 DELEGATION OF AUTHORITY. Each Participating Employer who has adopted the Plan may delegate to the Employer the right to name the Administrator and Trustees of the Plan.

15.7 TERMINATION. Any termination of the Plan or discontinuance of contributions by any one Participating Employer shall operate with regard only to the Participants employed by that Participating Employer. All Employees affected thereby shall have a 100% nonforfeitable interest in their Accounts.

In the event any Participating Employer terminates its participation in this Plan, or in the event that any such Participating Employer shall cease to exist through sale, reorganization or bankruptcy, the Trust Fund shall be allocated by the Trustee, in accordance with the direction of the Administrator, into separate trust funds. The amount to be allocated to the Trust of the terminating Participating Employer shall be equal to the value of Account balances of its Participants as of the most recent date as of which Plan assets were valued under Article Five, unless a special valuation is agreed to by the Administrator and the terminating Participating Employer.

IN WITNESS WHEREOF, the Employer, by its duly authorized officer, has caused this Plan to be executed on the 15^th day of December, 2004.

BERTUCCI’S CORPORATION
By:		/s/ David G. Lloyd
	Authorized Officer

SPECIAL NOTICE TO PARTICIPANTS

Effective January 1, 2005, and with respect to distributions made on or after April 1, 2005, the Bertucci’s Corporation Savings and Investment Plan (referred to as the “Plan”) provides that distributions of your vested account balance from the Plan will be made to you in a lump sum payment. All other forms of payment previously offered or required under the Plan will no longer be available ninety (90) days after the date you are furnished a copy of this Notice. In other words, a lump sum payment is the only form of payment for distributions to be made from the Plan on or after April 1, 2005.

You should keep this notice with your copy of the Summary Plan Description.

Date	Plan Administrator
Plan Name:	Bertucci’s Corporation Savings and Investment Plan
Plan Number:	001
Plan Sponsor:	Bertucci’s Corporation
	155 Otis Street
	Northborough, MA 01532
	Telephone: (508) 351-2578
	EIN: 06-1311266
Trustee:	MFS Heritage Trust Company
Plan Administrator:	Plan Sponsor

REQUIRED MINIMUM DISTRIBUTION AMENDMENT
BERTUCCI’S CORPORATION SAVINGS AND INVESTMENT PLAN

ARTICLE ONE—GENERAL RULES

1.1 EFFECTIVE DATE. The provisions of this Amendment will apply for purposes of determining required minimum distributions for calendar years beginning with the 2002 calendar year under the Bertucci’s Corporation Savings and Investment Plan (the “Plan”).

1.2 COORDINATION WITH MINIMUM DISTRIBUTION REQUIREMENTS PREVIOUSLY IN EFFECT. Required minimum distributions for 2002 will be determined as follows. If the total amount of 2002 required minimum distributions under the Plan made to the distributee for calendar 2002 (a) equals or exceeds the required minimum distributions determined under this Amendment, then no additional distributions will be required to be made for 2002 on or after such date to the distributee; or (b) is less than the amount determined under this Amendment, then required minimum distributions for 2002 on and after such date will be determined so that the total amount of required minimum distributions for 2002 made to the distributee will be the amount determined under this Amendment.

1.3 PRECEDENCE. The requirements of this Amendment will take precedence over any inconsistent provisions of the Plan.

1.4 REQUIREMENTS OF TREASURY REGULATIONS INCORPORATED. All distributions required under this Amendment will be determined and made in accordance with the Treasury regulations under Section 401(a)(9) of the Internal Revenue Code.

1.5 TEFRA SECTION 242(b)(2) ELECTIONS. Notwithstanding the other provisions of this Amendment, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA.

ARTICLE TWO—TIME AND MANNER OF DISTRIBUTION

2.1 REQUIRED BEGINNING DATE. The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s required beginning date.

2.2 DEATH OF PARTICIPANT BEFORE DISTRIBUTIONS BEGIN. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows:

(a) If the Participant’s surviving spouse is the Participant’s sole designated beneficiary, then, subject to Section 2.2(e) below, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 ½, if later.

(b) If the Participant’s surviving spouse is not the Participant’s sole designated beneficiary, then, subject to Section 2.2(e) below, distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

(c) If there is no designated beneficiary as of September30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December31 of the calendar year containing the fifth anniversary of the Participant’s death.

(d) If the Participant’s surviving spouse is the Participant’s sole designated beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 2.2, other than Section 2.2(a), will apply as if the surviving spouse were the Participant.

(e) Participants or beneficiaries may elect on an individual basis whether the 5-year rule or the life expectancy rule in this Section 2.2 applies to distributions after the death of a Participant who has a designated beneficiary. The election must be made no later than the earlier of September 30 of the calendar year in which distribution would be required to be made under this Section 2.2, or by September 30 of the calendar year which contains the fifth anniversary of the Participant’s (or, if applicable, surviving spouse’s) death. If neither the Participant nor beneficiary makes an election under this paragraph, distributions will be made in accordance with this Section 2.2.

For purposes of this Section 2.2 and Article Four, unless Section 2.2(d) applies, distributions are considered to begin on the Participant’s required beginning date. If Section 2.2(d) applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Section 2.2(a). If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant’s required beginning date (or to the Participant’s surviving spouse before the date distributions are required to begin to the surviving spouse under Section 2.2(a)), the date distributions are considered to begin is the date distributions actually commence.

2.3 FORMS OF DISTRIBUTION. Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with Articles Three or Four of this Amendment. If the Participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Section 401 (a)(9) of the Code and the Treasury regulations.

ARTICLE THREE—REQUIRED MINIMUM DISTRIBUTIONS DURING
PARTICIPANT’S LIFETIME

3.1 AMOUNT OF REQUIRED MINIMUM DISTRIBUTION FOR EACH DISTRIBUTION CALENDAR YEAR. During the Participant’s lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of: (1) the quotient obtained by dividing the Participant’s account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Participant’s age as of the Participant’s birthday in the distribution calendar year; or (2) if the Participant’s sole designated beneficiary for the distribution calendar year is the Participant’s spouse, the quotient obtained by dividing the Participant’s account balance by the number in the Joint and Last Survivor Table set forth in Section 1.401 (a)(9)-9 of the Treasury regulations, using the Participant’s and spouse’s attained ages as of the Participant’s and spouse’s birthdays in the distribution calendar year.

3.2LIFETIME REQUIRED MINIMUM DISTRIBUTIONS CONTINUE THROUGH YEAR OF PARTICIPANT’S DEATH. Required minimum distributions will be determined under this Article Three beginning with the first distribution calendar year and up to and including the distribution calendar year that includes the Participant’s date of death.

ARTICLE FOUR—REQUIRED MINIMUM DISTRIBUTIONS AFTER
PARTICIPANT’S DEATH

4.1 DEATH ON OR AFTER DATE DISTRIBUTIONS BEGIN.

(a) Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant’s designated beneficiary, determined as follows: (1) the Participant’s remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year; (2) if the Participant’s surviving spouse is the Participant’s sole designated beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participant’s death using the surviving spouse’s age as of the spouse’s birthday in that year. For distribution calendar years after the year of the surviving spouse’s death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year; and (3) if the Participant’s surviving spouse is not the Participant’s sole designated beneficiary, the designated beneficiary’s remaining life expectancy is calculated using the age of the beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent year.

(b) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no designated beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the Participant’s remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

4.2 DEATH BEFORE DATE DISTRIBUTIONS BEGIN.

(a) Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the remaining life expectancy of the Participant’s designated beneficiary, determined as provided in Section 4.1.

(b) No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the Participant’s death, then, subject to the last paragraph of this Section 4.2, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(c) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participant’s surviving spouse is the Participant’s sole designated beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 2.2(a), this Section 4.2 will apply as if the surviving spouse were the Participant.

Participants or beneficiaries may elect on an individual basis whether the 5-year rule or the life expectancy rule in this Section 4.2 applies to distributions after the death of a Participant who has a designated beneficiary. The election must be made no later than the earlier of September30 of the calendar year in which distribution would be required to be made under Section 2.2, or by September 30 of the calendar year which contains the fifth anniversary of the Participant’s (or, if applicable, surviving spouse’s) death. If neither the Participant nor beneficiary makes an election under this paragraph, distributions will be made in accordance with this Section 4.2.

ARTICLE FIVE—DEFINITIONS

5.1 DESIGNATED BENEFICIARY. The individual who is designated as the beneficiary under the Plan and is the designated beneficiary under Section 401(a)(9) of the Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.

5.2 DISTRIBUTION CALENDAR YEAR. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant’s required beginning date. For distributions beginning after the Participant’s death, the first distribution calendar year is the calendar year in which distributions are required to begin under Section 2.2. The required minimum distribution for the Participant’s first distribution calendar year will be made on or before the Participant’s required beginning date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participant’s required beginning date occurs, will be made on or before December 31 of that distribution calendar year.

5.3 LIFE EXPECTANCY. Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.

5.4 PARTICIPANT’S ACCOUNT BALANCE. The account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year.

5.5 REQUIRED BEGINNING DATE. The date specified in the Plan when distributions under Section 401(a)(9) of the Internal Revenue Code are required to begin.

IN WITNESS WHEREOF, the Employer, by its duly authorized officer, has caused this Plan to be executed on the 15^th day of December, 2004.

BERTUCCI’S CORPORATION
By:		/s/ David G. Lloyd
	Authorized Officer

EGTRRA AMENDMENT
BERTUCCI’S CORPORATION SAVINGS AND INVESTMENT PLAN

ARTICLE ONE—PREAMBLE

1.1 ADOPTION AND EFFECTIVE DATE OF AMENDMENT. This Amendment of the Bertucci’s Corporation Savings and Investment Plan (the “Plan”) is adopted to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). This Amendment is intended as good faith compliance with the requirements of EGTRRA and is to be construed in accordance with EGTRRA and guidance issued thereunder. Except as otherwise provided, this Amendment shall be effective as of the first day of the first Plan Year beginning after December 31, 2001.

1.2 SUPERSESSION OF INCONSISTENT PROVISIONS. This Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this Amendment.

ARTICLE TWO—INCREASE IN COMPENSATION LIMIT

2.1 INCREASE IN COMPENSATION LIMIT. The annual compensation of each Participant taken into account in determining allocations for any Plan Year beginning after December31, 2001, shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with Section 401(a)(17)(B) of the Code. Annual compensation means compensation during the Plan Year or such other consecutive I 2-month period over which compensation is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year.

ARTICLE THREE—CATCH-UP CONTRIBUTIONS

3.1 CATCH-UP CONTRIBUTIONS. All Employees who are eligible to make elective deferrals under this Plan and who have attained age fifty (50) before the close of the Plan Year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, Section 4 14 (v) of the Code. Such catch-up contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Section 402(g) and 415 of the Code. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the making of such catch-up contributions.

ARTICLE FOUR—ELECTIVE DEFERRALS

4.1 ELECTIVE DEFERRALS - CONTRIBUTION LIMITATION. No Participant shall be permitted to have elective deferrals made under this Plan, or any other qualified plan maintained by the Employer during any taxable year, in excess of the dollar limitation contained in Section 402(g) of the Code in effect for such taxable year, except to the extent permitted under Article Three of this Amendment and Section 414(v) of the Code, if applicable.

ARTICLE FIVE—ROLLOVERS FROM OTHER PLANS

5.1 ROLLOVERS FROM OTHER PLANS. The Employer, operationally and on a nondiscriminatory basis, may limit the source of rollover contributions that may be accepted by this Plan. The Employer will not accept the rollover of after-tax employee contributions from another plan.

ARTICLE SIX—INVOLUNTARY CASH-OUTS

6.1 APPLICABILITY AND EFFECTIVE DATE. If the Plan provides for involuntary cash-outs of amounts less than $5,000,this Article Six shall apply for distributions made after December 31, 2001, and shall apply to all Participants. However, regardless of the preceding, this Article Six shall not apply if the Plan is subject to the qualified joint and survivor annuity requirements of Section 401(a)(11) and 417 of the Code.

6.2 ROLLOVERS NOT DISREGARDED IN DETERMINING VALUE OF ACCOUNT BALANCE FOR INVOLUNTARY DISTRIBUTIONS. For purposes of the Section of Article Seven of the Plan that provides for the involuntary distribution of vested Account balances of $5,000 or less, the value of a Participant’s nonforfeitable Account balance shall be determined without excluding that portion of the Account balance that is attributable to rollover contributions (and earnings allocable thereto) within the meaning of Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If the value of the Participant’s nonforfeitable Account balance as so determined is $5,000 or less, then the Plan shall immediately distribute the Participant’s entire nonforfeitable Account balance.

ARTICLE SEVEN—DIRECT ROLLOVERS

7.1 EFFECTIVE DATE. This Article Seven shall apply to distributions made after December 31, 2001.

7.2 MODIFICATION OF DEFINITION OF ELIGIBLE RETIREMENT PLAN. For purposes of the direct rollover provisions of the Plan, an eligible retirement plan shall also mean an annuity contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Section 414(p) of the Code.

7.3 MODIFICATION OF DEFINITION OF ELIGIBLE ROLLOVER DISTRIBUTION TO EXCLUDE HARDSHIP DISTRIBUTIONS. For purposes of the direct rollover provisions of the Plan, any amount that is distributed on account of hardship shall not be an eligible rollover distribution and the distributee may not elect to have any portion of such a distribution paid directly to an eligible retirement plan.

7.4 MODIFICATION OF DEFINITION OF ELIGIBLE ROLLOVER DISTRIBUTION TO INCLUDE AFTER-TAX EMPLOYEE CONTRIBUTIONS. For purposes of the direct rollover provisions of the Plan, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in a gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code, or to a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

ARTICLE EIGHT—REPEAL OF MULTIPLE USE TEST

8.1 REPEAL OF MULTIPLE USE TEST. The multiple use test described in Treasury Regulation Section 1.401(m)-2 and Section 9.4 of the Plan shall not apply for Plan Years beginning after December 31, 2001.

ARTICLE NINE—LIMITATIONS ON CONTRIBUTIONS
(CODE SECTION 415 LIMITS)

9.1 EFFECTIVE DATE. This Article Nine shall be effective for limitation years beginning after December 31, 2001.

9.2 MAXIMUM ANNUAL ADDITION. Except to the extent permitted under Article Four of this Amendment and Section 4 14(v) of the Code, if applicable, the annual addition that may be contributed or allocated to a Participant’s Account under the Plan for any limitation year shall not exceed the lesser of:

(a) $40,000, as adjusted for increases in the cost-of-living under Section 415(d) of the Code; or

(b) 100 percent of the Participant’s compensation, within the meaning of Section 415(c)(3) of the Code, for the limitation year.

The compensation limit referred to in this Section 9.2(b) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as an annual addition.

ARTICLE TEN—MODIFICATION OF TOP-HEAVY RULES

10.1 EFFECTIVE DATE. This Article Ten shall apply for purposes of determining whether the Plan is a top-heavy plan under Section 416(g) of the Code for Plan Years beginning after December 31, 2001, and whether the Plan satisfies the minimum benefits requirements of Section 416(c) of the Code for such years. This Article Ten amends the top-heavy provisions of the Plan.

10.2 DETERMINATION OF TOP-HEAVY STATUS.

(a) Key Employee. Key employee means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the determination date was an officer of the Employer having annual compensation greater than $130,000 (as adjusted under Section 416(i)(1) of the Code for Plan Years beginning after December 31, 2002), a 5-percent owner of the Employer, or a 1-percent owner of the Employer having annual compensation of more than $150,000. For this purpose, annual compensation means compensation within the meaning of Section 415(c)(3) of the Code. The determination of who is a key employee will be made in accordance with Section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder.

(b) Determination of Present Values and Amounts. This Section 10.2(b) shall apply for purposes of determining the present values of accrued benefits and the amounts of Account balances of Employees as of the determination date.

(1) Distributions during Year ending on the Determination Date. The present values of accrued benefits and the amounts of Account balances of an Employee as of the determination date shall be increased by the distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under Section 416(g)(2) of the Code during the 1-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting “5-year period” for “1-year period.”

(2) Employees not Performing Services during Year ending on the Determination Date. The accrued benefits and Accounts of any individual who has not performed services for the Employer during the 1-year period ending on the determination date shall not be taken into account.

(c) Minimum Benefits.

(1) Matching Contributions. Employer matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Section 416(c)(2) of the Code and the Plan. The preceding sentence shall apply with respect to matching contributions under the Plan or, if the Plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Section 401(m) of the Code.

(2) Contributions under other Plans. The Employer may provide, in an addendum to this Amendment, that the minimum benefit requirement shall be met in another plan (including another plan that consists solely of a cash or deferred arrangement which meets the requirements of Section 401(k)(12) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) of the Code are met). The addendum should include the name of the other plan, the minimum benefit that will be provided under such other plan, and the Employees who will receive the minimum benefit under such other plan.

ARTICLE ELEVEN—SAFE HARBOR PLAN PROVISIONS

11.1 MODIFICATION OF TOP-HEAVY RULES. The top-heavy requirement of Section 416 of the Code and the Plan shall not apply in any year beginning after December 31, 2001, in which the Plan consists solely of a cash or deferred arrangement which meets the requirements of Section 401 (k)(12) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) of the Code are met.

ARTICLE TWELVE—PLAN LOANS

12.1 PLAN LOANS FOR OWNER-EMPLOYEES OR SHAREHOLDER-EMPLOYEES. If the Plan, pursuant to Article Thirteen of the Plan, permits loans to be made to Participants, then effective for plan loans made after December 31, 2001, Plan provisions prohibiting loans to any owner-employee or shareholder-employee shall cease to apply.

ARTICLE THIRTEEN—HARDSHIP DISTRIBUTIONS

13.1 APPLICABILITY AND EFFECTIVE DATE. If the Plan provides, pursuant to Article Thirteen of the Plan, for hardship distributions upon satisfaction of the safe harbor (deemed) standards as set forth in Treas. Reg. Section l.401(k)-1(d)(2)(iv), then this Article Thirteen shall apply for calendar years beginning after 2001.

13.2 SUSPENSION PERIOD FOLLOWING HARDSHIP DISTRIBUTION. A Participant who receives a distribution of elective deferrals after December 31, 2001, on account of hardship shall be prohibited from making elective deferrals and employee contributions under this Plan and all other plans of the Employer for six (6) months after receipt of the distribution. Furthermore, a Participant who receives a distribution of elective deferrals in calendar year 2001 on account of hardship shall be prohibited from making elective deferrals and employee contributions under this Plan and all other plans until the later of January 1, 2002, or six (6) months after receipt of the distribution.

ARTICLE FOURTEEN—DISTRIBUTION UPON SEVERANCE OF EMPLOYMENT

14.1 EFFECTIVE DATE. This Article Fourteen shall apply for distributions and transactions made after December 31, 2001, regardless of when the severance of employment occurred.

14.2 NEW DISTRIBUTABLE EVENT. A Participant’s elective deferrals, qualified nonelective contributions, qualified matching contributions, and earnings attributable to these contributions shall be distributed on account of the Participant’s severance from employment. However, such a distribution shall be subject to the other provisions of the Plan regarding distributions, other than provisions that require a separation from service before such amounts may be distributed.

IN WITNESS WHEREOF, the Employer, by its duly authorized officer, has caused this Plan to be executed on the 15^th day of December, 2004.

BERTUCCI’S CORPORATION
By:		/s/ David G. Lloyd
	Authorized Officer

EX-10.34

Exhibit 10.34

BERTUCCI’S CORPORATION
EXECUTIVE SAVINGS AND INVESTMENT PLAN

Table of Contents

ARTICLE ONE—DEFINITIONS

1.1 Account
1.2 Administrator
1.3 Beneficiary
1.4 Code
1.5 Compensation
1.6 Effective Date
1.7 Employee
1.8 Employer
1.9 Employment Date
1.10 Normal Retirement Date
1.11 Participant
1.12 Plan
1.13 Plan Year
1.14 Trust
1.15 Trustee
1.16 Valuation Date
1.17 Year of Service

ARTICLE TWO—PLAN PARTICIPATION

2.1 Participation
2.2 Termination of Participation

ARTICLE THREE—COMPENSATION DEFERRALS AND EMPLOYER MATCHING CONTRIBUTIONS

3.1 Compensation Deferrals
3.2 Employer Matching Contributions
3.3 Timing of Contributions

ARTICLE FOUR—ACCOUNTING RULES

4.1 Investment of Accounts and Accounting Rules

ARTICLE FIVE—VESTING, RETIREMENT AND DISABILITY BENEFITS

5.1 Vesting
5.2 Normal Retirement
5.3 Permanent and Total Disability

ARTICLE SIX—MANNER AND TIME OF DISTRIBUTING BENEFITS

6.1 Manner of Payment
6.2 Time of Commencement of Benefit Payments
6.3 Furnishing Information
6.4 Death Benefit
6.5 Designation of Beneficiary
6.6 Time and Mode of Distributing Death Benefits

ARTICLE SEVEN—ADMINISTRATION OF THE PLAN

7.1 Plan Administration
7.2 Claims Procedure

ARTICLE EIGHT—AMENDMENT AND TERMINATION

8.1 Amendment
8.2 Termination of the Plan

ARTICLE NINE—UNFORESEEABLE EMERGENCIES

9.1 Unforeseeable Emergencies

ARTICLE TEN—MISCELLANEOUS PROVISIONS

10.1 Benefits Unfunded
10.2 ERISA Compliance
10.3 Plan Does Not Affect Employment
10.4 Successor to the Employer
10.5 Benefits not Assignable
10.6 Source of Payments
10.7 Distribution to Legally Incapacitated Person
10.8 Construction
10.9 Governing Documents
10.10 Governing Law
10.11 Headings
10.12 Counterparts

SIGNATURE PAGE

BERTUCCI’S CORPORATION
EXECUTIVE SAVINGS AND INVESTMENT PLAN

WHEREAS, Bertucci’s Corporation (hereinafter referred to as the “Employer”) adopted the NE Restaurant Company, Inc. Executive Savings and Investment Plan, an unfunded, nonqualified deferred compensation plan for the benefit of a select group of its management or highly compensated employees, effective as of December 21, 1993; and

WHEREAS, Section 10.7 of said plan provides that the Employer may amend the plan; and

WHEREAS, the name of the NE Restaurant Company, Inc. Executive Savings and Investment Plan has been changed to the Bertucci’s Corporation Executive Savings and Investment Plan (hereinafter referred to as the “Plan”), effective as of January 1, 2005; and

WHEREAS, it is intended that the Plan is to be for the exclusive benefit of the Participants and their Beneficiaries;

NOW, THEREFORE, the Plan is hereby amended by restating the Plan in its entirety as follows:

ARTICLE ONE—DEFINITIONS

For purposes of the Plan, unless the context or an alternative definition specified within another Article provides otherwise, the following words and phrases shall have the definitions provided:

1.1 “ACCOUNT” shall mean the individual bookkeeping accounts maintained for a Participant under the Plan which shall record (a) the amounts of Compensation deferred to the Plan pursuant to the Participant’s election in accordance with Section 3.1, if any, (b) the Participant’s allocations of Employer matching contributions pursuant to Section 3.2 and (c) the allocation of investment experience.

1.2 “ADMINISTRATOR” shall mean the Plan Administrator appointed from time to time in accordance with the provisions of Section 7.1. “Plan Administrator” shall mean the committee consisting of those persons then holding the corporate office of Vice President of Human Resources, Vice President-Finance and Senior Vice President, if any person holds such office in the future, but only for such time that they are in office. The duties of the Plan Administrator are specified in Section 7.1.

1.3 “BENEFICIARY” shall mean any person, trust, organization. or estate entitled to receive payment under the terms of the Plan upon the death of a Participant.

1.4 “CODE” shall mean the Internal Revenue Code of 1986, as amended from time to time.

1.5 “COMPENSATION” shall mean a Participant’s Base Compensation and his Bonus Compensation. Base Compensation means the compensation paid to a Participant for the Plan Year which is reportable on Form W-2, exclusive of bonuses. Bonus Compensation means any bonus payable to the Participant under any incentive plan or program of the Employer.

1.6 “EFFECTIVE DATE.”The Plan’s initial Effective Date was December 21, 1993. The Effective Date of this restated Plan, on and after which it supersedes the terms of the existing Plan document, is January 1, 2005, except where the provisions of the Plan shall otherwise specifically provide. The rights of any Participant who separated from the Employer’s service prior to this date shall be established under the terms of the Plan as in effect at the time of the Participant’s separation from service, unless the Participant subsequently returns to service with the Employer. Rights of spouses and beneficiaries of such Participants shall also be governed by those documents.

1.7 “EMPLOYEE” shall mean a highly compensated manager or executive of the Employer.

1.8 “EMPLOYER” shall mean the Employer named as party to the Plan, and shall include any successor(s) thereto which adopt this Plan.

1.9 “EMPLOYMENT DATE” shall mean the first date as of which an Employee is credited with an hour of service with the Employer.

1.10 “NORMAL RETIREMENT DATE” shall mean a Participant’s sixty-fifth (65th) birthday.

1.11 “PARTICIPANT” shall mean any Employee who is participating in the Plan.

1.12 “PLAN” shall mean this Plan as set forth herein and as it may be amended from time to time.

1.13 “PLAN YEAR” shall mean the 12-consecutive-month period beginning January 1 and ending December 31.

1.14 “TRUST” shall mean the Trust Agreement entered into between the Employer and the Trustee forming part of this Plan, together with any amendments thereto. “Trust Fund” shall mean any and all property held by the Trustee pursuant to the Trust Agreement, together with income therefrom.

1.15 “TRUSTEE” shall mean the Trustee or Trustees appointed by the Employer and any successors thereto. The Trustee shall be an independent third party that may be granted corporate trust powers under state law.

1.16 “VALUATION DATE” shall mean the last day of the Plan Year and such other date(s) as specified by the Administrator in the sole exercise of its discretion.

1.17 “YEAR OF SERVICE” shall mean, for purposes of vesting computation, the twelve (12)- consecutive-month periods commencing with the Employee’s Employment Date, and anniversaries of that date. Credit shall be given for service performed prior to the Effective Date of the Plan.

ARTICLE TWO—PLAN PARTICIPATION

2.1 PARTICIPATION. All Employees participating in this Plan prior to the Plan’s restatement shall continue to participate, subject to the terms hereof. Each other Employee shall become a Participant under the Plan effective as of the date on which he is designated by the Plan Administrator to be a Participant in the Plan. For purposes of Section 3.1, an Employee shall become a Participant under the Plan effective as of the first day of the Plan Year for which he elects to defer a portion of his Compensation and completes a Compensation Deferral Authorization Form, provided that the Plan Administrator, in its sole discretion, determines that the Employee may make a compensation deferral election pursuant to Section 3.1. The Compensation Deferral Authorization Form must be completed, executed and returned to the Plan Administrator prior to the first day of the Plan Year for which it is applicable. Notwithstanding the foregoing provisions of this Section 2.1, an Employee shall become a Participant in the Plan for purposes of Section 3.1 during the first Plan Year in which the Plan Administrator determines that the Employee may make a compensation deferral election pursuant to Section 3.1 provided that the Participant’s election is made within thirty (30) days after his participation begins.

2.2 TERMINATION OF PARTICIPATION. The Employer, in its sole discretion, may terminate an Employee’s active participation in the Plan. In the event that the Employer terminates an Employee’s active participation, the Employee is no longer eligible to make compensation deferrals pursuant to Article Three.

ARTICLE THREE—COMPENSATION DEFERRALS
AND EMPLOYER MATCHING CONTRIBUTIONS

3.1 COMPENSATION DEFERRALS.

(a) Elections.The Employer, in its sole discretion, may permit a Participant to elect in writing to defer a portion of his Compensation up to 40% of his Base Compensation and up to 100% of his Bonus Compensation for any Plan Year. The election once made for a Plan Year is irrevocable for that Plan Year. The amount of a Participant’s Compensation that is deferred in accordance with the Participant’s election shall be withheld by the Employer from the Participant’s Compensation on a ratable basis throughout the Plan Year and/or on a nonratable, single-sum basis. The amount deferred on behalf of each Participant shall be contributed by the Employer to the Trust and allocated to the Participant’s Account at the time it would otherwise be paid to the Participant. Notwithstanding the foregoing provisions of this Section 3.1, a Participant may defer a portion of his Compensation for any Plan Year only if the Participant has elected in writing to defer a portion of his Compensation prior to the first day of such Plan Year or, in the case of a Participant’s initial participation in the Plan, the first day of the month coincident with or next following his designation by the Employer to be a Participant in the Plan pursuant to Section 2.1.

(b) Changes in Election. A Participant may, with the consent of the Employer in its sole discretion, prospectively elect to change or revoke the amount (or percentage) of his compensation deferral by filing a written election with the Employer prior to January 1 of the Plan Year for which it is effective. The Participant shall be entitled to change the amount (or percentage) of his compensation deferral which change shall be effective as of January 1, provided that the change is made in writing prior to January 1. A change in election is only permitted to be made prior to January 1 of the Plan Year for which it is applicable.

3.2 EMPLOYER MATCHING CONTRIBUTIONS. The Employer shall contribute to the Plan on behalf of any Participant a matching contribution equal to 25% of the Participant’s compensation deferrals pursuant to Section 3.1 up to 6% of Compensation (disregarding bonuses and special payments). The Employer may, in its sole discretion, make an additional contribution on behalf of any one Participant, or on behalf of any number of Participants, for any Plan Year without making an additional contribution on behalf of other Participants. Forfeitures which arise from Employer matching contributions shall be used to reduce Employer matching contributions.

3.3 TIMING OF CONTRIBUTIONS. Compensation deferrals under Section 3.1 and Employer matching contributions under Section 3.2 shall be made to the Trust as soon as administratively feasible.

ARTICLE FOUR—ACCOUNTING RULES

4.1 INVESTMENT OF ACCOUNTS AND ACCOUNTING RULES.

(a) Investment Funds. The investment of Participants’ Accounts shall be made in a manner consistent with the provisions of the Trust.

(b) Allocation of investment Experience. As of each Valuation Date, the investment fund(s) of the Trust shall he valued at fair market value, and any income, loss, appreciation and depreciation (realized and unrealized), and any paid expenses of the Trust attributable to such fund shall be apportioned among Participants’ Accounts based upon the value of each Account as of the preceding Valuation Date. Adjustment of Accounts for investment experience, if any, shall be deemed to be made as of the Valuation Date to which the adjustment relates, even if actually made on a later date.

(c) Safe investment Option. The Administrator may provide that one of the investment funds offers both a reasonable safety of the principal amount invested and a reasonable rate of interest return. An investment fund composed of guaranteed interest contracts through an insurance company, a pooled fund of short-term bonds and notes, or a money market fund shall be deemed to meet these standards.

(d) Allocation of Employer Contributions. Employer contributions shall be allocated to the Account of each eligible Participant as of the last day of the period for which the contributions are made.

(e) Manner and Time of Debiting Distributions. For any Participant who receives a distribution from his Account, distribution shall be made in accordance with the provisions dealing with the timing of commencement of benefit payments in Section 6.2. The distribution shall be equal to the fair market value of the Participant’s vested Account as of the Valuation Date preceding the distribution.

ARTICLE FIVE—VESTING, RETIREMENT AND DISABILITY BENEFITS

5.1 VESTING. Except as otherwise provided with respect to Normal Retirement, disability, or death, and subject to the provisions of this Article Five, a Participant shall have a nonforfeitable (vested) right to a percentage of his Account derived from Employer matching contributions under Section 3.2, as follows:

Years of Service	Vested Percentage
Less than 1 year	0	%
1 year but less than 2	25	%
2 years but less than 3	50	%
3 years but less than 4	75	%
4 years and thereafter	100	%

The nonvested portion of the Participant’s Account shall be forfeited as of the later of the Participant’s termination of employment or the date on which the Participant receives the first payment from his vested Account under the Plan. The amount forfeited shall be used to reduce Employer matching contributions, as set forth in Section 3.2.

5.2 NORMAL RETIREMENT. A Participant who is in the employment of the Employer at his Normal Retirement Date shall have a nonforfeitable interest in 100% of his Account. A Participant who continues in employment after his Normal Retirement Date shall continue to participate under the Plan.

5.3 PERMANENT AND TOTAL DISABILITY. If a Participant incurs a permanent and total disability while in the employ of the Employer, the Participant shall have a nonforfeitable interest in 100% of his Account. Payment of his Account balance will be made at the time and in a manner specified in Article Six, following receipt by the Plan Administrator of the Participant’s written distribution request. “Permanent and total disability” shall mean suffering from a physical or mental condition that, in the opinion of the Administrator and based upon appropriate medical advice and examination, can be expected to result in death or can be expected to last for a continuous period of no less than 12 months and for which the Participant is receiving income replacement benefits for a period of at least three months under an accident or health plan of the Employer. Receipt of a Social Security disability award shall be deemed proof of permanent and total disability.

ARTICLE SIX—MANNER AND TIME OF DISTRIBUTING BENEFITS

6.1 MANNER OF PAYMENT. The Participant’s Account shall be distributed to the Participant (or to the Participant’s Beneficiary in the event of the Participant’s death) in a single lump-sum payment.

6.2 TIME OF COMMENCEMENT OF BENEFIT PAYMENTS.

(a) Normal or Late Retirement. Participants whose employment has terminated shall have distribution of their Account commence within sixty (60) days following their Normal Retirement Date.

(b)Disability Retirement. Participants whose employment has terminated due to total and permanent disability shall have distribution of their Account commence within sixty (60) days following their termination of employment.

(c) Pre-retirement Termination of Employment. If a Participant terminates employment for any reason other than Normal Retirement, disability or death, distribution of his Account balance shall be made within sixty (60) days following the Participant’s termination of employment.

6.3 FURNISHING INFORMATION. Prior to the payment of any benefit under the Plan, each Participant or Beneficiary may be required to complete such administrative forms and furnish such proof as is deemed necessary or appropriate by the Employer and/or Administrator.

6.4DEATH BENEFIT.

(a) Death While an Employee. In the event of the death of a Participant while in the employ of the Employer, vesting in the Participant’s Account shall be 100%. The Account shall constitute the Participant’s death benefit to be distributed under this Article to the Participant’s Beneficiary.

(b) Death After Termination of Employment. In the event of the death of a former Participant after termination of employment but prior to the complete distribution of his Account balance, the undistributed balance of the Participant’s Account shall be paid to the Participant’s Beneficiary.

6.5 DESIGNATION OF BENEFICIARY. Each Participant shall file with the Administrator a designation of Beneficiary to receive payment of death benefits payable hereunder if such Beneficiary should survive the Participant. However, no married Participant’s designation of a Beneficiary other than his spouse shall be effective unless the Participant’s spouse has signed a written consent witnessed by a Plan representative or a Notary Public, which consent provides for a designation of an alternative Beneficiary. Such designation of an alternative Beneficiary may not be changed unless a new consent is signed by the Participant’s spouse.

Beneficiary designations may include primary and contingent Beneficiaries, and may be revoked or amended at any time in similar manner or form, and the most recent designation shall govern. In the absence of an effective designation of Beneficiary, or if the Beneficiary dies before complete distribution of the Participant’s benefits, all amounts shall be paid to the surviving spouse of the Participant, if living at least 30 days following the Participant’s death, or otherwise equally to the Participant’s then-surviving children, whether by marriage or adopted, and the surviving issue of any deceased children, per stirpes, or, if none, to the Participant’s estate. Notification to Participants of the death benefits under the Plan and the method of designating a Beneficiary shall be given at the time and in the manner provided by regulations and rulings under the Code.

6.6 TIME AND MODE OF DISTRIBUTING DEATH BENEFITS. In the event of the death of the Participant, the Participant’s Account shall be distributed to the Participant’s Beneficiary in a single lump-sum payment within sixty (60) days following the Participant’s death.

ARTICLE SEVEN—ADMINISTRATION OF THE PLAN

7.1PLAN ADMINISTRATION. Bertucci’s Corporation shall be the Plan Administrator, hereinbefore and hereinafter called the Administrator, and named fiduciary of the Plan, unless the Employer shall designate a person or committee of persons to be the Administrator and named fiduciary. The administration of the Plan, as provided herein, including a determination of the payment of benefits to Participants and their Beneficiaries, shall be the responsibility of the Administrator. In the event more than one party shall act as Administrator, all actions shall be made by majority decisions. In the administration of the Plan, the Administrator may (a) employ agents to carry out nonfiduciary responsibilities (other than Trustee responsibilities) and (b) consult with counsel, who may be counsel to the Employer.

The Administrator will administer the Plan in accordance with established policies, interpretations, practices, and procedures relating to the Plan and in accordance with the requirements of the Employee Retirement Income Security Act of 1974, as amended, and other applicable laws. The Administrator shall have discretion (a) to interpret the terms of the Plan, (b) to determine factual questions that arise in the course of administering the Plan, (c) to adopt rules and regulations regarding the administration of the Plan, (d) to determine the conditions under which benefits become payable under the Plan and (e) to make any other determinations that the Administrator believes are necessary and advisable for the administration of the Plan. Any determination made by the Administrator shall be final, conclusive and binding on all parties. The Administrator may delegate all or any portion of its authority to any person or entity.

The expenses of administering the Plan and the compensation of all employees, agents, or counsel of the Administrator, including the accounting fees, the recordkeeper’s fees, and the fees of any benefit consulting firm, shall be paid by the Plan, or shall be paid by the Employer if the Employer so elects. No compensation may be paid by the Plan to full-time Employees of the Employer.

The Administrator shall obtain from the Trustee, not less often than annually, a report with respect to the value of the assets held in the Trust Fund, in such form as is required by the Administrator.

‘The Administrator shall administer the Plan and adopt such rules and regulations as, in the opinion of the Administrator, are necessary or advisable to implement and administer the Plan and to transact its business.

7.2 CLAIMS PROCEDURE. Pursuant to procedures established by the Administrator, adequate notice in writing shall be provided to any Participant or Beneficiary whose claim for benefits under the Plan has been denied within 90 days of receipt of such claim; provided, however, that an extension of time not exceeding 90 days will be available if special circumstances require an extension of time for processing the claim. If so, notice of such extension, indicating what special circumstances exist and the date by which a final decision is expected to be rendered, will be furnished to the claimant before the initial 90-day period expires. The notice of denial shall set forth the specific reason for such denial, shall be written in a manner calculated to be understood by the claimant, and shall advise of the right to administrative review.

Within 90 days after receipt of such notice of denial, the claimant may request, by mailing or

delivery of written notice to the Plan, a review by the Administrator of the decision denying the claim. Such petition for review shall state in clear and concise terms the reason or reasons for disputing the denial and shall be accompanied by any pertinent documentary material not already furnished. The review will take into account all comments, documents, records and other information submitted relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

After such review, the Administrator will determine whether the denial of the claim was correct and will notify the claimant in writing of its determination within a reasonable period of time, but not later than 60 days after the receipt of your request for review by the Administrator; provided, however, that an extension of time not exceeding 60 days will be available if special circumstances require an extension of time for processing the appeal. If so, notice of such extension, indicating what special circumstances exist and the date by which a final decision is expected to be rendered, will be furnished to the claimant before the initial 60-day period expires.

The claimant will be advised of the Administrator’s decision in writing. The notice of denial shall set forth the specific reason for such denial and shall be written in a manner calculated to be understood by the claimant.

If the claimant fails to request review within the 90-day period, it shall be conclusively determined for all purposes of this Plan that the denial of such claim by the Administrator is correct.

If the Administrator’s determination is favorable to the claimant, it shall be binding and conclusive. If such determination is adverse to the claimant, it shall be binding and conclusive unless the claimant notifies the Administrator within 90 days after the mailing or delivery by the Administrator of its determination, that the claimant intends to institute legal proceedings challenging the determination of the Administrator, and the claimant actually institutes such legal proceeding within 180 days after such mailing or delivery.

The denial of an application or claim as to which the right of review has been waived or the decision of the Administrator with respect to a petition for review, shall be final and binding upon all parties, subject only to judicial review.

7.3 TRUST AGREEMENT AND DESIGNATION OF TRUSTEE. The Employer shall create and enter into a Trust Agreement with the Trustee as designated therein. The Trust, and any assets held by the Trust to assist the Employer in meeting its obligations under this Plan, shall conform to the terms of the model trust, as described in IRS Revenue Procedure 92-64.

ARTICLE EIGHT—AMENDMENT AND TERMINATION

8.1 AMENDMENT. The Employer shall have the right to amend, alter, or modify the Plan at any time, or from time to time, in whole or in part. Any such amendment shall become effective under its terms upon adoption by the Employer, unless otherwise set forth in the amendment. However, no amendment affecting the duties, powers or responsibilities of the Trustee may be made without the written consent of the Trustee. Except as provided below, no amendment shall be made to the Plan which would deprive any Participant of any nonforfeitable portion of his Account. Notwithstanding any provision of the Plan to the contrary, the Employer may amend the Plan at any time and in any manner it deems appropriate to comply with the law or regulations applicable to deferred compensation plans.

8.2 TERMINATION OF THE PLAN. The Employer reserves the right at any time and in its sole discretion to terminate the Plan. The Employer shall direct the Trustee to distribute the Trust Fund in accordance with the Plan’s distribution provisions to the Participants and their Beneficiaries, each Participant or Beneficiary receiving a portion of the Trust Fund equal to the value of his Account as of the date of distribution. These distributions may be implemented by the continuance of the Trust and the distribution of the Participants’ Accounts shall be made in such time and such manner as though the Plan had not terminated, or by any other appropriate method. Upon distribution of the Trust Fund, the Trustee shall be discharged from all obligations under the Trust and no Participant shall have any further right or claim therein.

ARTICLE NINE—UNFORESEEABLE EMERGENCIES

9.1 UNFORESEEABLE EMERGENCIES. The Administrator may distribute to any Participant or his Beneficiary in any one Plan Year up to 100% of his Account, valued as of the preceding Valuation Date, in the case of an unforseeable emergency.

For purposes of this Section 9.1, an unforeseeable emergency is defined as severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in Section 1 5 2(a) of the Code) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforesecable circumstances arising as a result of events beyond the control of the Participant. Distribution shall not be made to the extent that such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise, by liquidation of the Participant’s assets to the extent the liquidation of such assets would not itself cause severe financial hardship, or by cessation of salary deferrals under the Plan. Such distribution shall only be made to the extent reasonably needed to satisfy the emergency need.

The Administrator shall require that requests for hardship distributions be made under procedures which include the Participant’s signed statement of the facts causing the unforeseeable emergency, the amount of the financial need and any other information required to ascertain the facts.

ARTICLE TEN—MISCELLANEOUS PROVISIONS

10.1 BENEFITS UNFUNDED. It is the intention of the parties that this Plan is an unfunded deferred compensation plan and that the benefits payable hereunder are not to be included in the gross income of the Participant until the taxable year in which the benefits are actually received or otherwise made available, whichever occurs earlier. The Participant has the status of an unsecured general creditor of the Employer and the Plan constitutes a mere promise by the Employer to make benefit payments in the future. In the event there is an amendment to the Code or the Department of Treasury issues regulations which would require the Participant to include the benefits payable hereunder in gross income before they are actually received or otherwise made available, the Employer, with the consent of the Participant, shall revise and amend this Plan and/or adopt another method of retirement compensation for the Participant which is consistent with the deferral purposes contained in this Plan.

10.2 ERISA COMPLIANCE. This Plan is being established by the Employer with the express intention that the Plan constitutes an unfunded pension benefit plan maintained by the Employer for the purpose of providing benefits for a select group of management or highly compensated employees (“unfunded top-hat plan”) under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Accordingly, this Plan is being treated as a plan exempt from the participation, vesting, funding and fiduciary requirements of Title I of ERISA, but subject to the reporting and disclosure requirements. The Employer intends to comply with the reporting and disclosure requirements by filing a notice with the United States Department of Labor, Office of Pension and Welfare Benefit Programs, pursuant to 29 C.F.R. Section 2520.104-23(b). This notice states that the Plan information will be available to the Secretary of Labor upon request.

In the event there is an amendment to ERISA or the Department of Labor issues revised regulations governing the application of Title I of ERISA to unfunded top-hat plans and such amendment or regulations require the Plan to comply with ERISA’s participation, vesting, funding and/or fiduciary requirements, the Employer reserves the right to revise and amend this Plan or to adopt another method of retirement compensation consistent with the unfunded nature of this Plan.

10.3 PLAN DOES NOT AFFECT EMPLOYMENT. Neither the creation of this Plan nor any amendment thereto nor the creation of any fund nor the payment of benefits hereunder shall be construed as giving any legal or equitable right to any Employee or Participant against the Employer, its officers or Employees or against the Trustee, and all liabilities under this Plan shall be satisfied, if at all, only out of the Trust Fund held by the Trustee. Participation in the Plan shall not give any Participant any right to be retained in the employ of the Employer, and the Employer hereby expressly retains the right to hire and discharge any Employee at any time with or without cause, as if the Plan had not been adopted, and any such discharged Participant shall have only such rights or interests in the Trust Fund as may be specified herein.

10.4 SUCCESSOR TO THE EMPLOYER. In the event of the merger, consolidation, reorganization or sale of assets of the Employer, under circumstances in which a successor person, firm, or corporation shall carry on all or a substantial part of the business of the Employer, and such successor shall employ a substantial number of Employees of the Employer and shall elect to carry on the provisions of the Plan, such successor shall be substituted for the Employer under the terms and provisions of the Plan upon the filing in writing with the Trustee of its election to do so.

10.5 BENEFITS NOT ASSIGNABLE. The benefits under this Plan are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the Participant or the Participant’s Beneficiary, or liable for the debts, contracts, liabilities, engagements or torts of the Participant or his Beneficiary.

10.6 SOURCE OF PAYMENTS. Any funds which may be contributed and invested under the provisions of this Plan shall continue to be subject to the unsecured general creditors of the Employer. lo the extent that any person acquires a right to receive payments from the Employer under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Employer. Notwithstanding the foregoing, this Section 10.6 is subject to the provisions of the Trust.

10.7 DISTRIBUTION TO LEGALLY INCAPACITATED PERSON. In the event any benefit is payable to a minor or to a person deemed to be incompetent or to a person otherwise under legal disability, or who is by sole reason of advanced age, illness, or other physical or mental incapacity incapable of handling the disposition of his property, the Administrator may direct the Trustee to apply all or any portion of such benefit directly to the care, comfort, maintenance, support, education or use of such person or to pay or distribute the whole or any part of such benefit to (a) the spouse of such person, (b) the parent of such person, (c) the guardian, committee, or other legal representative, wherever appointed, of such person, (d) the person with whom such person shall reside, (e) any other person having the care and control of such person, or (f) such person. The receipt of any such payment or distribution is a complete discharge of liability for Plan obligations.

10.8 CONSTRUCTION. Wherever appropriate, the use of the masculine gender shall be extended to include the feminine and/or neuter or vice versa; and the singular form of words shall be extended to include the plural; and the plural shall be restricted to mean the singular.

10.9 GOVERNING DOCUMENTS. A Participant’s rights shall be determined under the terms of the Plan as in effect at the Participant’s date of separation from employment with the Employer.

10.10 GOVERNING LAW. The provisions of this Plan shall be construed under the laws of the state of the situs of the Plan, except to the extent such laws are preempted by Federal law.

10.11 HEADINGS. The Article headings and Section numbers are included solely for ease of reference. If there is any conflict between such headings or numbers and the text of the Plan, the text shall control.

10.12 COUNTERPARTS. This Plan may be executed in any number of counterparts, each of which shall he deemed an original; said counterparts shall constitute but one and the same instrument, which may be sufficiently evidenced by any one counterpart.

IN WITNESS WHEREOF, the Employer, by its duly authorized officer, has caused this Plan to be executed this 20^th day of December, 2004.

BERTUCCI’S CORPORATION
By	/s/ David G. Lloyd
Authorized Officer

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Stephen V. Clark, certify that:

1.I have reviewed this annual report on Form 10-K of Bertucci’s Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [omitted] for the Registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.[omitted]

c.evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors:

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: March 28, 2006
	By:	/s/ Stephen V. Clark
	Stephen V. Clark
	Chief Executive Officer and Director

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, David G. Lloyd, certify that:

1.I have reviewed this annual report on Form 10-K of Bertucci’s Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))[omitted] for the Registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.[omitted]

c.evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors:

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: March 28, 2006
	By:	/s/ David G. Lloyd
	David G. Lloyd
	Chief Financial Officer and Director