EXHIBIT 10.1

 

 

THQ INC. MANAGEMENT

 

DEFERRED COMPENSATION PLAN

 

 

Effective January 1, 2005

 

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TABLE OF CONTENTS

 

ARTICLE I

 

DEFINITIONS

 

 

 

 

ARTICLE II

 

ELIGIBILITY

 

2.1

Eligibility

 

2.2

Commencement of Participation

 

2.3

Cessation of Participation

 

2.4

Cessation of Eligibility

 

 

 

 

ARTICLE III

 

DEFERRALS AND CONTRIBUTIONS

 

3.1

Basic Deferrals

 

3.2

Bonus Deferrals and Performance Based Compensation Deferrals

 

3.3

Discretionary Company Credits

 

3.4

Limitations on Deferrals

 

3.5

No Withdrawal

 

 

 

 

ARTICLE IV

 

VESTING

 

4.1

Vesting of Participants’ Accounts

 

4.2

Vesting Upon Plan Termination

 

 

 

 

ARTICLE V

 

ACCOUNTS

 

5.1

Accounts

 

5.2

Interest Credited to Accounts at Least Monthly

 

5.3

Determination of Interest Rate

 

 

 

 

ARTICLE VI

 

BENEFIT DISTRIBUTIONS AND ACCOUNT WITHDRAWALS

 

6.1

Benefit Amount

 

6.2

Timing of Distributions

 

6.3

Method of Distribution

 

6.4

Election of In-Service Distribution Year

 

6.5

Distribution Upon Death of Participant

 

6.6

Distribution Upon Disability of Participant

 

6.7

Financial Hardship Withdrawal

 

6.8

Specified Employees

 

6.9

Limitation on Distributions to Covered Employees

 

6.10

Tax Withholding

 

 

 

 

ARTICLE VII

 

BENEFICIARIES

 

7.1

Designation of Beneficiary

 

7.2

No Designated Beneficiary

 

 

 

 

ARTICLE VIII

 

TRUST OBLIGATION TO PAY BENEFITS

 

8.1

Deferrals Transferred to the Trust

 

8.2

Source of Benefit Payments

 

8.3

Investment Discretion

 

8.4

No Secured Interest

 

 

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ARTICLE IX

 

PLAN ADMINISTRATION

 

9.1

Committee Powers and Responsibilities

 

9.2

Decisions of the Committee

 

9.3

Indemnification

 

9.4

Claims Procedure

 

 

 

 

ARTICLE X

 

AMENDMENT AND TERMINATION

 

10.1

Right to Amend

 

10.2

Amendments to Ensure Proper Characterization of Plan

 

10.3

Changes in Law Affecting Taxation of Participants

 

10.4

Plan Termination or Plan Suspension

 

10.5

Successor to Company

 

 

 

 

ARTICLE XI

 

MISCELLANEOUS

 

11.1

No Assignment

 

11.2

No Secured Interest

 

11.3

Successors

 

11.4

No Employment Agreement

 

11.5

Attorneys’ Fees

 

11.6

Governing Law

 

11.7

Entire Agreement

 

11.8

Severability

 

 

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THQ INC. MANAGEMENT

DEFERRED COMPENSATION PLAN

 

Effective January 1, 2005

 

The THQ INC. MANAGEMENT DEFERRED COMPENSATION PLAN (the “Plan”) is adopted
effective as of January 1, 2005, by THQ Inc., a Delaware corporation (the
“Company”), primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees of the Company. 
Accordingly, it is intended that this Plan be exempt from the requirements of
Parts II, III and IV of Title I of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”) pursuant to Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA.  This Plan is intended to be an unfunded, nonqualified
deferred compensation plan.  Plan participants shall have the status of
unsecured creditors of the Company with respect to the payment of Plan
benefits.  This Plan is intended to meet the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and any regulations
promulgated thereunder.

 

ARTICLE I

 

DEFINITIONS

 

Whenever used herein, the masculine pronoun shall be deemed to include the
feminine, and the singular to include the plural, unless the context clearly
indicates otherwise, and the following definitions shall govern the Plan:

 

1.1           “ACCOUNT(S)” MEANS THE BOOK ENTRY ACCOUNT(S) ESTABLISHED UNDER THE
PLAN FOR EACH PARTICIPANT TO WHICH ARE CREDITED THE PARTICIPANT’S BASIC
DEFERRALS, BONUS DEFERRALS, ANY DISCRETIONARY COMPANY CREDITS AND THE INTEREST
WITH RESPECT THERETO.  ACCOUNT BALANCES SHALL BE REDUCED BY ANY DISTRIBUTIONS
MADE TO THE PARTICIPANT OR THE PARTICIPANT’S BENEFICIARY(IES) THEREFROM AND ANY
CHARGES THAT MAY BE IMPOSED ON SUCH ACCOUNT(S) PURSUANT TO THE TERMS OF THE
PLAN.  SEPARATE SUBACCOUNTS MAY BE ESTABLISHED TO WHICH SHALL BE CREDITED A
PARTICIPANT’S DEFERRALS FOR EACH SEPARATE PLAN YEAR, THE DISCRETIONARY COMPANY
CREDITS, IF ANY, AND THE INTEREST WITH RESPECT THERETO.  WHERE SUBACCOUNTS HAVE
BEEN ESTABLISHED, ACCOUNT SHALL REFER TO ALL OF THE PARTICIPANTS’ SUBACCOUNTS,
COLLECTIVELY, AS THE CONTEXT MAY REQUIRE.

 

1.2           “BASIC DEFERRAL” MEANS THE PERCENTAGE OF A PARTICIPANT’S ANNUAL
BASE SALARY, COMMISSIONS OR DIRECTOR FEES AND RETAINERS, WHICH THE PARTICIPANT
ELECTS TO DEFER PURSUANT TO ARTICLE III.

 

1.3           “BENCHMARK FUND” SHALL MEAN ONE OR MORE OF THE MUTUAL FUNDS OR
CONTRACTS SELECTED BY THE COMMITTEE PURSUANT TO ARTICLE V.

 

1.4           “BENEFICIARY” MEANS ONE, SOME, OR ALL (AS THE CONTEXT SHALL
REQUIRE) OF THOSE PERSONS, TRUSTS OR OTHER ENTITIES DESIGNATED BY A PARTICIPANT
TO RECEIVE THE UNDISTRIBUTED VALUE OF HIS OR HER ACCOUNT FOLLOWING THE
PARTICIPANT’S DEATH.

 

1.5           “BENEFIT(S)” MEANS THE TOTAL VESTED AMOUNT CREDITED TO A
PARTICIPANT’S ACCOUNT OR SUBACCOUNT.

 

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1.6           “BOARD OF DIRECTORS” OR “BOARD” MEANS THE BOARD OF DIRECTORS OF
THE COMPANY.

 

1.7           “BONUS DEFERRAL” MEANS THE PERCENTAGE OF A PARTICIPANT’S BONUS
AND/OR PERFORMANCE BASED COMPENSATION WHICH THE PARTICIPANT ELECTS TO DEFER
PURSUANT TO ARTICLE III.

 

1.8           “CODE” MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

 

1.9           “COMMITTEE” MEANS THE DEFERRED COMPENSATION COMMITTEE COMPOSED OF
SUCH INDIVIDUALS AS MAY BE APPOINTED BY THE BOARD WHICH SHALL FUNCTION AS THE
ADMINISTRATOR OF THE PLAN.

 

1.10         “COMPANY” MEANS THQ INC., A DELAWARE CORPORATION, AND ANY SUCCESSOR
ORGANIZATION THERETO.

 

1.11         “DEFERRALS” MEANS THAT PERCENTAGE OF A PARTICIPANT’S BASE SALARY,
BONUSES, COMMISSIONS AND/OR DIRECTOR FEES OR RETAINER WHICH IS DEFERRED PURSUANT
TO THIS PLAN.

 

1.12         “DEFERRAL SUBACCOUNT” MEANS THE SUBACCOUNT TO WHICH A PARTICIPANT’S
DEFERRALS FOR A PARTICULAR YEAR ARE CREDITED.

 

1.13         “DISABILITY” MEANS A DETERMINATION BY THE INSURER UNDER THE
COMPANY’S LONG-TERM DISABILITY INSURANCE POLICY THAT THE PARTICIPANT IS DISABLED
AND ELIGIBLE FOR LONG-TERM DISABILITY BENEFITS UNDER SUCH POLICY. 
NOTWITHSTANDING THE FOREGOING, SHOULD REGULATIONS OR OTHER INTERNAL REVENUE
SERVICE (“IRS”) GUIDANCE INTERPRET THIS DEFINITION AS NOT MEETING THE MINIMUM
REQUIREMENTS OF SECTION 409A OF THE CODE, “DISABILITY” UNDER THIS PLAN SHALL
AUTOMATICALLY AND WITHOUT FURTHER ACTION OR AMENDMENT, BE DETERMINED TO EXIST IF
THE PARTICIPANT IS BY REASON OF ANY MEDICALLY DETERMINABLE PHYSICAL OR MENTAL
IMPAIRMENT WHICH CAN BE EXPECTED TO RESULT IN DEATH OR CAN BE EXPECTED TO LAST
FOR A CONTINUOUS PERIOD OF NOT LESS THAN 12 MONTHS, AND THE PARTICIPANT IS
RECEIVING INCOME REPLACEMENT BENEFITS FOR A PERIOD OF NOT LESS THAN 3 MONTHS
UNDER ANY DISABILITY BENEFIT PLAN FOR COVERED EMPLOYEES OF THE EMPLOYER.

 

1.14         “DISCRETIONARY COMPANY CREDIT” MEANS THE AMOUNT, IF ANY, OF COMPANY
CREDITS AWARDED TO A PARTICIPANT PURSUANT TO ARTICLE III AND SPECIFICALLY
INCLUDES ANY 401(K) MATCH CREDITS AS DESCRIBED IN SECTION 3.3.

 

1.15         “DISTRIBUTION DATE” MEANS THE DATE ON WHICH DISTRIBUTION OF A
PARTICIPANT’S BENEFITS IS MADE OR COMMENCED PURSUANT TO ARTICLE VI.

 

1.16         “EFFECTIVE DATE” MEANS THE DATE ON WHICH THE PLAN SHALL BE FIRST
EFFECTIVE, WHICH IS JANUARY 1, 2005.

 

1.17         “ELECTION” MEANS THE FORM ON WHICH A PARTICIPANT (I) ELECTS TO MAKE
DEFERRALS PURSUANT TO ARTICLE III,  AND (II) ELECTS A DISTRIBUTION DATE, AND
(III) ELECTS THE METHOD BY WHICH HIS OR HER BENEFITS WILL BE DISTRIBUTED.  THE
ELECTION SHALL BE IN SUCH FORM AS MAY BE PRESCRIBED BY THE COMMITTEE.

 

1.18         “ELIGIBLE INDIVIDUAL” MEANS (I) AN EMPLOYEE OF THE EMPLOYER WHO IS
A MEMBER OF THE SELECT GROUP OF MANAGEMENT AND HIGHLY COMPENSATED EMPLOYEES AS
MORE PARTICULARLY

 

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DESCRIBED IN ARTICLE II AND WHO HAS BEEN DESIGNATED BY THE COMMITTEE, IN ITS
SOLE DISCRETION, AS ELIGIBLE TO PARTICIPATE IN THE PLAN AND NOTIFIED OF HIS
ELIGIBILITY AND (II) MEMBERS OF THE BOARD.

 

1.19         “EMPLOYER” MEANS THE COMPANY OR A SUBSIDIARY THEREOF THAT HAS
ADOPTED THIS PLAN.

 

1.20         “ENTRY DATE” MEANS THE FIRST DAY OF ANY PLAN YEAR AND, AS TO AN
ELIGIBLE INDIVIDUAL, THE DATE WHICH IS THIRTY (30) DAYS FROM THE DATE ON WHICH
SUCH ELIGIBLE INDIVIDUAL IS FIRST DETERMINED TO BE ELIGIBLE TO PARTICIPATE IN
THE PLAN BY THE COMMITTEE.

 

1.21         “IN-SERVICE DISTRIBUTION YEAR” MEANS THE YEAR IN WHICH DISTRIBUTION
OF A PARTICIPANT’S DEFERRAL SUBACCOUNT IS MADE OR COMMENCED PURSUANT TO
SECTION 6.4.

 

1.22         “INTEREST” MEANS THE INVESTMENT RETURN OR LOSS DETERMINED IN
ACCORDANCE WITH ARTICLE V WHICH SHALL BE CREDITED TO THE PARTICIPANTS’ ACCOUNTS.

 

1.23         “INTEREST RATE” SHALL HAVE THE MEANING AS SET FORTH IN SECTION 5.3.

 

1.24         “OPEN ENROLLMENT PERIOD” MEANS SUCH PERIOD AS THE COMMITTEE MAY
SPECIFY WHICH IS (I) FOR THE FIRST PLAN YEAR, THE PERIOD SELECTED BY THE
COMMITTEE WHICH ENDS NO LATER THAN DECEMBER 31, 2004, AND (II) FOR ALL
SUBSEQUENT PLAN YEARS, THE PERIOD SELECTED BY THE COMMITTEE WHICH ENDS NO LATER
THAN THE FIRST DAY OF EACH PLAN YEAR, OR, WITH RESPECT TO AN ELIGIBLE INDIVIDUAL
WHO FIRST BECOMES ELIGIBLE TO PARTICIPATE IN THE PLAN DURING A PLAN YEAR, THE
PERIOD WHICH ENDS NO LATER THAN THIRTY (30) DAYS AFTER BECOMING AN ELIGIBLE
PARTICIPANT.  NOTWITHSTANDING THE FOREGOING, THE OPEN ENROLLMENT PERIOD FOR
DEFERRALS OF PERFORMANCE BASED COMPENSATION MAY BE DIFFERENT THAN THAT FOR BASIC
DEFERRALS AND MAY END NO LATER THAN SIX (6) MONTHS PRIOR TO THE END OF THE
PERFORMANCE PERIOD FOR WHICH SERVICES ARE TO BE RENDERED.

 

1.25         “PARTICIPANT” MEANS (I) AN ELIGIBLE INDIVIDUAL WHO HAS ELECTED TO
PARTICIPATE IN THE PLAN BY EXECUTING AND SUBMITTING AN ELECTION TO THE
COMMITTEE; (II) AN ELIGIBLE INDIVIDUAL WHO HAS CEASED ACTIVE PARTICIPATION IN
ACCORDANCE WITH SECTION 2.3 AND HAS NOT RECEIVED ALL OF THE VESTED BENEFITS TO
WHICH HE OR SHE IS ENTITLED; OR (III) AN ELIGIBLE INDIVIDUAL FOR WHOM
DISCRETIONARY COMPANY CREDITS ARE MADE, REGARDLESS OF WHETHER SUCH ELIGIBLE
INDIVIDUAL HAS EXECUTED AND SUBMITTED AN ELECTION.

 

1.26         “PERFORMANCE BASED COMPENSATION” MEANS ANY COMPENSATION WHICH MAY
BE PAID TO AN ELIGIBLE INDIVIDUAL BASED ON SERVICES PERFORMED OVER A PERIOD OF
AT LEAST TWELVE (12) MONTHS, OR SUCH OTHER DEFINITION AS MAY BE REQUIRED BY
APPLICABLE REGULATIONS.

 

1.27         “PLAN” MEANS THE THQ INC. MANAGEMENT DEFERRED COMPENSATION PLAN,
EFFECTIVE JANUARY 1, 2005, AS IT MAY BE AMENDED FROM TIME TO TIME.

 

1.28         “PLAN YEAR” MEANS THE 12-MONTH PERIOD BEGINNING ON EACH JANUARY 1
AND ENDING ON THE FOLLOWING DECEMBER 31.

 

1.29         “RETIREMENT” MEANS THE PARTICIPANT’S TERMINATION OF SERVICE WITH
THE EMPLOYER AFTER OBTAINING AGE SIXTY-FIVE (65).

 

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1.30         “SERVICE” MEANS THE PARTICIPANT’S EMPLOYMENT OR SERVICE WITH THE
EMPLOYER ON A SUBSTANTIALLY FULL-TIME BASIS IN THE CAPACITY OF AN EMPLOYEE.  A
PARTICIPANT’S SERVICE SHALL INCLUDE PERIODS OF EMPLOYMENT OR SERVICE WITH ANY
EMPLOYER REGARDLESS OF WHETHER SUCH EMPLOYER HAS ADOPTED THIS PLAN.  A
PARTICIPANT’S SERVICE SHALL NOT BE DEEMED TO HAVE TERMINATED MERELY BECAUSE OF A
CHANGE IN THE CAPACITY UNDER WHICH THE PARTICIPANT RENDERS SERVICE TO THE
COMPANY, PROVIDED THERE IS NO INTERRUPTION OR TERMINATION OF PARTICIPANT’S
SERVICE.  A PARTICIPANT’S SERVICE SHALL TERMINATE UPON AN ACTUAL TERMINATION OF
SERVICE, WHETHER BY DEATH, RETIREMENT, DISABILITY, OR OTHERWISE.  SUBJECT TO THE
FOREGOING, THE COMMITTEE, IN ITS DISCRETION, SHALL DETERMINE WHETHER
PARTICIPANT’S SERVICE HAS TERMINATED AND THE EFFECT OF SUCH TERMINATION.

 

1.31         “SPECIFIED EMPLOYEE” MEANS ANY PARTICIPANT WHO WOULD BE CONSIDERED
A “SPECIFIED EMPLOYEE” AS THAT TERM IS DEFINED IN SECTION 409A(A)(2)(B)(I) OF
THE CODE.

 

1.32         “TRUST” MEANS THE LEGAL ENTITY CREATED BY THE TRUST AGREEMENT.

 

1.33         “TRUST AGREEMENT” MEANS THE TRUST AGREEMENT ENTERED INTO BETWEEN
THE COMPANY AND FIRST AMERICAN TRUST, FSB, EFFECTIVE JANUARY 1, 2005, AND ANY
AMENDMENTS THERETO.

 

1.34         “TRUSTEE” MEANS THE TRUSTEE NAMED IN THE TRUST AGREEMENT AND ANY
DULY APPOINTED SUCCESSOR OR SUCCESSORS THERETO.

 

1.35         “YEAR OF SERVICE” MEANS 12 CONSECUTIVE MONTHS OF SERVICE.

 

ARTICLE II

 

ELIGIBILITY

 

2.1           ELIGIBILITY.  ELIGIBILITY FOR PARTICIPATION IN THE PLAN SHALL BE
LIMITED TO A SELECT GROUP OF MANAGEMENT (WHICH SHALL INCLUDE SPECIFICALLY
MEMBERS OF THE BOARD) OR HIGHLY COMPENSATED EMPLOYEES OF THE EMPLOYER, WHO ARE
DESIGNATED BY THE COMMITTEE, IN ITS SOLE DISCRETION, AS ELIGIBLE TO PARTICIPATE
IN THE PLAN.  ELIGIBLE INDIVIDUALS SHALL BE NOTIFIED AS TO THEIR ELIGIBILITY TO
PARTICIPATE IN THE PLAN.  PARTICIPATION IN THE PLAN IS VOLUNTARY.

 

2.2           COMMENCEMENT OF PARTICIPATION.  AN ELIGIBLE INDIVIDUAL MAY BEGIN
PARTICIPATION IN THE PLAN UPON ANY ENTRY DATE, SUBJECT TO THE EXECUTION AND
SUBMISSION OF AN ELECTION PURSUANT TO ARTICLE III.  NOTWITHSTANDING THE
FOREGOING, ALTHOUGH MEMBERS OF THE BOARD ARE ELIGIBLE INDIVIDUALS, THE SPECIFIC
INITIAL ENTRY DATE FOR PARTICIPATION BY MEMBERS OF THE BOARD AFTER THE EFFECTIVE
DATE SHALL BE DETERMINED BY THE COMMITTEE, IN ITS SOLE AND ABSOLUTE DISCRETION,
AND CONSEQUENTLY, NO MEMBER OF THE BOARD MAY PARTICIPATE IN THE PLAN UNTIL SUCH
TIME AS THE COMMITTEE DETERMINES.  IN ADDITION, PARTICIPATION OF AN ELIGIBLE
INDIVIDUAL WHO HAS NOT OTHERWISE COMMENCED PARTICIPATION IN THE PLAN, SHALL
COMMENCE WHEN A DISCRETIONARY COMPANY CREDIT IS MADE TO THE ACCOUNT OF SUCH
ELIGIBLE INDIVIDUAL PURSUANT TO THE PROVISIONS OF SECTION 3.3.

 

2.3           CESSATION OF PARTICIPATION.  ACTIVE PARTICIPATION IN THE PLAN
SHALL END WHEN A PARTICIPANT’S SERVICE TERMINATES OR AT SUCH TIME AS A
PARTICIPANT IS NOTIFIED BY THE COMMITTEE, PURSUANT TO SECTION 2.4, BELOW, THAT
HE OR SHE IS NO LONGER ELIGIBLE TO PARTICIPATE IN THE PLAN.  UPON TERMINATION OF
SERVICE OR ELIGIBILITY, A PARTICIPANT SHALL REMAIN AN INACTIVE PARTICIPANT IN

 

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THE PLAN UNTIL ALL OF THE VESTED BENEFITS TO WHICH HE OR SHE IS ENTITLED UNDER
THIS PLAN HAVE BEEN PAID IN FULL.

 

2.4           CESSATION OF ELIGIBILITY.  THE COMMITTEE MAY AT ANY TIME, AND IN
ITS SOLE DISCRETION, NOTIFY ANY PARTICIPANT THAT HE OR SHE IS NOT ELIGIBLE TO
PARTICIPATE IN THE PLAN, OR IS NOT ELIGIBLE FOR DISCRETIONARY COMPANY CREDITS IN
ANY PLAN YEAR.

 

ARTICLE III

 

DEFERRALS AND CONTRIBUTIONS

 

3.1           BASIC DEFERRALS.

 

3.1.1        AN ELIGIBLE INDIVIDUAL MAY ELECT TO REDUCE HIS OR HER ANNUAL BASE
SALARY, COMMISSIONS AND/OR DIRECTOR FEES AND RETAINERS, AS APPLICABLE, BY THE
PERCENTAGE SET FORTH IN A WRITTEN AND SIGNED ELECTION FILED WITH THE COMMITTEE,
SUBJECT TO THE PROVISIONS OF THIS ARTICLE III.  THE BASIC DEFERRALS SHALL NOT BE
PAID TO THE PARTICIPANT, BUT SHALL BE WITHHELD FROM SUCH AMOUNTS OTHERWISE TO BE
PAID TO THE PARTICIPANT AND AN AMOUNT EQUAL TO THE BASIC DEFERRALS SHALL BE
CREDITED TO THE PARTICIPANT’S APPLICABLE DEFERRAL SUBACCOUNT.

 

3.1.2        THE ELECTION MUST BE FILED WITH THE COMMITTEE DURING THE OPEN
ENROLLMENT PERIOD FOR THE PLAN YEAR TO WHICH SUCH ELECTION APPLIES.  UNLESS
REGULATIONS OR OTHER GUIDANCE IS PROVIDED BY THE IRS WHICH SPECIFICALLY
AUTHORIZES REVOCATION OF ELECTIONS, EACH PARTICIPANT ELECTION SHALL BE
IRREVOCABLE.  UNLESS INCREASED, DECREASED OR TERMINATED DURING ANY SUBSEQUENT
OPEN ENROLLMENT PERIOD, AN ELECTION SHALL REMAIN IN EFFECT UNTIL SO CHANGED BY
THE PARTICIPANT DURING SUCH SUBSEQUENT OPEN ENROLLMENT PERIOD.

 

3.1.3        EACH ELECTION TO MAKE BASIC DEFERRALS SHALL APPLY ONLY TO SUCH
AMOUNTS EARNED AFTER THE EFFECTIVE DATE OF SUCH ELECTION.

 

3.1.4        FOR THE PURPOSE OF DETERMINING AN ELIGIBLE INDIVIDUAL’S BASIC
DEFERRALS: (I) “BASE SALARY” SHALL MEAN THE BASE SALARY PAID BY THE EMPLOYER,
AND SHALL INCLUDE SEVERANCE PAY AND ANY OTHER SOURCE OF INCOME DETERMINED BY THE
COMMITTEE TO BE APPROPRIATE, BUT SHALL NOT INCLUDE, UNLESS SPECIFICALLY
AUTHORIZED BY THE COMMITTEE, BONUSES, OVERTIME, INCENTIVE PAYMENTS, NON-MONETARY
AWARDS, AUTO ALLOWANCES AND OTHER FORMS OF ADDITIONAL COMPENSATION, OR ANY OTHER
FORM OF COMPENSATION, WHETHER TAXABLE OR NON-TAXABLE; (II) “COMMISSIONS” SHALL
MEAN AMOUNTS, IF ANY, EARNED UNDER THE COMMISSION POLICIES MAINTAINED BY THE
EMPLOYER; AND (III) DIRECTOR FEES AND RETAINERS SHALL MEAN SUCH AMOUNTS PAID TO
DIRECTORS OF THE COMPANY PURSUANT TO DIRECTOR COMPENSATION POLICIES OF THE
COMPANY.

 

3.2           BONUS DEFERRALS AND PERFORMANCE BASED COMPENSATION DEFERRALS.

 

3.2.1        IN ADDITION TO THE BASIC DEFERRAL ELECTION DESCRIBED ABOVE, EACH
ELIGIBLE INDIVIDUAL MAY ELECT TO DEFER A PERCENTAGE OF EACH BONUS, INCLUDING
SPECIFICALLY ANY PERFORMANCE BASED COMPENSATION, EARNED IN THE PLAN YEAR WITH
RESPECT TO WHICH SUCH BONUS AND/OR PERFORMANCE BASED COMPENSATION DEFERRAL
ELECTION IS MADE BY FILING A WRITTEN ELECTION WITH THE COMMITTEE, SUBJECT TO THE
PROVISIONS OF THIS ARTICLE III.  THE BONUS DEFERRALS AND/OR PERFORMANCE BASED
COMPENSATION DEFERRALS SHALL NOT BE PAID TO THE PARTICIPANT, BUT SHALL BE
WITHHELD FROM THE

 

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APPLICABLE PAYMENT AND AN AMOUNT EQUAL TO THE BONUS DEFERRALS AND/OR PERFORMANCE
BASED COMPENSATION DEFERRALS, AS APPLICABLE, SHALL BE CREDITED TO THE
PARTICIPANT’S APPLICABLE DEFERRAL SUBACCOUNT.

 

3.2.2        THE BONUS AND/OR PERFORMANCE BASED COMPENSATION DEFERRAL ELECTION
MUST BE FILED WITH THE COMMITTEE DURING THE OPEN ENROLLMENT PERIOD FOR THE PLAN
YEAR TO WHICH THE ELECTION APPLIES.  A BONUS AND/OR PERFORMANCE BASED
COMPENSATION DEFERRAL ELECTION SHALL REMAIN IN EFFECT UNTIL CHANGED OR REVOKED
BY THE PARTICIPANT DURING A SUBSEQUENT OPEN ENROLLMENT PERIOD.  THE BONUS AND/OR
PERFORMANCE BASED COMPENSATION DEFERRAL ELECTION MAY BE REVOKED OR CHANGED ONLY
DURING AN OPEN ENROLLMENT PERIOD AND SUCH REVOCATION OR CHANGE MAY BE
PROSPECTIVE ONLY.

 

3.2.3        FOR THE PURPOSES OF DETERMINING AN ELIGIBLE INDIVIDUAL’S BONUS
DEFERRALS: “BONUS” SHALL MEAN AMOUNTS, IF ANY, PAYABLE UNDER THE BONUS POLICIES
MAINTAINED BY THE EMPLOYER.  A PARTICIPANT’S BONUS/PERFORMANCE BASED
COMPENSATION DEFERRAL ELECTION SHALL APPLY TO ANY BONUS OR OTHER PERFORMANCE
BASED COMPENSATION WHICH IS EARNED IN THE PLAN YEAR TO WHICH SUCH ELECTION
APPLIES, REGARDLESS OF WHEN THE AMOUNTS ARE PAID.

 

3.3           DISCRETIONARY COMPANY CREDITS.  A PARTICIPANT’S SUBACCOUNT SHALL
BE CREDITED WITH DISCRETIONARY COMPANY CREDITS, IN SUCH AMOUNTS AND AT SUCH
TIMES AS THE COMPANY MAY, IN ITS SOLE DISCRETION, DETERMINE AND COMMUNICATE TO
THE PARTICIPANT.  DISCRETIONARY COMPANY CREDITS SHALL BE BASED UPON THE
PROFITABILITY OF THE COMPANY, THE PERFORMANCE OF THE PARTICIPANT, MANDATORY
DEFERRAL OF ANY AWARD TO A PARTICIPANT OR SUCH OTHER FACTORS AS THE COMPANY
SHALL CONSIDER APPROPRIATE, IN ITS SOLE DISCRETION.  IN ADDITION, THE COMPANY
SHALL AUTOMATICALLY CREDIT, UNTIL SUCH TIME AS THE COMMITTEE DETERMINES
OTHERWISE, ADDITIONAL DISCRETIONARY COMPANY CREDITS TO THE ACCOUNTS OF
APPLICABLE PARTICIPANTS IN AN AMOUNT EQUAL TO THE LOST MATCHING CONTRIBUTION TO
THE COMPANY’S 401(K) PLAN WHICH THE PARTICIPANT WOULD HAVE BEEN ENTITLED TO
RECEIVE BUT FOR A REDUCTION REQUIRED PURSUANT TO APPLICABLE NONDISCRIMINATION
REQUIREMENTS OF THE 401(K) PLAN (THE “401(K) MATCH CREDITS”).  THE COMPANY SHALL
BE UNDER NO OBLIGATION TO CONTINUE TO MAKE DISCRETIONARY COMPANY CREDITS AND MAY
DISCONTINUE OR CHANGE THE AMOUNT OR METHOD OF CALCULATING THE AMOUNT OF SUCH
DISCRETIONARY COMPANY CREDITS AT ANY TIME.

 

3.4           LIMITATIONS ON DEFERRALS.  A PARTICIPANT’S DEFERRAL ELECTIONS
SHALL BE SUBJECT TO THE FOLLOWING:

 

3.4.1        A PARTICIPANT MUST DEFER A MINIMUM OF $5,000 EACH PLAN YEAR.  THIS
REQUIRED MINIMUM DEFERRAL MAY BE SATISFIED BY BASIC AND/OR BONUS DEFERRALS OR A
COMBINATION THEREOF.  IN THE EVENT THE TOTAL AMOUNT DEFERRED BY A PARTICIPANT IN
A PLAN YEAR IS LESS THAN THE APPLICABLE MINIMUM DEFERRAL AMOUNT, THE COMMITTEE
MAY, IN ITS SOLE DISCRETION, DIRECT THE COMPANY TO PAY THE AMOUNT DEFERRED
DURING THAT PLAN YEAR TO THE PARTICIPANT AS SOON AS ADMINISTRATIVELY FEASIBLE
AFTER THE END OF THE PLAN YEAR.

 

3.4.2        A PARTICIPANT MAY ELECT TO DEFER UP TO A MAXIMUM OF ONE HUNDRED
PERCENT (100%) OF HIS OR HER ANNUAL BASE SALARY, BONUSES, PERFORMANCE BASED
COMPENSATION AND/OR DIRECTOR FEES AND RETAINERS.

 

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3.4.3        THE BASIC AND/OR BONUS DEFERRALS ELECTED BY THE PARTICIPANT SHALL
BE REDUCED BY THE AMOUNT(S), IF ANY, WHICH MAY BE NECESSARY:

 

3.4.3.1     TO SATISFY ALL APPLICABLE INCOME AND EMPLOYMENT TAXES WITHHOLDING
AND FICA CONTRIBUTIONS;

 

3.4.3.2     TO PAY ALL CONTRIBUTIONS ELECTED BY THE PARTICIPANT PURSUANT TO ANY
EMPLOYER BENEFIT PLANS; AND

 

3.4.3.3     TO SATISFY ALL GARNISHMENTS OR OTHER AMOUNTS REQUIRED TO BE WITHHELD
BY APPLICABLE LAW OR COURT ORDER.

 

3.4.4        NOTWITHSTANDING ANYTHING IN THIS PLAN TO THE CONTRARY, ANY
WITHHOLDING OR SALARY DEFERRAL ELECTIONS MADE UNDER THE COMPANY’S 401(K) PLAN
SHALL BE DETERMINED BASED ON THE PARTICIPANT’S COMPENSATION AFTER REDUCTION FOR
THE BASIC AND/OR BONUS DEFERRALS MADE UNDER THIS PLAN.

 

3.5           NO WITHDRAWAL.  EXCEPT AS PROVIDED IN SECTION 6.7 BELOW, AMOUNTS
CREDITED TO A PARTICIPANT’S ACCOUNT MAY NOT BE WITHDRAWN BY A PARTICIPANT AND
SHALL BE PAID ONLY IN ACCORDANCE WITH THE PROVISIONS OF THIS PLAN.

 

ARTICLE IV

 

VESTING

 

4.1           VESTING OF PARTICIPANTS’ ACCOUNTS.

 

4.1.1        AMOUNTS CREDITED TO A PARTICIPANT’S DEFERRAL SUBACCOUNTS SHALL
ALWAYS BE 100% VESTED.

 

4.1.2        A PARTICIPANT SHALL VEST IN DISCRETIONARY COMPANY CREDITS, IF ANY,
AND THE INTEREST CREDITED THEREON IN ACCORDANCE WITH THE SCHEDULE SPECIFIED BY
THE COMPANY, IN ITS SOLE DISCRETION, AT THE TIME OF ANY DISCRETIONARY COMPANY
CREDITS ARE AWARDED.  NOTWITHSTANDING THE FOREGOING, UNTIL OTHERWISE CHANGED BY
THE COMMITTEE, 401(K) MATCH CREDITS SHALL BECOME VESTED IN THE SAME MANNER AND
PURSUANT TO THE SAME SCHEDULE AS IN EFFECT UNDER THE COMPANY’S 401(K) PLAN UNDER
WHICH SUCH MATCHING CONTRIBUTIONS WERE LIMITED AT THE TIME SUCH MATCHING
CONTRIBUTIONS WOULD HAVE BEEN MADE TO THE COMPANY’S 401(K) PLAN.  AMOUNTS
CREDITED TO A PARTICIPANT’S DISCRETIONARY COMPANY CREDIT SUBACCOUNT (INCLUDING
401(K) MATCH CREDITS) SHALL BE 100% VESTED UPON EITHER THE PARTICIPANT’S DEATH,
RETIREMENT OR DISABILITY.

 

4.2           VESTING UPON PLAN TERMINATION.  NOTWITHSTANDING ANY OTHER
PROVISION IN THE PLAN TO THE CONTRARY, A PARTICIPANT’S ACCOUNT SHALL BE 100%
VESTED UPON THE TERMINATION OF THE PLAN.

 

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ARTICLE V

 

ACCOUNTS

 

5.1           ACCOUNTS.  SEPARATE SUBACCOUNTS SHALL BE ESTABLISHED AND
MAINTAINED FOR EACH PARTICIPANT.  EACH PARTICIPANT’S APPLICABLE SUBACCOUNTS
SHALL BE CREDITED WITH THE PARTICIPANT’S BASIC DEFERRALS, BONUS DEFERRALS AND
DISCRETIONARY COMPANY CREDITS, IF ANY, MADE FOR SUCH PARTICIPANT.  PARTICIPANTS’
ACCOUNTS SHALL BE CREDITED (DEBITED) WITH THE APPLICABLE INTEREST, AS SET FORTH
IN THIS ARTICLE V.  PARTICIPANTS’ ACCOUNTS SHALL BE REDUCED BY DISTRIBUTIONS
THEREFROM AND ANY CHARGES WHICH MAY BE IMPOSED ON THE ACCOUNTS PURSUANT TO THE
TERMS OF THE PLAN.

 

5.2           INTEREST CREDITED TO ACCOUNTS AT LEAST MONTHLY.  EACH SUBACCOUNT
SHALL BE CREDITED (DEBITED) MONTHLY, OR MORE FREQUENTLY AS THE COMMITTEE MAY
SPECIFY, IN AN AMOUNT EQUAL TO THE SUBACCOUNT BALANCE ON THE FIRST DAY OF THE
PRIOR MONTH MULTIPLIED BY THE INTEREST RATE APPLICABLE TO SUCH SUBACCOUNT.

 

5.3           DETERMINATION OF INTEREST RATE.

 

5.3.1        THE COMMITTEE SHALL DESIGNATE THE PARTICULAR FUNDS OR CONTRACTS
WHICH SHALL CONSTITUTE THE BENCHMARK FUNDS, AND MAY, IN ITS SOLE DISCRETION,
CHANGE OR ADD TO THE BENCHMARK FUNDS; PROVIDED, HOWEVER, THAT THE COMMITTEE
SHALL NOTIFY PARTICIPANTS OF ANY SUCH CHANGE PRIOR TO THE EFFECTIVE DATE
THEREOF.

 

5.3.2        EACH PARTICIPANT MAY SELECT AMONG THE BENCHMARK FUNDS AND SPECIFY
THE MANNER IN WHICH EACH OF HIS OR HER SUBACCOUNTS SHALL BE DEEMED TO BE
INVESTED, SOLELY FOR PURPOSES OF DETERMINING THE PARTICIPANT’S INTEREST RATE. 
EACH YEAR’S SALARY, BONUS AND/OR COMMISSION DEFERRALS MAY HAVE A SEPARATE
INVESTMENT ELECTION.  THE COMMITTEE SHALL ESTABLISH AND COMMUNICATE THE RULES,
PROCEDURES AND DEADLINES FOR MAKING AND CHANGING BENCHMARK FUND SELECTIONS. 
COMPANY SHALL HAVE NO OBLIGATION TO ACQUIRE INVESTMENTS CORRESPONDING TO THE
PARTICIPANT’S BENCHMARK FUND SELECTIONS.

 

5.3.3        THE INTEREST RATE IS BASED ON THE ASSET UNIT VALUE, NET OF
ADMINISTRATIVE FEES AND INVESTMENT MANAGEMENT FEES AND OTHER APPLICABLE FEES OR
CHARGES, OF THE BENCHMARK FUND(S) DESIGNATED BY THE BOARD AND OTHER APPLICABLE
FEES OR CHARGES.  THE INTEREST RATE MAY BE NEGATIVE IF THE APPLICABLE BENCHMARK
FUND(S) SUSTAIN A LOSS.

 

ARTICLE VI

 

BENEFIT DISTRIBUTIONS AND ACCOUNT WITHDRAWALS

 

6.1           BENEFIT AMOUNT.  THE VALUE OF THE PARTICIPANT’S BENEFIT SHALL BE
EQUAL TO THE VESTED VALUE OF THE PARTICIPANT’S SUBACCOUNT(S) ON THE LAST DAY OF
THE CALENDAR MONTH PRIOR TO THE DISTRIBUTION DATE, OR SUCH OTHER DATE AS THE
COMMITTEE MAY SPECIFY, ADJUSTED FOR DEFERRALS, DISCRETIONARY COMPANY CREDITS,
AND/OR WITHDRAWALS WHICH HAVE BEEN SUBSEQUENTLY CREDITED THERETO OR MADE
THEREFROM PRIOR TO THE DISTRIBUTION DATE.

 

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6.2           TIMING OF DISTRIBUTIONS.  IN ACCORDANCE WITH THE PARTICIPANT’S
ELECTION MADE AT THE TIME OF THE ORIGINAL DEFERRAL (OR SUCH LATER ELECTION IF
APPLICABLE), BENEFITS SHALL BE PAID (OR, PAYMENTS SHALL COMMENCE) AS SOON AS
PRACTICABLE AFTER THE EARLIER OF:

 

6.2.1        THE FIRST DAY OF THE MONTH FOLLOWING THE END OF THE MONTH IN WHICH
A PARTICIPANT’S EMPLOYMENT WITH THE EMPLOYER TERMINATES OR FEBRUARY OF THE YEAR
FOLLOWING TERMINATION; OR

 

6.2.2        THE IN-SERVICE DISTRIBUTION YEAR DESIGNATED BY THE PARTICIPANT; OR

 

6.2.3        THE DATE THE COMMITTEE IS NOTIFIED THAT A PARTICIPANT HAS DIED OR
AFTER THE COMMITTEE HAS DETERMINED THAT A PARTICIPANT HAS INCURRED A DISABILITY;
OR

 

6.2.4        THE DATE THE COMMITTEE IS NOTIFIED OF A PARTICIPANT’S RETIREMENT,
IF SO DESIGNATED BY THE PARTICIPANT IN APPLICABLE ELECTIONS; OR

 

6.2.5        THE DATE OF A CHANGE IN THE OWNERSHIP OR EFFECTIVE CONTROL OF THE
COMPANY, OR IN THE OWNERSHIP OF A SUBSTANTIAL PORTION OF THE ASSETS OF THE
COMPANY (COLLECTIVELY A “CHANGE IN CONTROL”) IF SO DESIGNATED BY THE PARTICIPANT
IN APPLICABLE ELECTIONS.  THE DEFINITION OF AN APPLICABLE CHANGE IN CONTROL
UNDER THE PLAN SHALL BE DEEMED TO BE AMENDED TO REFLECT ANY ADDITIONAL GUIDANCE
OR REGULATIONS ISSUED BY THE IRS.

 

6.3           METHOD OF DISTRIBUTION.

 

6.3.1        DISTRIBUTION METHODS.  A PARTICIPANT’S BENEFITS SHALL BE PAID IN
ONE OF THE FOLLOWING METHODS, AS SPECIFIED IN HIS OR HER MOST RECENT EFFECTIVE
ELECTION:

 

6.3.1.1     A SINGLE LUMP SUM PAYMENT;

 

6.3.1.2     IN ANNUAL INSTALLMENT PAYMENTS OF SUBSTANTIALLY EQUAL AMOUNTS OVER A
PERIOD AS PROVIDED BELOW:

 

 

Reason for Distribution

 

Years of Service

 

Installment Period

 

 

 

 

 

Termination of
Service/Disability/Retirement

 

5+ Years of Service

 

5 Years

 

 

10+ Years of Service

 

5/10 Years

 

 

 

 

 

 

 

15+ Years of Service

 

5/10/15 Years

 

 

 

 

 

In-Service Distribution Year

 

N/A

 

2/3/4/5 Years

 

6.3.1.3     A PARTICIPANT MAY AMEND HIS OR HER ELECTION FROM A SINGLE LUMP SUM
TO INSTALLMENTS BY FILING AN AMENDED ELECTION AT LEAST TWELVE (12) MONTHS IN
ADVANCE OF THE MONTH OF FEBRUARY IN THE YEAR THAT THE FIRST DISTRIBUTION
SPECIFIED IN THE ORIGINAL ELECTION BEING

 

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AMENDED.  THE AMENDED NEW DISTRIBUTION DATE MUST BE IN A PLAN YEAR FIVE (5)
YEARS AFTER THE MONTH OF FEBRUARY IN THE YEAR OF THE FIRST DISTRIBUTION
SPECIFIED IN THE ORIGINAL ELECTION.  NO AMENDMENT MAY ACCELERATE THE DATE THAT
ANY DISTRIBUTION WOULD BE MADE FROM THE PLAN.

 

6.3.1.4     THE PARTICIPANT’S METHOD OF DISTRIBUTION SELECTED IN HIS OR HER
ELECTION SHALL REMAIN IN EFFECT FOR ALL FUTURE SIMILAR DEFERRALS UNTIL CHANGED
OR REVOKED BY THE PARTICIPANT DURING A SUBSEQUENT OPEN ENROLLMENT PERIOD.  THE
PARTICIPANT’S METHOD OF DISTRIBUTION MAY BE REVOKED OR CHANGED ONLY DURING AN
OPEN ENROLLMENT PERIOD AND SUCH REVOCATION OR CHANGE MAY BE PROSPECTIVE ONLY.

 

6.3.2        FAILURE TO SPECIFY A FORM OF DISTRIBUTION OR FAILURE TO QUALIFY FOR
INSTALLMENT TERM ELECTED.  IF, AT THE TIME OF HIS OR HER DISTRIBUTION DATE, A
PARTICIPANT FAILS TO ELECT A FORM OF DISTRIBUTION OR WHO ELECTS AN INSTALLMENT
DISTRIBUTION DOES NOT SATISFY THE REQUIREMENTS FOR THE INSTALLMENT TERM ELECTED,
THEN SUCH PARTICIPANT’S BENEFITS SHALL BE DISTRIBUTED EITHER (I) IN A SINGLE
LUMP SUM PAYMENT (IF NO FORM SELECTED) OR (II) IN THE CASE OF INSTALLMENTS, OVER
THE LONGEST INSTALLMENT TERM FOR WHICH THE PARTICIPANT IS QUALIFIED ON HIS OR
HER DISTRIBUTION DATE.

 

6.3.3        INSTALLMENT AMOUNTS.  FOR PURPOSES OF THIS SECTION 6.3, INSTALLMENT
DISTRIBUTIONS SHALL BE PAID IN SUBSTANTIALLY EQUAL ANNUAL PAYMENTS UNDER AN
INSTALLMENT METHODOLOGY ESTABLISHED BY THE COMMITTEE.

 

6.3.4        REEMPLOYED AFTER INSTALLMENTS BEGIN.  IF A FORMER PARTICIPANT IS
REEMPLOYED AFTER HAVING BEGUN TO RECEIVE INSTALLMENT DISTRIBUTIONS FROM THE
PLAN, THEN SUCH FORMER PARTICIPANT, UPON ONCE AGAIN BECOMING AN ELIGIBLE
INDIVIDUAL, MAY BEGIN A NEW PERIOD OF PARTICIPATION IN THE PLAN, PROVIDED,
HOWEVER, THAT THE INSTALLMENT DISTRIBUTIONS PREVIOUSLY COMMENCED WILL CONTINUE
TO BE PAID TO THE PARTICIPANT OVER THE SPECIFIED TERM.

 

6.3.5        MINIMUM ACCOUNT BALANCE NECESSARY FOR INSTALLMENTS. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTION 6.4, IF A PARTICIPANT’S
ACCOUNT BALANCE IS LESS THAN $25,000 AT THE TIME ELECTED TO BEGIN INSTALLMENT
DISTRIBUTIONS, THE PARTICIPANT’S BENEFIT WILL AUTOMATICALLY BE DISTRIBUTED IN A
SINGLE LUMP SUM.

 

6.4           ELECTION OF IN-SERVICE DISTRIBUTION YEAR.

 

6.4.1        INITIAL ELECTION.  UPON FILING THE DEFERRAL ELECTION FOR ANY PLAN
YEAR, A PARTICIPANT MAY SPECIFY AN IN-SERVICE DISTRIBUTION YEAR FOR THE
SUBACCOUNT TO WHICH SUCH DEFERRALS ARE CREDITED, SUBJECT TO THE FOLLOWING:

 

6.4.1.1     A PARTICIPANT MAY ELECT AN IN-SERVICE DISTRIBUTION YEAR FOR ALL OF
THE BENEFITS CREDITED TO SUCH SUBACCOUNT.

 

6.4.1.2     THE IN-SERVICE DISTRIBUTION YEAR FOR ANY DEFERRAL SUBACCOUNT MUST BE
AT LEAST TWO (2) YEARS AFTER THE END OF THE PLAN YEAR FOR WHICH DEFERRALS TO
SUCH SUBACCOUNT ARE MADE.

 

6.4.1.3     BENEFITS SHALL BE PAID (OR PAYMENTS SHALL COMMENCE) IN FEBRUARY OF
THE IN-SERVICE DISTRIBUTION YEAR.

 

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6.4.2        REVOCATION OR AMENDMENT OF ELECTION.  A PARTICIPANT WHO HAS ELECTED
AN IN-SERVICE DISTRIBUTION YEAR MAY REVOKE AND/OR AMEND THE IN-SERVICE
DISTRIBUTION YEAR ELECTION BY FILING A REVOCATION OR AN AMENDED ELECTION AT
LEAST TWELVE (12) MONTHS IN ADVANCE OF THE MONTH OF FEBRUARY IN THE IN-SERVICE
DISTRIBUTION YEAR SPECIFIED IN THE ELECTION BEING REVOKED OR AMENDED.  THE
AMENDED IN-SERVICE DISTRIBUTION YEAR MUST BE IN A PLAN YEAR FIVE (5) YEARS AFTER
THE MONTH OF FEBRUARY IN THE IN-SERVICE DISTRIBUTION YEAR SPECIFIED IN THE PRIOR
ELECTION OR AT TERMINATION OF EMPLOYMENT.  IF A PARTICIPANT REVOKES AN
IN-SERVICE DISTRIBUTION YEAR ELECTION AND DOES NOT PROVIDE ANOTHER IN-SERVICE
DISTRIBUTION YEAR, THE PARTICIPANT SHALL BE DEEMED TO HAVE ELECTED TO HAVE THE
BENEFIT DISTRIBUTED AT TERMINATION OF EMPLOYMENT.  AN IN-SERVICE DISTRIBUTION
YEAR ELECTION FOR ANY DEFERRAL SUBACCOUNT MAY BE AMENDED ONLY ONCE.  NOTHING IN
THIS SECTION 6.4.2 SHALL PRECLUDE A PARTICIPANT FROM AMENDING HIS OR HER
ELECTION AS TO THE METHOD OF DISTRIBUTION IN ACCORDANCE WITH SECTION 6.3.1.3,
ABOVE.

 

6.4.3        TERMINATION BEFORE THE PLANNED DISTRIBUTION DATE.  IF THE
PARTICIPANT TERMINATES EMPLOYMENT WITH THE EMPLOYER BEFORE HIS IN-SERVICE
DISTRIBUTION YEAR, DISTRIBUTION OF THE PARTICIPANT’S ACCOUNT SHALL BE MADE OR
COMMENCED AT THE SAME TIME AND IN THE SAME MANNER AS SPECIFIED IN THE
PARTICIPANT’S MOST RECENT EFFECTIVE ELECTION.

 

6.4.4        TERMINATION AFTER COMMENCEMENT OF INSTALLMENT IN-SERVICE
DISTRIBUTIONS.  NOTWITHSTANDING ANY PRIOR ELECTION, IF THE PARTICIPANT
TERMINATES EMPLOYMENT WITH THE EMPLOYER WHILE RECEIVING INSTALLMENT IN-SERVICE
DISTRIBUTIONS, DISTRIBUTION OF THE PARTICIPANT’S REMAINING INSTALLMENTS SHALL
CONTINUE IN THE FORM ORIGINALLY ELECTED FOR SUCH IN-SERVICE DISTRIBUTION.

 

6.4.5        ABSENCE OF IN-SERVICE DISTRIBUTION ELECTION.  IF A PARTICIPANT DOES
NOT ELECT AN IN-SERVICE DISTRIBUTION YEAR IN HIS OR HER INITIAL ELECTION, OR IF
THE PARTICIPANT REVOKES AN IN-SERVICE DISTRIBUTION YEAR ELECTION, THE
PARTICIPANT WILL BE DEEMED TO HAVE ELECTED TO HAVE THE BENEFITS CREDITED TO THE
RELEVANT SUBACCOUNT DISTRIBUTED UPON HIS OR HER TERMINATION OF EMPLOYMENT.

 

6.5           DISTRIBUTION UPON DEATH OF PARTICIPANT.  IF A PARTICIPANT DIES
BEFORE HIS OR HER BENEFIT PAYMENTS HAVE COMMENCED, THEN SUCH PARTICIPANT’S
BENEFITS SHALL BE PAID TO HIS OR HER DESIGNATED BENEFICIARY IN A SINGLE LUMP SUM
CASH DISTRIBUTION AS SOON AS ADMINISTRATIVELY FEASIBLE AFTER THE COMMITTEE IS
NOTIFIED OF THE PARTICIPANT’S DEATH AND RECEIVES EVIDENCE SATISFACTORY TO IT
THEREOF.  IF A PARTICIPANT DIES AFTER HIS OR HER BENEFIT DISTRIBUTION HAS
COMMENCED, HIS OR HER REMAINING BENEFITS SHALL BE PAID TO THE DECEASED
PARTICIPANT’S BENEFICIARY IN A SINGLE LUMP SUM CASH DISTRIBUTION AS SOON AS
ADMINISTRATIVELY FEASIBLE AFTER THE COMMITTEE IS NOTIFIED OF THE PARTICIPANT’S
DEATH AND RECEIVES EVIDENCE SATISFACTORY TO IT THEREOF.

 

6.6           DISTRIBUTION UPON DISABILITY OF PARTICIPANT.  IF A PARTICIPANT
SUFFERS A DISABILITY BEFORE OR AFTER HIS OR HER BENEFIT PAYMENTS HAVE COMMENCED,
THEN SUCH PARTICIPANT’S BENEFITS SHALL BE PAID IN THE OPTIONAL FORM OF
DISTRIBUTION PREVIOUSLY SELECTED BY THE PARTICIPANT WITH RESPECT TO TERMINATION
OF SERVICE AS SOON AS ADMINISTRATIVELY FEASIBLE AFTER THE COMMITTEE IS NOTIFIED
OF THE PARTICIPANT’S DISABILITY AND RECEIVES EVIDENCE SATISFACTORY TO IT
THEREOF.

 

6.7           FINANCIAL HARDSHIP WITHDRAWAL.  A PARTICIPANT MAY WITHDRAW UP TO
ONE HUNDRED PERCENT (100%) OF THE BENEFITS CREDITED TO HIS OR HER DEFERRAL
SUBACCOUNT(S) (DISCRETIONARY

 

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COMPANY CREDITS ARE NOT ELIGIBLE FOR THIS HARDSHIP WITHDRAWAL) AS MAY BE
REQUIRED TO MEET A SUDDEN UNFORESEEABLE FINANCIAL EMERGENCY OF THE PARTICIPANT. 
SUCH HARDSHIP DISTRIBUTION SHALL BE SUBJECT TO THE FOLLOWING PROVISIONS:

 

6.7.1        THE HARDSHIP WITHDRAWAL MUST BE NECESSARY TO SATISFY THE
UNFORESEEABLE EMERGENCY AND NO MORE MAY BE WITHDRAWN THAN IS REQUIRED TO RELIEVE
THE FINANCIAL NEED AFTER TAKING INTO ACCOUNT OTHER RESOURCES THAT ARE REASONABLY
AVAILABLE TO THE PARTICIPANT FOR THIS PURPOSE.

 

6.7.2        THE PARTICIPANT MUST CERTIFY THAT THE FINANCIAL NEED CANNOT BE
RELIEVED:  (I) THROUGH REIMBURSEMENT OR COMPENSATION BY INSURANCE OR OTHERWISE;
(II) BY REASONABLE LIQUIDATION OF THE PARTICIPANT’S ASSETS, TO THE EXTENT SUCH
LIQUIDATION WOULD NOT ITSELF CAUSE AN IMMEDIATE AND HEAVY FINANCIAL NEED; OR
(III) BY BORROWING FROM COMMERCIAL SOURCES ON REASONABLE COMMERCIAL TERMS.

 

6.7.3        AN UNFORESEEABLE FINANCIAL EMERGENCY IS A SEVERE FINANCIAL HARDSHIP
TO PARTICIPANT RESULTING FROM A SUDDEN AND UNEXPECTED ILLNESS OR ACCIDENT OF
PARTICIPANT OR OF A DEPENDENT OF PARTICIPANT (AS DEFINED IN SECTION 152(A) OF
THE CODE), LOSS OF PARTICIPANT’S PROPERTY DUE TO CASUALTY, OR OTHER SIMILAR
EXTRAORDINARY AND UNFORESEEABLE CIRCUMSTANCES ARISING AS A RESULT OF EVENTS
BEYOND THE CONTROL OF PARTICIPANT.  NEITHER THE NEED TO PAY TUITION EXPENSES ON
BEHALF OF THE PARTICIPANT OR THE PARTICIPANT’S SPOUSE OR CHILDREN NOR THE DESIRE
TO PURCHASE A HOME SHALL BE CONSIDERED AN UNFORESEEABLE EMERGENCY.

 

6.7.4        THE COMMITTEE, IN ITS SOLE DISCRETION, SHALL DETERMINE IF THERE IS
AN UNFORESEEABLE FINANCIAL EMERGENCY, IF THE PARTICIPANT HAS OTHER RESOURCES TO
SATISFY SUCH EMERGENCY AND THE AMOUNT OF THE HARDSHIP WITHDRAWAL THAT IS
REQUIRED TO ALLEVIATE THE PARTICIPANT’S FINANCIAL HARDSHIP.

 

6.7.5        UPON RECEIVING A FINANCIAL HARDSHIP WITHDRAWAL, THE PARTICIPANT’S
DEFERRALS WILL BE DISCONTINUED FOR THE REMAINDER OF THE PLAN YEAR IN WHICH A
FINANCIAL HARDSHIP WITHDRAWAL OCCURS.  SUCH PARTICIPANTS WILL, HOWEVER, BE
ELIGIBLE FOR ANY DISCRETIONARY COMPANY CREDITS WHICH MAY BE MADE TO THE PLAN ON
THEIR BEHALF.

 

6.8           SPECIFIED EMPLOYEES.  IN THE EVENT OF A DISTRIBUTION TO A
SPECIFIED EMPLOYEE BASED UPON SUCH INDIVIDUAL’S TERMINATION OF SERVICE WITH THE
EMPLOYER, NO DISTRIBUTIONS WILL BE MADE, IRRESPECTIVE OF ANY ELECTION TO THE
CONTRARY, BEFORE THE DATE WHICH IS SIX (6) MONTHS AFTER THE DATE OF TERMINATION
OF SERVICE, OR IF EARLIER THE DATE OF THE DEATH OF THE SPECIFIED EMPLOYEE.

 

6.9           LIMITATION ON DISTRIBUTIONS TO COVERED EMPLOYEES.  NOTWITHSTANDING
ANY OTHER PROVISION OF THIS ARTICLE VI IN THE EVENT THAT THE PARTICIPANT IS A
“COVERED EMPLOYEE” AS THAT TERM IS DEFINED IN SECTION 162(M)(3) OF THE CODE, OR
WOULD BE A COVERED EMPLOYEE IF BENEFITS WERE DISTRIBUTED IN ACCORDANCE WITH HIS
OR HER BENEFIT DISTRIBUTION ELECTION OR EARLY WITHDRAWAL REQUEST, THE MAXIMUM
AMOUNT WHICH MAY BE DISTRIBUTED FROM THE PARTICIPANT’S ACCOUNT IN ANY PLAN YEAR
SHALL NOT EXCEED ONE MILLION DOLLARS ($1,000,000) LESS THE AMOUNT OF
COMPENSATION PAID TO THE PARTICIPANT IN SUCH PLAN YEAR WHICH IS NOT
“PERFORMANCE-BASED” (AS DEFINED IN CODE SECTION 162(M)(4)(C)), WHICH AMOUNT
SHALL BE REASONABLY DETERMINED BY THE COMMITTEE AT THE TIME OF THE PROPOSED
DISTRIBUTION.  ANY AMOUNT WHICH IS NOT DISTRIBUTED TO THE PARTICIPANT IN A

 

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PLAN YEAR AS A RESULT OF THIS LIMITATION SHALL BE DISTRIBUTED TO THE PARTICIPANT
IN THE NEXT PLAN YEAR, SUBJECT TO COMPLIANCE WITH THE FOREGOING LIMITATIONS SET
FORTH IN THIS SECTION 6.9.

 

6.10         TAX WITHHOLDING.  DISTRIBUTION AND WITHDRAWAL PAYMENTS UNDER THIS
ARTICLE VI SHALL BE SUBJECT TO ALL APPLICABLE WITHHOLDING REQUIREMENTS FOR STATE
AND FEDERAL INCOME TAXES AND TO ANY OTHER FEDERAL, STATE OR LOCAL TAXES THAT MAY
BE APPLICABLE TO SUCH PAYMENTS.

 

ARTICLE VII

 

BENEFICIARIES

 

7.1           DESIGNATION OF BENEFICIARY.  THE PARTICIPANT SHALL HAVE THE RIGHT
TO DESIGNATE ON SUCH FORM AS MAY BE PRESCRIBED BY THE COMMITTEE, ONE OR MORE
BENEFICIARIES TO RECEIVE ANY BENEFITS DUE UNDER THE PLAN WHICH MAY REMAIN UNPAID
ON THE DATE OF THE PARTICIPANT’S DEATH.  THE PARTICIPANT SHALL HAVE THE RIGHT AT
ANY TIME TO REVOKE SUCH DESIGNATION AND TO SUBSTITUTE ONE OR MORE OTHER
BENEFICIARIES.

 

7.2           NO DESIGNATED BENEFICIARY.  IF, UPON THE DEATH OF THE PARTICIPANT,
THERE IS NO VALID BENEFICIARY DESIGNATION, THE BENEFICIARY SHALL BE THE
PARTICIPANT’S SURVIVING SPOUSE.  IN THE EVENT THERE IS NO SURVIVING SPOUSE, THEN
THE PARTICIPANT’S BENEFICIARY SHALL BE THE PARTICIPANT’S ESTATE.

 

ARTICLE VIII

 

TRUST OBLIGATION TO PAY BENEFITS

 

8.1           DEFERRALS TRANSFERRED TO THE TRUST.  THE EMPLOYER MAY TRANSFER THE
DEFERRALS AND DISCRETIONARY COMPANY CREDITS, IF ANY, MADE BY OR ON BEHALF OF A
PARTICIPANT TO THE TRUSTEE TO BE HELD PURSUANT TO THE TERMS OF THE TRUST
AGREEMENT.

 

8.2           SOURCE OF BENEFIT PAYMENTS.  ALL BENEFITS PAYABLE TO A PARTICIPANT
HEREUNDER SHALL BE PAID BY THE TRUSTEE TO THE EXTENT OF THE ASSETS HELD IN THE
TRUST BY THE TRUSTEE, AND BY THE EMPLOYER TO THE EXTENT THE ASSETS IN THE TRUST
ARE INSUFFICIENT TO PAY A PARTICIPANT’S BENEFITS AS PROVIDED UNDER THIS PLAN.

 

8.3           INVESTMENT DISCRETION.  THE BENCHMARK FUNDS ESTABLISHED PURSUANT
TO SECTION 5.3 SHALL BE FOR THE SOLE PURPOSE OF DETERMINING THE INTEREST RATE TO
BE USED FOR DETERMINING THE INTEREST CREDITED TO THE PARTICIPANT’S ACCOUNT. 
NEITHER THE TRUSTEE NOR THE COMMITTEE SHALL HAVE ANY OBLIGATION TO INVEST THE
PARTICIPANTS’ ACCOUNT IN ACCORDANCE WITH HIS DEEMED INVESTMENT DIRECTIONS OR IN
ANY OTHER INVESTMENT.

 

8.4           NO SECURED INTEREST.  EXCEPT AS OTHERWISE PROVIDED BY THE TRUST
AGREEMENT, THE ASSETS OF THE TRUST, SHALL BE SUBJECT TO THE CLAIMS OF CREDITORS
OF THE EMPLOYER.  EXCEPT AS PROVIDED IN THE TRUST AGREEMENT, THE PARTICIPANT (OR
THE PARTICIPANT’S BENEFICIARY) SHALL BE A GENERAL UNSECURED CREDITOR OF THE
EMPLOYER WITH RESPECT TO THE PAYMENT OF BENEFITS UNDER THIS PLAN.

 

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ARTICLE IX

 

PLAN ADMINISTRATION

 

9.1           COMMITTEE POWERS AND RESPONSIBILITIES.  THE COMMITTEE SHALL HAVE
COMPLETE CONTROL OF THE ADMINISTRATION OF THE PLAN HEREIN SET FORTH WITH ALL
POWERS NECESSARY TO ENABLE IT PROPERLY TO CARRY OUT ITS DUTIES IN THAT RESPECT. 
NOT IN LIMITATION, BUT IN AMPLIFICATION OF THE FOREGOING, THE COMMITTEE SHALL
HAVE THE POWER AND AUTHORITY TO:

 

9.1.1        CONSTRUE THE PLAN AND TRUST AGREEMENT TO DETERMINE ALL QUESTIONS
THAT SHALL ARISE AS TO INTERPRETATIONS OF THE PLAN’S PROVISIONS INCLUDING
DETERMINATION OF WHICH INDIVIDUALS ARE ELIGIBLE INDIVIDUALS, WHICH INDIVIDUALS
ARE SPECIFIED EMPLOYEES AND THE DETERMINATION OF THE AMOUNTS CREDITED TO A
PARTICIPANT’S ACCOUNT, AND THE APPROPRIATE TIMING AND METHOD OF BENEFIT
PAYMENTS;

 

9.1.2        ESTABLISH REASONABLE RULES AND PROCEDURES WHICH SHALL BE APPLIED IN
A UNIFORM AND NONDISCRIMINATORY MANNER WITH RESPECT TO ELECTIONS, THE
ESTABLISHMENT OF ACCOUNTS AND SUBACCOUNTS, AND ALL OTHER DISCRETIONARY
PROVISIONS OF THE PLAN;

 

9.1.3        ESTABLISH THE RULES AND PROCEDURES BY WHICH THE PLAN WILL OPERATE
THAT ARE CONSISTENT WITH THE TERMS OF THE PLAN DOCUMENTS;

 

9.1.4        ESTABLISH THE RULES AND PROCEDURES BY WHICH THE PLAN SHALL
DETERMINE AND PAY INSTALLMENT DISTRIBUTIONS AND IN-SERVICE DISTRIBUTIONS;

 

9.1.5        COMPILE AND MAINTAIN ALL RECORDS IT DETERMINES TO BE NECESSARY,
APPROPRIATE OR CONVENIENT IN CONNECTION WITH THE ADMINISTRATION OF THE PLAN;

 

9.1.6        ADOPT AMENDMENTS TO THE PLAN DOCUMENT WHICH ARE DEEMED NECESSARY OR
DESIRABLE TO FACILITATE ADMINISTRATION OF THE PLAN AND/OR TO BRING THESE
DOCUMENTS INTO COMPLIANCE WITH ALL APPLICABLE LAWS AND REGULATIONS, PROVIDED
THAT THE COMMITTEE SHALL NOT HAVE THE AUTHORITY TO ADOPT ANY PLAN AMENDMENT THAT
WILL RESULT IN SUBSTANTIALLY INCREASED COSTS TO THE COMPANY UNLESS SUCH
AMENDMENT IS CONTINGENT UPON RATIFICATION BY THE BOARD BEFORE BECOMING
EFFECTIVE;

 

9.1.7        EMPLOY SUCH PERSONS OR ORGANIZATIONS TO RENDER SERVICE OR PERFORM
SERVICES WITH RESPECT TO THE ADMINISTRATIVE RESPONSIBILITIES OF THE COMMITTEE
UNDER THE PLAN AS THE COMMITTEE DETERMINES TO BE NECESSARY AND APPROPRIATE,
INCLUDING BUT NOT LIMITED TO ATTORNEYS, ACCOUNTANTS, AND BENEFIT, FINANCIAL AND
ADMINISTRATIVE CONSULTANTS;

 

9.1.8        SELECT, REVIEW AND RETAIN OR CHANGE THE BENCHMARK FUNDS WHICH ARE
USED FOR DETERMINING THE INTEREST RATE UNDER THE PLAN;

 

9.1.9        DIRECT THE INVESTMENT OF THE ASSETS OF THE TRUST;

 

9.1.10      REVIEW THE PERFORMANCE OF THE TRUSTEE WITH RESPECT TO THE TRUSTEE’S
DUTIES, RESPONSIBILITIES AND OBLIGATIONS UNDER THE PLAN AND THE TRUST AGREEMENT;

 

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9.1.11      TAKE SUCH OTHER ACTION AS MAY BE NECESSARY OR APPROPRIATE TO THE
MANAGEMENT AND INVESTMENT OF THE PLAN ASSETS.

 

9.2           DECISIONS OF THE COMMITTEE.  DECISIONS OF THE COMMITTEE MADE IN
GOOD FAITH UPON ANY MATTER WITHIN THE SCOPE OF ITS AUTHORITY SHALL BE FINAL,
CONCLUSIVE AND BINDING UPON ALL PERSONS, INCLUDING PARTICIPANTS AND THEIR LEGAL
REPRESENTATIVES OR BENEFICIARIES.  ANY DISCRETION GRANTED TO THE COMMITTEE SHALL
BE EXERCISED IN ACCORDANCE WITH RULES AND POLICIES ESTABLISHED BY THE COMMITTEE.

 

9.3           INDEMNIFICATION.  TO THE EXTENT PERMITTED BY LAW, THE COMPANY
SHALL INDEMNIFY EACH MEMBER OF THE COMMITTEE, AND ANY OTHER EMPLOYEE OR MEMBER
OF THE BOARD WITH DUTIES UNDER THE PLAN, AGAINST LOSSES AND EXPENSES (INCLUDING
ANY AMOUNT PAID IN SETTLEMENT) REASONABLY INCURRED BY SUCH PERSON IN CONNECTION
WITH ANY CLAIMS AGAINST SUCH PERSON BY REASON OF SUCH PERSON’S CONDUCT IN THE
PERFORMANCE OF DUTIES UNDER THE PLAN, EXCEPT IN RELATION TO MATTERS AS TO WHICH
SUCH PERSON HAS ACTED FRAUDULENTLY OR IN BAD FAITH IN THE PERFORMANCE OF
DUTIES.  NOTWITHSTANDING THE FOREGOING, THE COMPANY SHALL NOT INDEMNIFY ANY
PERSON FOR ANY EXPENSE INCURRED THROUGH ANY SETTLEMENT OR COMPROMISE OF ANY
ACTION UNLESS THE COMPANY CONSENTS IN WRITING TO THE SETTLEMENT OR COMPROMISE.

 

9.4           CLAIMS PROCEDURE.  BENEFITS SHALL BE PROVIDED FROM THIS PLAN
THROUGH PROCEDURES INITIATED BY THE COMMITTEE, AND THE PARTICIPANT NEED NOT FILE
A CLAIM.  HOWEVER, IF A PARTICIPANT OR BENEFICIARY BELIEVES HE OR SHE IS
ENTITLED TO A BENEFIT DIFFERENT FROM THE ONE RECEIVED, THEN THE PARTICIPANT OR
BENEFICIARY MAY FILE A CLAIM FOR THE BENEFIT BY WRITING A LETTER TO THE
COMMITTEE.

 

9.4.1        IF ANY CLAIM FOR BENEFITS UNDER THE PLAN IS WHOLLY OR PARTIALLY
DENIED, THE CLAIMANT SHALL BE GIVEN NOTICE IN WRITING OF SUCH DENIAL WITHIN 90
DAYS OF THE DATE THE LETTER CLAIMING BENEFITS IS RECEIVED BY THE COMMITTEE.  IF
SPECIAL CIRCUMSTANCES REQUIRE AN EXTENSION OF TIME, WRITTEN NOTICE OF THE
EXTENSION SHALL BE FURNISHED TO THE CLAIMANT WITHIN THE INITIAL 90-DAY PERIOD.

 

9.4.2        NOTICE OF THE DENIAL SHALL SET FORTH THE FOLLOWING INFORMATION: (A)
THE SPECIFIC REASON OR REASONS FOR THE DENIAL; (B) SPECIFIC REFERENCE TO
PERTINENT PLAN PROVISIONS ON WHICH DENIAL IS BASED; (C) A DESCRIPTION OF ANY
ADDITIONAL MATERIAL OR INFORMATION NECESSARY FOR THE CLAIMANT TO PERFECT THE
CLAIM AND AN EXPLANATION OF WHY SUCH MATERIAL OR INFORMATION IS NECESSARY; (D)
AN EXPLANATION THAT A FULL REVIEW BY THE COMMITTEE OF THE DECISION DENYING THE
CLAIM MAY BE REQUESTED BY THE CLAIMANT OR HIS OR HER AUTHORIZED REPRESENTATIVE
BY FILING WITH THE COMPANY, WITHIN 60 DAYS AFTER SUCH NOTICE HAS BEEN RECEIVED,
A WRITTEN REQUEST FOR SUCH REVIEW; AND (E) IF SUCH REQUEST IS SO FILED, THE
CLAIMANT OR HIS OR HER AUTHORIZED REPRESENTATIVE MAY REVIEW PERTINENT DOCUMENTS
AND SUBMIT ISSUES AND COMMENTS IN WRITING WITHIN THE SAME 60 DAY PERIOD
SPECIFIED IN THE PRECEDING SUBPARAGRAPH.

 

9.4.3        THE DECISION OF THE COMMITTEE UPON REVIEW SHALL BE MADE PROMPTLY,
AND NOT LATER THAN 60 DAYS AFTER THE COMMITTEE’S RECEIPT OF THE REQUEST FOR
REVIEW, UNLESS SPECIAL CIRCUMSTANCES REQUIRE AN EXTENSION OF TIME FOR
PROCESSING, IN WHICH CASE THE CLAIMANT SHALL BE SO NOTIFIED AND A DECISION SHALL
BE RENDERED AS SOON AS POSSIBLE, BUT NOT LATER THAN 120 DAYS AFTER RECEIPT OF
THE REQUEST FOR REVIEW.  IF THE CLAIM IS DENIED, WHOLLY OR IN PART, THE CLAIMANT
SHALL BE PROMPTLY GIVEN A COPY OF THE DECISION.  THE DECISION SHALL BE IN
WRITING AND SHALL INCLUDE SPECIFIC

 

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REASONS FOR THE DENIAL, SPECIFIC REFERENCES TO THE PERTINENT PLAN PROVISIONS ON
WHICH THE DENIAL IS BASED AND SHALL BE WRITTEN IN A MANNER CALCULATED TO BE
UNDERSTOOD BY THE CLAIMANT.  NO FURTHER LEGAL ACTION MAY BE INITIATED CLAIMING
BENEFITS UNDER THIS PLAN UNTIL THE CLAIMS PROCEDURE SET FORTH IN THIS ARTICLE IX
IS COMPLETED.

 

ARTICLE X

 

AMENDMENT AND TERMINATION

 

10.1         RIGHT TO AMEND.  THE COMMITTEE OR THE COMPANY, BY ACTION OF THE
BOARD, SHALL HAVE THE RIGHT TO AMEND THE PLAN, AT ANY TIME AND WITH RESPECT TO
ANY PROVISIONS HEREOF, AND ALL PARTIES HERETO OR CLAIMING ANY INTEREST HEREUNDER
SHALL BE BOUND BY SUCH AMENDMENT; PROVIDED, HOWEVER, THAT NO SUCH AMENDMENT
SHALL DEPRIVE A PARTICIPANT OF A RIGHT ACCRUED HEREUNDER PRIOR TO THE DATE OF
THE AMENDMENT UNLESS SUCH AN AMENDMENT IS REQUIRED BY APPLICABLE LAW OR DEEMED
NECESSARY TO PRESERVE THE PREFERRED TAX TREATMENT OF THE PLAN.

 

10.2         AMENDMENTS TO ENSURE PROPER CHARACTERIZATION OF PLAN. 
NOTWITHSTANDING THE PROVISIONS OF SECTION 10.1, THE PLAN MAY BE AMENDED BY THE
COMMITTEE OR THE COMPANY, BY ACTION OF ITS BOARD, AT ANY TIME, RETROACTIVELY IF
REQUIRED, IF FOUND NECESSARY, IN THE OPINION OF THE COMMITTEE OR THE BOARD, IN
ORDER TO ENSURE THAT THE PLAN IS CHARACTERIZED AS A “TOP-HAT” PLAN OF DEFERRED
COMPENSATION MAINTAINED FOR A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED
EMPLOYEES AS DESCRIBED UNDER ERISA SECTIONS 201(2), 301(A)(3), AND 401(A)(1),
AND TO CONFORM THE PLAN TO THE PROVISIONS AND REQUIREMENTS OF ANY APPLICABLE LAW
(INCLUDING SPECIFICALLY SECTION 409A OF THE CODE, AND OTHER APPLICABLE PORTIONS
OF ERISA AND THE CODE).  NO SUCH AMENDMENT SHALL BE CONSIDERED PREJUDICIAL TO
ANY INTEREST OF A PARTICIPANT HEREUNDER.

 

10.3         CHANGES IN LAW AFFECTING TAXATION OF PARTICIPANTS.  THE PLAN AND
ANY ELECTION MAY ALSO BE AMENDED AS PROVIDED IN THIS SECTION 10.3.

 

10.3.1      OPERATION.  THIS SECTION 10.3 SHALL BECOME OPERATIVE UPON THE
ENACTMENT OF ANY CHANGE IN APPLICABLE STATUTORY LAW OR THE PROMULGATION BY THE
IRS OF A FINAL REGULATION OR OTHER PRONOUNCEMENT HAVING THE FORCE OF LAW, WHICH
STATUTORY LAW, AS CHANGED, OR FINAL REGULATION OR PRONOUNCEMENT, AS PROMULGATED,
WOULD CAUSE ANY PARTICIPANT TO INCLUDE IN HIS OR HER FEDERAL GROSS INCOME
AMOUNTS ACCRUED BY THE PARTICIPANT UNDER THE PLAN ON A DATE (AN “EARLY TAXATION
EVENT”) PRIOR TO THE DATE ON WHICH SUCH AMOUNTS ARE MADE AVAILABLE TO HIM OR HER
HEREUNDER.

 

10.3.2      AFFECTED RIGHT OR FEATURE NULLIFIED.  NOTWITHSTANDING ANY OTHER
PROVISION OF THIS PLAN TO THE CONTRARY (BUT SUBJECT TO SECTION 10.3.3 BELOW), AS
OF AN EARLY TAXATION EVENT, THE FEATURE OR FEATURES OF THIS PLAN THAT WOULD
CAUSE THE EARLY TAXATION EVENT SHALL BE NULL AND VOID, TO THE EXTENT, AND ONLY
TO THE EXTENT, REQUIRED TO PREVENT THE PARTICIPANT FROM BEING REQUIRED TO
INCLUDE IN HIS OR HER FEDERAL GROSS INCOME AMOUNTS ACCRUED BY THE PARTICIPANT
UNDER THE PLAN PRIOR TO THE DATE ON WHICH SUCH AMOUNTS ARE MADE AVAILABLE TO HIM
OR HER HEREUNDER.  IF ONLY A PORTION OF A PARTICIPANT’S ACCOUNT IS IMPACTED BY
THE CHANGE IN THE LAW, THEN ONLY SUCH PORTION SHALL BE SUBJECT TO THIS SECTION
10.3, WITH THE REMAINDER OF THE ACCOUNT NOT SO AFFECTED BEING SUBJECT TO SUCH
RIGHTS AND FEATURES AS IF THE LAW WERE NOT CHANGED.  IF THE LAW ONLY IMPACTS

 

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PARTICIPANTS WHO HAVE A CERTAIN STATUS WITH RESPECT TO THE EMPLOYER, THEN ONLY
SUCH PARTICIPANTS SHALL BE SUBJECT TO THIS SECTION 10.3.

 

10.3.3      TAX DISTRIBUTION.  IF AN EARLY TAXATION EVENT IS EARLIER THAN THE
DATE ON WHICH THE STATUTE, REGULATION OR PRONOUNCEMENT GIVING RISE TO THE EARLY
TAXATION EVENT IS ENACTED OR PROMULGATED, AS APPLICABLE (I.E., IF THE CHANGE IN
THE LAW IS RETROACTIVE), THERE SHALL BE DISTRIBUTED TO EACH PARTICIPANT, AS SOON
AS PRACTICABLE FOLLOWING SUCH DATE OF ENACTMENT OR PROMULGATION, THE AMOUNTS
THAT BECAME TAXABLE ON THE EARLY TAXATION EVENT.

 

10.4         PLAN TERMINATION OR PLAN SUSPENSION.  THE COMPANY RESERVES THE
RIGHT TO TERMINATE THE PLAN AND/OR ITS OBLIGATION TO MAKE FURTHER DISCRETIONARY
COMPANY CREDITS TO THE PLAN, BY ACTION OF ITS BOARD.  THE COMPANY ALSO RESERVES
THE RIGHT TO SUSPEND THE OPERATION OF THE PLAN FOR A FIXED OR INDETERMINATE
PERIOD OF TIME, BY ACTION OF ITS BOARD.

 

10.5         SUCCESSOR TO COMPANY.  ANY CORPORATION OR OTHER BUSINESS
ORGANIZATION WHICH IS A SUCCESSOR TO THE COMPANY BY REASON OF A CONSOLIDATION,
MERGER OR PURCHASE OF SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY, OR ANY
OTHER CHANGE IN CONTROL, SHALL HAVE THE RIGHT TO BECOME A PARTY TO THE PLAN BY
ADOPTING THE SAME BY RESOLUTION OF THE ENTITY’S BOARD OF DIRECTORS OR OTHER
APPROPRIATE GOVERNING BODY.  IF, WITHIN NINETY (90) DAYS FROM THE EFFECTIVE DATE
OF SUCH CONSOLIDATION, MERGER OR SALE OF ASSETS, OR CHANGE IN CONTROL SUCH NEW
ENTITY DOES NOT BECOME A PARTY HERETO, AS ABOVE PROVIDED, THE PLAN AUTOMATICALLY
SHALL BE TERMINATED.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.1         NO ASSIGNMENT.  THE RIGHT OF ANY PARTICIPANT, ANY BENEFICIARY OR
ANY OTHER PERSON TO THE PAYMENT OF ANY BENEFITS UNDER THIS PLAN SHALL NOT BE
ASSIGNED, TRANSFERRED, PLEDGED OR ENCUMBERED.

 

11.2         NO SECURED INTEREST.  THE OBLIGATION OF THE COMPANY TO PARTICIPANTS
UNDER THIS PLAN SHALL NOT BE FUNDED OR OTHERWISE SECURED, AND SHALL BE PAID OUT
OF THE GENERAL ASSETS OF THE COMPANY.  PARTICIPANTS ARE GENERAL UNSECURED
CREDITORS OF THE COMPANY WITH RESPECT TO THE OBLIGATIONS HEREUNDER AND SHALL
HAVE NO LEGAL OR EQUITABLE INTEREST IN THE ASSETS OF THE COMPANY, INCLUDING ANY
ASSETS AS THE COMPANY MAY SET ASIDE OR RESERVE AGAINST ITS OBLIGATIONS UNDER
THIS PLAN.

 

11.3         SUCCESSORS.  THIS PLAN SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF THE EMPLOYEE, ITS SUCCESSORS AND ASSIGNS AND THE PARTICIPANT AND HIS
OR HER HEIRS, EXECUTORS, ADMINISTRATORS AND LEGAL REPRESENTATIVES.

 

11.4         NO EMPLOYMENT AGREEMENT.  NOTHING CONTAINED HEREIN SHALL BE
CONSTRUED AS CONFERRING UPON ANY PARTICIPANT THE RIGHT TO CONTINUE IN THE EMPLOY
OF THE EMPLOYER AS AN EMPLOYEE.

 

11.5         ATTORNEYS’ FEES.  IF THE EMPLOYER, THE PARTICIPANT, ANY
BENEFICIARY, AND/OR A SUCCESSOR IN INTEREST TO ANY OF THE FOREGOING, BRINGS
LEGAL ACTION TO ENFORCE ANY OF THE PROVISIONS OF THIS PLAN, THE PREVAILING PARTY
IN SUCH LEGAL ACTION SHALL BE REIMBURSED BY THE OTHER PARTY, THE

 

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PREVAILING PARTY’S COSTS OF SUCH LEGAL ACTION INCLUDING, WITHOUT LIMITATION,
REASONABLE FEES OF ATTORNEYS, ACCOUNTANTS AND SIMILAR ADVISORS AND EXPERT
WITNESSES.

 

11.6         GOVERNING LAW.  THIS PLAN SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.

 

11.7         ENTIRE AGREEMENT.  THIS PLAN CONSTITUTES THE ENTIRE UNDERSTANDING
AND AGREEMENT WITH RESPECT TO THE SUBJECT MATTER CONTAINED HEREIN, AND THERE ARE
NO AGREEMENTS, UNDERSTANDINGS, RESTRICTIONS, REPRESENTATIONS OR WARRANTIES AMONG
ANY PARTICIPANT AND THE EMPLOYER OTHER THAN THOSE AS SET FORTH OR PROVIDED FOR
HEREIN.

 

11.8         SEVERABILITY.  IF ANY PROVISION OF THIS PLAN IS HELD TO BE INVALID,
ILLEGAL OR UNENFORCEABLE, SUCH INVALIDITY, ILLEGALITY, OR UNENFORCEABILITY SHALL
NOT AFFECT ANY OTHER PROVISION OF THIS PLAN, AND THE PLAN SHALL BE CONSTRUED AND
ENFORCED AS IF SUCH PROVISION HAD NOT BEEN INCLUDED.  IN ADDITION, IF SUCH
PROVISION IS INVALID, ILLEGAL OR UNENFORCEABLE DUE TO CHANGES IN APPLICABLE LAW,
THE COMPANY MAY AMEND THE PLAN, WITHOUT THE CONSENT AND WITHOUT PROVIDING ANY
ADVANCE NOTICE TO ANY PARTICIPANT, AS MAY BE NECESSARY OR DESIRABLE TO COMPLY
WITH CHANGES IN THE APPLICABLE LAW OR FINANCIAL ACCOUNTING OF DEFERRED
COMPENSATION PLANS.

 

IN WITNESS WHEREOF, this Plan has been adopted by the Company effective as of
the Effective Date.

 

 

THQ INC.

 

 

 

 

Dated:

 

,

2004

By:

 

 

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